DATED 2014 EMMIT PLC 5 PER CENT CONVERTIBLE UNSECURED LOAN NOTE 2017

Transcription

1 DATED 2014 EMMIT PLC 5 PER CENT CONVERTIBLE UNSECURED LOAN NOTE

2 CONVERTIBLE LOAN NOTE executed as a deed and dated 2014 by EMMIT PLC, a company registered in England and Wales under Company No , whose registered office is at 3 Field Court, Gray s Inn, London WC1R 5DF (the Company ). INTRODUCTION (A) (B) 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 [ ] February 2014 resolved to create up to 300,000 5 per cent Convertible Unsecured Loan Notes This Note has been issued by the Company in respect of the principal amount of up to 300,000 which is to be advanced to the Company by Leo Knifton of Oaklands, 4 Grove Avenue, West Mersea, Colchester, Essex CO5 8AE (the Lender ) on and subject to the terms of the Loan Facility Agreement (as defined below) and of this Instrument. NOW THIS INSTRUMENT WITNESSES AND IT IS AGREED AND DECLARED as follows: 1. DEFINITIONS 1.1 In this Instrument (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; Companies Act means Companies Act 2006; Conversion Date has the meaning given in clause 3.4; Conversion Notice Conversion Price means the notice to be served by the Noteholder unde r clause 3.1, exercising the Conversion Right; means a subscription price of 0.06 per Ordinary Share; Conversion Rate means the rate at which the principal amount of the Loan is to be applied in subscribing for Ordinary Shares under clause 3.1 below; Conversion Right Draw Down means the right of the Noteholder to convert all or part of the Loan into Ordinary Shares in accordance with clause 3.1 and Conversion Rights shall be construed accordingly; means a notice given by the Company to the Lender to draw down any amount of the Loan under clause 2.1 below; Event of Default means any of the conditions, events or acts provided in clause 6 of this Instrument to be events upon the happening of which the Loan would, subject only as therein provided, become immediately due and repayable; 2

3 Final Repayment means 31 December 2017 or such later date as the Date Company and the Noteholder may agree in writing; Group Loan 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) and a member of the Group shall be construed accordingly; means the principal amount of up to 300,000 that is to be advanced to the Company by the Lender under clause 2.1 or has been advanced under clause 2.2 below and is to be constituted as 5 per cent Convertible Unsecured Loan Notes 2017 of the Company under this Instrument, or the principal amount of such indebtedness 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 2.3 below or any exercise of a Conversion Right; Loan Facility means the loan facility agreement dated 14 November Agreement 2013 between the Company (1) and the Lender (2) as amended by a letter dated [ ] March 2014 between the Company and the Lender; Market means AIM or any other recognised securities market to which the Ordinary Shares are admitted to trading for the time being; this Instrument means this convertible loan note and the schedules and any instrument supplemental hereto and the schedules (if any) thereto, all as from time to time modified in accordance with the provisions herein or therein contained; Noteholder Notes means the Lender and includes any successor or transferee for the time being registered as a holder of the Notes, and any rights or powers to be exercised by the Noteholders shall be exercised by the person holding the majority of in nominal value of the Notes for the time being; means each of the 5 per cent Convertible Unsecured Loan Notes 2017 issued under this Instrument and evidenced by the Certificates in the form shown in Schedule 1 issued to be issued to the Noteholder and any successor or transferee of the Noteholder; Ordinary Shares means the Ordinary Shares of each in the and Shares 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 (the Register ) as holding Ordinary Shares; 3

4 Register means the Register of the holders of the Notes maintained by the Company; and repay, redeem shall each include both the others and cognate and pay 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 Instrument (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 Instrument 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. DRAWDOWN AND REPAYMENT OF THE LOAN 2.1 The Company may at any time and from time to time by notice in writing to the Lender (a Draw Down Notice ) require that the Lender is to advance to the Company an amount or amounts totalling not more than 300,000 in total by way of subscription for Notes. The Draw Down Notice shall include a description of the purpose for which the Loan is to be drawn down including a budget showing the application of the amount to be drawn by the Company. The Lender will be obliged to transfer of the Company the amount stated in the Draw Down Notice to be advanced to the Company by the Lender within five Business Days after the date of the Draw Down Notice by payment to the bank account of the Company stated in the Draw Down Notice. The Lender has executed this Loan Note to commit to his obligation to advance amounts required by Draw Down Notices. Amounts that are drawn down by the Company and paid by the Lender may not be redrawn. The Company will issue to the Lender a Loan Note Certificate in the firm contained in Schedule 1 in respect of each amount paid to the Company by the Lender on the draw down of all or part of the Loan. 2.2 At the date hereof the sum of about 77,000 has been advanced by the Lender to the Company by way of loan under Loan Facility Agreement and that amount, is to be treated as an amount of the Loan that has been advanced and is outstanding at the date hereof. This amount is party of the total amount of 300,000 of the Loan to be drawn down under clause 2.1 above The Company shall pay interest (less any tax required to be deducted by law) at the rate of 5 per cent. per annum on the principal amount of the Loan calculated from the date of issue of the Notes in respect of the principal amount of the Loan advanced by the Lender. Interest shall be outstanding from time to time calculated on the basis of a 365 day year and payable on the Final Repayment Date or on any earlier repayment of the Loan or conversion of the Loan into Ordinary Shares, at which time the accrued interest on the 4

5 amount of the Loan converted shall be paid. The accrued interest shall not be convertible into Ordinary Shares. 2.4 The Company hereby covenants with the Noteholder that on the Final Repayment Date, or on such earlier date as the Loan or any part thereof shall become due to be redeemed or paid off in accordance with this Instrument, the Company shall pay to or to the order of the Noteholder, the principal amount of the Loan outstanding at that date. 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 Loan and 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 The Company may not, without the prior written consent of the Noteholder, make any repayment of the Loan or interest prior to the Final Repayment Date or on demand by the Noteholder under Clause 6 hereof. 2.8 Repayment by the Company of the Loan and interest or conversion of the Loan in accordance with the terms of this Instrument shall constitute satisfaction in full of all of the Company s obligations under this Instrument, and the Notes shall automatically be cancelled and will not be re-issued. 3. CONVERSION BY THE NOTEHOLDER 3.1 Subject to clause 3.3, in relation to any amount of the Loan, 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 3.4 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 Noteholder shall be entitled to exercise from time to time the right of conversion referred to in clause 3.1 only to the extent that the issue to the Noteholder of Ordinary Shares arising from such conversion does not invoke any requirement for a mandatory bid to be made under Rule 9 of the City Code on Takeovers and Mergers. 3.4 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 Loan so converted. 5

6 3.5 The Ordinary Shares allotted on conversion of any amount of the Loan 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 the Register on a date whilst any amount of the Loan remains outstanding, the Conversion Rate in respect of the Loan 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 specified in this Instrument and in lieu of the Ordinary Shares immediately theretofore convertible thereunder, to convert the principal amount of the Loan 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 Loan is 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 covenants with the Noteholder that for so long as any amount of the Loan remains outstanding it shall send to the Noteholder for information a copy of every document sent by the Company to the holders of its Ordinary Shares or to the creditors generally of the Company at the same time that the same is sent to the holders of its Ordinary Shares or to such creditors. 6

7 5.2 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 the Notes. 5.3 For so long as any amount of the Loan 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 Loan 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 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. 5.4 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 clauses 3.1 or 3.6 will, upon allotment, be admitted to trading on the Market and to maintain for so long as any of the Loan may be or become convertible, the admission to trading on the Market of the fully 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. 5.5 So long as any amount of the Loan remains capable of being converted, the following provisions shall apply: the Company shall not: (a) (b) 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 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 the Instrument, 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. 7

8 5.6 So long as any amount of the Loan remains outstanding, the Company shall not do any act or thing resulting in an adjustment to the Conversion Rate if, in consequence, Ordinary Shares would be required to be issued at a discount to their nominal value. 5.7 The Company shall not: reduce its share capital or any uncalled or unpaid liability in respect thereof or any amount for the time being standing to the credit of any share premium account or capital redemption reserve or purchase any of its own share capital; or (except with the prior written consent of the Noteholder) make any offer or invitation to the holders of the Ordinary Share capital or allot any shares in each case pursuant to a capitalisation issue. 5.8 If, whilst any of the Loan remains outstanding, any offer is made to all the Ordinary Shareholders of the Company (or to all the Ordinary Shareholders of the Company other than the offeror and/or any company controlled by the offeror and/or persons associated or acting in concert with the offeror and/or persons to whom it is impracticable to make the offer) to acquire the whole or any part of the Ordinary Share capital of the Company (an "Ordinary Offer") and the Company becomes aware that the right to cast more than 50 per cent of the votes which may ordinarily be cast on a poll at a general meeting of the Company has or will become vested in the offeror and/or any company controlled by the offeror and/or persons associated or acting in concert with the offeror, the Company shall give notice of that fact in writing to the Noteholder within 10 Business Days of its becoming so aware and unless an offer, proposal, scheme or other arrangement which, in the opinion of an Independent Financial Adviser approved for such purpose by the Noteholder, is fair and reasonable (having regard to the terms of the Ordinary Offer and any other circumstances which may appear to such Independent Financial Adviser to be relevant), has already been or not later than 42 calendar days after the date of such notice is made or put to the Noteholder, then the Company shall forthwith thereafter give further notice in writing of that fact to the Noteholder and the Noteholder may, within a period of 15 Business Days after the date of such further notice, give notice in writing to the Company: exercising its Conversion Rights (such exercise to be effective on the last day of the said period of 15 Business Days) in respect of the whole or such part of the Loan as it may in such notice specify at the Conversion Rate; and/or requiring the Company to repay the whole or such part of the Loan as the Noteholder may in such notice specify (excluding any amount of the Loan to be converted) in cash. The publication of a scheme of arrangement under the Companies Act providing for the acquisition by any person of the whole or any part of the Ordinary Share capital of the Company shall be deemed to be the making of an offer for the purposes of this clause EVENTS OF DEFAULT If: 6.5 default shall be made by the Company in the payment of any principal moneys which is due and payable in accordance with this Instrument; 8

9 6.6 default is made by the Company in payment of any amount of interest which has become due and payable under this Instrument and has not been paid within 30 days after becoming payable; 6.7 the Lender fails to comply with any of the terms of the Loan Facility Agreement insofar as such terms apply to the Loan and the Notes to be issued under this Instrument; 6.8 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; 6.9 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); 6.10 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; 6.11 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; 6.12 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; 6.13 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; 6.14 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; 6.15 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 9

10 6.16 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 Loan and all 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 the Notes as a result of the winding up or insolvency of the Noteholder or of any other event giving rise to the transmission of the Notes 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 the Notes. 8. TRANSFER 8.5 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. 8.6 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. 8.7 No transfer of the Notes shall be permissible in the 15 Business Days preceding the Final Repayment Date. 8.8 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). 8.9 Every instrument of transfer must be left at the registered office of the Company from time to time for registration accompanied by the Note to be transferred and such other evidence (if any) as the Board may require to prove the title of the transferor or its right to transfer the Note. No fee will be charged by the Company for the registration of any transfer Upon compliance with clause 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 in the Register and deliver the Note to the transferee (or in the case of multiple transferees, cancel the 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 Loan and accrued interest or other moneys payable under any provision of this Instrument. 10

11 10. NOTICES 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 above (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. 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. EXECUTED as a DEED by ), Director ) for EMMIT PLC ) in the presence of: ) EXECUTED as a DEED by ) for LEO KNIFTON ) in the presence of: ) 11

12 SCHEDULE 1 LOAN NOTE CERTIFICATE Certificate No. Issue Date Amount of Loan Notes 1 [ ] 2014 [ ] EMMIT PLC (incorporated and registered in England and Wales with Company No ) 5 PER CENT CONVERTIBLE UNSECURED LOAN NOTE 2017 ( Loan Notes ) THIS IS TO CERTIFY THAT the undermentioned is the registered holder of the amount shown above of the Amount (as defined by an Instrument (the Instrument ) constituting the Loan Notes that the Company resolved to issue on [ ] 2014) represented by this Loan Note Certificate which is issued subject to and with the benefit of the provisions contained in such Instrument. HOLDER: EXECUTED as a DEED by, Director EMMIT PLC in the presence of: 12

13 SCHEDULE 2 Form of Conversion Notice CONVERSION NOTICE To: EMMIT 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 / [AMOUNT] nominal only] of the Note in accordance with the Conditions printed hereon. I/We desire *[all / [AMOUNT] 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 [NAME] at [ADDRESS] 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] day of [MONTH] [YEAR] * 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. 13