DATED 2013 ALPHA PROSPECTS PLC AND [ ] 10 PER CENT. CONVERTIBLE UNSECURED LOAN NOTE 2016

Transcription

1 DATED 2013 ALPHA PROSPECTS PLC AND [ ] 10 PER CENT. CONVERTIBLE UNSECURED LOAN NOTE 2016 Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August 2013

2 CONTENTS 1. DEFINITIONS AND INTERPRETATION PAYMENT OF PRINCIPAL AND INTEREST CONVERSION BY THE NOTEHOLDER AND BY THE COMPANY ADJUSTMENT COVENANTS BY COMPANY EVENTS OF DEFAULT TRANSMISSION OF NOTES ASSIGMENT AND TRANSFER ENFORCEMENT NOTICES GOVERNING LAW AND JURISDICTION SCHEDULE 1 - DETAILS OF THE LENDER SCHEDULE 2 - FORM OF CONVERSION NOTICE SCHEDULE 3 - TERMS OUTLINE Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

3 CONVERTIBLE LOAN NOTE executed as a deed and dated this [ ] day of [ ] 2013 BETWEEN: (1). ALPHA PROSPECTS PLC, a company registered in England and Wales under Company No whose registered office is at 2nd Floor Suite, 30 Clarendon Road, Watford, Hertfordshire WD17 1JJ (the Company ). (2). THE PERSON whose name and address/registered office/principal place of business are set out in Schedule 1 hereto (the Lender). INTRODUCTION (A) The board of directors of the Company in exercise of powers conferred upon it by the Company s Articles of Association, has by resolution passed on 13 September 2013 resolved to create up to 2,500,000 Convertible Unsecured Loan Notes (B) This Note has been issued by the Company in respect of the principal sum of [ ] which represents the amount of indebtedness owing by the Company to [ ] (the Lender ) at the date hereof. NOW THIS INSTRUMENT WITNESSES AND IT IS AGREED AND DECLARED as follows: 1. DEFINITIONS AND INTERPRETATION 1.1 In this Note (including the Introduction and Schedules hereto) unless there is something in the subject or context inconsistent therewith the expressions set out below shall have the following meanings namely: Business Day means a day (other than Saturday or Sunday) as where banks are open for general business in London; Conversion Date has the meaning given in clause 3.4; Conversion Notice means the notice to be served by the Noteholder under clause 3.1, exercising the Conversion Right in the form set out in Schedule 2. Conversion Price means a subscription price of 2.5p per Ordinary Share; Conversion Rate means the rate at which the principal amount of the Indebtedness is to be applied in subscribing for Ordinary Shares under clause 3.1 below; Conversion Right means the right of the Noteholder to convert all or part of Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

4 the Indebtedness into Ordinary Shares in accordance with clause 3.1 and Conversion Rights shall be construed accordingly; Event of Default means any of the conditions, events or acts provided in clause 6 of this Note to be events upon the happening of which the Loan would, subject only as therein provided, become immediately due and repayable; Final Repayment Date means 13 August 2016 or such later date as the Company and the Noteholder may agree in writing; Group means the Company and each company that is for the time being a subsidiary, direct or indirect, of the Company (within in the meaning of Section 1159 of the Companies Act 2006) and a member of the Group shall be construed accordingly; holding company and subsidiary Indebtedness means a "holding company" and "subsidiary" as defined in section 1159 of the Companies Act 2006; means [ ] that is owing by the Company to the Lender and, is to be constituted as 10 per cent. Convertible Unsecured Loan Notes 2016 of the Company under this Instrument or the principal amount thereof for the time being outstanding or, as the context may require, a specific amount thereof or such lesser sum as shall be outstanding following any repayment under clause 2.1 below or any exercise of a Conversion Right; Interest means interest at the rate of 10 per cent. per annum on the principal amount of the Loan; Interest Payment Date means 13 August in each year; the first Interest Payment Date is to be 13 August 2014; Market means the ISDX Growth Market, a market operated by ICAP Securities and Derivatives Exchange Limited or any other recognised securities market to which the Ordinary Shares are admitted to trading for the time being; this Note means this convertible loan note and the schedules and any instrument supplemental hereto and the schedules (if Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

5 any) thereto, all as from time to time modified in accordance with the provisions herein or therein contained; Terms Outline the terms outlined in Schedule 3 to this Agreement, which in and of themselves are not binding in respect of the Agreement, but represent an outline of the main points described in this Agreement. In the case of any discrepancy, the Agreement itself overrides the Terms Outline. Ordinary Shares and Shares means the Ordinary Shares of each in the capital of the Company, which may be issued to the Noteholder following exercise of the Conversion Rights and Ordinary Shareholder shall mean any person who is reflected in the register of members of the Company as holding Ordinary Shares; and repay, redeem and pay shall each include both the others and cognate expressions shall be construed accordingly. 1.2 Words importing the singular number only shall include the plural number and vice versa and words importing the masculine gender shall include the feminine gender and words importing persons shall include corporations. 1.3 Subject as aforesaid and subject as hereinafter expressly defined any words and expressions defined in the Companies Acts shall bear the same respective meanings in these presents. 1.4 References in this Note (except in this clause) to any statute or statutory provisions are to that statute or provisions as from time to time amended, extended or re-enacted. 1.5 All references in this Note to Sterling, pounds Sterling, pounds or the or to pence and p shall be construed as references to the lawful currency for the time being of the United Kingdom of Great Britain and Northern Ireland. 2. PAYMENT OF PRINCIPAL AND INTEREST 2.1 The Company hereby covenants with the Noteholder that on the Final Repayment Date, or on such earlier date as the Indebtedness or any part thereof shall become due to be redeemed or paid off in accordance with this Note, the Company shall pay to Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

6 or to the order of the Noteholder, the principal amount of the Indebtedness and all accrued Interest outstanding at that date. 2.2 Interest on the Indebtedness will be charged at the rate of 10 per cent. per annum. The Company will on the Interest Payment Date in each year pay Interest in arrears on the Indebtedness, the first such payment to be made on 13 August 2014 in respect of the period from the date of issue of this Note to that Interest Payment Date. 2.3 Interest shall be outstanding from time to time calculated on the basis of a 365 day year. Interest shall be paid subject to deduction of any tax required to be deducted by law, but shall otherwise be paid without any set of withholding or deduction of any kind. 2.4 The Company may by not less than ten Business Days notice given ( a ) prior to any Interest Payment Date require the Noteholder to apply the amount of Interest to be paid on that Interest Payment Date, or (b) prior to the Final Repayment Date require the Noteholder to apply all or any part of the principal amount of the Loan as stated in such notice, in either case in subscribing for Ordinary Shares at a price per share equal to the Conversion Price. The Company will allot and issue to the Noteholder the number of Ordinary Shares for which the Noteholder is required to subscribe on the relevant Interest Payment Date or Final Repayment Date fully paid at the Conversion Price and the provisions of clauses 3.4 and 5.3 will apply, mututis mutandis, to the Ordinary Shares issued to the Noteholder in satisfaction of payments of Interest or of the principal amount of the Loan under this clause. 2.5 Whenever any payment hereunder shall become due on a day which is not a Business Day the due date thereof shall be the next succeeding Business Day unless such Business Day falls in the next calendar month in which event such date shall be the first preceding Business Day. 2.6 All payments to the Noteholder of principal in respect of the Indebtedness or Interest shall be made in sterling in cleared funds to the account from time to time nominated by the Noteholder for this purpose and shall be made without any set off, withholding of, or deduction save as required by law. 2.7 Repayment by the Company of the Indebtedness or conversion of the Indebtedness in accordance with the terms of this Note shall constitute satisfaction in full of all of the Company s obligations under this Note, and this Note shall automatically be cancelled and will not be re-issued. 2.8 The Company may not, without the prior written consent of the Noteholder, make any repayment of the Indebtedness prior to the Final Repayment Date or on demand by the Noteholder under clause 6 hereof. Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

7 3. CONVERSION BY THE NOTEHOLDER AND BY THE COMPANY 3.1 Subject to clause 3.3, in relation to any amount of the Indebtedness, the Noteholder will be entitled from time to time by notice in writing in the form set out in Schedule 2 of this Instrument sent at any time after the date of this Instrument to the registered office of the Company to require the Company to allot fully paid Ordinary Shares of the Company in accordance with clause 3.3 in exchange for and in satisfaction of such nominal amount of the Loan as it may specify in the Conversion Notice at the Conversion Price (subject to adjustment under clause 4 below) (the "Conversion Rate"). 3.2 The Noteholder shall only be entitled to exercise the right of conversion referred to in clause 3.1 above in integral multiples of The Conversion Rights will be treated as exercised as at the close of business on the date of service of the Conversion Notice (the "Conversion Date"). If a Conversion Notice duly completed and signed has been duly delivered to the registered office of the Company as aforesaid, the Company will not later than five Business Days after the date of the Conversion Notice allot and issue as at that Conversion Date, to the Noteholder or its nominee(s), the Ordinary Shares of the Company credited as fully paid to which the Noteholder or such nominee(s) shall be entitled by virtue of the exercise of the Conversion Rights and such allotment and issue shall be in full satisfaction and discharge of the principal amount of the Indebtedness so converted. 3.4 The Ordinary Shares allotted on conversion of any amount of the Indebtedness under the Conversion Rights will rank pari passu in all respects with the existing Ordinary Shares in the capital of the Company then in issue and will rank in full for all dividends to be declared on the Ordinary Shares on or after the Conversion Date. 4. ADJUSTMENT 4.1 Upon any allotment of the fully paid Ordinary Shares pursuant to a capitalisation of profits or reserves to any Ordinary Shareholders on a date whilst any amount of the Indebtedness remains outstanding, the Conversion Rate in respect of the Indebtedness converted on any date following the record date for such allotment shall be increased in due proportion. 4.2 In the case of any reclassification or capital reorganisation affecting the Ordinary Shares, or in the case of any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and which does not result in any reclassification, capital reorganisation or other change of issued Ordinary Shares other than the number thereof), the Noteholder shall have the right thereafter, upon the terms and conditions Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

8 specified in this Instrument and in lieu of the Ordinary Shares immediately theretofore convertible thereunder, to convert the principal amount of the Indebtedness and accrued Interest into the kind and number of shares or stock or other securities or property (including cash) receivable upon such reclassification or capital reorganisation, consolidation or merger by a holder of the number of Ordinary Shares that might have been allotted to the Noteholder upon the exercise of its Conversion Rights immediately prior to such reclassification, capital reorganisation, consolidation or merger. The Company shall not effect any such consolidation or merger unless, prior to or simultaneously with the consummation thereof, the successor (if other than the Company) resulting from such consolidation or merger or other appropriate corporation or entity shall assume, by written instrument executed and delivered to the Company, the obligation to deliver to the Noteholder such shares or stock, securities or assets as, in accordance with the foregoing provisions, the Noteholder may be entitled to have allotted to it and the other obligations under this Instrument. The foregoing provisions shall similarly apply to successive reclassifications or capital reorganisations, consolidations or mergers. 4.3 After each adjustment pursuant to clauses 4.1 or 4.2 above, the Company will promptly prepare a certificate signed by a director of the Company and confirmed in writing by the auditors for the time being of the Company setting forth: (i) the number of Ordinary Shares into which the Indebtedness are convertible after such adjustment and (ii) a brief statement of the facts accounting for such adjustment. The Company will promptly cause a copy thereof to be sent by ordinary first class mail to the Noteholder at the Noteholder s last address as it shall appear in the books of the Company. 5. COVENANTS BY COMPANY 5.1 The Company undertakes to the Noteholder that it shall at all times maintain an unissued and authorised amount of Ordinary Shares, with the necessary authorities under Sections 551 and 570 of the Companies Act sufficient to satisfy in full the outstanding Conversion Rights under this Note. 5.2 For so long as any amount of the Indebtedness remains outstanding, if any offer or invitation is made by the Company or by any person on behalf of the Company to the holders of the Ordinary Shares of the Company, the Company shall make or, so far as it is able, procure that there be made, a like offer or invitation at the same time to the Noteholder as if its Conversion Rights had been exercisable and exercised in full in respect of the amount of the Indebtedness and accrued Interest then outstanding immediately before the record date for such offer or invitation at the Conversion Rate then applicable. The Company shall not make, or permit any Group company to make, any offer or invitation to holders of the ordinary share capital of the Company Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

9 unless it makes, or procures to be made, to the Noteholder at the same time a like offer or invitation as referred to in this clause. 5.3 The Company will use all reasonable endeavours to ensure that all the ordinary share capital of the Company issued on any conversion pursuant to any notice under clause 3.1 will, upon allotment, be admitted to trading on the Market and to maintain for so long as any of the Indebtedness may be or become convertible, the admission to trading on the Market of the paid ordinary share capital of the Company. For the purposes of this clause 5.3, reasonable endeavours shall entail the making of an application to the Market and the undertakings of all actions normally associated with or required in such an application, such application and actions to be at the Company s cost. 5.4 So long as any amount of the Indebtedness remains capable of being converted, the following provisions shall apply: the Company shall not: (a) make any distribution of capital profits or capital reserves (including all surpluses and accretions required to be credited to capital reserve by the Articles of Association of the Company) whether by means of a capitalisation issue in the form of paid Ordinary Shares or a redemption or purchase of the Company s own shares in accordance with Chapters 3, 4 or 5 of the Companies Act or otherwise; or (b) capitalise profits or reserves other than by way of a capitalisation issue made only to the holders of Ordinary Shares in the form of fully paid Ordinary Shares the Company shall not (except with the previous consent in writing of the Noteholder) create, or permit to be in issue, equity share capital which, as regards rights as to voting, dividends or other distributions or capital, has more favourable rights than those attached to its Ordinary Shares in issue at the date of this Note, or modify the rights attached to all or any part of the issued ordinary share capital as a class or attach any special rights, privileges or restrictions thereto or convert any issued share or loan capital into equity share capital except in accordance with the terms of issue thereof. 5.7 So long as any amount of the Indebtedness remains outstanding, the Company shall not do any act or thing resulting in an adjustment to the Conversion Rate if, in Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

10 consequence, Ordinary Shares would be required to be issued at a discount to their nominal value. 6. EVENTS OF DEFAULT If: 6.1 default shall be made by the Company in the payment of any principal moneys or Interest which are due and payable in accordance with this Instrument; 6.2 any secured creditor of the Company or any member of the Group takes any steps to enforce any charge or security held by such secured creditor in respect of any of the undertaking and assets of the Company or any member of the Group or to cancel or require the permanent repayment of any borrowing facility that the secured creditor has made available to the Company; 6.3 an order shall be applied for or made or a resolution proposed or passed for the winding up of the Company or any member of the Group (except for a solvent winding up for the purposes of any reconstruction or amalgamation approved in writing by Noteholder); 6.4 an administrative receiver shall be appointed of the Company or any member of the Group in respect of the whole or any part of their property; 6.5 either (i) a petition for an Administration Order under the Insolvency Act 1986 (or any statutory modification or re-enactment thereof) is presented or (ii) any person gives, makes or files an administration application or a notice of appointment of an administrator or takes any other step under the Insolvency Act 1986 (as amended) to appoint an administrator, in each case in relation to the Company or any member of the Group; 6.6 an encumbrancer takes possession of the whole or any part of the property of the Company or any member of the Group or any distress execution or other process shall be levied or enforced upon or against the whole or any part of such property and not discharged within ten (10) Business Days; 6.7 the Company or any member of the Group shall default or fail to observe in any material respect any covenant, condition or provision in this Note and which (in the case of any such default or failure to observe which is capable of remedy) is not remedied within ten (10) Business Days of the earlier of the Company receiving a notification from the Noteholder requiring the same to be remedied or the Company first becoming aware of such default or failure to observe; Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

11 6.8 the Company or any member of the Group shall cease or threaten to cease to carry on its business of any significant part thereof or defaults for a period of at least ten (10) Business Days in payment of any hire purchase, rental or other loan agreement in each case in an amount in excess of 10,000 or threatens to stop payment of its obligations in each case other than as a result of a bone fide dispute or for the purposes of Section 123(1) of the Insolvency Act 1986 shall be deemed to be unable to pay its debts (however reference to 750 in paragraph (c) of such section shall for these purposes be construed as 10,000; 6.9 the Company or any member of the Group declares or agrees to declare or files any papers at Court in order to obtain a moratorium whether in connection with a voluntary arrangement or otherwise or proposes to enter into any composition or arrangement with its creditors or a class of its creditors; or 6.10 any debenture, pledge, mortgage, charge or other security interest of the Company or any member of the Group shall become enforceable and steps are taken to enforce the same or if any loan capital or borrowings of the Company or any member of the Group shall become repayable by reason of default by the Company or any member of the Group and steps are taken to enforce payment or if any guarantee or indemnity from the Company or any member of the Group is not paid when called or if any guarantee or indemnity given by any person in respect of the obligations the Company or the Group shall be called due to non-payment by the Company or any member of the Group; then upon or at any time following the occurrence of any of such events the principal amount of the Indebtedness and accrued Interest shall immediately become due and payable on demand by the Noteholder. 7. TRANSMISSION OF NOTES Subject to the provisions of clauses 8.2 and 8.4, if any person who has become entitled to this Note as a result of the winding up or insolvency of the Noteholder or of any other event giving rise to the transmission of this Note by operation of law produces such evidence of his title as the Company shall think sufficient, the Company shall register him as the holder of this Note. 8. ASSIGMENT AND TRANSFER 8.1 The Lender may assign or transfer any of its rights, benefits or obligations under this Agreement. Subject to the remaining provisions of this clause 8, upon the provision of reasonable notice to the Company, the Noteholder will be entitled to sell or transfer all or any part of the Notes. Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

12 8.2 The transfer shall be by an instrument in writing in the usual common form or such other form as the board of directors of the Company (the Board ) may approve. 8.3 No transfer of this Note shall be permissible in the 15 Business Days preceding the Final Repayment Date. 8.4 The directors of the Company shall be entitled to refuse to register any transfer to a corporate entity operating in the same sector as the Company or on such other grounds as the directors of the Company may reasonably determine (acting in good faith towards the Noteholder). 8.5 The Company shall, unless registration would result in a breach of any applicable laws or regulations in any part of the world, register the transfer of this Note and deliver this Note to the transferee (or in the case of multiple transferees, cancel this Note and issue new Notes (on the same terms as this Note) to the respective transferees). 9. ENFORCEMENT The Noteholder shall be entitled to prove in any winding-up of the Company in respect of the principal payable in relation to the Indebtedness or other moneys payable under any provision of this Instrument. 10. NOTICES 10.1 Communications in writing Any communication to be made under or in connection with this Agreement shall be made in writing Addresses In the case by the Borrower Any demand, notice or other communication by the Noteholder may be delivered personally to the Company or sent to the Company by post at its address set out at the beginning of the document (or such other address in England notified in writing to the Noteholder). Any such notice, demand or other communication shall be deemed to have been received by the Company 24 hours after posting (where sent by first-class pre-paid post) and immediately upon delivery (where delivered personally) whether or not it has been actually received In the case of the Lender Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

13 Any demand, notice or other communication by the Company may be delivered personally to the Noteholder or sent to the Noteholder by post at its address set out in the Schedule 1 of this Agreement (or such other address in England notified in writing to the Company). Any such notice, demand or other communication shall be deemed to have been received by the Noteholder 24 hours after posting (where sent by first-class pre-paid post) and immediately upon delivery (where delivered personally) whether or not it has been actually received Delivery Any communication or document made or delivered by one person to another under or in connection with this Agreement must be in English and will only be effective: (A) If by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address, or (B) if delivered by hand, when it has been left at the relevant address Notification of address Each Party shall promptly notify the others of any change of address. 11. GOVERNING LAW AND JURISDICTION This Instrument should be construed and governed in all respects in accordance with English Law and the parties hereto hereby accept and submit to the non-exclusive jurisdiction of the English Courts. IN WITNESS whereof this Instrument has been executed and delivered as a deed on the day and year first above written. Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

14 EXECUTED as a DEED by ) ALPHA PROSPECTS PLC ) acting by Director ).. EXECUTED as a DEED by ) [ ] ) ) In the presence of: Witness Signature: Witness Name: Witness Address: Witness Occupation: Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

15 SCHEDULE 1 - DETAILS OF THE LENDER Lender Facility Amount No. of Conversion Shares [ ] Address: [ ] [ ] [ 2.5p per share Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

16 SCHEDULE 2 - FORM OF CONVERSION NOTICE CONVERSION NOTICE To: ALPHA PROSPECTS PLC (the Company ) I/We being the registered holder(s) of the Note hereby give notice of my/our desire to exercise my/our Conversion Rights in respect of *[the whole / [ ] nominal only] of the Note in accordance with the Conditions printed hereon. I/We desire *[all / [ ] nominal only] of the ordinary share capital of the on such exercise of my/our Conversion Rights to be allotted to me/us and registered in my/our name(s) and hereby authorise the entry of my/our name(s) in the Register. I/We agree to accept all the fully paid ordinary share capital of the Company to be allotted to me/us pursuant hereto subject to the Memorandum and Articles of Association of the Company. I/We hereby authorise for the balance (if any) of the Note represented by this Certificate in respect of which the Conversion Rights have not been exercised (together (if applicable) with a cheque in respect of the proceeds of the sale of any fractional entitlement) to be sent by ordinary post at my/our risk to [ ] at [ ] NOTE: If this space is left blank the Certificate and cheque (if any) will be sent to the registered address of the (first-named) Noteholder. Signature(s) of Noteholder(s) (In the case of joint holdings all Noteholders must sign. In the case of a corporation this Notice must be given either under its Common Seal or signed on its behalf by an attorney or duly authorised official of the corporation.) Dated this [ ] day of [ ] 20 * Delete or complete as appropriate. If this space is left blank the Notice will be deemed to relate to the whole of the Note represented by this Certificate. Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August

17 SCHEDULE 3 - TERMS OUTLINE Loan Amount [ ] Interest Rate 10% p.a. on the principal amount of the Loan Repayment Date 36 months from the Date of this Agreement Conversion Price 2.5p Amount of shares issued in total after provision of Conversion Notice Interest Payment dates [ ] Annually on the 13 August of each year Alpha Prospects Plc 10% Convertible Unsecured Loan Note 2016 for [ ] August