DATED 3 February 2006
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(1) XXXXXXX XXXXXXX & CO. LIMITED
(2) BODISEN BIOTECH, INC.
(3) THE DIRECTORS of the Company
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PLACING AGREEMENT
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CONTENTS
Clause Page
1. INTERPRETATION.....................................................1
2. CONDITIONS.........................................................5
3. APPLICATION FOR ADMISSION..........................................6
4. AUTHORITIES........................................................7
5. PLACING............................................................7
6. ISSUE OF SHARES....................................................7
7. PAYMENT AND REGISTRATION...........................................8
8. FEES, COMMISSIONS AND EXPENSES.....................................9
9. WARRANTIES.........................................................9
10. INDEMNITY.........................................................10
11. TERMINATION.......................................................12
12. ANNOUNCEMENTS.....................................................13
13. CONTINUING OBLIGATIONS............................................13
14. RESTRICTIONS ON SALES ............................................15
15. NOTICES...........................................................16
16. GENERAL...........................................................16
SCHEDULE 1 Directors...................................18
SCHEDULE 2 Documents to be Delivered...................19
SCHEDULE 3 Warranties..................................21
SCHEDULE 4 Warranty Certificate........................29
SCHEDULE 5 Properties..................................30
APPENDIX 1 PROFORMA PLACING LETTER.........................................33
DATED 3 February 2006
PARTIES
(1) XXXXXXX XXXXXXX & CO. LIMITED (registered in England with number 01903304)
of 00 Xxxx Xxxxxx, Xxxxxx XX0X 0XX ("Xxxxxxx Xxxxxxx");
(2) BODISEN BIOTECH, INC. (incorporated in Delaware with number 0001178552)
whose registered office is at The Corporation Trust Company, Corporation
Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, XXX (the
"Company"); and
(3) THE PERSONS listed in Schedule 1 (the "Directors").
RECITALS
(A) The Company was incorporated in the State of Delaware, USA on 14 January
2000 with number 0001178552 under the name Xxxxxxxxx.xxx, Inc. On 24
February 2004, Bodisen Holdings, Inc., a wholly owned subsidiary of the
Company, merged with Bodisen International, Inc., the parent company of
Yang Ling Bodisen Biology Science and Technology Development Company
Limited. On 1 March 2004 the Company changed its name to Bodisen Biotech,
Inc.
(B) The Company commenced trading intially on the Over-the-Counter Bulletin
Board with the symbol 'BBOI' and then on the American Stock Exchange with
the symbol 'BBC' on 26 August 2005.
(C) The Company filed a SB-2 Registration Statement with the United States
Securities and Exchange Commission on 1 February 2006 which was declared
effective on 3 February 2006.
(D) At the date of this agreement the Company has an authorised share capital
of $3500 divided into 30,000,000 shares of common stock, $0.0001 par value
and 5,000,000 shares of preferred stock, $0.0001 par value of which
15,474,220 shares of common stock have been issued.
(E) Subject to and upon the terms and conditions set out below, the Company
proposes to issue 1,643,836 Common Stock, being the Placing Shares, at the
Placing Price to Placees procured by or on behalf of Xxxxxxx Xxxxxxx.
(F) Xxxxxxx Xxxxxxx is willing as agent for the Company to use reasonable
endeavours to procure subscribers for the Placing Shares.
(G) Application will be made for the admission to trading on AIM of the
Existing Shares and the Placing Shares.
(H) Xxxxxxx Xxxxxxx is acting as Nominated Adviser and Broker to the Company in
connection with the Placing and the proposed admission of the Common Stock
to trading on AIM.
OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 In this agreement (including the recitals and the Schedules) the following
words and expressions have the following meanings unless the context
otherwise requires:
"Admission" means the admission of the Existing Shares and the Placing
Shares to trading on AIM becoming effective as provided in rule 6 of the
AIM Rules;
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"Admission Document" means the document dated on or about the date of this
agreement comprising an admission document relating to the Company prepared
in compliance with the AIM Rules
"AIM" means the market of that name operated by the London Stock Exchange;
"AIM Rules" means the AIM Rules for Companies published by the London Stock
Exchange as in force at the date of this agreement, or where the context
requires, as amended or modified after the date of this agreement;
"AMEX" means the American Stock Exchange;
"associated company" means in relation to a company, any subsidiary
undertaking or parent undertaking of it or any subsidiary undertaking of
such a parent undertaking;
"Board" means the board of directors of the Company from time to time or a
duly authorised committee of it;
"Broker" means has the meaning given to the expression "broker" in the AIM
Rules;
"Business Day" means a day upon which dealings in domestic securities may
take place on the London Stock Exchange;
"CA85" means the Companies Xxx 0000 (as amended by the Companies Act 1989);
"CDI" means a CREST depositary instrument as described in the edition of
the CREST International Manual current at the date of this agreement;
"City Code" means the City Code on Takeovers and Mergers;
"Common Stock" means the shares of common stock in the Company, par value
$0.0001;
"Company's Solicitors" means Xxxx Xxxxx Xxxxxxx Charot LLP of Xxxxxxx
Xxxxx, 0 Xxxxxxxx Xxxxx, Xxxxxx XX0 0XX;
"Conditions" means the conditions set out in clause 2.1;
"CREST" means the computer-based system established under the Regulations
which enables title to units of relevant securities (as defined in the
Regulations) to be evidenced and transferred without a written instrument
and in respect of which CRESTCo Limited is the Operator (as defined in the
Regulations);
"Directors" means the directors of the Company whose names are set out in
Schedule 1;
"Due Diligence Reports" means the legal due diligence reports on the Group
prepared by the Company's Solicitors and JG which are addressed to the
Company and to Xxxxxxx Xxxxxxx;
"Existing Shares" means the Common Stock in issue on the date of this
agreement;
"Forms of Confirmation" means the letters of confirmation attached to the
Placing Letters;
"FRP Report" means the report prepared by the Reporting Accountants into
the financial reporting procedures used by the Company;
"FSA" means the Financial Services Authority;
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"FSMA" the Financial Services and Markets Xxx 0000;
"Group" means the Company and its subsidiary undertakings and associated
undertakings from time to time and "member of the Group" shall be construed
accordingly;
"Indemnified Person" means Xxxxxxx Xxxxxxx, each associated company of
Xxxxxxx Xxxxxxx and each of the directors, officers, employees, agents and
advisers of Xxxxxxx Xxxxxxx and each such associated company;
"Indemnity" means the indemnity contained in clause 10.2;
"Institutional Presentation" means all materials used in institutional
presentations in connection with the Placing and all materials given to
Placees in connection with the Placing;
"Intellectual Property Rights" means patents, patent applications, utility
models, trade marks, service marks, registered designs, unregistered design
rights, copyrights, moral rights, technical drawings, business names,
database rights, brand names, computer software programmes and systems,
know-how, inventions, confidential information and other industrial or
commercial intellectual property rights of any kind and in any place and
whether registered or capable of registration or not and all applications
for registration or protection of any of the above;
"Interim Statement" means the consolidated profit and loss account of the
Group for the 9 months' period ended 30 September 2005 and the consolidated
balance sheet of the Group as at 30 September 2005 and the explanatory
statements in connection with them;
"Issue Documents" means the Admission Document, the Placing Letters and the
Press Announcement;
"JG" means Jingtian & Gongcheng of 15th Floor, Union Plaza, 20
Chaoyangmenway Dajie, Beijing, 100020, PRC;
"Xxxxx Day" means Xxxxx Day, Solicitors, of 00 Xxxxx Xxxxxx, Xxxxxx, XX0X
0XX;
"Last Accounts" means the audited consolidated profit and loss account of
the Group for the twelve months' period ended on the Last Accounts Date and
the audited consolidated balance sheet of the Group as at the Last Accounts
Date and the notes to and the directors' and auditor's reports on them;
"Last Accounts Date" means 31 December 2004;
"London Stock Exchange" means London Stock Exchange plc;
"Long Stop Date" means 27 February 2006;
"Nomad Agreement" means the agreement dated the date of this Agreement
under which Xxxxxxx Xxxxxxx has been appointed as Nominated Adviser and
Broker to the Company;
"Nominated Adviser" has the meaning given to the expression "nominated
adviser" in the AIM Rules;
"Opinion" means the legal opinion in the agreed form given by the Company's
Solicitors to Xxxxxxx Xxxxxxx;
"Placees" means persons who agree conditionally to subscribe for Placing
Shares either directly or indirectly by means of a CDI, pursuant to the
Placing Letters;
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"Placing" means the placing of the Placing Shares pursuant to this
agreement;
"Placing Letters" means the placing letters delivered or sent to potential
Placees by Xxxxxxx Xxxxxxx or its agents in connection with the Placing
including the letters of confirmation attached to them;
"Placing Price" means the price of 730 xxxxx per Placing Share;
"Placing Shares" means the 1,643,836 new shares of common stock, par value
$0.0001, which are to be issued by the Company pursuant to this agreement;
"Press Announcement" means the press announcement prepared in accordance
with rule 2 of and Schedule 1 to the AIM Rules containing details of the
Placing;
"Regulations" means the Uncertificated Securities Regulations 2001 (SI 2001
No 3755);
"Reporting Accountants" means Deloitte & Touche LLP of Xxxxxxxxxxx Xxxxx, 0
Xxxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
"SEC" means the United States Securities and Exchange Commission;
"Specified Event" means an event occurring or matter arising on or after
the date of this agreement and before Admission which if it had occurred or
arisen before such date would have rendered any of the Warranties untrue or
incorrect in any material respect;
"Supplementary Admission Document" means a supplementary admission document
prepared in relation to the Company in accordance with clause 3.4 of this
agreement;
"VAT" means United Kingdom value added tax;
"Verification Notes" means the verification notes relating to the Admission
Document;
"Warranties" means the representations warranties and undertakings on the
part of the Company and the Directors set out in clause 9 and Schedule 3;
"Warranty Certificate" means a certificate in the form set out in Schedule
4;
"Working Capital Memorandum" means the Board memorandum dated 3 February
2006 on the cashflow and working capital projections for the Group for the
period ending on 31 December 2007;
"Working Capital Report" means the report by the Reporting Accountants
dated on or about the date of this agreement on the cashflow and working
capital projections contained in the Working Capital Memorandum, which
report incorporates a copy of that memorandum.
1.2 In this agreement:
(A) any reference to a document being "in the Agreed Form" means in the
form of the draft signed for the purpose of identification by Xxxxx
Day (on behalf of Xxxxxxx Xxxxxxx) and the Company's Solicitors (on
behalf of the Company and the Directors) with such alterations (if
any) as may subsequently be agreed by or on behalf of the parties;
(B) the Interpretation Xxx 0000 shall apply in the same way as it applies
to an enactment;
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(C) save where the context otherwise requires and except as expressly
provided to the contrary, words and expressions defined in CA85 have
the same meaning as in CA85;
(D) references to clauses, recitals and Schedules are to clauses of and
recitals and Schedules to this agreement;
(E) headings are included for convenience only and shall be disregarded in
the interpretation of this agreement or any part thereof;
(F) any document referred to as being certified shall be certified as a
true and complete copy by a lawyer qualified and eligible to practise
in the jurisdiction in which the certification occurred;
(G) general words shall not be given a restrictive meaning by reason of
their being preceded or followed by words indicating a particular
class or examples of acts matters or things.
2. CONDITIONS
2.1 The obligations of Xxxxxxx Xxxxxxx under this agreement are conditional
upon:
(A) the delivery to Xxxxxxx Xxxxxxx or to Xxxxx Day on its behalf of each
of the documents referred to in Schedule 2 by the times and in the
form referred to in that schedule;
(B) the delivery to Xxxxxxx Xxxxxxx or to Xxxxx Day on its behalf of the
Opinion;
(C) there not having occurred or arisen prior to Admission any significant
change or significant new matter or significant inaccuracy as is
referred to in clause 3.5 of this agreement which would require a
Supplementary Admission Document to be published by the Company;
(D) the SB-2 registration statement filed by the Company with the SEC in
relation to the Admission having been declared effective by the SEC at
or before 8.00 a.m. on 6 February 2006;
(E) approval of Admission by AMEX at or before 8.00 a.m. on 6 February
2006;
(F) the Warranty Certificate having been duly executed and dated with the
date shortly prior to the date of Admission and having been delivered
to Xxxxxxx Xxxxxxx or Xxxxx Day on its behalf on that date;
(G) Xxxxxxx Xxxxxxx having received from Placees duly executed Forms of
Confirmation containing commitments to subscribe all of the Placing
Shares upon the terms of the Issue Documents; and
(H) Admission having become effective at or before 8.00 a.m. on 6 February
2006;
or (in the case of any time/date provided above) such later time or date
(being not later than 3.00 p.m. on the Long Stop Date) as the Company and
Xxxxxxx Xxxxxxx may agree in writing PROVIDED THAT each of the parties
shall perform its obligations under this agreement until such time (if any)
as any of the Conditions shall have become incapable of being satisfied.
2.2 The Company shall procure due satisfaction of the Condition set out in
clause 2.1(A) and use all reasonable endeavours to procure the fulfilment
of the other Conditions in each case by the times and dates (if any) stated
in clause 2.1.
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2.3 If any of the Conditions are not fulfilled (unless waived in writing by
Xxxxxxx Xxxxxxx) by 3.00 p.m. on the Long Stop Date, this agreement shall
automatically lapse and clause 11.4 shall apply.
3. APPLICATION FOR ADMISSION
3.1 The Company will make the application for Admission immediately after the
publication of the Admission Document, approval for the Admission by AMEX
and the declaring effective of the SB2 filing by the SEC and will use all
reasonable endeavours to obtain Admission including paying all fees and
executing and delivering all such documents as shall be necessary in
connection with the application therefor and, insofar as within its power,
shall generally do and procure to be done all such things as may properly
be required by the London Stock Exchange for the purposes of or in
connection with Admission so as to enable Admission to take place by 8.00
a.m. on 6 February 2006.
3.2 Xxxxxxx Xxxxxxx is given all such authorities and powers by the Company and
the Directors as are required for the purposes of obtaining Admission and
Xxxxxxx Xxxxxxx shall take all reasonable steps to assist in the obtaining
of Admission including (without limitation) liaising with and dealing
(insofar as it is able) with any requirements of the London Stock Exchange
in connection with the same.
3.3 The Company and the Directors shall procure that copies of the Admission
Document are made available free of charge at the addresses specified in
the Admission Document as required by rule 3 of the AIM Rules.
3.4 (A) Without prejudice to clause 11 and without prejudice to any claim that
Xxxxxxx Xxxxxxx may have under this agreement, if at any time prior to
Admission the Company or the Directors become aware that a significant
new factor, material mistake or inaccuracy relating to the information
included in the Admission Document has arisen or been noted, such
change or matter or inaccuracy being significant within the meaning
ascribed to that term in section 87G(4) of the FSMA, the Company or
the Director in question will notify Xxxxxxx Xxxxxxx immediately of
such factor, mistake or inaccuracy and will consult with it as to the
communication or announcement (if any) to be made to persons to whom
the Issue Documents have been sent.
(B) Following notification under clause 3.4(A) the Company will:
(1) make such announcement(s) relating to the fact, circumstance,
change, matter or inaccuracy as Xxxxxxx Xxxxxxx shall reasonably
require;
(2) promptly prepare such supplementary admission document as may be
necessary to inform persons to whom the Issue Documents have been
sent of such fact, matter or inaccuracy in a form approved by
Xxxxxxx Xxxxxxx (such approval not to be unreasonably withheld or
delayed) and publish such supplement in accordance with rule 3 of
the AIM Rules; and
(3) promptly despatch copies of the Supplementary Admission Document
to the persons to whom the Issue Documents have been sent.
(C) Following such announcement and/or despatch, references in this
agreement to the Issue Documents shall include any such
announcement(s) and/or Supplementary Admission Document and the
Warranties relating to the Admission Document in paragraph 1 of
Schedule 3 shall, notwithstanding any provision of this agreement, be
deemed to be repeated on the date of publication of the Supplementary
Admission Document and when so repeated shall be read and construed as
if references in them to the Admission Document meant the Admission
Document when read together with the Supplementary Admission Document.
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4. AUTHORITIES
4.1 The Company authorises and instructs Xxxxxxx Xxxxxxx to procure subscribers
at the Placing Price for the Placing Shares and for such purpose:
(A) irrevocably appoints Xxxxxxx Xxxxxxx as its agent for the purpose of
procuring Placees and confirms its authority to Xxxxxxx Xxxxxxx or its
agents to seek commitments from Placees by the distribution of Placing
Letters and copies or proofs (including placing proofs) of the
Admission Document;
(B) confers on Xxxxxxx Xxxxxxx and its agents all powers, authorities and
discretions on behalf of the Company which are within its powers and
necessary to implement the Placing; and
(C) agrees to ratify and approve all documents, acts and things which
Xxxxxxx Xxxxxxx and its agents shall lawfully do or have done in the
exercise of or in contemplation of such appointment, powers,
authorities and discretions.
4.2 The Company shall give all such assistance and provide any information
Xxxxxxx Xxxxxxx may reasonably require for the making and implementation of
the Placing and will do (or procure to be done insofar as it is able) all
such things and execute (or procure to be executed insofar as it is able)
all such documents as may be necessary to be done or executed by the
Company or on its behalf by its officers or employees in connection with
the Placing.
4.3 The Company confirms that it will provide CREST Depository Limited with all
authorisations and information necessary to enable them to perform their
duties as trustee in respect of the CDI and to the extent required that it
has irrevocably authorised and instructed them to act in accordance with
all reasonable instructions of Xxxxxxx Xxxxxxx in connection with the
Placing.
5. PLACING
5.1 Pursuant to but without limiting the authority in clause 4.1, Xxxxxxx
Xxxxxxx agrees, as agent of the Company and in reliance on the Warranties,
to use reasonable endeavours to procure persons to subscribe for the
Placing Shares at the Placing Price and otherwise upon the terms of the
Issue Documents.
5.2 Xxxxxxx Xxxxxxx shall hold all subscription monies received by it from
Placees in a separate designated escrow account pending payment of the sums
due under clauses 7 and 8 or (if this agreement shall lapse in accordance
with clause 2.3 or shall be terminated pursuant to clause 11) return of the
same to the persons entitled to those monies.
6. ISSUE OF SHARES
6.1 Not later than 8.00 a.m. on 6 February 2006 the Company shall:
(A) deliver to Xxxxx Day on behalf of Xxxxxxx Xxxxxxx the Warranty
Certificate duly signed;
(B) issue Placing Shares to the persons notified in accordance with clause
6.2, conditionally only upon Admission and otherwise upon the terms of
the Issue Documents, and following such issue shall deliver to Xxxxx
Day on behalf of Xxxxxxx Xxxxxxx a certified copy of the relevant
resolution.
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6.2 Xxxxxxx Xxxxxxx shall notify the Company as soon as possible following the
signature of this agreement of the names and denominations in which the
Placing Shares are to be issued as specified in the registration
particulars included in the Forms of Confirmation together with details of
each Placee's CREST participant ID reference and the relevant CREST member
account ID reference(s) relating to the CREST member account(s) to which
that Placee wishes Placing Shares to be credited.
6.3 The Placing Shares issued pursuant to this clause 6 shall be issued subject
to the certificate of incorporation and by-laws of the Company and subject
to payment in full of the Placing Price for each such share and shall be
issued fully paid free from all claims, liens, charges, encumbrances and
equities and on terms that they will rank equally in all respects with the
Existing Shares, including the right to receive all dividends and other
distributions declared, made or paid after Admission in respect of the
Company's ordinary share capital.
7. PAYMENT AND REGISTRATION
7.1 Subject to the satisfaction or waiver of all the Conditions, Xxxxxxx
Xxxxxxx will by no later than 5.00 p.m on the third Business Day after
Admission or (if later) such date (not being later than the Long Stop Date)
as is agreed by the Company and Xxxxxxx Xxxxxxx, pay or cause to be paid to
the Company to the account specified in clause 7.4, or as the Company may
direct, a sum equal to the aggregate amount received by Xxxxxxx Xxxxxxx
pursuant to the Placing less the amounts referred to in clause 8.1.
7.2 As soon as practicable following Admission, the Company shall procure
registration (without registration fees and in accordance with the
Regulations) of the Placees (as indicated to it in accordance with clause
6.1) as the holders of Placing Shares.
7.3 The Company shall procure that the appropriate CREST member accounts are
properly credited in respect of those Placing Shares which are requested by
the respective placees to be so credited by the date set out in the
Admission Document or, in the event of any difficulties or delays in the
admission of the Placing Shares to CREST and if Xxxxxxx Xxxxxxx shall so
determine, or if any placee so requests, shall procure that definitive
certificates in respect of the Placing Shares shall be prepared and
delivered to the Placees by that date.
7.4 The account of the Company referred to in clause 7.1 is:
Bank Bank of China, Shaanxi Branch, xi'an Changan Lu Sub-Branch,
Xi'an, Shaanxi, China
Swift-code BKCHCN BJ620
Account Number 3070-33421128092014
Account Name Yangling Bodisen Agricultural Technology Co. Ltd.
7.5 The Company irrevocably instructs Xxxxxxx Xxxxxxx either itself or through
its agents to make payments to the Company under clause 7.1 by electronic
funds transfer and such payments shall be deemed effective forthwith upon
irrevocable instructions being issued by Xxxxxxx Xxxxxxx or any such agent
to any bank or person obliged to comply with those instructions to transfer
the relevant amounts by electronic funds transfer to the account of which
details are set out in clause 7.4.
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8. FEES, COMMISSIONS AND EXPENSES
8.1 In consideration of this agreement the Company shall pay (together with VAT
where applicable):
(A) to Xxxxxxx Xxxxxxx a corporate finance fee of (pound)150,000;
(B) to Xxxxxxx Xxxxxxx a commission of 3.5% of the aggregate value at the
Placing Price of the Placing Shares; and
(C) the expenses to be borne by the Company under clause 8.2.
8.2 The Company will bear all proper and reasonable expenses of or incidental
to the Placing, including, the fees of its and Xxxxxxx Xxxxxxx'x
professional advisers (including the fees and out of pocket expenses of
Xxxxx Day and the Reporting Accountants, such fees but not the expenses
being subject to a limit of (pound)50,000 and (pound)88,000 respectively
without prior agreement), the cost of printing and distribution of the
Issue Documents and all other documents connected with the Placing, the
document fees of the London Stock Exchange, all reasonable out of pocket
expenses and disbursements of Xxxxxxx Xxxxxxx and, where applicable, VAT,
stamp duty and stamp duty reserve tax. The Company will forthwith upon
demand by Xxxxxxx Xxxxxxx reimburse to it the amount of any such proper and
reasonable expenses which it may have paid on behalf of the Company.
8.3 Save where this agreement lapses in accordance with clause 2.3 or is
terminated pursuant to clause 11, the amounts payable under clause 8.1
shall become payable immediately following Admission and may be withheld by
Xxxxxxx Xxxxxxx from any payment under clause 7.
8.4 Where under any provision of this agreement a sum is reimbursed to Xxxxxxx
Xxxxxxx the Company shall, in addition, pay to Xxxxxxx Xxxxxxx in respect
of VAT:
(A) to the extent that any reimbursement is in respect of any supply of
services to the Company, such amount as equals any VAT charged to
Xxxxxxx Xxxxxxx in respect of such expenses and which it is unable to
recover together with an amount representing any VAT properly
chargeable on the consideration for the supply; and
(B) to the extent that any such reimbursement is in respect of a
disbursement made by Xxxxxxx Xxxxxxx as agent on behalf of the
Company, such amount as equals any VAT paid on that disbursement by
Xxxxxxx Xxxxxxx.
9. WARRANTIES
9.1 The Company and the Directors represent, warrant and undertake to Xxxxxxx
Xxxxxxx in the terms of Schedule 3 and acknowledge that Xxxxxxx Xxxxxxx is
entering into this agreement in reliance on the Warranties.
9.2 Without prejudice to clause 9.1 each of the Directors warrants to the
Company and Xxxxxxx Xxxxxxx that:
(A) the information relating to him included in the Admission Document
pursuant to paragraph (g) of Schedule 2 to the AIM Rules is true,
accurate and not misleading; and
(B) his interests and those of his family and connected persons (for the
purposes of sections 324, 325 and 328 of CA85) in the share capital of
the Company are as set out in the Admission Document and neither he
nor any connected person has any interest in the share capital of the
Company other than as set out in the Admission Document;
9
(C) there is no information regarding him which is not disclosed in the
Admission Document and which would be likely to make any statement in
the Admission Document regarding him misleading, untrue or inaccurate
and that there is no information of which he is aware concerning his
present or past activities which might reasonably be considered
material and which has not been disclosed in writing to Xxxxxxx
Xxxxxxx or in the Admission Document.
9.3 Where any of the Warranties is given to the best of the knowledge,
information and belief of the Company and/or the Directors (or qualified by
any similar expression) the Company and/or the Directors (as the case may
be) are deemed also to warrant that such Warranty has been given after it
has or (as the case may be) they have made all due and careful enquiries.
9.4 Acceptance of the terms of this agreement will constitute an undertaking by
the Company and each Director not knowingly, recklessly or negligently to
cause, and to use all reasonable endeavours not to permit, any Specified
Event to occur before Admission.
9.5 If any breach of Warranty or Specified Event or matter which may give rise
to a claim under the Indemnity shall occur or come to the knowledge of the
Company or of any Director prior to Admission it or he shall forthwith give
notice of the same to Xxxxxxx Xxxxxxx and provide it with such information
with regard to it as Xxxxxxx Xxxxxxx shall reasonably require.
9.6 In the event that any claim is made against any of the Directors for breach
of the Warranties or under the Indemnity, none of the Directors shall
pursue any claim or third party action to join in, claim against, seek a
contribution from or otherwise claim or seek damages or compensation from
any member of the Group.
9.7 The maximum liability of each of the Directors under these clauses 9 and 10
shall not exceed the sums set out next to their names in Schedule 1.
10. INDEMNITY
10.1 No claim shall be made against any Indemnified Person to recover any loss,
damage, costs, charges or expenses which any member of the Group or any of
the Directors or any other person may suffer or incur by reason of or
arising out of the performance by any Indemnified Person of its obligations
under this agreement or in connection with the Placing or the publication
or despatch of any of the Issue Documents save to the extent that such
loss, damage, costs, charges or expenses arise(s) as a result of the
finally and judicially determined negligence or wilful default of such
Indemnified Person or the breach by it of its obligations under this
agreement or any material contravention by it of the regulatory system (as
defined in the handbook and rules of the FSA).
10.2 The Company undertakes to Xxxxxxx Xxxxxxx (for itself and on the basis that
it shall enjoy absolute discretion as to the enforcement of any claim under
this clause, as agent or trustee on behalf of and for the benefit of any
Indemnified Persons) to the fullest extent permitted by law to indemnify
and keep indemnified each Indemnified Person against all claims, actions,
demands, liabilities, judgments or proceedings in any jurisdiction which
may be made, brought or established against it (together "Claims") and
against all loss, damage, costs, charges and expenses in any jurisdiction
which any such person may suffer or incur (including but not limited to
those suffered or incurred in disputing any Claim or in establishing its
right to be indemnified under this clause and/or in seeking advice as to
any Claim) (together "Losses") and which in any case directly or indirectly
results from or is attributable to or would not have arisen but for the
Placing or the transactions contemplated by this agreement including
without limitation:
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(A) the approval and/or despatch or publication of the Issue Documents;
(B) the issue of the Placing Shares;
(C) any breach by the Company or Directors of any of the Warranties or any
of its or their other obligations under this agreement;
(D) the proper performance by any Indemnified Person of its obligations
under this agreement or otherwise in connection with the Placing
and/or Admission;
(E) any failure or alleged failure by the Company or the Directors or
their agents, employees or professional advisors to comply with any
legal, statutory or regulatory requirement of the United Kingdom or
elsewhere in relation to the Placing and/or Admission;
(F) any Issue Document not containing or being alleged not to contain all
information required to be stated in it or any statement in it being
or being alleged to be defamatory, untrue, inaccurate, incomplete or
misleading in any respect or having been or alleged to have been made
negligently or otherwise without the required standard of skill and
care or reasonableness;
unless and to the extent that such Claim(s) or Loss(es) result(s) from the
finally and judicially determined negligence or wilful default of such
Indemnified Person or material breach by it of its obligations under this
agreement or a material contravention by it of the regulatory system (as
defined in the handbook and rules of the FSA) or the provisions of the
FSMA.
10.3 All sums payable under the Indemnity shall be paid free and clear of all
deductions or withholdings save only as may be required by law. If any such
deductions are required by law or if any taxing authority in any
jurisdiction brings into any charge to taxation (or into any computation of
income, profits or gain for the purpose of any charge to taxation) any sum
payable under the Indemnity then the Company shall pay such additional sum
or sums as will ensure that after deduction of the taxation so chargeable
the Indemnified Person concerned shall retain a sum equal to the amount
that would otherwise has been payable pursuant to the Indemnity.
10.4 The Indemnity shall extend to include all costs and expenses including
legal fees and expenses suffered or incurred by any Indemnified Person in
connection with enforcing its rights under this clause 10 (together with
any VAT on them).
10.5 If Xxxxxxx Xxxxxxx becomes aware of any claim relevant for the purposes of
the Indemnity which may be made against it or any other Indemnified Person,
it shall notify the same to the Company and (subject to being indemnified
and secured to its reasonable satisfaction against any additional costs or
losses that it may suffer as a result of so doing and to the requirements
(if any) of the Indemnified Person's insurers) shall enter into and
maintain consultation in good faith with the Company on all material
aspects of the claim PROVIDED THAT failure by such Indemnified Person to
notify the Company shall only relieve the Company from the obligation to
indemnify to the extent such loss was caused or increased by such failure
and THAT such Indemnified Person shall be under no obligation to comply
with any requirements of the Company in connection with the conduct of the
claim.
10.6 The Company agrees that it will not without the prior written consent of
Xxxxxxx Xxxxxxx settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim in respect of
which indemnification may be sought under this clause 10 unless such
settlement, compromise or consent includes an unconditional release of all
Indemnified Persons from all liability arising out of such claim.
11
10.7 No Indemnified Person has been responsible for or requested by the Company
to undertake any verification relating to the information contained in the
Admission Document.
11. TERMINATION
11.1 If before Admission:
(A) any statement contained in the Issue Documents has, in the reasonable
opinion of Xxxxxxx Xxxxxxx been discovered to be untrue, incorrect or
misleading in any respect which it reasonably considers to be material
in the context of the Placing; or
(B) there has, in the reasonable opinion of Xxxxxxx Xxxxxxx, been a breach
of any of the Warranties or any other obligations on the part of the
Company or the Directors under this agreement which it reasonably
considers to be material in the context of the Placing; or
(C) a Specified Event has, in the reasonable opinion of Xxxxxxx Xxxxxxx,
occurred which it reasonably considers to be material in the context
of the Placing; or
(D) any of the Conditions shall have become incapable of fulfilment before
the latest time provided in clause 2.2 and has not been waived as
provided in clause2.3;
then, upon Xxxxxxx Xxxxxxx giving notice of such matter to the Company,
clause 11.3 shall apply.
11.2 If before Admission there shall in the reasonable opinion of Xxxxxxx
Xxxxxxx, develop, occur or come into effect any change in national or
international financial, economic, political, military or market conditions
or other event, which in the reasonable opinion of Xxxxxxx Xxxxxxx, is
likely materially and adversely to affect the financial or trading position
or prospects of the Group or to have a materially prejudicial effect on the
Placing or make the success of the Placing doubtful or makes it
impracticable or inadvisable to proceed with the Placing, Xxxxxxx Xxxxxxx
will consult with the Company (to the extent practicable) and, if Xxxxxxx
Xxxxxxx shall, at any time before Admission, give notice of any such matter
to the Company, clause 11.3 shall apply.
11.3 Where this clause 11.3 applies, Xxxxxxx Xxxxxxx may in its absolute
discretion, following discussions with the Company:
(A) allow the issue of Placing Shares to proceed on the basis of the Issue
Documents; or
(B) give notice to the Company (at the same time as the notice pursuant to
clause 11.1 or, as the case may be, clause 11.2 or at any time after
it, but before Admission) terminating this agreement in which case
clause 11.4 shall apply.
11.4 If this agreement is terminated pursuant to the provisions of this clause
11 or lapses in accordance with clause 2.3
(A) no party to this agreement will have any claim against any other
party, except that:
(1) such termination or lapse shall be without prejudice to any
accrued rights or obligations under this agreement;
12
(2) the Company shall pay to Xxxxxxx Xxxxxxx a fee of (pound)35,000
(together with any applicable VAT);
(3) the Company shall pay the fees and expenses specified in clause
8.2;
(4) any payments required to be made in accordance with this clause
11.4(A) shall be made within three Business Days after such
termination or lapse; and
(5) the provisions of clauses 1, 10, 11.4, 12, 15 and 17 shall remain
in full force and effect.
(B) Xxxxxxx Xxxxxxx shall withdraw the application for Admission; and
(C) if so requested in writing by Xxxxxxx Xxxxxxx the Company shall make a
press announcement in a form reasonably required by Xxxxxxx Xxxxxxx,
or if the Company shall fail to do so Xxxxxxx Xxxxxxx may itself make
such announcement.
12. ANNOUNCEMENTS
12.1 Save for the issue and publication of the Issue Documents, no public
announcement or communication which is or might be material in the context
of the Placing or which relates to Admission shall, without the prior
written consent of Xxxxxxx Xxxxxxx be published, by or on behalf of any
member of the Group between the date of this agreement and the date ninety
days after Admission without the prior written consent of Xxxxxxx Xxxxxxx.
12.2 The Company will not and will procure that no other member of the Group
will prior to Admission:
(A) enter into any commitment or agreement, or put itself in a position
where it is obliged to announce:
(1) that any commitment or agreement may be entered into, which is or
might be material in the context of the Placing or Admission; or
(2) that any significant new matter has arisen or any significant
change has occurred as referred to in clause 3.4; or
(B) issue any relevant securities (as defined in CA85); or
(C) enter into any agreement or undertaking to do any of the above;
without the prior written consent of Xxxxxxx Xxxxxxx.
12.3 Xxxxxxx Xxxxxxx shall be entitled to make for itself or on behalf of any
other Indemnified Person, after such consultation with the Company as shall
be reasonably practicable in the circumstances, any announcement concerning
the Placing as may be necessary in its reasonable opinion to ensure
compliance with the FSMA (and in particular Parts VIII and XXVII of that
Act).
13. CONTINUING OBLIGATIONS
13.1 The Company shall at all times whilst Xxxxxxx Xxxxxxx remains the Company's
Nominated Advisor or Broker comply with all statements of intent and
undertakings contained in the Issue Documents.
13
13.2 The Company shall whilst Xxxxxxx Xxxxxxx remains the Company's Nominated
Advisor or Broker:
(A) give advance notice to and discuss with Xxxxxxx Xxxxxxx any
announcement of profits or losses and dividends in respect of any
financial period of the Group;
(B) discuss with Xxxxxxx Xxxxxxx any other information which is likely to
affect the general character or nature of the business of the Company
or the Group or may be necessary to be made known to the public in
order to enable shareholders and the public to appraise the position
of the Company or the Group and in order to avoid the establishment of
a false market in the Company's securities;
(C) forward to Xxxxxxx Xxxxxxx for its prior perusal and (unless required
to be made by law or the AIM Rules or the City Code) 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 profit sharing or share option
or employee share schemes) and all press announcements (other than
routine trade press announcements); and
(D) provide to Xxxxxxx Xxxxxxx such financial information (including
management accounts, budgets and other relevant financial data)
relating to the Company and the Group as it may reasonably require
from time to time.
13.3 The Company undertakes that except with the prior written consent of
Xxxxxxx Xxxxxxx (which consent shall not be unreasonably withheld or
delayed) and for so long as Xxxxxxx Xxxxxxx is Nominated Advisor or Broker
to the Company it will not after Admission and before the date of
announcement of results of the Group for the financial year ending 31
December 2006 enter into or procure or (insofar as reasonably within its
power to prevent the same) permit any company in the Group to enter into
any material commitment or agreement or arrangement or knowingly do or
permit to be done any other act or thing which in any such case constitutes
a significant change to anything contained in the Issue Documents or a
significant new matter affecting the assessment of the Placing or which is
otherwise material to the Company or the Group.
13.4 The Company undertakes to Xxxxxxx Xxxxxxx to comply with the requirements
of the AIM Rules and all other requirements statutory or otherwise relating
to listed public companies and confirms that it has established a proper
system and appointed appropriate personnel to monitor such compliance.
13.5 The Directors confirm to the Company and to Xxxxxxx Xxxxxxx, for the
purposes of rule 31 of the AIM Rules, that they accept full responsibility,
collectively and individually for the Company's compliance with the AIM
Rules.
13.6 Each of the Directors severally undertakes to Xxxxxxx Xxxxxxx and the
Company that:
(A) he will not at any time deal in any of the Company's AIM Securities
during a close period (as those expressions are respectively defined
in the AIM Rules), he will at all times comply with paragraph 21 of
the AIM Rules and the provisions of the City Code as they may be from
time to time in force so far as the same apply or are intended to
apply to a person having the relationship to the Company which he for
the time being may have and will so far as he is able procure that the
affairs of the Company are conducted in accordance with the AIM Rules;
14
(B) he will comply with and, so far as he is able, procure compliance by
the Company and the other directors of the Company with all the
undertakings and commitments made by the Company and/or those
directors or on their behalf in the Admission Document;
(C) he will, so far as he is able, procure that the Company complies with
the AIM Rules; and
(D) he will disclose to the Company all information which the Company
needs in order to comply with rule 17 of and Schedule 5 to the AIM
Rules; and
(E) he will procure so far as he is able that the Company complies with
its obligations under the Nomad Agreement.
13.7 The Company and each of the Directors confirms that the Company has no
intent to issue any preferred stock and the Company undertakes that it
shall not issue any preferred stock unless authorised by not less than 75%
of the holders of Common Stock entitled to vote on such a resolution. The
Company and each of the Directors further undertakes that it/he/she shall
endeavour to procure a stockholders resolution at the next annual general
meeting of stockholders to either: (a) cancel all authorised preferred
stock; or (b) require a stockholders resolution with not less than 75% of
the holders of Common Stock entitled to vote on such a resolution before
the Company can issue any preferred stock.
14. RESTRICTIONS ON SALES
14.1 Each of the Directors covenants with the Company and Xxxxxxx Xxxxxxx that:
(A) before the first anniversary of Admission, he will not dispose or
agree to dispose of, and will procure in so far as he is able that no
person with whom he is connected or associated for the purposes of
section 346 of CA85 will dispose or agree to dispose of any shares or
any interest in any shares of the Company, or any rights arising from
or attached to or to subscribe for any such shares without the prior
written consent of Xxxxxxx Xxxxxxx (such consent may be withheld in
its absolute discretion);
(B) at any time after the first anniversary of Admission and before the
second anniversary of Admission, he will, and will procure in so far
as he is able that any such connected or associated person will, only
dispose of any such shares or interest or rights with the consent of
the Company and Xxxxxxx Xxxxxxx (such consent being reasonably
required to maintain an orderly market in the shares of the Company);
and
(C) at any time after the first anniversary of Admission, he will, and
will procure in so far as he is able that any such connected or
associated person will, only dispose of any such shares or interest or
rights through the brokers for the time being of the Company (provided
that the Company's brokers shall be obliged to effect any such bargain
on on a best price and execution basis).
14.2 The restrictions contained in clause 14.1 shall not prevent:
(A) acceptance of any offer made for the share capital of the Company (or
any part of it) that would result in the offeror obtaining or, for the
purposes of Rule 9.1(b) of the City Code, consolidating control (as
defined in the City Code) of the Company or the execution of an
irrevocable commitment to accept such an offer or a sale to an offeror
or potential offeror which is named in a public announcement of a firm
or, as the case may be, possible intention to make such an offer; or
15
(B) a disposal pursuant to a court order; or
(C) a disposal after the death of a Director.
14.3 Notwithstanding clause 14.1 and 14.2, no disposal by any of the Directors
shall be made in contravention of rule 21 of the AIM Rules.
14.4 Each Director warrants there has not been created and there is not in
effect any charge over or in respect of any shares of the Company held by
him or any person connected or associated with him for the purposes of
section 346 of CA85.
15. NOTICES
15.1 Any notice to be given under this agreement shall be in writing (not
including writing on the screen of a visual display unit or other similar
device which shall not be treated as writing for the purposes of this
agreement) and shall be delivered or sent to:
(A) in the case of the Company or any of the Directors:
Xxxx Xxxxx Xxxxxxx Charot LLP, Xxxxxxx Xxxxx, 0 Xxxxxxxx Xxxxx, Xxxxxx
XX0 0XX
Fax: x00 (0) 00 0000 0000
Attention: Xxxx Xxxxxxx/Xxxxx Xxxxxx
(B) in the case of Xxxxxxx Xxxxxxx:
00 Xxxx Xxxxxx, Xxxxxx XX0X 0XX
Fax: x00 (0)000 000 0000
Attention: Xxxxxx Xxxxxxx/Xxxxxxx Xxxxxxxx
15.2 Any notice shall be valid if delivered by hand or sent by legible facsimile
transmission or pre-paid first class post (airmail if sent to or from an
address outside the United Kingdom) and if delivered by hand or sent by
legible facsimile transmission shall conclusively be deemed to have been
given or served at the time of despatch and if sent by post in the manner
described above shall conclusively be deemed to have been received 48 hours
from the time of posting (or 72 hours if sent to or from an address outside
the United Kingdom).
15.3 Any notice given by Xxxxxxx Xxxxxxx under clauses 11.1, 11.2 or 11.3 may
also be given by any of its directors to any Director either personally or
by telephone (to be confirmed immediately in writing) and shall have
immediate effect from such personal or telephone notification.
16. AGENT FOR SERVICE OF PROCESS
16.1 The Company irrevocably agrees that any claim, order, judgment or other
process (each a "Service Document") may be sufficiently and effectively
served on it in connection with any proceedings in England and Wales
arising out of or in any way connected with this Agreement ("Proceedings")
by service on the Company's Solicitors or on any replacement agent
appointed pursuant to clause 16.2) below.
16.2 If the agent referred to in clause 16.1 (or any replacement agent appointed
pursuant to this clause 16.2) ceases for any reason to act as such, the
Company will forthwith appoint a replacement agent having an address for
service in England or Wales and immediately notify Xxxxxxx Xxxxxxx of such
change in writing. Until such time as notice of such change of agent has
been served on Xxxxxxx Xxxxxxx, service on the original agent or, where
applicable, any replacement agent who has ceased to act, will be deemed
effective service under this clause 16.
16
16.3 Any Service Document addressed in accordance with clause 16.1 will be
deemed to have been duly served if served in accordance with clause 15.
16.4 A copy of any Service Document served on an agent pursuant to this clause
16 will also be sent by post to the Company at its address for the time
being for service under clause 15, but no failure or delay in so doing will
prejudice the effectiveness of service of the Service Document in
accordance with the provisions of this clause 16.
16.5 Nothing in this clause 16 will affect the right of the Company to serve
process in any other manner permitted by law.
17. GENERAL
17.1 Any time, date or period referred to in this agreement may be extended by
mutual agreement between the parties but as regards any time, date or
period as originally fixed or so extended, time shall be of the essence.
17.2 The obligations and liabilities of any party shall not be affected by any
time, forbearance, indulgence, release or compromise given to him or any
other party, nor by any other matter or circumstance which (but for this
provision) would operate to affect any such obligations except an express
written release by all the parties to whom the relevant obligations and
liabilities are owed or due.
17.3 Xxxxxxx Xxxxxxx may take action for any breach or non-fulfilment of any
warranties undertakings agreements and representations on behalf of the
Company and/or Directors before or after Admission notwithstanding that
such breach or non-fulfilment was known to or discoverable by it before
Admission and notwithstanding that it shall delay or otherwise fail to
exercise its rights under this agreement or generally.
17.4 The rights and remedies reserved to Xxxxxxx Xxxxxxx under any provision of
this agreement or in any document to be executed pursuant to it shall be in
addition and without prejudice to any other rights or remedies available to
it whether under this agreement or any such document or by statute common
law or otherwise.
17.5 The provisions of this agreement (including without limitation, the
Warranties, the Indemnity, the tax covenant contained in Schedule 6 and the
provisions of clauses 12 to 17 inclusive) which are capable of having
effect following Admission shall remain in full force and effect,
notwithstanding the completion of all matters, arrangements and
transactions referred to in or contemplated by this agreement.
17.6 This agreement may be entered into in any number of counterparts and by the
parties to it on separate counterparts, each of which when executed and
delivered shall be an original but all the counterparts shall together
constitute one and the same instrument.
17.7 The parties agree and acknowledge that:
(A) nothing in this agreement, except for clauses 10.1 and 10.2 which are
intended to benefit persons who are not parties to this agreement, is
intended to benefit any person who is not a party to it (a
"Non-Party") and accordingly, except as aforesaid, no Non-Party has
any right under the Contracts (Rights of Third Parties) Xxx 0000 to
enforce any term of this agreement; and
17
(B) no consent of any Non-Party shall be required for any rescission of or
amendment to this agreement.
The provisions of this clause 17.7 do not affect any right or remedy of a
third party which exists or is available otherwise than by operation of the
Contracts (Rights of Third Parties) Xxx 0000.
17.8 The parties agree and acknowledge that this agreement and the Nomad
Agreement constitiute the entire agreement between the parties relating to
the subject matter of this agreement.
17.9 This agreement shall be governed by and construed in accordance with
English Law and the parties irrevocably submit themselves to the
non-exclusive jurisdiction of the English Courts.
THIS AGREEMENT has been duly executed, as a deed in the case of each of the
Directors and under hand by the other parties, and delivered on the date set out
at the head of page 1
18
SCHEDULE 1
Directors
------------------- ------------------------------------------ ---------------------------------------
Name Address Amount under clause 9.7
------------------- ------------------------------------------ ---------------------------------------
Xxxx Xxxxx No 13, Weihui Road, Yangling 3 times annual salary received from
Agricultural High-tech Industries the Group in 2005
Demonstration Zone, Shaanxi, PRC
------------------- ------------------------------------------ ---------------------------------------
Xxxx Xx No. 29, Xxxxxx Road, Yangling 3 times annual salary received from
Agricultural High-tech Industries the Group in 2005
Demonstration Zone, Shaanxi, PRC
------------------- ------------------------------------------ ---------------------------------------
Xxxxx Xxxxxx 0000 Xxxxxxxx Xxxx, XxXxxx, XX 00000, XXX $50,000
------------------- ------------------------------------------ ---------------------------------------
Xxxxxxx XxXxxxx 00 Xxxxxxxxx Xxxxxx, Xxxx, XX, XXX $50,000
------------------- ------------------------------------------ ---------------------------------------
Weirui Wan Xx. 000, Xxxxxxxx 0, Xxxxxxxx Xxxxx, 3 times annual salary received from
Kejiao Street, Yangling Agricultural the Group in 2005
High-tech Industries Demonstration Zone,
Shaanxi, PRC
------------------- ------------------------------------------ ---------------------------------------
19
SCHEDULE 2
Documents to be Delivered
Save to the extent that they have been delivered to Xxxxxxx Xxxxxxx prior to
signature of this agreement, each of the following documents is to be delivered,
in a form previously approved by Xxxxxxx Xxxxxxx, to Xxxxxxx Xxxxxxx or to Xxxxx
Day on its behalf, forthwith upon execution of this agreement (or such other
time as is specified below) and, save where the context otherwise requires, is
to be dated on or about the date of this agreement:
1. a certified copy of the minutes of a meeting of the Board:
(A) approving and authorising the execution of this agreement;
(B) approving the Placing;
(C) approving and authorising the application for Admission;
(D) approving and authorising the publication of the Issue Documents;
(E) appointing or confirming the appointment of audit or compensation
committee;
2. a copy of the Admission Document (to be delivered as soon as practicable on
the date of this agreement);
3. the Opinion;
4. a copy of the Press Announcement initialled by a Director;
5. an original copy of the Working Capital Memorandum signed on behalf of the
Board;
6. an original copy of the Working Capital Report signed by the Reporting
Accountants;
7. an original copy of the FRP Report signed by the Reporting Accountants;
8. letters from the Reporting Accountants in relation to:
(A) the Proforma Net Asset Statement set out in Part V of the Admission
Document, addressed to Xxxxxxx Xxxxxxx and the Company;
(B) the statements relating to taxation contained in the Admission
Document, addressed to Xxxxxxx Xxxxxxx and the Company;
(C) the accuracy of certain financial information in the Admission
Document, addressed to Xxxxxxx Xxxxxxx and the Company;
(D) the no significant change statement contained in the Admission
Document, addressed to Xxxxxxx Xxxxxxx and the Company;
9. a copy of the letter from JG addressed to the Company and to Xxxxxxx
Xxxxxxx confirming that they have explained to the non-English speaking
Directors in Mandarin the nature of their responsibilities and obligations
under the AIM Rules and the importance of the verification process, and
confirming that the non-English speaking Directors understand their
obligations;
10. letters signed by the Company, the Company's Solicitors and the Reporting
Accountants in relation to Xxxxxxx Xxxxxxx'x undertaking in accordance with
Schedule 6 to the AIM Rules;
20
11. the duly signed responsibility letter and a certified copy of the power of
attorney of each of the Directors;
12. a copy of the memorandum prepared by the Company's Solicitors explaining
the nature of responsibilities and obligations of directors of a company
whose securities are traded on AIM;
13. a certificate of incorporation and by-laws of the Company;
14. an original copy of the Due Diligence Reports signed by the Company's
Solicitors;
15. the Verification Notes (with supporting documents) duly signed by each
party responsible for them;
16. a certified copy of the rules of the Company's share option scheme(s);
17. the application for Admission duly signed by a Director;
The following documents are to be delivered to Xxxxxxx Xxxxxxx or Xxxxx Day on
its behalf as soon as practicable after the issue of the Placing Shares in
accordance with clause 6:
1. a certified copy of a resolution of the Board in accordance with clause 6
approving the issue of the Placing Shares;
The following documents are to be delivered to Xxxxxxx Xxxxxxx or Xxxxx Day on
its behalf by the times specified below:
1. a cheque payable to the London Stock Exchange in respect of the London
Stock Exchange's charges notified by Xxxxxxx Xxxxxxx to be delivered on the
Business Day before the date of hearing of the application for Admission;
2. an original copy of the Warranty Certificate to be delivered by close of
business on the Business Day immediately preceding the expected date of
Admission; and
3. such evidence as Xxxxxxx Xxxxxxx shall reasonably request of satisfaction
of each of the Conditions to be delivered by close of business on the
Business Day immediately preceding the expected date of Admission.
21
SCHEDULE 3
Warranties
1. Admission Document and due diligence
1.1 All statements of fact contained in the Admission Document are true and
accurate in all material respects and not misleading in any material
respect and all expressions of opinion, intention or expectation contained
in it are made on reasonable grounds, are truly and honestly held and are
made after due and careful consideration and enquiry.
1.2 There are no facts or matters known which on reasonable enquiry would have
been known to the Company or the Directors which have not been disclosed in
the Admission Document, the omission of which makes any statement in it
misleading in any material respect or which would be material for
disclosure in it.
1.3 The Admission Document contains 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 Group and of the rights attaching to the Common Stock.
1.4 The Admission Document contains all particulars and information required by
and in accordance with the AIM Rules, the City Code on Takeovers and
Mergers, the FSMA and all other relevant requirements of the London Stock
Exchange and any other relevant law or regulation in the United Kingdom.
1.5 All statements of fact contained in the Institutional Presentation are true
and accurate in all material respects and not misleading in any material
respect and all expressions of opinion, intention or expectation contained
therein are made on reasonable grounds, are truly and honestly held and are
made after due and careful enquiry.
1.6 All material information requested by the Reporting Accountants from the
Company and the Directors for the purposes of the preparation by them of
the FRP Report and the Working Capital Report (a copy of which has been
delivered to Xxxxxxx Xxxxxxx) and by the Company's Solicitors for the
purposes of the preparation by them of the Due Diligence Reports has been
supplied to them and such information was when supplied and is true and
accurate in all material respects and was given in good faith.
1.7 To the best of the Company's and the Directors' knowledge, information and
belief, all statements of fact contained in the the Working Capital Report,
the FRP Report and the Due Diligence Reports are true and accurate in all
material respects and there is no statement either of fact or opinion in
any such report or any omission therefrom which presents a view of the
Company or the Group or its businesses or circumstances which is inaccurate
in any material respect or which is misleading or with which the Company or
the Directors disagree in any material respect and any such opinion
attributed to the Company or the Directors is truly and honestly held by
the Company or, as the case may be, the Directors and either fairly based
upon facts within the knowledge of the Company or, as the case may be, the
Directors, (having made all due enquiries) or made on reasonable grounds.
1.8 The cashflow and working capital projections which are contained in the
Working Capital Memorandum and which are reported on by the Reporting
Accountants in the Working Capital Report have been carefully compiled on
reasonable assumptions honestly made, all of which are referred to in such
memorandum, and prepared with due care and attention and are presented on a
basis consistent with the accounting policies normally adopted by the Group
and take into account all matters known to the Directors concerning the
Company and/or other members of the Group or the markets in which they are
expected to carry on business. All expressions of opinion or intention or
22
expectation contained in the Working Capital Memorandum are made on
reasonable grounds and are truly and honestly held by the Company and the
Directors, there are no other facts known or which could on reasonable
enquiry have been known to the Company or the Directors the omission of
which would make any such statement or expression misleading, and there are
no other assumptions on which the cashflow projections ought to have been
based which have not been made. The working capital available to the Group
is sufficient for its present requirements, that is for at least the next
twelve months from the date of publication of the Admission Document.
1.9 The Proforma Statement of Net Assets of the Group contained in the
Admission Document and all information relating to it (including the bases
and adjustments in respect of such proforma statement) contained in the
Admission Document have been prepared after due and careful consideration
of all relevant facts and figures available to the Company and the bases
and adjustments in respect of such proforma statement are reasonable bases
to rely upon and adjustments to make having regard to the circumstances of
the Group.
1.10 All reasonable enquiries have been made to ascertain and verify the
accuracy of all statements of fact and the reasonableness of all other
statements contained in the Admission Document and in particular the
replies to the Verification Notes have been prepared or approved by persons
having appropriate knowledge and responsibility to enable them properly to
provide such replies and the replies for which any officer or employee of
or the Group is responsible have been provided with due care and attention
are true, complete and accurate in all material respects and not misleading
in any material respect and do not omit any material matter and all
statements of opinion or intention in, or referred to in, such replies are
honestly held and based on reasonable grounds.
1.11 The Directors' expectations as to the prospects of the Group and as to
future dividends as set out in the Admission Document are honestly held
beliefs and are based on reasonable grounds.
1.12 The section headed "Risk Factors" in Part 1 of the Admission Document
accurately summarises in a way which is not misleading each of the risk
factors which the Company and the Directors, after due and careful
consideration, believe should be taken into account by an investor before
subscribing for Placing Shares and there are no other risk factors relating
to the Group or the Placing Shares which ought to be included in the
Admission Document.
1.13 The section headed "Management's Discussion and Analysis of Financial
Condition and Results of Operation" accurately summarises in a way which is
not misleading the financial condition of the Company and its operations
and there are no factors relating to the financial condition of the Company
and the results of its operation which ought to be included in the
Admission Document.
2. Share Capital and Authority
2.1 The authorised and issued share capital of the Company at the date of this
agreement and upon Admission is or will be as stated in Part VI of the
Admission Document and the issued share capital is or will upon Admission
be fully paid and is not and will not at Admission be subject to any lien,
encumbrance, equity, charge or third party right or restriction on transfer
either imposed by the Company or of which the Company is or the Directors
are aware and will confer upon any purchaser of them under the Placing the
rights and restrictions set out or referred to in the Admission Document.
The other facts set out in the recitals to this agreement are true.
23
2.2 All sums due in respect of the issued share capital of the Company and
every other member of the Group have been paid to and received by the
Company or as the case may be such member of the Group and, save as
disclosed in the Admission Document, there are no allotted but unissued
shares or outstanding options or other rights to subscribe for or call for
the allotment of any shares or securities convertible into shares or loan
capital of the Company or any other member of the Group.
2.3 The Company has power under its certificate of incorporation and by-laws to
issue the Placing Shares in the manner proposed in this agreement and all
necessary steps have been taken (subject only to Admission) to permit and
implement such issues of shares as are referred to in the Admission
Document and the issue of the Placing Shares so as to enable full effect to
be given to the terms of this agreement and the Placing.
2.4 The issue of the Placing Shares will not infringe any limits, powers or
restrictions to which the Company is subject or the terms of any contract,
obligation or commitment of the Company nor give rise to any obligation or
commitment of the Company nor give rise to any obligation under any such
contract, obligation or commitment which is inconsistent with the
acquisition by any allottee, purchaser or subscriber (as the case may be)
of valid unencumbered title to the Placing Shares or any of them.
2.5 The entry into this agreement and the performance of the Company's
obligations under it and full implementation of the matters stated as
proposed to be undertaken as referred to in the recitals are within the
power of the Company without the need for any further sanction, approval,
licence or consent of members of the Company or any class of them or of any
other person and will comply with all relevant requirements of CA85, the
AIM Rules, the FSMA and all other applicable laws, rules and regulations of
any jurisdiction and with all agreements to which any member of the Group
is a party or by which it or its property is bound and will not infringe
any limits, restrictions, obligations or commitments of or any member of
the Group howsoever arising or result in the imposition on or variation of
any rights or obligations of any member of the Group, in any such case in a
manner which is material.
3. Financial
3.1 The audited financial statements of the Group for the three years ended on
the Last Accounts Date:
(A) were prepared in accordance with United States generally accepted
accounting principles with all applicable standards of the Public
Company Accounting Oversight Board (United States) consistently
applied except as disclosed or stated in the relevant accounts; and
(B) give a true and fair view of the state of affairs of the Group at the
relevant balance sheet dates and of the profits and losses and cash
flows of the Group for such periods; and
(C) either make proper provision for, or, where appropriate, include a
note in accordance with good accounting practice in the United States
in respect of all liabilities, whether actual, deferred, contingent or
disputed, of the Group as at the relevant dates.
and the Company and the Directors are not aware of any matter which
would mean that the financial statements included in the Admission
Document do not give a true and fair view of the financial position and
the profits and cash flows of the Group at the dates and for the
periods stated in the report.
3.2 Since the Last Accounts Date and save as set out in the Interim Statement:
24
(A) the operations of the Group have been carried on in the ordinary and
usual course and there has been no material adverse change in the
financial or trading position or prospects of the Group;
(B) no member of the Group has otherwise than in the ordinary course of
business entered into or assumed or incurred any contract, commitment
(whether in respect of capital expenditure or otherwise) borrowing,
indebtedness in the nature of borrowing, guarantee, liability
(including contingent liability) or other obligation of a long term,
unusual or onerous nature or which involves or could involve an
obligation of a material nature or magnitude;
(C) no dividend or other distribution has been declared, paid or made by
any member of the Group;
(D) no debtor has been released by any member of the Group to an extent
which is material in relation to the Group on terms that he pays less
than the book value of his debt and no debt of such material amount
owing to any member of the Group has been deferred, subordinated or
written-off or is now thought likely to prove to any material extent
irrecoverable;
(E) no member of the Group has incurred any liability for taxation in any
jurisdiction or entered into any transaction which will give rise to
any liability to taxation in any jurisdiction other than corporation
tax on actual income or gains (and not deemed income) of the Group,
PAYE or National Insurance (or any analogous taxation for which any
member of the Group is liable outside the United Kingdom);
(F) no member of the Group is involved in any claim or dispute with any
taxation or excise authorities anywhere in the world which could
reasonably be considered material to the Group and to the best of the
knowledge information and belief of the Company and the Directors,
there is no significant risk that such a claim or dispute will be made
or arise; and
(G) the business of the Group has not been adversely affected by the loss
of any important customer or source of supply or any abnormal
factor(s) not affecting similar businesses to a similar extent and to
the best of the knowledge and belief of the Company and the Directors,
there are no facts or circumstances likely to give rise to any such
effect whether before or after Admission.
3.3 The Interim Statement (which is not audited) was prepared in accordance
with United States generally accepted accounting principles applied
consistently with the manner in which those principles were applied in the
preparation of the Last Accounts and fairly reflects the profits and
losses, assets and liabilities and cashflows as at and up to the date to
which it was drawn up.
3.4 All necessary information, notices, computations and returns which ought to
have been made have been properly and duly submitted by the any member of
the Group to the Inland Revenue and any other relevant taxation or excise
authorities and such information, notices, computations and returns are
true and accurate in all material respects and are not the subject of any
material dispute with any taxation or excise authorities and all taxation
of any nature whatsoever for which any member of the Group is liable or for
which any member of the Group is liable to account has been duly paid
(insofar as such taxation ought to have been paid) or in so far as the same
is not yet payable, has been provided for in the Last Accounts.
3.5 No notice has been received and, to the best of the knowledge, information
and belief of the Company and the Directors, no circumstances have arisen
or are about to arise such that any person is, or would with the giving of
notice and/or lapse of time, become entitled to require payment of
indebtedness in respect of any monies borrowed by the any member of the
Group before its stated maturity and to the best of the knowledge,
information and belief of the Company and the Directors, no person to whom
any indebtedness is owed in respect of monies borrowed by any member of the
Group which are payable on demand proposes to demand repayment of such
indebtedness at present.
25
3.6 No event has occurred and is subsisting or to the best of the knowledge,
information and belief of the Company and the Directors is about to occur
(including the entry into this agreement and the performance of the
Company's obligations under it and full implementation of the matters
stated as proposed to be undertaken as referred to in the Admission
Document) which constitutes or would constitute or would with the giving of
notice and/or the lapse of time constitute an infringement or default, of
any obligation under any arrangement to which any member of the Group is a
party or by which it or any of its interests, properties, revenues or
assets are bound which would in any such case have a material adverse
effect on the overall business, assets, prospects or condition of any
member of the Group.
3.7 No member of the Group is liable under any guarantee or indemnity or
similar obligation in favour of any third party which is material to the
Group nor has it agreed to give or enter into any such guarantee or
indemnity or similar obligation.
3.8 No member of the Group nor any person for whom the Company or such a member
is vicariously liable has any material claim outstanding against it nor is
it engaged in or affected by any material legal or arbitration proceedings
(or in any material proceedings with any governmental or other body or any
other governmental, revenue or regulatory investigations or enquiries) and
no such proceedings, investigations or enquiries are threatened or pending
nor, to the best of the knowledge, information and belief of the Company
and the Directors, are there any circumstances which may give rise to any
such proceedings, investigations or enquiries. 7.9 No member of the Group
has taken any action nor have any proceedings been served on or notified to
any member of the Group, nor to the best of the knowledge, information and
belief of the Company and the Directors, have any steps been taken or
proceedings started or threatened against any member of the Group for its
winding up or dissolution or for it to enter into any arrangement or
composition for the benefit of creditors, or the appointment of a receiver,
administrative receiver, trustee or similar officer of any member of the
Group or any of its interests, properties, revenues or assets nor has any
distress, execution or other similar process been commenced or undertaken
in respect of any member of the Group nor is there any unfulfilled or
unsatisfied judgment or court order outstanding against any member of the
Group.
3.10 No member of the Group has received any notice under, nor is it unable to
pay its debts for the purposes of, section 123 of the Insolvency Xxx 0000
or any analogous legislation outside the United Kingdom.
4. Group Operations
4.1 The Company and each other member of the Group has been duly incorporated
and has full corporate power and authority to carry on its business as at
the date of this agreement and has carried on such business in compliance
in all material respects with all legal and regulatory requirements
applicable to such business and each member of the Group holds all
licences, permissions, authorisations and consents necessary to enable it
to carry on the same, and all such licences, permissions, authorisations
and consents are in full force and effect and, there are no circumstances
which indicate that any of them may be revoked, rescinded, avoided or
repudiated or not renewed in whole, or in part, in the ordinary course of
events.
26
4.2 No member of the Group has carried on investment business for the purposes
of the FSA.
4.3 (A) The Company, or another member of the Group, is the sole unencumbered
legal and beneficial owner, capable of transferring with full title
guarantee and, where registered, the sole registered proprietor of,
all the Intellectual Property Rights owned by the Group ("the Group's
Intellectual Property Rights") and is otherwise entitled to use all
Intellectual Property Rights used in or in connection with its
business, free from any licence, sub-licence or royalty obligations.
(B) The Group's Intellectual Property Rights are set out in the Due
Diligence Reports.
(C) None of the Group's Intellectual Property Rights has been wrongfully
or unlawfully acquired by the Company.
(D) Neither the validity or subsistence of the Group's Intellectual
Property Rights nor the Company's right, title or interest in any
third party Intellectual Property Rights is the subject of any
current, pending or threatened challenge, claim or proceedings,
including for opposition, cancellation, revocation or rectification.
The Group's right, title or interest in the Group's Intellectual
Property Rights has not been the subject of any claim, challenge or
proceedings and there are no facts or matters which might give rise to
any such challenge, claim or proceedings.
(E) The Group has not entered into any agreement, arrangement or
understanding (whether legally enforceable or not) for the licensing
of, or otherwise permitting the use or exploitation of, any of the
Group's Intellectual Property Rights or which prevents, restricts or
otherwise inhibits the Group's freedom to use and exploit the Group's
Intellectual Property Rights.
(F) None of the Group's Intellectual Property Rights are currently being
infringed or used without authorisation by any third party, nor has
any of the Group's Intellectual Property Rights been infringed prior
to the date of this agreement.
(G) The Group is not engaged in any activities which infringe any
Intellectual Property Rights of any third party.
(H) All of the Intellectual Property Rights used in or in connection with
the Group's business and created or discovered by any of the
Directors, employees of the Group or any other third party on behalf
of the Company or other members of the Group have either been legally
assigned to a member of the Group or were created or discovered during
the normal course of employment and a member of the Group has sole
ownership of such Intellectual Property Rights and all proprietary
rights therein (whether created or discovered alone or jointly with
others).
(I) No member of the Group is engaged in any activities which involve the
misuse of any confidential information belonging to any third party,
nor does any member of the Group have in its possession or control any
such confidential information without the licence or authority of the
relevant owner.
(J) The Company and the Directors are not aware of any actual, alleged or
threatened misuse by any person of its own confidential information.
No member of the Group has disclosed to any person any of its
confidential information other than under an appropriate, legally
binding and enforceable confidentiality agreement.
27
(K) The Company or another member of the Group is the sole legal and
beneficial owner (duly registered with Network Solutions, Inc.) of the
domain name: "xxx.xxxxxxx.xxx" ("the Domain Name").
(L) Neither the Company nor any member of the Group has at any time had
any dispute with any person relating to proprietary or other rights in
the Domain Name and that its use does not infringe any third party
Intellectual Property Rights.
(M) The Company or another member of the Group has paid all the necessary
registration fees in relation to the Domain Name for the period prior
to the date hereof and it is not aware of any reason why the
registration may be capable of being expunged.
4.4 All statements of fact contained in the Admission Document relating to the
premises currently occupied by members of the Group are true and accurate
in all material respects and not misleading in any material respect and a
member of the Group has good and marketable title to each of the said
premises.
4.5 The businesses, undertakings and other assets of the Group are insured to
levels and against risks which the Company and the Directors reasonably
consider to be prudent having regard to the businesses carried on by the
Group and local practices and to the best of the knowledge, information and
belief of the Company and the Directors there are no circumstances which
could render any of such insurances void or voidable and there is no
material insurance claim made by or against any member of the Group
pending, threatened or outstanding.
4.6 To the best of the knowledge, information and belief of the Company and the
Directors, neither the Company nor any other member of the Group has any
material environmental liabilities and no facts or circumstances exist
which would give rise to material environmental liabilities.
5. General
5.1 Other than as dislcosed in the Admission Document, there is not
outstanding:
(A) save for expenses or advances of immaterial amount, any loan made by
any member of the Group to, or debt owing to any member of the Group
by, any of the Directors or any person connected with any of them
(within the meaning of section 839 of the Income and Corporation Taxes
Act 1988); and
(B) any agreement or arrangement to which any member of the Group is a
party and in which any of the Directors or any such connected person
is interested.
5.2 There are no agreements or understandings (whether legally enforceable or
not) between any member of the Group and any person who is a shareholder or
the beneficial owner of any interest in any member of the Group relating to
the management of the business or the appointment or removal of any
director of any member of the Group or the ownership or transfer of
ownership of any of its assets or which concerns the provision of any
finance, goods, services or other facilities to or by any member of the
Group or otherwise relating to any member of the Group or the affairs of
any member of the Group.
5.3 The Company is the beneficial owner free from all liens, charges, equities,
encumbrances and other third party rights of all of the issued shares of
Bodisen Holdings, Inc. which is incorporated with limited liability.
Bodisen Holdings, Inc. is the beneficial owner free from all liens,
charges, equities, encumbrances and other third party rights of all of the
issued shares of Yang Ling Bodisen Biology Science and Technology
Development Company Limited. Save for those shares, neither the Company nor
any member of the Group owns, or has ever owned, any interest in the share
or loan capital of any company, corporation or undertaking save as is
disclosed in the Admission Document.
28
5.4 The Directors are all of the directors of the Company and no person is a
shadow director of the Company.
6. Competition
6.1 There is not in existence in connection with the businesses of any member
of the Group any agreement or arrangement which infringes, or of which
particulars have or should have been delivered to any relevant governmental
or other authority in any jurisdiction under, any relevant legislation in
any territory regarding anti-competitive or restrictive trade or business
practices.
7. US warranties
7.1 The Company is not, and after giving effect to the offering and sale of the
Placing Shares will not be, required to register as an "investment company"
as such term are defined in the Investment Company Act of 1940 (US), as
amended.
7.2 The Company and its affiliates have not taken directly or indirectly, any
action prohibited by Regulation M under the Securities Exchange Act of 1934
(US) in connection with the offering of the Placing Shares.
7.3 Neither the Company or any of its subsidiaries nor any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or any of its subsidiaries has:
(A) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity;
(B) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds;
(C) caused the Company or any of its subsidiaries to be in violation of
any provision of the U.S. Foreign Corrupt Practices Act of 1977 when
such regulation becomes applicable to the Company or any of its
subsidiaries; or
(D) made any unlawful bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
29
SCHEDULE 4
Warranty Certificate
Xxxxxxx Xxxxxxx & Co. Limited
00 Xxxx Xxxxxx, Xxxxxx XX0X 0XX
*** 2006
Dear Sirs
We refer to the placing agreement dated *** between Xxxxxxx Xxxxxxx & Co.
Limited (1), Bodisen Biotech, Inc. (2) and its directors (3) (the "Placing
Agreement"). Words and expressions defined in the Placing Agreement have the
same meanings in this letter.
We confirm to you that:
1. each of the Conditions (other than Admission) has been, or will, upon
delivery of this letter, have been satisfied or fulfilled in accordance
with its terms;
2. none of the Warranties was breached, or untrue, or inaccurate or misleading
at the date of the Placing Agreement and no Specified Event has occurred.
This letter, which has been delivered to you prior to the date of Admission, is
to be released to you immediately prior to Admission.
..............................
duly authorised on
behalf of Bodisen Biotech, Inc.
30
SIGNED by )
for and on behalf of Bodisen Biotech, Inc. )
in the presence of: )
SIGNED by )
for and on behalf of )
Xxxxxxx Xxxxxxx & Co. Limited in the )
presence of: )
SIGNED and DELIVERED as a DEED )
by Wang Quiong )
in the presence of: )
SIGNED and DELIVERED as a DEED )
by Xxxx Xx )
in the presence of: )
SIGNED and DELIVERED as a DEED )
by Xxxxx Xxxxxx )
in the presence of: )
SIGNED and DELIVERED as a DEED )
by Xxxxxxx XxXxxxx )
in the presence of: )
31
SIGNED and DELIVERED as a DEED )
by Weirui Wan )
in the presence of: )
32
APPENDIX 1 TO AIM PLACING AGREEMENT
Proforma Placing Letter
33
