EX-10.1
OLSWANG 90 High Holborn T ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇ Regulated by the Law Society
London WC1V 6XX F ▇▇▇ (▇) ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇.▇▇▇ DX 37972 Kingsway
2006
PLACING AGREEMENT
(1) TURBOTEC PRODUCTS PLC
(2) EXECUTIVE DIRECTORS
(3) NON-EXECUTIVE DIRECTOR
(4) THERMODYNETICS, INC.
(5) DAWNAY, DAY CORPORATE FINANCE LIMITED
(6) DAWNAY, DAY CAPITAL MARKETS
Contents
CLAUSE PAGE
1. DEFINITIONS AND INTERPRETATION________________________________________2
2. APPOINTMENTS__________________________________________________________7
3. APPLICATION FOR ADMISSION_____________________________________________8
4. CONDITIONS____________________________________________________________8
5. DELIVERY AND RELEASE OF DOCUMENTS____________________________________10
6. ANNOUNCEMENTS________________________________________________________10
7. SUPPLEMENTARY ADMISSION DOCUMENTS____________________________________11
8. THE SUBSCRIPTION SHARES______________________________________________12
9. THE SALE SHARES______________________________________________________12
10. PLACING______________________________________________________________15
11. SETTLEMENT AND REGISTRATION__________________________________________15
12. COMMISSIONS, FEES AND EXPENSES_______________________________________16
13. VAT__________________________________________________________________17
14. REPRESENTATIONS AND WARRANTIES_______________________________________17
15. EXCLUSION OF DDCF'S AND DDCM'S LIABILITY AND INDEMNITY_______________17
16. LIMITS ON LIABILITY__________________________________________________17
17. TERMINATION__________________________________________________________17
18. SERVICE AGREEMENTS___________________________________________________17
19. CONTINUING OBLIGATIONS_______________________________________________17
20. UNDERTAKINGS WITH RESPECT TO SHARES__________________________________17
21. THIRD PARTY RIGHTS___________________________________________________17
22. TIME OF THE ESSENCE__________________________________________________17
23. NOTICES______________________________________________________________17
24. FURTHER ASSURANCE____________________________________________________17
25. AMENDMENTS___________________________________________________________17
26. WAIVERS AND REMEDIES_________________________________________________17
27. ASSIGNMENT___________________________________________________________17
28. ENTIRE AGREEMENT_____________________________________________________17
29. GOVERNING LAW AND JURISDICTION_______________________________________17
30. EXCLUSION OF CLIENT RELATIONSHIP_____________________________________17
31. EXECUTION____________________________________________________________17
SCHEDULE 1
The Directors
PART I: The Executive Directors_____________________________________17
PART II: The Non-executive Director_________________________________17
SCHEDULE 2
Warranties
PART I_______________________________________________________________17
PART II______________________________________________________________17
PART III_____________________________________________________________17
SCHEDULE 3
Certificate under Clause 4.2.6_______________________________________17
SCHEDULE 4
Documents to be Delivered to DDCF____________________________________17
THIS AGREEMENT is made on 2006
BETWEEN:
(1) TURBOTEC PRODUCTS PLC a company incorporated in England and Wales
(Company No. 5593339), whose registered office is at c/o Capita
Registrars, The Registry, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇ ▇▇▇
(the "COMPANY");
(2) The several persons whose names and business addresses are set out in
Part I of schedule 1 (each an "EXECUTIVE DIRECTOR" and collectively the
"EXECUTIVE DIRECTORS");
(3) The person whose name and business address is set out in Part II of
schedule 1 (the "NON-EXECUTIVE DIRECTOR");
(4) THERMODYNETICS, INC. a company incorporated in the state of Delaware
under the Delaware General Corporation Law whose principal place of
business is at ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇
("TDYT");
(5) DAWNAY, DAY CORPORATE FINANCE LIMITED (Company No. 1154048) whose
registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("DDCF");
and
(6) DAWNAY, DAY CAPITAL MARKETS a division of DAWNAY, DAY BROKERS LIMITED
(Company No. 4397988) whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("DDCM").
RECITALS:
(A) The Company is a public company limited by shares.
(B) At the date of this agreement the authorised share capital of the
Company is (pound)200,000 divided into 20,000,000 ordinary shares of 1p
each of which 10,009,590 ordinary shares are in issue.
(C) In reliance on the various representations, warranties, undertakings
and indemnities set out in this agreement, DDCF has agreed to act as
nominated adviser in connection with the application for Admission and
the Placing.
(D) In reliance on the various representations, warranties, undertakings
and indemnities set out in this agreement, DDCM has agreed to act as
broker in connection with the Placing.
(E) The Company proposes to seek subscribers for the Subscription Shares
and TDYT proposes to sell the Sale Shares.
(F) On the terms and subject to the conditions contained in this agreement
DDCM has agreed:
(1) as agent for the Company to use its reasonable endeavours to
procure subscribers for the Subscription Shares; and
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(2) as agent for TDYT, to use its reasonable endeavours to procure
purchasers for the Sale Shares.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement the following expressions shall have the following
meanings (except where the context otherwise requires):
"ACT" the Companies Act 1985;
"ADMISSION" admission of the whole of the share
capital of the Company, issued and to be
issued in connection with the Placing,
to trading on AIM and references to
Admission becoming effective are to be
construed in accordance with Rule 6 of
the AIM Rules;
"ADMISSION DOCUMENT" the document in the agreed form to be
published by the Company under the AIM
Rules;
"ADVERSE INTEREST" any claim, equity, lien, charge, trust,
encumbrance or other adverse right or
interest of any kind;
"ACCOUNTS DATE" 31 March 2005;
"AIM" AIM, a market of the London Stock
Exchange;
"AIM RULES" the AIM Rules for companies and
nominated advisers published by the
London Stock Exchange;
"ANNOUNCEMENT DATE" the date of publication of the
preliminary announcement of the results
of the Company for the financial period
ending on 31 December 2006;
"ARTICLES OF ASSOCIATION" the articles of association adopted by
the Company by a written resolution
dated 8 April 2006;
"BOARD" the board of directors of the Company
from time to time or a duly authorised
committee of it;
"BUSINESS DAY" a day (not being a Saturday or Sunday)
on which banks in London are open for
general business;
"CITIZENS BANK" Citizens Bank of Massachusetts;
"CITY CODE" the City Code on Take-overs and Mergers
issued by the Panel on Take-overs and
Mergers;
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"COMMENCEMENT OF DEALINGS" commencement of dealings in the Ordinary
Shares on AIM;
"CONDITIONS" each of the conditions set out in
clauses 4.1 and 4.2;
"CREST" the system enabling securities to be
held and transferred in dematerialised
form operated by CRESTCo;
"CREST ACCOUNT" a securities account held within CREST;
"CRESTCO" CRESTCo Limited;
"CREST REGULATIONS" the Uncertificated Securities
Regulations 2001;
"CREST RULES" the rules made by CRESTCo with respect
to CREST;
"DIRECTORS" the directors of the Company whose names
are set out in schedule 1;
"DUE DILIGENCE REPORTS" the legal due diligence reports on (i)
Turbotec Products, Inc. dated 28 April
2006 prepared by ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP and
(ii) on the Company dated 28 April 2006
prepared by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, each
addressed to the Company, DDCM and DDCF;
"ENCUMBRANCE" a mortgage, charge, pledge, lien,
option, restriction, right of first
refusal, right of pre-emption or other
third party right, interest or claim of
any kind, or any other encumbrance or
security interest of any kind
(including, without limitation, any
liability imposed or right conferred by
or under any legislation) or any other
type of preferential arrangement
(including, without limitation, a title
transfer or retention arrangement)
having similar effect;
"ENGAGEMENT LETTER" the letter dated 10 March 2006 from DDCF
and DDCM to the Company and TDYT setting
out the terms on which it agreed to act
for the Company in connection with the
application for Admission and the
Placing;
"FINANCIAL STATEMENTS" the financial statements of the Company
and its subsidiaries as set out in the
Short Form Report;
"FSMA" the Financial Services and Markets Act
2000;
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"GROUP" the Company and each of its subsidiary
undertakings and "GROUP COMPANY" means
any of them;
"IN ALL MATERIAL RESPECTS" in all respects material in the context
of the Placing;
"IN ANY MATERIAL RESPECT" in any respect which is material in the
context of the Placing;
"INTERIM ACCOUNTS" the unaudited interim results of
Turbotec Products, Inc for the 9 month
period ended 31 December 2005;
"INVESTOR PRESENTATION" the presentation by the Company to
potential Placees in the agreed form;
"LONDON STOCK EXCHANGE" London Stock Exchange plc;
"LONG FORM REPORT" the long form report on the Group dated
28 April 2006 prepared by the Reporting
Accountants and addressed to the
Company, DDCF and DDCM;
"MATERIAL NEW FACTOR, means a material new factor, mistake or
MISTAKE OR INACCURACY" inaccuracy to which the notes to Rule 3
as set out in Part Two - Guidance Notes
of the AIM Rules applies in the context
of the Placing;
"ORDINARY SHARES" ordinary shares of 1p each in the
capital of the Company;
"PATHFINDER ADMISSION the draft Admission Document dated 8
DOCUMENT" April 2006;
"PLACEE" a person whom DDCM procures to take
Placing Shares under the Placing;
"PLACING" the placing of the Placing Shares on the
basis described in this agreement;
"PLACING DOCUMENTS" the Admission Document and the Placing
Letter each in the agreed form;
"PLACING LETTER" the placing letter and form of
confirmation in the agreed form to be
issued by DDCM;
"PLACING PRICE" the price of 85p per Placing Share;
"PLACING SHARES" the Subscription Shares and the Sale
Shares;
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"PRE-ADMISSION ANNOUNCEMENT" the pre-admission announcement required
to be made by the Company under Rule 2
of the AIM Rules;
"PRESS ANNOUNCEMENT" the press announcement in the agreed
form supplementing the information in
the Pre-Admission Announcement
concerning the Placing and Admission;
"PROTECTED PERSONS" in respect of DDCF, any parent
undertaking of DDCF, any subsidiary
undertaking of DDCF or of any such
parent undertaking and their respective
shareholders, directors, officers,
employees and agents and in respect of
DDCM, any parent undertaking of DDCM,
any subsidiary undertaking of DDCM or of
any such parent undertaking and their
respective shareholders, directors,
officers, employees and agents;
"REGISTRAR" Capita Registrars, The Registry, ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇;
"REGISTRAR'S AGREEMENT" means the letter agreement issued on 6
April 2006 and accepted on 21 April 2006
and made between the Registrars and the
Company pursuant to which the Company
appointed the Registrars and the
Registrars accepted such appointment;
"REGULATION S" means the general rules and regulations
promulgated under the US Securities Act
with that title;
"REORGANISATION" the re-registration of the Company as a
public limited company following
completion of the Share Exchange
Agreement;
"REPORTING ACCOUNTANTS" MRI ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP of ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇;
"SALE SHARES" 2,797,183 Ordinary Shares to be sold by
TDYT pursuant to this agreement;
"SDRT" stamp duty reserve tax;
"SHARE EXCHANGE AGREEMENT" the agreement for the sale and purchase
of the entire issued share capital of
Turbotec Products, Inc. between TDYT and
the Company;
5
"SHORT FORM REPORTS" the accounting reports on the Group set
out in the Admission Document;
"STAMP DUTY" United Kingdom stamp duty;
"SUBSCRIPTION SHARES" 2,797,183 new Ordinary Shares to be
allotted and issued to subscribers
pursuant to this agreement;
"SUPPLEMENTARY ADMISSION any supplementary admission document
DOCUMENT" published by the Company pursuant to the
notes to Rule 3 as set out in Part Two -
Guidance Notes of the AIM Rules which is
supplementary to the Admission Document
(or to any previously published
admission document which is so
supplementary);
"TAX" means all forms of taxation, duty, rate,
impost, contribution, charge or levy (in
the nature of taxation) imposed by any
competent taxing body, authority or
analogous body in the United Kingdom,
the United States or elsewhere,
including any interest, surcharge,
penalty or fine in relation to any of
them;
"TAX WARRANTIES" the Warranties in paragraph 14 of Part I
of schedule 2;
"UNITED STATES" means the United States of America each
of its States, its territories and
possessions and the District of
Columbia;
"US SECURITIES ACT" means the United States Securities Act
of 1933 (as amended) and all regulations
made thereunder;
"VERIFICATION NOTES" the verification notes in the agreed
form, including the copies of the
documents cited in response to the
questions contained in the notes in
relation to the Admission Document, the
Pathfinder Admission Document and the
Investor Presentation;
"VAT" United Kingdom value added tax;
"WARRANTIES" the representations and warranties set
out in clause 14 and schedule 2; and
"WORKING CAPITAL REPORT" the cash flow and working capital
projections relating to the Group in the
agreed form.
1.2 The words "subsidiary undertaking" and "parent undertaking" have the
meanings given to them by section 258 of the Act.
6
1.3 Any reference to a person being connected with another person is to be
construed in accordance with section 839 of the Income and Corporation
Taxes Act 1988.
1.4 References to an uncertificated share or to a share being in
uncertificated form shall mean a share which is or is to be recorded in
the Operator Register of Members (as defined in the CREST Regulations),
and any reference to a certificated share shall mean any share of the
Company other than an uncertificated share.
1.5 The liabilities of each of the Directors bind their respective personal
representatives.
1.6 Any reference to a document being in an "agreed form" is to the form of
the relevant document agreed between the Company and DDCF and
initialled by them, or on their behalf, in each case with such
amendments as may be agreed in accordance with clause 25.
1.7 Any phrase introduced by the terms "including", "include", "in
particular" or any similar expression shall be construed as
illustrative and shall not limit the sense of the words preceding those
terms.
1.8 Any reference to the awareness, knowledge, information or belief of any
person or any similar expression shall be deemed to include a statement
that it has been made after due and careful enquiry into the relevant
subject matter.
1.9 References to any particular legislation shall include all orders,
regulations and subordinate legislation made under or with respect to
that legislation and shall be construed as referring to such
legislation as amended and in force and to any legislation which
re-enacts or consolidates (with or without modification) any such
legislation, in each case prior to the date hereof. For these purposes
"legislation" includes any rule, regulation or requirement of the
London Stock Exchange, the Financial Services Authority and any other
body or authority acting under the authority of any legislation.
1.10 Any reference to a time of the day is to London time.
1.11 References to recitals, clauses and schedules are references to the
recitals, clauses and schedules of this agreement (except where the
context otherwise requires).
1.12 The schedules form part of this agreement and shall have effect as if
set out in full in the body of this agreement and any reference to this
agreement includes the schedules.
1.13 The headings in this agreement do not affect its interpretation.
2. APPOINTMENTS
2.1 The Company confirms to DDCF and DDCM that it has appointed the
Registrar to act in connection with the Placing in the terms of the
letter to be delivered to DDCF under clause 5.1 and schedule 4 and that
such appointment has been accepted.
2.2 The Company will provide each of DDCF and DDCM and the Registrar with
all authorisations and information necessary to enable them to perform
their respective duties in accordance with and as contemplated by this
agreement, the Placing
7
Documents and any other document in connection with the Placing of the
Subscription Shares and will authorise the Registrar to act in
accordance with the instructions of any director of DDCF or DDCM or of
any person so authorised by any such director.
3. APPLICATION FOR ADMISSION
3.1 The Company confirms that it has authorised and instructed DDCF to make
an application to the London Stock Exchange for Admission of the
Ordinary Shares to trading on AIM.
3.2 The Company shall at its own expense do or procure to be done all such
acts and things, provide all information, give all undertakings, pay
all fees and execute all such documents as may reasonably be required
in connection with the applications referred to in clause 3.1.
3.3 DDCF shall give to the Company all such assistance as the Company may
reasonably require in connection with the application for Admission.
4. CONDITIONS
4.1 The obligations of DDCF and DDCM (as the case may be) under clause 10.1
are subject to fulfilment of the following conditions by not later than
5.00 p.m. on the date of this agreement (or such later time and/or date
as DDCF (having consulted with DDCM) and the Company shall agree in
writing):
4.1.1 publication of the Admission Document in accordance with
clause 5.2; and
4.1.2 the Company having complied with its obligations under clauses
2 (Appointments), 3 (Application for Admission) and 5.1
(Delivery and release of Documents) to the extent that those
obligations fall to be performed prior to the time previously
referred to in this clause 4.1.
4.2 The obligations of DDCF and/or DDCM (as the case may be) under clauses
8.2, 9.2 and 10.3 are subject to fulfilment of the following conditions
by not later than 8.00 a.m. on 15 May 2006 (or such later time and/or
date as DDCF (having consulted with DDCM) and the Company shall agree
in writing, not being later than 30 June 2006):
4.2.1 satisfaction of the conditions set out in clause 4.1 by the
date and time specified in that clause (or such later time
and/or date as DDCF and the Company shall agree in writing);
4.2.2 an electronic version of the Admission Document being
submitted to the London Stock Exchange by the Company as
required by Rule 5 of the AIM Rules together with the
application form for admission and the fee payable in respect
of the application (with the accompanying declaration from
DDCF under Rule 39 of the AIM Rules) by not later than 8 May
2006;
4.2.3 the Company complying with all other of its obligations under
clause 6 and the AIM Rules (in so far as such obligations are
not the responsibility of DDCF
8
under this agreement) as to the publication and availability
of the Admission Document;
4.2.4 the London Stock Exchange having agreed to admit the Ordinary
Shares to trading on AIM;
4.2.5 DDCM having received Placing Letters from Placees duly
completed and executed in all respects pursuant to which DDCM
has procured subscribers for all the Subscription Shares and
purchasers for all the Sale Shares and receipt of funds from
Placees except where settling on a delivery versus payment
basis;
4.2.6 the Company delivering to DDCF and DDCM at close of business
on the last business day prior to the date referred to in this
clause 4.2 a certificate signed by the Company, TDYT and each
Director (or on behalf of each Director) in the form set out
in schedule 3 and a certified copy of the minutes of the Board
evidencing the conditional allotment of the Subscription
Shares under clause 11.1;
4.2.7 DDCF (having consulted with DDCM) not having exercised any
rights which it may have to terminate its and DDCM's
obligations under this agreement prior to Admission under
clause 17;
4.2.8 completion of the Share Exchange Agreement having occurred in
accordance with its terms;
4.2.9 completion of revised banking arrangements between, inter
alia, Citizens Bank, TDYT and Turbotec Products, Inc. subject
only to receipt of funds by Citizens Bank in accordance with a
letter agreement dated 25 April 2006 from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
LLP; and
4.2.10 Admission becoming effective by 8.00 a.m. on 15 May 2006 or
such later time and/or date as DDCF (having consulted with
DDCM) and the Company shall agree in writing, not being later
than 30 June 2006.
4.3 The Company and the Directors shall use their respective reasonable
endeavours to procure that each of the Conditions is satisfied by not
later than the time and date specified for its fulfilment (or such
later time or date as DDCF and the Company shall agree in writing in
accordance with clause 4.1 or 4.2 (as appropriate)).
4.4 If any of the Conditions is not fulfilled (or waived by DDCF) on or
before the time and/or date specified for its fulfilment (or such later
time as DDCF and the Company agree in writing in accordance with clause
4.1 or 4.2 (as appropriate)) or if any such Condition becomes incapable
of being fulfilled and DDCF notifies the Company that it will not waive
such condition, clause 17.3 shall apply as if the non-fulfilment of the
relevant Condition had been an event permitting DDCF to terminate its
obligations under this agreement within clause 17.1 and, except to the
extent specified in clause 17.3, the obligations of the parties under
this agreement shall cease.
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5. DELIVERY AND RELEASE OF DOCUMENTS
5.1 The Company shall ensure that DDCF and DDCM receive the documents
listed in schedule 4 on or before the time(s) specified in that
schedule for the delivery of them.
5.2 The Company shall procure that:
5.2.1 the Admission Document is published as required by the AIM
Rules;
5.2.2 sufficient copies of the Admission Document are made available
at the registered office of the Company; and
5.2.3 the documents stated in the Admission Document as being
available for inspection shall be made available for
inspection in accordance with the provisions of the Admission
Document.
5.3 The Company and/or TDYT shall deliver or cause to be delivered to DDCF
and/or DDCM such other information and documents as DDCF or DDCM may
reasonably require in order to discharge its obligations under this
agreement and otherwise in connection with the Placing. In particular,
the Company shall deliver to DDCF and DDCM such numbers of the
Admission Document as it shall require in order that it might
distribute the same to such institutional and other investors as they
in their sole discretion determine.
5.4 The Company, the Directors and TDYT agree with and acknowledge to DDCF
and DDCM that neither DDCF, DDCM, any other Protected Person or any of
their professional advisers, shall be responsible to the Company or to
the Directors for verifying the accuracy and/or fairness of any
information published in the Admission Document or those documents
otherwise published by the Company in connection with the Placing.
6. ANNOUNCEMENTS
6.1 Each party to this agreement (other than DDCF and DDCM) undertakes that
during the period commencing on the date of this agreement and ending
on Admission or, as the case may be, after the date on which this
agreement terminates or fails to become unconditional, it will not, and
to the extent it is within its control, it will procure that no other
person will, make any public announcement or public communication
concerning the Company or any other Group Company, the Placing, the
Placing Documents or the Placing Shares without the prior written
consent of any director or managing director of DDCF, provided that
this clause shall not apply to:
6.1.1 any announcement or written communication under clause 6.2 or
otherwise required by the AIM Rules, the London Stock
Exchange, the Financial Services Authority or other competent
regulatory body or as required by law;
6.1.2 any announcement made by DDCF or DDCM which they consider is
required for the proper discharge of their duties as the
nominated adviser and/or broker (as the case may be);
10
6.1.3 any announcement or written communication which DDCF has
previously agreed in writing may be released (such agreement
not to be unreasonably withheld or delayed) and any statement
written or oral made at a press conference or presentation
organised or attended by a representative of DDCF insofar as
it is based on and is consistent with the information
contained in the Admission Document;
6.1.4 the provision of the Investor Presentation to such persons who
DDCF may approve or who attend presentations arranged by DDCF;
or
6.1.5 (subject to prior consultation with DDCF) any announcement or
written confirmation that TDYT is required to make by the
regulatory body relevant to TDYT or as required by law.
6.2 The Company undertakes to DDCF to make all such announcements
concerning the Company and/or the Placing as shall be necessary to
comply with the AIM Rules and DDCF reserves the right (following
consultation with the Company) to make any such announcement if the
Company fails (in the reasonable opinion of DDCF) to fulfil its
obligations under this clause 6.2 as soon as reasonably practicable.
6.3 The Company will discuss with DDCF any public announcement or
communication which any person proposes to make or publish within
clauses 6.1.1 or 6.2 (and will have due regard to the comments of
DDCF).
7. SUPPLEMENTARY ADMISSION DOCUMENTS
7.1 The Company and each Director severally undertakes to notify DDCF and
DDCM immediately on becoming aware at any time up to the Commencement
of Dealings of any matter which:
7.1.1 indicates that a material new factor, mistake or inaccuracy
relating the information contained in the Admission Document
has arisen or may arise such that a Supplementary Admission
Document is or may be required by the notes to Rule 3 as set
out in Part Two - Guidance Notes of the AIM Rules or is
otherwise material or required to make the statements in the
Admission Document not misleading in any material respect; or
7.1.2 is or might be material in the context of any assumption or
other matter relevant to any forecast or statement about
prospects in the Admission Document; or
7.1.3 indicates that a significant change or new matter has or might
have occurred before the Commencement of Dealings.
7.2 DDCF may (acting reasonably) require the Company at the Company's own
reasonable expense to:
7.2.1 prepare a Supplementary Admission Document in such terms as
DDCF reasonably require and publish it in such manner as DDCF
may require;
11
7.2.2 make an announcement in such terms and in such a manner as
DDCF may reasonably require;
7.2.3 despatch a written notice or some other form of communication
in such terms and in such manner and to such persons as the
DDCF may reasonably require; and/or
7.2.4 take such other additional or alternative steps as the DDCF
may reasonably require,
in each case at the Company's own expense and in such form as DDCF may
reasonably require.
7.3 If a Supplementary Admission Document is published, the representations
and Warranties relating to the Admission Document given under clause 14
and Part I of schedule 2 shall be deemed repeated on the date of
publication of such Supplementary Admission Document and when so
repeated shall be read and construed as if references therein to the
Admission Document meant the Admission Document when read together with
such Supplementary Admission Document.
8. THE SUBSCRIPTION SHARES
8.1 The Company:
8.1.1 irrevocably appoints DDCM as its agent for the purpose of
procuring Placees for the Subscription Shares at the Placing
Price and otherwise on the terms and subject to the conditions
set out in the Placing Documents and any Supplementary
Admission Document;
8.1.2 confers on DDCM all powers, authorities and discretions on
behalf of the Company which are necessary for or reasonably
incidental to the procuring of Placees for the Subscription
Shares or otherwise for giving effect to this agreement
including giving any instructions to any of the Registrars
which DDCM considers necessary or advisable in the context of
the Placing; and
8.1.3 agrees to ratify and confirm everything which DDCM shall
lawfully and properly do or have done in the exercise of such
appointment, powers, authorities and discretions.
8.2 DDCM agrees, as agent of the Company, to use its reasonable endeavours
to procure subscribers at the Placing Price for the Subscription Shares
and otherwise on the terms and subject to the conditions set out in the
Placing Documents and this agreement (including satisfaction of the
Conditions).
9. THE SALE SHARES
9.1 TDYT:
9.1.1 agrees to sell, to such persons as may be nominated by DDCM,
with full title guarantee free from any adverse interest and
with all rights attaching to them
12
the Sale Shares at the Placing Price in cash and otherwise on
the terms and subject to the conditions set out in the Placing
Documents;
9.1.2 irrevocably appoints DDCM as its agent for the purpose of
arranging purchasers for the Sale Shares in cash at the
Placing Price and otherwise on the terms and subject to the
conditions set out in the Placing Documents;
9.1.3 confirms that the appointment in clause 9.1.2 confers on DDCM
all powers, authorities and discretions which are necessary
for or reasonably incidental to the procuring of purchasers
for the Sale Shares to be sold by TDYT (including the giving
of all and any instructions to the Registrar which DDCM
considers necessary or advisable in connection with the
Placing) and agrees to ratify and confirm everything which
DDCM shall lawfully and properly do or have done in the
exercise of such appointment, powers, authorities and
discretions in accordance with this agreement;
9.1.4 undertakes:
9.1.4.1 not to give any direction to DDCM, the Company or the
Directors, and not to take any other action, which is
inconsistent with his obligations to DDCM or the
authorities conferred by him under this agreement;
and
9.1.4.2 to keep DDCM fully and effectively indemnified
against any loss arising from any breach by TDYT of
the warranty made by TDYT in the terms set out in
Part III of schedule 2 or of any of TDYT's
undertakings in this clause 9.
9.2 DDCM agrees as agent of TDYT, to use its reasonable endeavours to
procure purchasers for the Sale Shares at the Placing Price and
otherwise on the terms and subject to the conditions set out in the
Placing Documents and this agreement (including satisfaction of the
Conditions).
9.3 TDYT undertakes to deliver to DDCM immediately following execution of
this agreement:
9.3.1 a share certificate duly issued by the Company in respect of
the of Sale Shares; and
9.3.2 such number of transfer forms as DDCM shall require duly
executed in favour of such person(s) as DDCM may nominate in
respect of the Sale Shares.
DDCM shall have the power to complete each such blank transfer form
delivered to it under this clause 9.3 with the name(s) of the person or
persons to be registered as the holder or holders of some or all of the
Sale Shares to which that transfer form relates, and to deliver that
transfer form accompanied by the relevant share certificate to the
Company or the Registrar for registration, and TDYT irrevocably
instructs the Company and the Directors to give effect to such
documents and any such application for registration to the exclusion of
any instruction they may receive from TDYT after execution of this
agreement. If Admission has not occurred by the time and date referred
13
to in clause 4.2.5 or if this agreement is terminated by DDCF (having
consulted with DDCM) in accordance with its terms:
(a) DDCM shall return to TDYT forthwith the documents of title and
stock transfer forms delivered to it under this clause 9.3;
and
(b) the instructions and appointments referred to in clause 9.1
will be of no further effect.
9.4 If TDYT fails to comply with its obligations under clause 9.3 any
director of DDCM may complete and execute on TDYT's behalf one or more
transfer forms in respect of the Sale Shares.
9.5 TDYT:
9.5.1 irrevocably appoints (by way of security for its obligations
under this Agreement) any director of DDCM as its true and
lawful attorney in the name and on behalf of TDYT to execute
and/or complete on its behalf a transfer form in respect of
the Sale Shares to be sold by TDYT under the Placing;
9.5.2 agrees to ratify everything which any director of DDCM shall
lawfully and properly do in the exercise of the appointment in
9.5.1;
9.5.3 acknowledges and agrees that this power of attorney is given
to secure the performance by TDYT of its obligations to DDCM
under this agreement within the meaning and for the purposes
of section 4 of the Powers of Attorney Act 1971;
9.5.4 authorises the delivery of this document (or a certified copy
of this document) to DDCF, DDCM, their solicitors, the London
Stock Exchange and any other person who requires a copy for
the purposes of or in connection with the Placing; and
9.5.5 shall not give any instruction to the Company or the Directors
or DDCF or DDCM or take any action which is inconsistent with
TDYT's obligations under this agreement which prevents the
registration of the Sale Shares in accordance with this clause
9.
9.6 Without prejudice to the other provisions of this clause, for a
reasonable period following Admission, and in any event not more than 6
months thereafter, TDYT shall execute such additional documents and do
such additional things as are reasonably necessary or desirable to
ensure that the Sale Shares are transferred to the relevant Placee
immediately following Admission.
9.7 TDYT shall be liable to pay all and any stamp duty and/or SDRT (if any)
arising in respect of the sale to and purchase by a Placee, in
accordance with the provisions of this agreement, of the Sale Shares at
a rate of 50p per (pound)100 (or part thereof) of the value of the Sale
Shares at the Placing Price or, as the case may be, stamp duty reserve
tax in
14
respect of the Sale Shares sold by it pursuant to this agreement at the
rate of 0.5% of the value of the Sale Shares at the Placing Price.
10. PLACING
10.1 DDCF and/or DDCM shall despatch the Placing Documents and any
Supplementary Admission Document to such institutional and other
investors as it determines in accordance with clause 10.2.1 but not so
as to cause any breach of FSMA.
10.2 DDCF and DDCM (after consultation with the Company) shall have absolute
discretion to determine all matters in respect of the Placing
including:
10.2.1 the institutional and other investors who are to receive the
Placing Documents and any Supplementary Admission Document;
10.2.2 the identity of the Placees;
10.2.3 the number (if any) of any Placing Shares which each Placee
will acquire;
10.2.4 the latest time at which Placing Letters may be despatched and
acceptances of the offers in them may be made; and
10.2.5 the validity of acceptances received in respect of any of the
Placing Shares.
10.3 Subject to the satisfaction of the Condition set out in clause 4.2.5,
by no later than 4.00 p.m. on the business day prior to the date of
Admission, DDCF and/or DDCM shall deliver to the Company a list of the
names of the persons who have agreed with it to take the Placing Shares
on the terms and conditions of the Placing Documents and any
Supplementary Admission Document. The list shall identify each Placee's
allocation of Placing Shares.
11. SETTLEMENT AND REGISTRATION
11.1 The Company and the Directors agree that the Subscription Shares shall
be allotted:
11.1.1 conditionally on Admission becoming effective by no later than
the time and date referred to in clause 4.2.5 (or such later
time and/or date as the Company and DDCF (having consulted
with DDCM) may agree in writing);
11.1.2 subject to the memorandum and Articles of Association of the
Company;
11.1.3 credited as fully paid free from any encumbrance and on terms
that they will rank pari passu in all respects with the
existing Ordinary Shares; and
11.1.4 on and subject to the terms and conditions set out in the
Placing Documents.
11.2 The Company and the Directors shall procure that the Registrars arrange
the issue of definitive share certificates not later than five business
days after Admission to the Placees (or their nominees).
15
11.3 No later than three business days following Admission becoming
effective, DDCM shall pay or procure to be paid to the Company the
price for the Subscription Shares (at the Placing Price) less the
commissions, fees and expenses (including DDCM and DDCF's legal fees)
due to DDCM and DDCF from the Company and which are referred to in
clause 12 (if then known) (and any applicable VAT). Any payment due to
the Company in accordance with this clause 11.3 shall be made, for the
benefit of the Company, by telegraphic transfer to Turbotec Products,
Inc's bank account with Citizens Bank at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ABA Routing Number ▇▇▇▇▇▇▇▇▇, Beneficiary Account
Number 1130184266 or such other bank account as the Company shall
specify in writing. Such payment shall operate as a complete discharge
of all of DDCF's and DDCM's obligations to the Company under this
clause 11. If and to the extent that any interest is earned on such
monies between Admission and the time such monies are paid to the
Company, DDCF and/or DDCM (as the case may be) shall account for that
interest (less any tax due on the same) to the Company.
11.4 No later than three days business days following Admission becoming
effective, DDCM shall pay or procure to be paid to TDYT (as specified
below) an amount equal to (pound)2,233,061.20, being the Placing Price
multiplied by the number of Sale Shares less:
11.4.1 the commission payable by TDYT in accordance with the
provisions of clause 12; and
11.4.2 an amount equal to any stamp duty or SDRT payable by TDYT in
accordance with the provisions of clause 9.7
(and DDCM shall pay any amount so deducted in respect of stamp duty or
SDRT to the HM Revenue & Customs as soon as that duty is due to be
paid). Of the sums payable to TDYT pursuant to this clause 11.4,
$1,475,000 plus an amount of interest to be determined immediately
following Admission shall be paid to Citizens Bank by telegraphic
transfer to Citizen Bank's bank account with Royal Bank of Scotland,
London, SWIFT ▇▇▇▇▇▇▇▇, A/C ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ (payment of which
shall be deemed to constitute payment to TDYT) and the balance payable
shall be paid to TDYT by telegraphic transfer to Turbotec Products,
Inc's bank account with Citizens Bank at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ABA Routing Number ▇▇▇▇▇▇▇▇▇, Beneficiary Account
Number 1130184266 for the benefit of TDYT.
If and to the extent that any interest is earned on such monies between
Admission and the time such monies are paid to TDYT, DDCM shall account
for that interest (less any tax due on the same) to TDYT.
12. COMMISSIONS, FEES AND EXPENSES
12.1 Conditional upon Admission occurring, the Company shall pay to DDCF a
corporate finance fee of (pound)120,000 for its services under this
agreement. Such fee shall be payable on the date of Admission less such
amounts of the staged fee (as such term is defined in the Engagement
Letter) has have been paid to DDCF by such date.
16
12.2 Conditional upon Admission occurring, the Company shall pay to DDCM a
commission equal to 6 per cent of the sum resulting from multiplying
the Placing Price by the number of Subscription Shares.
12.3 Conditional upon Admission occurring, TDYT shall pay to DDCM a
commission equal to 6 per cent of the sum resulting from multiplying
the Placing Price by the number of Sale Shares.
12.4 In addition to the fees and commissions referred to in clause 12.1 (and
whether or not DDCF's and DDCM's obligations under this agreement
become unconditional or are terminated), the Company shall pay the
other expenses of or incidental to the Placing, Admission, the
admission of the Ordinary Shares as participating securities within
CREST and any related arrangements, including (but not limited to) the
expenses for printing, publication, advertising and distribution of the
Press Announcement, the Pathfinder Admission Document, the Placing
Documents, any Supplementary Admission Document, the fees of the
Registrar and its own and DDCF's and DDCM's professional expenses
(including without limitation the fees of DDCF's solicitors, Olswang,
in an amount not exceeding (pound)35,000 plus VAT and disbursements)
and accountants and other expenses, all stamp duty, SDRT and other
duties and taxes in relation to the Placing. The Company shall,
immediately on request, reimburse DDCF and DDCM for the amount of any
such expenses which may have been incurred by it in connection with the
Placing.
13. VAT
13.1 Where a person is required to pay any amount to DDCF or DDCM under this
agreement, that person shall, in addition to the amount in question and
if applicable, pay to DDCF or DDCM:
13.1.1 in the case of a payment which is consideration for any supply
of services by DDCF or DDCM for VAT purposes, an amount equal
to the VAT properly chargeable in respect of such supply,
including (without limitation) any payment by way of
reimbursement of or in respect of expenses, duties or taxes,
if and to the extent that the reimbursement constitutes
consideration for any supply by DDCF or DDCM, in each case on
receipt of a valid VAT invoice;
13.1.2 in the case of any reimbursement of or in respect of expenses,
duties or taxes, if and to the extent that the reimbursement
does not constitute consideration for any supply by DDCF or
DDCM incurred the expenses, duties or taxes otherwise than as
agent for the company, an amount equal to the amount in
respect of VAT properly paid or payable by DDCF or DDCM which
is not recoverable for VAT purposes by DDCF or DDCM as input
tax or otherwise by repayment or set-off (except so far as it
would be so recoverable had it been properly attributed, under
the method of attribution used by DDCF, to a taxable supply
made by it); and
13.1.3 in the case of any reimbursement of or in respect of expenses
which constitute disbursements incurred by DDCF or DDCM as
agent on behalf of the person and in respect of which the VAT
invoice is issued not to DDCF or DDCM but to
17
that person, that person shall pay to DDCF or DDCM the full
amount of the disbursements including any amount in respect of
the VAT properly charged in respect thereof.
14. REPRESENTATIONS AND WARRANTIES
14.1 Each of the Company, TDYT, the Executive Directors and the
Non-Executive Director (the "WARRANTORS") severally represents and
warrants to DDCF and DDCM in the terms set out in Part I of schedule 2
and acknowledges that DDCF and DDCM have been induced to enter into
this agreement in reliance upon representations in the terms of the
Warranties set out in Part I of schedule 2.
14.2 Each of the Directors severally warrants to DDCF and DDCM with respect
to himself in the terms set out in Part II of schedule 2 and
acknowledges that DDCF and DDCM have been induced to enter into this
agreement in reliance upon representations in the terms of the
Warranties set out in Part II of schedule 2.
14.3 TDYT warrants to DDCF and DDCM in the terms set out in Part III of
schedule 2 and acknowledges that DDCF and DDCM have been induced to
enter into this agreement in reliance upon representations in the terms
of the Warranties set out in Part III of schedule 2.
14.4 Each of the Warranties:
14.4.1 is given at the date of this agreement and shall be deemed to
be repeated and given at all times up to and including the
Commencement of Dealings; and
14.4.2 shall be construed independently of any other and (unless
expressly provided to the contrary) shall not be limited or
restricted by reference to or inference from any other
provision of this agreement or any other Warranty.
14.5 The Company, each of the Directors and TDYT severally undertakes to
DDCF and DDCM that (except only as may be necessary to give effect to
this agreement) it or he shall not knowingly do, or knowingly allow (so
far as it is within its or his power to prevent the same) or knowingly
procure any act or omission during the period up to and including the
Commencement of Dealings which would constitute a breach of any of the
Warranties or which would make any of them untrue or inaccurate or
misleading in any material respect if repeated by reference to facts
and circumstances in existence at any time during the period up to and
including the Commencement of Dealings.
14.6 The Company, each of the Directors and TDYT severally undertakes to
notify DDCF and DDCM immediately if at any time before Commencement of
Dealings it or he becomes aware that any of the Warranties given by it
or him was or might have been untrue, inaccurate or misleading at the
date of this agreement or would or might be untrue, inaccurate or
misleading if repeated by reference to facts or circumstances in
existence at any time up to and including Commencement of Dealings. The
Company, each of the Directors and TDYT severally undertakes to take
all reasonable steps promptly to provide DDCF and DDCM with any further
information which it requests if it is notified or otherwise becomes
aware of anything such as is referred to in this clause.
18
14.7 Each of the Directors severally warrants to DDCF and DDCM that (other
than pursuant to the articles of association of the Company) there are
no agreements or arrangements under which the Company could become
obliged to indemnify or compensate any Director for any losses (as
defined in clause 15.1) incurred under this agreement or in connection
with the application for Admission and the Placing and hereby waives
any right of contribution or payment they may have, whether under
statute, contract at common law or otherwise, against the Company in
respect of any claim made against them or in respect of any payment
made by them arising out of or in connection with the application for
Admission, Placing, the Admission Document, any of the other Placing
Documents or this agreement.
14.8 The Company warrants to the DDCF and DDCM that there are no agreements
or arrangements under which the Company could become obliged to
indemnify or compensate TDYT for any losses (as defined in clause 15.1)
incurred under this agreement or in connection with the application for
Admission or the Placing.
14.9 The Company, each of the Directors and TDYT hereby severally confirms
to DDCF and DDCM that, save for any insurance arrangements entered into
by it or him with its or his insurers, neither it nor he (and in the
case of the Company, each member of the Group) has entered into any
agreement or arrangement concerning his or its liability for any breach
of the representations, Warranties, undertakings and indemnities given
by it or him under this agreement and, subject to clause 16, the
Company's, each of the Directors' and TDYT's liability is not qualified
or limited in any respect.
14.10 The Warranties, representations, undertakings and indemnities set out
in this agreement and the provisions of clause 15 shall remain in full
force and effect notwithstanding the completion of all the matters and
arrangements referred to in or contemplated by this agreement.
14.11 None of the investigations made by or on behalf of DDCF or DDCM in
relation to the Company shall in any way affect or be deemed to be a
waiver of any Warranties, undertakings or indemnities given by the
Company, the Directors or TDYT in this agreement.
14.12 Any Placee acquiring Placing Shares shall have, in addition to any
other rights and remedies it may have, the rights and remedies of a
person acquiring Placing Shares on the basis of the Placing Documents.
14.13 In the event that:
14.13.1 any deduction or withholding is required by law to be made
from any sum payable by any person pursuant to this clause 14,
the person in question shall be obliged to pay such increased
sum as will, after the deduction or withholding has been made,
leave the recipient with the same amount as it would have been
entitled to receive in the absence of such requirement to make
a deduction or withholding; and
14.13.2 any sum paid by any person pursuant to this clause 14 is or
will be chargeable to Tax and such Tax has not been taken into
account in computing any
19
measure of damages or other relevant sum, the person in
question shall be obliged to pay such further or increased sum
or sums as will, after payment of the Tax, leave a sum equal
to the amount that would otherwise have been payable if Tax
had not been so chargeable and for these purposes a sum shall
be regarded as chargeable to Tax in circumstances where it
would have been chargeable to Tax but for some relief
available to the recipient.
15. EXCLUSION OF DDCF'S AND DDCM'S LIABILITY AND INDEMNITY
15.1 No claim may be made by the Company, any Director or TDYT (whether in
contract, tort or otherwise) against any Protected Person to recover
any loss, damage, cost, charge or expense ("LOSSES") which the Company,
any Director, TDYT or any other person may suffer or incur by reason of
or arising out of or in connection with:
15.1.1 the application for Admission, the Placing and/or the carrying
out by DDCF and/or DDCM of their obligations under or in
connection with this agreement; or
15.1.2 the exercise by DDCF and/or DDCM of their rights under this
agreement,
except to the extent such losses result from the wilful default,
negligence or fraud of any Protected Person or a breach by DDCF or DDCM
of their obligations under this agreement or of their obligations to
the Company, TDYT or the Directors under FSMA or under the regulatory
system (as defined in the rules of the Financial Services Authority).
15.2 The Company and TDYT will jointly and severally indemnify each
Protected Person and keep them fully and effectively indemnified from
and against all claims, actions, liabilities, demands, proceedings or
judgements ("CLAIMS") made or established against any Protected Person
and against all losses (as defined in clause 15.1), which a Protected
Person may suffer or incur and which arise, directly or indirectly, out
of or in connection with:
15.2.1 DDCF's and DDCM's provision of services in connection with the
application for Admission, the Placing and/or the performance
of its obligations under or in connection with this agreement;
15.2.2 the publication or despatch of the Pathfinder Admission
Document, any of the Placing Documents and any Supplementary
Admission Document;
15.2.3 the issue or approval of any financial promotion relating to
the Placing and/or the Company;
15.2.4 the Admission Document or any Supplementary Admission Document
not containing, or being alleged not to contain, all relevant
information;
15.2.5 any statement in any Placing Document, in any Supplementary
Admission Document, in the Pathfinder Admission Document, or
in any other document or presentation relating to the Placing
(whether of fact, opinion, expectation or intention and
including any forecast or estimate) being or being alleged to
be untrue, inaccurate, incomplete or misleading or as having
been made
20
negligently or otherwise without the required standard of
skill and care or reasonableness;
15.2.6 the allotment and/or issue and/or sale of the Placing Shares;
15.2.7 any breach by the Company, TDYT or any of the Directors of any
of their respective obligations under this agreement or any
breach or alleged breach of the Warranties, representations or
undertakings set out or referred to in this agreement; and/or
15.2.8 any breach of the Act, the AIM Rules or any other laws or
regulations of any country or regulatory authority as a result
of or in connection with the making of the Placing,
except to the extent that such claims or losses are due to:
(i) the negligence, wilful default or fraud of any Protected
Person; or
(ii) a breach of DDCF's or DDCM's obligations under this agreement
or FSMA or under the regulatory system (as defined in clause
15.1).
15.3 If HM Revenue & Customs or any other taxing authority in any
jurisdiction brings into any charge to taxation any sum payable under
any indemnity contained in this clause 15 ("the original amount") then
(to the extent that the matter in respect of which the sum is payable
is not allowable as a deduction for tax purposes) the amount so payable
shall be grossed-up by such amount ("the additional amount") as will
ensure that after subtraction of the taxation so chargeable there shall
remain a net sum equal to the original amount. To the extent that a
Protected Person subsequently obtains any tax credit, benefit,
allowance or repayment of tax as a result of the Company or TDYT (as
the case may be) paying to the Protected Person the additional amount
or as a result of or in connection with the circumstances giving rise
to the payment of the additional amount, the Protected Person shall
notify the Company or TDYT in writing (as the case may be) and shall
pay to the Company or the Directors (as the case may be) an amount
which equates to so much of the economic benefit which the Protected
Person has received from that tax credit, benefit, allowance, repayment
or relief as does not exceed the additional amount (any question as to
the accrual or amount of any such economic benefit, the order and
manner of making any claim for any tax credit, allowance, repayment or
relief, and the timing of any payment being determined by the Protected
Person's auditors if the relevant person does not have auditors). Such
additional amount shall be paid not later than the later of five
business days before the date on which the payment of such taxation is
due to the relevant Tax authority and five business days after written
notification is given to the Company or TDYT (as the case may be) that
such additional amount is payable.
15.4 If the Company enters into any agreement or arrangement with any
adviser for the purpose of or in connection with the Placing, the terms
of which provide that the liability of the adviser to the Company or
any other person is excluded or limited in any manner, and any
Protected Person may have joint and/or several liability with such
adviser to the Company or to any other person arising out of the
performance of its duties under this letter or if the liability of any
third party to the Company (including such adviser) is limited
21
or excluded in any other way, whether under statute, in contract or as
a result of death, bankruptcy or insolvency, the Company shall:
15.4.1 not be entitled to recover any amount from any Protected
Person which, in the absence of such exclusion or limitation,
such Protected Person would have been entitled to recover
pursuant to the Civil Liability (Contribution) Act 1978;
15.4.2 indemnify each of the Protected Persons on an after tax basis
in respect of any increased liability to any third party which
would not have arisen in the absence of such exclusion or
limitation; and
15.4.3 take such other action as any Protected Person may require to
ensure that such Protected Person is not prejudiced as a
consequence of such agreement or arrangement.
15.5 The provisions of clause 21 (third party rights) shall apply to the
enforcement by any Protected Person of the undertakings and indemnities
in this clause.
16. LIMITS ON LIABILITY
16.1 No claim shall be made against any Director or TDYT under clause 14
unless the claim (together with reasonable details of the claim) has
been notified to the Company, the relevant Director or TDYT in writing
on or before the date falling three months after publication of the
reports and accounts of the Company for the year ending 30 September
2007.
16.2 The maximum aggregate liability of the Directors and TDYT (including
interest and costs) for breach of the Warranties shall not exceed:
16.2.1 in the case of the Executive Directors, an amount equal to two
times the amount of their annual salary payable by the Company
following Admission;
16.2.2 in the case of the Non-Executive Director an amount equal to
two times the amount of his annual fee payable by the Company
following Admission; and
16.2.3 in the case of TDYT the proceeds of the sale by TDYT of the
Sale Shares plus an amount equal to the gross proceeds
received by TDYT from the sale of Ordinary Shares on or before
30 September 2007.
16.3 The maximum aggregate liability of any of the parties as stated in this
clause shall be inclusive of any amounts payable in respect of
interest, expenses or VAT.
16.4 None of the limitations for the benefit of a particular party set out
in this clause 16 shall apply to any claim which arises as a result of
fraud or fraudulent concealment by that particular party.
17. TERMINATION
17.1 If at any time prior to Admission DDCF (having consulted with DDCM)
reasonably believes that:
22
17.1.1 any of the Warranties is untrue or misleading in any material
respect; or
17.1.2 the Company, any Director or TDYT is in breach of any of its
obligations under this agreement which is material in the
context of the Placing and which is not readily remediable and
so remedied; or
17.1.3 an event or other matter has occurred, or is likely to occur
and which:
17.1.3.1 makes (or would make if it occurs) any of the
Warranties untrue or misleading in any material
respect if repeated by reference to the facts or
circumstances in existence at any time up to and
including Admission (notwithstanding any
communication or announcement from the Company); or
17.1.3.2 constitutes (or will constitute if it occurs) a
material new factor, mistake or inaccuracy; or
17.1.3.3 is (or will be if it occurs) material in the context
of any assumption or other matter relevant to any
statement about the Company's prospects in the
Admission Document; or
17.1.4 a requirement to publish a Supplementary Admission Document
has arisen; or
17.1.5 an event or other matter (including, without limitation, any
change or development in economic, financial, political,
diplomatic or other market conditions or any change in any
government regulation) has occurred or is likely to occur
which, in the reasonable opinion of DDCF, is (or will be if it
occurs) likely materially and prejudicially to affect the
business of the Group, or otherwise makes it impractical or
inadvisable for DDCF or DDCM to perform their obligations
under this agreement (and for these purposes "market
conditions" includes conditions affecting securities in the
business sector in which the Company operates and conditions
affecting securities generally)
DDCF may (after such consultation with the Company as the circumstances
shall permit) terminate all of its obligations under this agreement
which remain unperformed by giving notice of termination to the Company
in accordance with clause 17.2.
17.2 A notice of termination may be served in accordance with clause 23, and
on the day that Admission is proposed to take place and on the day
prior to such day only, notice of termination may be given orally
(including by telephone) to any Director. If a notice of termination is
given orally, DDCF shall as soon as possible deliver or send a notice
in writing to the Company and DDCM in accordance with clause 23
confirming that the notice of termination was given, and specifying the
time and date of the termination and the names of the director (or
managing director) of DDCF and the Director involved.
17.3 If this agreement is terminated:
17.3.1 subject to paragraph 17.3.2 no party shall have any claim
against any other party in respect of any act, matter or thing
arising out of or in connection with
23
this agreement for compensation, costs or damages except that
any such cessation or termination shall be without prejudice
to any accrued rights or obligations of any party;
17.3.2 a termination notice shall not affect any of DDCF's or DDCM's
rights in connection with any breach of this agreement or any
of their rights under clause 15 (indemnity);
17.3.3 DDCM shall within 5 business days of the date of termination
return all monies (if any) received from Placees pursuant to
the Placing; and
17.3.4 clauses 1 (definitions and interpretation), 6 (announcements),
12 (Fees), 13 (VAT), 15 (exclusion of liability and
indemnity), 16 (limits on liability), 17.3 (this clause), 21
(third party rights), 23 (notices) and 25 to 30 (supplemental)
shall remain in full force and effect.
18. SERVICE AGREEMENTS
18.1 The service agreements referred to in this clause are those referred to
in the Admission Document as having been entered into between the
Company and any Director, and as subsequently amended and/or
superseded.
18.2 The Company undertakes to DDCF that during the period commencing on the
date of this agreement and ending on 12 months after Admission, except
with the prior written consent of DDCF, the Company shall not agree to
any increase in salary or other benefits under any service agreement or
to any Director being released from any material obligation or
liability arising under any service agreement.
18.3 Where the employer under a service agreement is not the Company but
another Group Company, clause 18.2 shall apply as if the references to
the Company are references to that other Group Company, and the Company
had undertaken to procure compliance by that other Group Company with
that clause.
19. CONTINUING OBLIGATIONS
19.1 The Company and each of the Directors (while he remains a director of
the Company) shall comply with the statutory requirements referred to
in clause 19.2, the requirements of the AIM Rules, the CREST Rules and
other requirements relating to CREST, the requirements of the City Code
which affect the Company or (as the case may be) its directors and any
other requirements from time to time in force in relation to companies
whose share are admitted to trading on AIM.
19.2 The statutory requirements for the purposes of clause 19.1 are those of
the Act, Part V of the Criminal Justice Act 1993, FSMA and the CREST
Regulations.
19.3 The Company, the Directors and TDYT, acknowledge that the Ordinary
Shares have not been and will not be registered under the US Securities
Act and have not been and will not be offered or sold within the United
States except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the US Securities Act.
24
Each of the Company, TDYT, the Directors confirms that it or he has
not, nor any persons acting on its or his behalf have, engaged and
undertakes that it or he will not, nor will any persons acting on its
or his behalf, engage in any directed selling efforts (as defined in
Regulation S under the US Securities Act) with respect to the Placing
Shares and has not made nor will make, directly or indirectly, offers
or sales of the Placing Shares in the United States or solicit offers
to buy or otherwise negotiate in connection with the Placing Shares in
the United States.
19.4 The Company agrees not to recognise (and to instruct its agents not to
effect transfer) any attempted sale, pledge, or other purported
transfer of any Placing Share that is in violation of (i) the transfer
restrictions relating to the Placing Shares which are set out in the
section in Part IV of the Admission Document entitled "Transfer
Restrictions"; (ii) the US Securities Act and (iii) any applicable law
or jurisdiction of the United States governing the offer and sale of
securities.
19.5 The Company undertakes to DDCF and DDCM to apply for the admission of
the Ordinary Shares to paperless settlement of trades and the holding
of Ordinary Shares in uncertified form in CREST, being the relevant
system administered by CRESTCo, on or as soon as reasonably practicable
after the date which is the later of (a) the time when the Placing
Shares are first offered to persons other than distributors in reliance
upon Regulation S of the US Securities Act and (b) the anniversary of
the date of Admission.
19.6 The Company undertakes to DDCF that between the date of this agreement
and the Announcement Date:
19.6.1 it will inform DDCF if any person is appointed, or ceases to
be, a director of the Company or if the Board has made any
determination in respect of an appointment or removal;
19.6.2 it will not without the prior written consent of DDCF (not to
be unreasonably withheld) enter into any agreement or
arrangement or knowingly do or permit to be done any other act
or thing which, in any case would:
19.6.2.1 give rise to any obligation to make an announcement
to the London Stock Exchange; or
19.6.2.2 involve any increase in or obligation (whether
contingent or otherwise) to allot any of the share
capital of the Company save for grants or exercise of
share options within limits described in the
Admission Document; and
19.6.3 it will not take any steps which, in the reasonable opinion of
DDCF, would be materially inconsistent with any expression of
policy or intention in the Admission Document or any
Supplementary Admission Document.
19.7 Each Director will take reasonable steps to ensure that until the
Announcement Date no person will be appointed as a director of the
Company unless he has first executed an undertaking with DDCF (in such
terms as DDCF may reasonably require) to comply with the continuing
obligations of the Directors under this clause 19 of this agreement.
25
19.8 The Company undertakes to DDCF that it shall, at all times from and
including the date of this agreement until the Announcement Date, as
soon as practicable:
19.8.1 provide DDCF with such financial and other information
concerning the Group Companies as DDCF may from time to time
reasonably require;
19.8.2 notify and discuss with DDCF in advance any public statement
or document which any Group Company proposes to make or
publish and which relates to the financial affairs, condition,
trading or financial prospects or dividend policy of the Group
or to any acquisition, disposal, re-organisation, take-over,
merger or other scheme (including a profit sharing scheme or a
share option scheme);
19.8.3 notify and discuss with DDCF in advance other information
which the Company may be required to notify to a Regulatory
Information Service (as defined in the AIM Rules) in
accordance with the AIM Rules; and
19.8.4 forward to DDCF for its prior perusal and written approval
(which shall not be unreasonably withheld or delayed) proofs
of all documents to be despatched to holders of the Company's
securities and documents relating to takeovers, mergers,
reorganisations or other schemes (including without limitation
employee profit sharing schemes or share option schemes) and
all press announcements (other than routine trade press
announcements).
19.8.5 The Company undertakes to DDCF to use all reasonable
endeavours to appoint two UK based independent non executive
directors (the identities of whom have been approved by DDCF,
such approval not to be unreasonably withheld) as soon as
possible and in any event within three months of Admission.
20. UNDERTAKINGS WITH RESPECT TO SHARES
20.1 Each of the Directors undertakes to the Company and DDCF and DDCM not:
20.1.1 to apply for, and to procure that no person connected with him
or it applies for, any of the Placing Shares; or
20.1.2 (other than pursuant to the Placing) to dispose of, or agree
to dispose of, and to procure that no person connected with
him or it disposes of, or agrees to dispose of, any interest
in any Ordinary Shares for the time being owned by such person
(in each case other than under this agreement) at any time
before Admission; or
20.1.3 to dispose of, and to procure that no person connected with
him or it disposes of, or agrees to dispose of, any interest
in any Ordinary Shares for the time being owned by such person
(in each case other than pursuant to this agreement) at any
time before the date falling 12 months from the date of
Admission; or
26
20.1.4 for a period of 12 months following the date of the
anniversary of Admission, and shall procure that all persons
connected with him or it, shall not for a period of 12 months
following the date of the anniversary of Admission, dispose of
any Ordinary Shares (or any interest in Ordinary Shares)
otherwise than through DDCM
except with the prior written consent of DDCF.
20.2 TDYT undertakes to the Company and DDCF and DDCM not:
20.2.1 to apply for any of the Placing Shares; or
20.2.2 (other than pursuant to the Placing) to dispose of, or agree
to dispose of, and to procure that no person connected with it
disposes of, or agrees to dispose of, any interest in any
Ordinary Shares for the time being owned by such person (in
each case other than under this agreement) at any time before
Admission; or
20.2.3 for a period of 24 months following the date of Admission, and
shall procure that all persons connected with it, shall not
for a period of 24 months following the date of Admission,
dispose of any Ordinary Shares (or any interest in Ordinary
Shares) otherwise than through DDCM
except with the prior written consent of DDCF.
20.3 For the purposes of this clause 20:
20.3.1 a reference to any interest in any Ordinary Shares includes
any interest created under a mortgage, charge or assignment of
that share and any interest in, or right relating to, shares
in the Company arising as a result of any capitalisation
issue, rights issue or open offer by the Company or any
consolidation or sub-division of its shares; and
20.3.2 (notwithstanding the provisions of clause 1.3 and in addition
to the provisions of clause 1.3) a person is "connected" with
a Director if that Director would have to notify the Company
in respect of the interests of that person under sections 324
or 328 of the Act.
20.4 The restrictions contained in clause 20.1 shall not apply:
20.4.1 to a transfer or disposal by way of gift:
20.4.1.1 to a member of the family of the transferor (meaning
the wife, husband, parents, widow, widower, brother,
cohabitee, adult child or grandchild (including a
child or grandchild by adoption) of the transferor
concerned);
20.4.1.2 to any person or persons acting in the capacity of
trustee or trustees of a trust created by the
transferor or, upon any change of trustees of a trust
so created, to the new trustee or trustees,
27
provided that the trust is established for charitable
purposes or there are no persons beneficially
interested under the trust other than the transferor
and members of the family (which for these purposes
shall mean the individuals set out in clause
20.3.1.1) of the transferor; or
20.4.1.3 by the trustee or trustees of a trust to which clause
20.4.1.2 applies to any person beneficially
interested under the trust
provided that, prior to the making of any such transfer, the
relevant transferee or trustee or trustees has satisfied DDCF
that the transferee falls within one of the categories listed
in this clause 20.4.1 and the transferee has agreed in terms
reasonably acceptable to DDCF to be bound by the provisions of
clause 20.1 as if it were the relevant transferor;
20.4.2 to an acceptance of a general offer (or giving an irrevocable
undertaking to accept an offer) for the share capital of the
Company made in accordance with the City Code which has either
been recommended by the Directors or has become unconditional
as to acceptances;
20.4.3 to any compromise or arrangement under section 425 of the Act
providing for the acquisition by any person (or group of
persons acting in concert) of 50 per cent or more of the
equity share capital of the Company;
20.4.4 to any scheme of reconstruction under section 110 of the
Insolvency Act 1986 in relation to the Company;
20.4.5 to any disposal or agreement to dispose of an interest in
Ordinary Shares of which DDCF has previously approved in
writing and DDCF will not unreasonably withhold its approval
where the Director or selling shareholder can demonstrate
genuine financial hardship; or
20.4.6 to any disposal to fund a payment obligation (other than
commissions) under this agreement.
20.5 Each of the Directors undertakes that he will not and will procure that
no Connected Person, within the meaning of Section 839 Income and
Corporation Taxes Act 1988, shall:
20.5.1 dispose of any interest in any shares in the common stock of
TDYT for a period of 12 months from the date of Admission; nor
20.5.2 dispose of any such interest for a period of 12 months
thereafter except with the prior written consent of DDCF,
which consent shall not be unreasonably withheld or delayed,
and for these purposes, the expression "dispose" shall extend to any
sale, transfer, charge, pledge, encumbrance or grant of any option over
or in respect of or an agreement to do any of these things (whether
oral or in writing).
28
21. THIRD PARTY RIGHTS
21.1 Subject to and in accordance with clauses 21.2 and 21.3, each Protected
Person may rely upon and enforce the terms of clause 15 against the
Company, each Director and TDYT.
21.2 The rights referred to in clause 21.1 (or otherwise expressly provided
in this agreement) may only be enforced by the relevant third party
with the written consent of DDCF and subject to and in accordance with
the provisions of the Contracts (Rights of Third Parties) Act 1999 (the
"1999 ACT") and all other relevant terms of this agreement.
21.3 Notwithstanding any other provision of this agreement (including
without limitation clause 21.1) the parties may amend any of the
provisions of this agreement in accordance with clause 25 and without
the consent of any third party, and accordingly section 2(1) of the
1999 Act shall not apply.
21.4 Save as provided in clause 21.1, a person who is not a party to this
agreement shall have no rights under the 1999 Act to enforce any term
of this agreement but this does not affect any right or remedy of a
third party which exists or is available apart from that Act.
22. TIME OF THE ESSENCE
Any time, date or period specified in this agreement may be extended by
written agreement in accordance with clause 25 but, as regards any
time, date or period originally fixed or so extended, time shall be of
the essence.
23. NOTICES
23.1 Any notice or other communication given or made under this agreement
shall be in writing and shall be delivered by hand or fax to the
address and for the attention of the relevant party set out in clause
23.3 (or as otherwise notified by that party in accordance with that
clause).
23.2 Any such notice shall be deemed to have been received:
23.2.1 if delivered by hand, at the time of delivery; or
23.2.2 if delivered by fax, at the time of transmission
provided that if deemed receipt occurs before 9.00 a.m. on a business
day the notice shall be deemed to have been received at 9.00 a.m. on
that day, and if deemed receipt occurs after 5.00 p.m. on a business
day, or on any day which is not a business day, the notice shall be
deemed to have been received at 9.00 a.m. on the next business day.
29
23.3 The addresses and fax numbers of the parties for the purposes of clause
23.1 are:
THE COMPANY, THE DIRECTORS AND TDYT:
Address: ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
For the attention of: ▇▇▇▇▇ ▇▇▇▇▇ (for the Company and the Directors)/
▇▇▇▇▇▇ ▇▇▇▇▇▇ (for TDYT)
Fax number: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
DDCF:
Address: ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
For the attention of: ▇▇▇ ▇▇▇▇▇▇▇▇
Fax number: ▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
DDCM:
Address: ▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
For the attention of: ▇▇▇▇▇ ▇▇▇▇▇
Fax number: ▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
or such other address or fax number as may be notified in writing from
time to time by the relevant party to the other parties. Any such
change to the place or fax number of service shall take effect five
business days after notice of the change is received or (if later) on
the date (if any) specified in the notice as the date on which the
change is to take place.
23.4 In proving service it shall be sufficient to prove that the envelope
containing the notice was properly addressed and delivered or, in the
case of fax, that the fax was properly addressed and disclosed the
number of pages transmitted on its front sheet and that the
transmission report indicates that each of the pages of the fax were
received at the relevant fax number.
24. FURTHER ASSURANCE
24.1 The Company undertakes to DDCF and DDCM that it will take all
reasonable steps to ensure that each Group Company complies with those
provisions of this agreement which are applicable to that Group
Company.
30
24.2 The Company, each Director and TDYT severally agrees and undertakes
with DDCF and DDCM that it or he will give all such assistance and
provide all such information as DDCF and DDCM may reasonably require
for the purposes of this agreement and the Placing.
25. AMENDMENTS
25.1 This agreement may be amended by agreement in writing signed by the
Company, the Directors, TDYT and any director (or managing director) of
DDCF and DDCM on their behalf.
25.2 This clause 25 also applies to any document in an agreed form (and
including without limitation the documents listed in schedule 4) and to
any amending agreement entered into under this clause.
26. ▇▇▇▇▇▇▇ AND REMEDIES
26.1 The failure to exercise or delay in exercising a right or remedy
provided by this agreement or by law does not constitute a waiver of
the right or remedy or a waiver of other rights or remedies.
26.2 A release, waiver or compromise or other arrangement of any kind which
any person may agree to or effect as regards a breach of any of the
terms of this agreement or of a default under this agreement will not
prevent a party from subsequently requiring compliance with the waived
obligation and does not constitute a waiver of any other breach or
default and shall not affect the other terms of this agreement.
26.3 The rights and remedies provided by this agreement are cumulative and
(subject as otherwise provided in this agreement) are not exclusive of
any rights or remedies available provided by law.
27. ASSIGNMENT
No party shall assign or transfer any rights or obligations under this
agreement, or purport to do the same, or sub-contract any of its
obligations under this agreement without the prior written consent of
the other parties.
28. ENTIRE AGREEMENT
This agreement and the Engagement Letter between the Company, DDCF and
DDCM in relation to the Placing, constitute the entire agreement and
understanding between the parties in connection with the Placing and
supersedes any previous agreement between the parties relating to the
subject matter of this agreement. The provisions of the Engagement
Letter regarding fees in the event of Admission occurring are
superseded by this agreement.
29. GOVERNING LAW AND JURISDICTION
29.1 The validity, construction and performance of this agreement shall be
governed by and construed in accordance with the law of England and
Wales.
31
29.2 The parties to this agreement irrevocably agree that the courts of
England and Wales shall have exclusive jurisdiction over any claim or
matter arising under or in connection with this agreement or the legal
relationships established by this agreement and that accordingly any
proceedings in respect of any such claim or matter may be brought in
such courts. Nothing in this clause shall limit the right of DDCF or
DDCM to take proceedings against the Company and any Warrantor in any
other court of competent jurisdiction, nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction or jurisdictions, whether
concurrently or not, to the extent permitted by the law of such other
jurisdiction or jurisdictions.
29.3 Each Director not resident in the UK and TDYT irrevocably appoints
Jordans Limited of ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ as its agent to
receive on its behalf in England service of any proceedings arising out
of or in connection with this agreement or the legal relationships
established by this agreement. Such service shall be deemed completed
on delivery to such agent (whether or not it is forwarded to and
received by the relevant party).
30. EXCLUSION OF CLIENT RELATIONSHIP
Each of the parties hereto (other than the Company) acknowledges that
DDCF and DDCM are acting in an advisory capacity for the Company in
connection with the application for Admission and the Placing and no
one else, and accordingly will not be responsible to any party to this
agreement (other than the Company) nor to any other person for
providing protections afforded to their respective clients under the
FSA Handbook or advising any party to this agreement (other than the
Company) or any other person in connection with the application for
Admission and the Placing.
31. EXECUTION
This agreement may be executed in any number of counterparts and by the
parties to it in separate counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument.
This agreement has been executed by the parties to it as a deed on the date at
the top of page 1.
32
SCHEDULE 1
THE DIRECTORS
PART I: THE EXECUTIVE DIRECTORS
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
both of 651 Day Hill, Windsor, Connecticut 06095, United States of America
PART II: THE NON-EXECUTIVE DIRECTOR
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
of 651 Day Hill, Windsor, Connecticut 06095, United States of America
33
SCHEDULE 2
WARRANTIES
PART I
THE WARRANTIES IN THIS SCHEDULE ARE GIVEN SAVE TO THE EXTENT EXPRESSLY DISCLOSED
AND STATED TO THE CONTRARY IN THE ADMISSION DOCUMENT.
1. GENERAL INFORMATION
1.1 All of the factual information supplied by or on behalf of the Company
to DDCF and DDCM for the purposes of or in connection with the
arrangements contemplated by this agreement and the Placing is true,
and accurate in all material respects and all forecasts and estimates
supplied by or on behalf of the Company have been made after due and
proper consideration, are fair and honest and represent reasonable
expectations based on facts known or which, on reasonable enquiry,
should have been known to the Warrantors.
1.2 The information contained in the application for Admission is true and
accurate in all respects.
1.3 The Due Diligence Reports have been carefully considered by the
Warrantors and:
1.3.1 insofar as they contain statements of fact and, insofar as the
Warrantors are aware, those statements of fact are true,
accurate and not misleading in any material respect;
1.3.2 none of the Warrantors disagree in any material respect with
the statements of opinion or belief contained in them and the
opinions attributed to the Company and/or its Directors in the
Due Diligence Reports are honestly held, fairly based, have
been made on reasonable grounds and are capable of being
properly supported; and
1.3.3 there are no facts known to the Warrantors which have not been
taken into account in the preparation of the Due Diligence
Reports which would have a material effect on them.
2. THE INVESTOR PRESENTATION AND THE ADMISSION DOCUMENT
2.1 Each statement of fact contained in the Investor Presentation and/or
the Admission Document is true, accurate and not misleading in any
material respect. Each estimate and expression of opinion, belief,
intention or expectation contained in the Investor Presentation and/or
Admission Document is made on reasonable grounds after due and proper
consideration of all information currently available to the Warrantors,
is honestly held and fairly based upon facts within the knowledge of
the Company and the Directors and can properly be supported.
2.2 There are no other facts or considerations of which the Warrantors are
aware, or which they could on reasonable enquiry have been made aware
of, which are not disclosed in
34
the Admission Document, the omission of which would make any statement
in the Admission Document misleading in any material respect or which
would affect the import of any information contained in them or which
in the context of the Placing would be material for disclosure to DDCF,
DDCM or to prospective subscribers or purchasers of any of the Ordinary
Shares.
2.3 The Admission Document contains all the particulars required to comply
with all statutory and other legal provisions of the United Kingdom and
any other relevant jurisdiction, the rules and requirements of the AIM
Rules and, in particular (but without limitation), all such information
as investors and their professional advisers would reasonably require,
and reasonably expect to find there, for the purpose of making an
informed assessment of the assets and liabilities, financial position,
profits and losses, and prospects of the Company and of the Group and
of the rights attaching to the Ordinary Shares.
2.4 All statements of fact contained in any Supplementary Admission
Document will be true, accurate and not misleading and all forecasts,
estimates and expressions of opinion, belief, intention or expectation
contained in any Supplementary Admission Document will be made on
reasonable grounds after due and proper consideration, will be honestly
held and fairly based and will be capable of being properly supported.
There will be no other facts known or which could on reasonable inquiry
have been known to the Director, the omission of which would make any
such statement or expression in any such Supplementary Admission
Document misleading in any material respect.
2.5 If any Supplementary Admission Document is published, the Admission
Document, together with the Supplementary Admission Document, will
contain all such information as investors and their professional
advisers would reasonably require, and reasonably expect to find there,
for the purpose of making an informed assessment of the assets and
liabilities, financial position, profits and losses and prospects of
the company and of the Group and of the rights attaching to the
Ordinary Shares.
2.6 The representations and warranties set out above in paragraphs 2.1 -
2.4 of this Part I of schedule 2 were true in relation to the
Pathfinder Admission Document on the date of its issue.
3. FINANCIAL STATEMENTS AND INTERIM RESULTS
3.1 The Financial Statements:
3.1.1 give a true and fair view of the profits (or losses) and state
of affairs of the Group as at the relevant balance sheet date
and for the financial period ended on that date;
3.1.2 accurately state the assets, liabilities (including contingent
liabilities whether for taxation or otherwise), reserves,
profits (or losses), cashflows and state of affairs of the
Group as at the relevant balance sheet date and for the
financial period ended on that date; and
3.1.3 have been prepared in accordance with the International
Financial Reporting Standards and United States generally
accepted accounting principles.
35
3.2 The profits (or losses) of the Group as disclosed in the Financial
Statements were not affected by any matter rendering those profits
unusually high (or low).
3.3 The Interim Results were prepared with all due care and attention and
have been properly compiled on a basis consistent with the accounting
policies and principles applied in the preparation of the Financial
Statements for the financial period which ended on the Accounts Date,
except in so far as inappropriate in respect of the preparation of
interim results and contained a true and fair statement of the
turnover, profit before tax and profit after tax of Turbotec Products,
Inc. for the 9 months ended on that date.
3.4 The pro-forma statement of net assets set out at Part VII of the
Admission Document has been properly compiled on the basis set out in
the Admission Document and such basis is consistent with the accounting
policies of the Company and the adjustments are appropriate for the
purposes of such pro forma net assets statement.
3.5 The Directors have established procedures which provide a reasonable
basis for them to make proper judgements as to the financial position
and prospects of the Company and the Group and have had explained to
them by DDCF or another appropriate professional adviser the nature of
their responsibilities and obligations as directors of a company
admitted to trading on AIM under the AIM Rules.
4. LONG FORM REPORT
4.1 All information requested from the Company or any Group Company by the
Reporting Accountants or by DDCF or by DDCM for the purpose of
preparing the Long Form Report has been supplied to them.
4.2 The Long Form Report has been carefully considered by the Warrantors
and:
4.2.1 insofar as it contains statements of fact and, insofar as the
Warrantors are aware, those statements of fact are true,
accurate and not misleading in any material respect;
4.2.2 the expressions of opinion, belief, intention or expectation
contained in the Long Form Report and attributed to the
Company or the Directors (or any of them) have been made on
reasonable grounds after due and proper consideration of all
information currently available to the Company and the
Directors, are honestly held and fairly based upon facts
within the knowledge of the Company and the Directors and
capable of being properly supported; and
4.2.3 there are no facts known to the Warrantors which have not been
taken into account in the preparation of the Long Form Report
which could reasonably be expected to have a material effect
on it.
5. WORKING CAPITAL AND INDEBTEDNESS
5.1 No Group Company has any off balance sheet financing, investment or
liability material for disclosure in the Admission Document.
36
5.2 No Group Company has any indebtedness in respect of borrowed monies.
5.3 All information requested from the Company or any Group Company by the
Reporting Accountants or by DDCF for the purpose of reviewing the
working capital requirements of the Group has been supplied to them.
5.4 The Working Capital Report has been properly compiled after due and
careful enquiry and on the basis and assumptions stated in it which the
Warrantors believe to be reasonable and:
5.4.1 insofar as it contains statements of fact, and insofar as the
Warrantors are aware, those statements of fact are true,
accurate and not misleading in any material respect;
5.4.2 the expressions of opinion, belief, intention or expectation
contained in the Working Capital Report and attributed to the
Company or the Directors (or any of them) have been made on
reasonable grounds after due and proper consideration, are
honestly held and fairly based and capable of being properly
supported;
5.4.3 there are no facts known to the Warrantors which have not been
taken into account in the preparation of the Working Capital
Report which could reasonably be expected to have a material
effect on it; and
5.4.4 after due and careful enquiry, the Group will have sufficient
working capital for its present and reasonably foreseeable
future requirements (including, at least, the next 12 months).
5.5 No circumstances have arisen nor, so far as the Warrantors are aware,
are about to arise, which would entitle any person to require payment
of any indebtedness in respect of borrowed monies of any Group Company
before its stated maturity and, without prejudice to the generality of
the foregoing, no event has occurred and is subsisting nor, so far as
the Company or the Directors are aware, is about to occur which
constitutes or would, with the giving of notice, constitute an
infringement or default or entitle termination or acceleration of any
obligation under any agreement, undertaking, instrument or arrangement
to which any Group Company is a party or by which it or any of them or
any of their respective properties, revenues and assets are bound and
which would in any such case have a material adverse effect on the
overall business, assets, prospects or condition of the Group taken as
a whole.
6. TRADING SINCE THE ACCOUNTS DATE
Save as referred to in the Admission Document, since the Accounts Date;
6.1 each Group Company has carried on business in the ordinary and usual
course and in all material respects in the same manner as before that
date;
6.2 so far as the Company and the Directors are aware, there has not been
any significant or material adverse change in the financial or trading
position of any Group Company;
37
6.3 there has been no material depletion in the net assets of any Group
Company;
6.4 no contract or commitment (whether in respect of capital expenditure or
otherwise) has been entered into by any Group Company which is of a
long-term or unusual nature or which involves an obligation of a
material magnitude (otherwise than in the ordinary course of business)
and which is material for disclosure;
6.5 no dividends or other distributions have been declared, paid or made by
the Company or any Group Company (other than by a wholly owned
subsidiary to its parent undertaking or those in respect of which
provision was made in the latest accounts of the relevant Group
Company);
6.6 no Group Company has acquired or disposed of or agreed to acquire or
dispose of any material company, business or any other material asset
or assumed or acquired any material liabilities (including contingent
liabilities) otherwise than in the ordinary course of business; and
6.7 there has been no material loss or interference with the business of
any Group Company from fire, explosion, flood or for any other reason,
whether or not covered by insurance, or from any labour dispute or
court or government action, order or decree.
7. DIRECTORS
7.1 The Directors are, or following Admission becoming effective will be,
all the directors of the Company and there is no other person who is a
shadow director of the Company or any Group Company within the meaning
of the Act.
7.2 The Warrantors are satisfied that procedures exist which provide a
reasonable basis for them to make proper judgements as to the financial
position and prospects of the Group.
8. LITIGATION AND INVESTIGATIONS
No Group Company nor any person for whom any of them is or may be
vicariously liable has any claims outstanding against them or is
engaged in litigation or arbitration which, individually or
collectively, may have or have had during the 12 months prior to the
date of this agreement a material adverse effect on the financial
position of the Group or which, individually or collectively, in the
context of the Placing are material for disclosure to a subscriber for
and/or purchaser of the Placing Shares and, so far as the Warrantors
are aware, no such litigation, arbitration or similar proceedings or
any such investigation or enquiry is pending or threatened and, nor so
far as the Company is aware, are there any circumstances which are
likely to give rise to any such proceedings, investigation or enquiry.
9. CONTRACTS/COMMITMENTS
9.1 No Group Company is a party to or subject to any contract or commitment
of a nature which is onerous or unusual and which has been entered into
other than in the ordinary course of business.
38
9.2 The Warrantors are not aware of the invalidity or grounds for
rescission, avoidance or repudiation of any material agreement or other
material transaction to which any Group Company is a party or any
circumstances likely to give rise to the same and no Group Company has
received notice of any intention to terminate any such agreement or
repudiate or disclaim any such transaction and, so far as the Company
is aware, no material contract or arrangement to which any Group
Company is a party will be determined or adversely affected as a result
of Admission and/or the Placing.
9.3 No Group Company is a party to any restrictive trading or other
agreement or arrangement which in any way infringes, or which has or
should have been registered or notified under UK competition laws,
Article 81 or 82 of the Treaty of Rome or any other applicable anti
trust or anti monopoly legislation.
9.4 No Group Company is actually or contingently liable as an original
contracting party to or as guarantor of any party to, or otherwise
contractually liable in respect of, any lease or leasehold property or
licence connected with any such lease or leasehold property other than
the Property.
9.5 No Group Company has entered into nor has it any liability under any
guarantee, indemnity or other agreement to secure an obligation of a
third party (other than another Group Company) under which any
liability or contingent liability is outstanding.
10. DIRECTORS' AND SHAREHOLDERS' INTERESTS
10.1 There are no contracts or arrangements to which any Group Company is a
party and in which any of the Directors is or has been interested,
whether directly or indirectly (save for the service contracts or
letters of engagement of the Directors which are in the agreed form)
and which remain outstanding or unperformed in any respect.
10.2 There are no agreements or understandings (whether legally enforceable
or not) between any Group Company and any person who is a shareholder
or the beneficial owner of any interest in the share capital of the
Company or any Group Company relating to the management of any Group
Company's business, to the appointment or removal of its directors, to
the ownership or transfer of ownership or the letting of any Group
Company's assets, to the provision of finance, goods, services or other
facilities to or by any Group Company save for the service contracts of
the Directors which are in the agreed form.
10.3 There are no options or other arrangements in force, and no person has
claimed that there are options or arrangements in force, which require,
whether conditionally or unconditionally, or confer any right to
require, the issue of, or conversion of any security into, any shares,
debentures or other securities of any Group Company now or at any time
after the date of this agreement.
11. BUSINESS
Each Group Company has been duly incorporated, has full corporate power
and authority to carry on its activities in the ordinary course of
business and has obtained all material licences, permissions,
authorisations and consents required for the carrying on of its
business and such licences, permissions, authorisations and consents
are in full force
39
and effect and, so far as the Warrantors are aware, there are no
circumstances which indicate that any of such licences, permissions,
authorisations or consents which is material in the context of the
relevant Group Company's business as a whole will be revoked or not
renewed, in whole or in part, in the ordinary course of events; and
each Group Company has complied in all material respects with all legal
and other requirements applicable to its business.
12. PROPERTY
The only interests of the Group in any real property are as stated in
the Admission Document.
13. ENVIRONMENT
13.1 For the purposes of this paragraph:
"DANGEROUS SUBSTANCE" means any waste, substance (whether in solid
or liquid or gaseous form and either alone
or in combination with any other, waste,
substance, or article) which is likely to
cause harm to human health or the
environment;
"ENVIRONMENTAL LAW" means all statutes, common law, bylaws,
regulations, directives, codes of practice,
circulars, guidance notices and the like
concerning the protection of the environment
or the generation, transportation, storage,
treatment or disposal of Dangerous
Substances; and
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation,
consent or other approval required by any
Environmental Law.
13.2 Each Group Company is and has been in compliance in all material
respects with all applicable Environmental Law and the terms of all
Environmental Licences. No Group Company has received written notice or
communication that it may be in violation of any Environmental Law or
that any Environmental Licence may be subject to modification or
revocation. No Group Company is or has been, or is as far as the
Company or the Executive Directors are aware likely to become, the
subject of any material litigation or any material judgement concerning
any Environmental Law or Environmental Licence.
14. TAX
14.1 Each Group Company has, within any applicable time limit, duly made all
returns, given all notices and supplied all other information required
to be made, given or supplied to any applicable Tax authority; all such
returns, notices and information were and remain true and accurate in
all material respects and were made on a proper basis to the best of
the Directors' knowledge.
14.2 No Group Company is involved in any dispute with, or subject to any
investigation by, any Tax authority and so far as the Company and the
Warrantors are aware there are no facts or circumstances which are
likely to give rise to any such dispute or investigation.
40
14.3 Each payment made by any Group Company to any person required to be
made under deduction of Tax has been so made after deduction of such
Tax and such Group Company has, where appropriate, duly accounted to
the relevant Tax authority for such Tax.
14.4 All national insurance contributions and sums due and payable by any
Group Company in respect of the employment or engagement of any person
have been paid to all appropriate Tax authorities.
14.5 Proper provision or reserve is made in the Financial Statements for all
Tax liable to be assessed on the Group Companies or for which it is or
may become accountable in respect of any period ended on or before the
Interim Accounts Date.
14.6 All clearances and consents required to be obtained from any Tax
authority by any Group Company in the last three years were based on
full and accurate disclosure of all the facts and circumstances
material to the decision of the relevant Tax authority.
14.7 All documents in the possession of a Group Company or to the production
of which it is entitled and which attract stamp or transfer duty in the
United Kingdom or elsewhere have been properly stamped.
14.8 All Tax for which each member of the Group is liable has been paid and
accounted for to the relevant Tax authority.
15. SHARE CAPITAL
15.1 All sums due in respect of the issued share capital of the Company
(including the Sale Shares) have been paid to and received by the
Company.
15.2 The Company and the Directors had all necessary powers to create and
allot the Ordinary Shares (including the Sale Shares) and the creation
and the allotment of those shares complied with the Memorandum and
Articles of Association of the Company, the Act, FSMA and all other
applicable laws, rules and regulations of the United Kingdom and with
all agreements to which the Company is a party or by which it or its
property is bound and no person has the right (whether exercisable now
or in the future and whether contingent or not) to call for the
allotment, conversion, issue, sale or transfer of any share or loan
capital or any other security giving rise to a right over the capital
of any Group Company under any option or other agreement (including
conversion rights and rights of pre-emption).
15.3 There are no options or other arrangements in force which require,
whether conditionally or unconditionally, or confer any right to
acquire, the issue of any shares or other securities of any Group
Company now or at any time after the date of this Agreement.
15.4 No Group Company has at any time purchased its own shares or redeemed
or forfeited any shares, or agreed to do so, or granted an option
whereby it might become liable to do so.
41
15.5 No share in the capital of any Group Company has been allotted at a
discount or otherwise than as fully paid.
15.6 The allotment of Ordinary Shares to TDYT under the Share Exchange
Agreement was proper and valid, credited as fully paid and complied
with the memorandum and Articles of Association of the Company, the
Act, FSMA and all other applicable laws, rules and regulations of the
United Kingdom and with all agreements to which the Company is a party
or by which it or its property is bound.
16. SUBSCRIPTION SHARES
16.1 The allotment and issue of the Subscription Shares in accordance with
this agreement, the payment by the Company of the fees provided for in
clause 12.1 and the publication and despatch of the Placing Documents
will comply with the Memorandum and Articles of Association of the
Company, the Act, FSMA, the AIM Rules, the rules and regulations of the
London Stock Exchange and all other applicable laws, rules and
regulations of the United Kingdom, United States and any other relevant
jurisdiction, and with all agreements to which each Group Company is a
party or by which it or its property is bound.
16.2 The Company's performance of its obligations under this agreement will
not infringe any borrowing limits or restrictions or the terms of any
contract, obligations or commitment by the Company and all
authorisations, approvals, consents and licences required by the
Company for the entering into of this agreement (other than as
contemplated in this agreement or in the Placing Documents) have been
unconditionally obtained and are in full force and effect.
16.3 The Company and the Directors have all necessary powers to create,
allot and issue the Subscription Shares and to pay the fees in the
manner proposed and to enter into this agreement without any sanction
or consent by members of any Group Company or any class of them or any
other person and there are no other consents, authorisations, approvals
or licences required by the Company for the entering into or completion
of this agreement which have not been unconditionally obtained and are
in full force and effect.
17. SALE SHARES
17.1 The sale of the Sale Shares in accordance with this agreement and the
payment by TDYT of the fees provided for in clause 12.3 will comply
with the Memorandum and Articles of Association of the Company, the
Act, FSMA, the AIM Rules, the rules and regulations of the London Stock
Exchange and all other applicable laws, rules and regulations of the
United Kingdom, the United States and any other relevant jurisdiction,
and with all agreements to which TDYT is a party or by which it or its
property is bound.
17.2 The sale of Sale Shares will not, and is not likely to, conflict with
or result in a breach of or constitute a default under any agreement,
arrangement or instrument to which any Group Company is now a party nor
give rise to any obligation under any such agreement, arrangement or
instrument which is inconsistent with the acquisition by any purchaser
or subscriber (as the case may be) of valid unencumbered title to any
such Sale Shares.
42
18. INSOLVENCY
No order has been made or petition or application presented or
resolution passed for the winding-up of any Group Company or for an
administration order in relation to any Group Company and no notice of
intention to appoint or notice of appointment of an administrator has
been presented or served in respect of any Group Company. No distress,
execution or other process has been levied on any of the assets of any
Group Company and neither is any member of the Group insolvent or
unable to pay its debts for the purposes of section 123 of the
Insolvency Act 1986, no administrative receiver or receiver and manager
has been appointed by any person over the business or assets of any
Group Company or any part of its business or assets and there are no
unfulfilled or unsatisfied judgements or court orders outstanding
against any Group Company.
19. EMPLOYMENT
19.1 Save as are not material in the context of the Placing, there are no
amounts owing or promised to any present or former directors, senior
management or employees of any Group Company other than remuneration
accrued due or for reimbursement of business expenses, no directors or
senior management employees of any Group Company have given or been
given notice terminating their contracts of employment.
19.2 Save as are not material in the context of the Placing, or save to the
extent to which provision or allowance has been made in the Accounts or
save as disclosed in the Due Diligence Reports, no liability has been
incurred by any Group Company for breach of any contract of service,
contract for services or consultancy agreement, for redundancy payments
(including protective awards) or for compensation for wrongful
dismissal or unfair dismissal or for failure to comply with any order
for the reinstatement or re-engagement of any employee or for the
actual or proposed termination or suspension of employment or variation
of any terms of employment of any present or former employee of any
Group Company.
19.3 Save as is not material in the context of the Placing, no Group Company
has any obligation, or could become liable, to provide or contribute
towards pension arrangements for its directors or employees or former
directors or employees other than those disclosed in the Admission
Document.
20. INTELLECTUAL PROPERTY RIGHTS
20.1 The Group is either the sole legal and beneficial owner free from all
encumbrances of the intellectual property rights which it uses, or the
Group has a valid licence to use all intellectual property rights which
it uses and such intellectual property rights are valid, enforceable
and subsisting and nothing has been done or omitted to be done by the
Company which may cause any of it to cease to be so.
20.2 All reasonable steps have been taken for the diligent maintenance and
protection of the Group's intellectual property rights. All application
and renewal fees and other costs and charges in relation to the
maintenance of all registrations and the prosecution of all
applications in relation to the Group's intellectual property rights
and all other payments due and payable by the Group in respect of the
Group's intellectual property rights have
43
been paid at the due time. All other steps for the diligent maintenance
and prosecution of such registrations and applications have been taken
in a timely manner.
20.3 The Group's intellectual property rights comprise all the intellectual
property rights necessary to carry on the business as conducted by the
Group.
20.4 The Group has received no notice during the 15 years prior to the date
of this Agreement that any activities, products, services or processes
of the Group or the Group's intellectual property rights from time to
time infringe or have infringed any intellectual property rights of a
third party or involve or have involved the unlicensed use of a third
party's confidential information or give or have given rise to
liability to pay compensation.
21. DUE DILIGENCE REPORTS
21.1 All information requested by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP
(as the case may be) has been supplied by the TDYT and the Company to
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP for the purpose of preparing
the Due Diligence Reports and all such information is, and was when so
supplied (save to the extent subsequently superseded), (so far as the
Warrantors are aware), true and accurate in all material respects and
is not (whether by reason of omission or otherwise) misleading in any
material respect.
21.2 So far as the Company, TDYT and the Executive Directors are aware:
21.2.1 all agreements material to the Company or to Turbotec Inc were
provided to ▇▇▇▇▇▇▇▇ ▇▇▇▇ for review for the purpose of its
Due Diligence Report;
21.2.2 the Due Diligence Report produced by ▇▇▇▇▇▇▇▇ ▇▇▇▇ does not
omit to deal with any matter material to Turbotec Products,
Inc. in the context of the Placing and/or Admission.
22. REORGANISATION
22.1 The Due Diligence Reports accurately and correctly describe the
Reorganisation. The Reorganisation was undertaken with due care taking
into account all material accounting, legal and taxation advice which
TDYT and the Group received in connection with the Reorganisation.
22.2 So far as the Company, TDYT and the Executive Directors are aware:
22.2.1 all agreements material to the Company or to Turbotec
Products, Inc were provided to Seyfarth ▇▇▇▇ for review for
the purpose of its Due Diligence Report; and
22.2.2 the Due Diligence Report produced by ▇▇▇▇▇▇▇▇ ▇▇▇▇ does not
omit to deal with any matter material to Turbotec Products,
Inc in the context of the Placing and/or Admission.
22.3 The Reorganisation complied with and continues to comply with all
applicable laws and regulations and with all agreements, deeds and
instruments to which each Group Company is party and all consents,
permits and authorisations necessary or desirable for
44
the carrying out of the Reorganisation were obtained prior to its
completion and remain valid and subsisting.
23. REGULATION
Neither the making of the application for Admission, the Placing,
Admission or any other act, matter or thing provided for in this
agreement:
23.1 requires any person to secure the permission, consent or approval of
any governmental, quasi-governmental, statutory or regulatory body or
institution or a court in the United States (a "RELEVANT AUTHORITY");
23.2 will infringe any United States federal or state law, rule or
regulation;
23.3 requires any person to make any filing with a Relevant Authority now or
in the future;
23.4 will cause the Company to be subject to any United States securities
laws and/or the provisions of Sarbannes-Oxley Act 2002.
24. VERIFICATION
24.1 Verification has been made by the Directors of all material facts
stated, information given and opinions expressed in the Placing
Documents.
24.2 The replies to the Verification Questions:
24.2.1 have been prepared or approved by persons having appropriate
knowledge and responsibility to enable them properly to
provide such replies; and
24.2.2 have been given in good faith.
45
PART II
Each Director severally warrants that:
(a) he has provided DDCF and DDCM in writing with all information which
might reasonably be considered material for disclosure in respect of
himself in the Placing Documents including, without limitation any such
information as relates to his prior employment and other positions or
offices he has held and past or present business interests (including
an interest in any company, partnership or organisation which carries
on a business similar to that of the Company or any member of the Group
and an interest in any company, partnership or organisation which has
entered into any contract or arrangement with the Company or any member
of the Group);
(b) the answers given to DDCF and DDCM in his director's questionnaire and
information in his declaration of business interests and share
interests are true and accurate and no further information has been
withheld which would make such information misleading; and
(c) all statements of fact in the Placing Documents and any other documents
relating to the Placing with respect to himself are true, accurate and
not misleading.
PART III
TDYT represents and warrants:
(a) that it has, and that up to and including the moment when Placees
unconditionally acquire Sale Shares in accordance with the provisions
of this agreement, it will continue to have, unencumbered beneficial
ownership of, and all necessary title, power and authority to sell in
accordance with this Agreement, the Sale Shares;
(b) the Sale Shares are fully paid;
(c) that all statements of fact in the Admission Document relating to TDYT
are true, accurate and not misleading.
46
SCHEDULE 3
CERTIFICATE UNDER CLAUSE 4.2.6
[LETTERHEAD OF THE COMPANY]
To: Dawnay, Day Corporate Finance Limited
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
To: Dawnay, Day Capital Markets
(a division of Dawnay, Day Brokers Limited)
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
Date: [ ] 2006
Dear Sirs
PLACING OF 5,594,366 ORDINARY SHARES (THE "PLACING")
We refer to the Placing Agreement dated O 2006 between us relating to the
Placing (the "Agreement"). Words and expressions defined in the Agreement have
the same meanings in this letter.
We confirm to you that:
(a) we are not aware of any circumstances giving rise or likely to give
rise to a right for DDCF or DDCM to terminate its obligations pursuant
to clause 17.1 of this agreement in accordance with its provisions;
(b) each of the Conditions referred to in clause 4 of the Agreement (save
for Conditions 4.2.3 to 4.2.5) has been fulfilled in accordance with
its terms;
(c) none of the Warranties, representations or undertakings referred to in
clause 14 of the agreement was breached or untrue or inaccurate or
misleading in any respect when made and none of such warranties or
undertakings would be breached or untrue or inaccurate or misleading in
any respect were they to be repeated by reference to the facts and
circumstances subsisting at the date of this letter, which in any such
case is material in the context of the Placing.
47
Yours faithfully
.................................................
director, duly authorised,
for and on behalf of
TURBOTEC PRODUCTS PLC
.................................................
▇▇▇▇▇ ▇▇▇▇▇
.................................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
.................................................
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
.................................................
Officer, duly authorised for and on behalf of
THERMODYNETICS, INC.
48
SCHEDULE 4
DOCUMENTS TO BE DELIVERED TO DDCF
The Company shall deliver the following documents to DDCF, in each case in the
agreed form and by the times specified below:
References below to "certified copies" means copies certified by any Director,
or by the secretary of the Company, or its legal advisers.
Where any document referred to in this schedule is signed by an agent or
attorney, the Company must also provide a certified copy of his authority.
1. ON THE EXECUTION OF THIS AGREEMENT
APPLICATION FOR ADMISSION/ADMISSION DOCUMENT
1.1 Three certified copies of the application for Admission.
1.2 Three copies of the Admission Document signed by or on behalf of each
Director.
1.3 Three certified copies of each of the Pre-Admission Announcement and
the Press Announcement.
1.4 Any other document required by the London Stock Exchange in connection
with the application for Admission which is not required from DDCF.
FINANCIAL DOCUMENTATION
1.5 Three original copies of the Long Form Report prepared and signed by
the Reporting Accountants.
1.6 Three original copies of the Short Form Reports prepared and signed by
the Reporting Accountants.
1.7 Three original copies of the Working Capital Report signed by the
Reporting Accountants.
1.8 Three original copies of the working capital comfort letter signed by
or on behalf of the Board.
1.9 Three original copies of the comfort letters addressed to the Company
and DDCF from the Reporting Accountants with respect to:
1.9.1 working capital and indebtedness;
1.9.2 the pro forma statement of net assets set out in the
Admission Document;
1.9.3 taxation statements in the Admission Document;
1.9.4 their responsibilities as reporting accountants under
the AIM Rules and confirming that these have been
complied with;
49
1.9.5 the accuracy of the financial information in the
Admission Document (insofar as the same is not
contained within the Short Form Report);
1.9.6 the no significant change statement in the Admission
Document.
1.10 The Reporting Accountants' written consent to their name appearing in
the Admission Document in the form and context in which they are
included.
1.11 Letters signed by the Company and the Reporting Accountants in relation
to DDCF's declaration in accordance with Schedule 6 of the AIM Rules
dated the date of Admission.
LEGAL DOCUMENTATION
1.12 The Due Diligence Reports from ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and a legal opinion letter addressed to the Company, DDCF and DDCM
signed by ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP.
1.13 The Verification Notes signed by or on behalf of each of the Directors.
CORPORATE DOCUMENTATION
1.14 Three certified copies of the Company's certificate of incorporation,
any certificates of incorporation on change of name, any certificate
confirming the Company's re-registration as a public limited company
and of its memorandum and Articles of Association.
1.15 Three copies of the form of definitive share certificate.
DOCUMENTATION RELATING TO THE DIRECTORS
1.16 Certified copies of each director's questionnaire completed by all the
Directors.
1.17 Certified copies of each Director's service contract/letter of
appointment.
1.18 An original letter addressed to the Company and to DDCF from each of
the Directors accepting responsibility for the Admission Document in
the terms set out in the Admission Document.
1.19 A certified copy of the power of attorney of each of the Directors.
SHAREHOLDER/BOARD MINUTES
1.20 Three certified copies of the minutes of a meeting of the members of
the Company giving effect to the capital reorganisation described in
paragraph 4 of Part VIII of the Admission Document.
1.21 Three certified copies of the minutes of a meeting of the Board at
which:
1.21.1 this agreement and all related documents were
approved and execution of them was authorised;
50
1.21.2 the form of the Admission Document was approved and
publication of it and other documents connected with
the Placing was authorised;
1.21.3 the making of an application for Admission was
approved;
1.21.4 all other steps to be taken by the Company in
connection with the Placing were authorised.
MISCELLANEOUS AGREEMENTS
1.22 Certified copies of each of the documents stated in the Admission
Document as being available for inspection.
1.23 Three certified copies of the Registrar's Agreement.
1.24 Two original counterparts of a nominated adviser and broker agreement
duly executed by the Company and the Directors.
1.25 Two original counterparts of the Share Exchange Agreement duly executed
by the Company and TDYT.
1.26 Two original counterparts of the Relationship Agreement duly executed
by the Company, TDYT and the TDYT Directors.
1.27 The letter agreement referred to in clause 4.2.9 of this Agreement.
2. BY 3.00 P.M. ON THE DAY PRIOR TO ADMISSION
Three certified copies of the minutes of a meeting of the Directors
and/or a duly authorised committee of the Directors at which:
2.1.1 the Subscription Shares were conditionally allotted
in accordance with clause 11.1 of this agreement;
2.1.2 it was confirmed that the Company was not aware of
any circumstances giving rise to or likely to give
rise to a right for DDCF to terminate its obligations
under this agreement pursuant to clause 17.1 in
accordance with its provisions and each Director was
authorised to sign and deliver to DDCF the
certificate referred to in clause 4.2.5 of this
agreement;
2.1.3 it was noted that no requirement had arisen for a
Supplementary Admission Document to be issued in
accordance with the AIM Rules.
2.2 The legal opinion letter addressed to the Company, DDCF and DDCM signed
by ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP.
2.3 Such other information as DDCF shall reasonably request of satisfaction
of each of the Conditions.
3. BY 12 NOON ON THE BUSINESS DAY FOLLOWING ADMISSION BECOMING EFFECTIVE
51
If relevant, a statement of the number of securities which were in fact
issued and, where different from the number which were the subject of
the application for Admission, the aggregate number of securities of
that class in issue.
52
EXECUTED and DELIVERED )
as a Deed by TURBOTEC PRODUCTS ) /s/ ...............................
PLC acting by two directors or a )
director and the secretary ) /s/ ...............................
EXECUTED and DELIVERED )
as a Deed by ▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of ) /s/ ...............................
Name: .......................................
Address: ....................................
Occupation: .................................
EXECUTED and DELIVERED )
as a Deed by ▇▇▇▇▇▇ ▇▇▇ )
▇▇▇▇▇▇▇▇▇ )
in the presence of ) /s/ ...............................
Name: .......................................
Address: ....................................
Occupation: .................................
EXECUTED and DELIVERED )
as a Deed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
▇▇▇▇▇▇▇▇▇ )
in the presence of ) /s/ ...............................
Name: .......................................
Address: ....................................
Occupation: .................................
53
EXECUTED and DELIVERED )
as a Deed by THERMODYNETICS, INC. )
acting by: )
THERMODYNETICS, INC.
By: /s/ ...........................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
PRESIDENT
EXECUTED and DELIVERED )
as a Deed by ▇▇▇▇▇▇, ▇▇▇ ) /s/ ...............................
CORPORATE FINANCE LIMITED )
acting by two directors or a )
director and the secretary ) /s/ ...............................
EXECUTED and DELIVERED )
as a Deed by ▇▇▇▇▇▇, DAY CAPITAL ) /s/ ...............................
MARKETS (A DIVISION OF DAWNAY, )
DAY BROKERS LIMITED) acting by )
two directors or a director and the )
secretary ) /s/ ...............................
54