DATED 29 March 2000
PLACING AGREEMENT
EUROTELECOM COMMUNICATIONS INC. (1)
XXXXXX XXXXXXX LIMITED (2)
THE DIRECTORS (3)
DATE
29 March 2000
PARTIES
(1) EUROTELECOM COMMUNICATIONS. INC. a company incorporated on 1 June 1987
in the State of Delaware in the United Slates, whose registered office
is at Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxx xx Xxxxxxxxxx,
Xxxxxx of Xxx Xxxxxx, Xxxxx xx Xxxxxxxx 00000 ("the Company");
(2) XXXXXX XXXXXXX LIMITED (number 2316630) a company incorporated on 14
November 1988 in England and Wales whose registered office is at The
Registry, Xxxxx Xxxx Xxxxx, Xxxxxx XX0X 0X0 ("XX");
(3) THE PERSONS LISTED IN THE FIRST SCHEDULE (`the Directors').
INTRODUCTION
(A) The Company has at the date of this Agreement an authorised share
capital of US$1,100,000 divided into 50,000.000 shares of common stock
of US$0.01 each (`Common Stock') of which ~> 17946,222 are in issue
fully paid up and 50,000000 shares of Class `A' common stock of US$0.01
each and US$100,000 of Preferred Stock.
(B) The Company has at the date of this Agreement an issued share capital
comprising 17,946,222 Shares of Common Stock only.
(C) The Company proposes to raise (pound)17,250,000 (prior to expenses) by
means of the placing up to 11,500,000 shares of Class "A" common stock
("the New Shares") for the purposes described in the Prospectus.
(D) On the terms and subject to the conditions of this Agreement, BG has
agreed, as agent for the Company, to use its reasonable endeavours to
procure Placees for the New Shares at the Issue Price on the terms set
out below.
(E) The Company proposes to apply for the admission of the New Shares to
trading on the Alternative Investment Market.
OPERATIVE PROVISIONS
1 DEFINITIONS
1.1 In this Agreement all words and expressions defined in the Prospectus
shall bear the same meanings and in addition the following words and
expressions shall, unless the context otherwise requires, have the
following meanings:
Accounts the audited consolidated balance sheets of the
Company and its Subsidiaries as at the Accounts Date
and the audited consolidated profit and loss accounts
and the cash flow statements for the Company and its
Subsidiaries for the accounting period ended on the
Accounts Date (including the notes thereto) (as
revised)
Accounts Date 30 June 1999
Act the Delaware General Corporation Law
Admission the admission of the New Shares to trading on AIM
AIM the Alternative Investment Market of the London Stock
Exchange
Posting Date 29 March 2000
Pre-placed Shares those 7,966,667 shares of class "A" common
stock of US $0.01 each which shall be placed by BG
with certain private individuals
Press Announcement a press announcement, in the agreed form, to be
released by BG on behalf of the Company giving
details of the Proposals
Proposals the Placing and Admission
Prospectus the circular in the agreed form, constituting a
prospectus for the purposes of and in accordance with
the POS Regulations and the AIM Rules, to be issued
by the Company
"(pound)" and "p" pounds and xxxxx, the lawful currency of the United
Kingdom the register of members of the Company
the Register the register of the members of the Company
the Registrars Lloyds TSB Registrars, Xxx Xxxxxxxx, Xxxxxxxx, Xxxx
Xxxxxx, XX00 0XX
the Registrars Agreement the agreement between the Registrars and the Company
for the provision of share registration services in
the agreed form
Relevant Person shall have the meaning set out in Clause 11.1 the
Securities Act of 1933 of the United States
Securities Act the Securities Act of 1933 of the United States
Share Option Scheme the EuroTelecom Communications, Inc. Employee Share
Option Scheme adopted on 28 March 2000
Shares the Existing Shares and the New Shares
Subsidiary a subsidiary (as defined by Sections 736 and 736A of
the Companies Act 1985) for the time being of the
Company
VAT United Kingdom Value Added Tax
Verification Notes verification notes, in the agreed form, the questions
to which have been prepared by the Company's legal
advisers in connection with the Proposals for the
purpose of substantiating the contents of the
Prospectus
Warranties the representations and warranties contained in
Schedule 2 made and given pursuant to the relevant
provisions of Clause 10
1.2 References to the Parties, the Introduction, the Schedules and Clauses
are to the Parties, the Introduction and the Schedules to and Clauses
of this Agreement.
1.3 Any document stated to be `in the agreed form" shall be in such form as
shall be agreed by the Parties on or before the date of the Prospectus
and signed on behalf of the Company and BG and by one of the Directors
on behalf of all the Directors for the purposes of identification in
each case with such amendments as may be agreed by or on behalf of the
Company and BG.
1.4 References to statutory provisions shall be construed as references to
those provisions as modified or re-enacted or extended from time to
time (whether before or after the date of this Agreement) and to any
subordinate legislation made under such provision and shall include
references to any repealed statutory provision (whether with or without
modification but so as not to increase the liability of any Party
hereunder).
1.5 All obligations of the Directors hereunder shall be several
obligations.
(b) the Company shall, where such termination arises under
paragraphs (b) or (c) of Clause 16, forthwith pay the amount
specified in Clause 9.1(b) (together with any VAT thereon);
(c) the Company shall forthwith pay to BC such of the expenses,
charges, and disbursements referred to in Clause 9.3 as have
been incurred (together with any VAT thereon)
(d) the provisions of clauses 9.4, 9.5,11 and 12 shall remain in
full force and effect.
2.4 BG may, in its absolute discretion, agree to extend the time for
satisfaction of any of the conditions in Clause 2.1 to not later than
the Longstop Date (in which case, references to such conditions in this
Agreement shall be to conditions so varied and corresponding
adjustments will be made to the other dates specified in this Agreement
and to the commissions payable pursuant to Clause 9) or to waive the
satisfaction of any of the conditions in Clause 2.1.
2.5 Subject as otherwise provided herein, the Company and the Directors
shall use all reasonable endeavours to procure that:
(a) the London Stock Exchange shall consent to Admission (subject
to it becoming effective in accordance with paragraph 16.6 of
the AIM Rules) not later than the Closing Date (or such later
date as BG and the Company may agree, being not later than the
Longstop Date);
(b) Admission shall become effective in accordance with paragraph
16.6 of the AIM Rules not later than the Closing Date (or such
later date as the Company and BC may agree, being not later
than the Longstop Date); and
(c) the Company and the Directors severally undertake to BC to use
all reasonable endeavours, insofar as they are able, to
procure that the conditions set forth in sub-clause 2.1 shall
be satisfied on or before the relevant time.
3 DELIVERY OF DOCUMENTS
3.1 The Company shall, prior to the despatch of the Prospectus, procure to
be delivered to BG
(a) one copy of the Press Announcement;
(b) one certified copy of the Prospectus as signed by or on behalf
of each of the Directors and one copy of the Application
signed as aforesaid;
(c) one certified copy of the responsibility letters and powers of
attorney, In the agreed form, signed by each of the Directors;
(d) one certified copy of the written consents, in the agreed
form, of each of those persons who have consented, in
accordance with the provisions of the POS Regulations, to the
inclusion in the Prospectus of the references to their names
in the form and context in which they are included;
(e) one certified copy of the Verification Notes signed by, or on
behalf of, all those persons responsible for any replies
thereto whereby such persons agree to take responsibility for
the answers to those questions for which they are expressly
stated to be responsible, together with copies of such
annexures thereto or material referred to therein as BG may
require;
(f) two certified copies of the minutes of a meeting of the board
of Directors, or a duly authorised committee thereof, in the
agreed form, approving and authorising the Placing and
Admission and the issue of the Prospectus; and shall advise as
to the extent to which cleared funds have been received from
the Placees of Pre-placed Shares pursuant to the Placing.
4.7 BG shall not have any liability in respect of any omission of
information in the Placing Documents or any information or statement of
fact or opinion contained therein being untrue, incorrect or
misleading, for which the Company and the Directors are solely
responsible.
4.8 BG shall be entitled to terminate its appointment as nominated adviser
under sub-clause 4.1 prior to the expiry of the term provided for
therein forthwith at any time by notice to the Company in the event
that there is a material breach of any of the provisions of this
Agreement or the Engagement Letter by the Company or by any of the
Directors (and, if capable of remedy, shall not have been duly remedied
by the defaulting Party within 14 days of the breach having come, or
being drawn, to his or its attention in writing).
5 ADMISSION
5.1 The Company hereby undertakes to BG to supply or procure the supply of
all such information, to give or procure the giving of all such
undertakings and to execute or procure the execution of all such
documents and to do or procure to be done all such things within its
power as may be required by the London Stock Exchange in connection
with the application by (or on behalf of) the Company for Admission.
5.2 The Company undertakes to BG to use its reasonable endeavours to
procure Admission on the next Business Day following the satisfaction
of the condition set out in paragraph (c) of Clause 2.1.
5.3 To the extent required by applicable law and/or the London Stock
Exchange, if any significant new matter or significant inaccuracy in
the Prospectus capable of affecting assessment of the New Shares arises
or is noted between publication of the Prospectus and Admission, the
Company and the Directors will promptly prepare a supplement to the
Prospectus in a form satisfactory to BC containing details of any such
significant new mailer or significant inaccuracy and ensure that such
supplement is delivered to the Registrar of Companies in London and to
the London Stock Exchange in the same manner in which the Prospectus
was delivered to such persons in compliance with the P05 Regulations
and the AIM Rules.
6 APPOINTMENT OF REGISTRARS
The Company hereby confirms to BG that:
(a) it has appointed the Registrars to act as registrars (upon the
terms of the Registrars Agreement) to the Placing;
(b) it will provide the Registrars with all authorisations and
information as will enable the Registrars to perform their
duties in accordance with the terms of this Agreement and the
Placing Letter, and that the authorities and discretions
granted to BG and contained in Clause 4 shall operate to
authorise BC to give any reasonable instructions to the
Registrars as BC considers appropriate; and
(c) it has appointed Lloyds TSB Registrars of Xxx Xxxxxxxx,
Xxxxxxxx, Xxxx Xxxxxx XX00 GDA to act as receiving agents to
the Placing.
7 OBLIGATIONS OF THE COMPANY
7.1 The Company shall procure:
(a) the publication of the Prospectus in accordance with paragraph
16.11 of the AIM Rules;
(b) delivery of the copies of the Prospectus to the Registrar of
Companies in England and Wales in accordance with the P05
Regulations on the date hereof;
(c) executed by the Company in the names of the allottees and for
the relevant numbers of New Shares shall be despatched to such
persons on the day of Admission (or as soon as practicable
thereafter).
8.4 Subject to the fulfilment in all respects of the conditions set out in
sub-clause 2.1 and to this Agreement not being terminated prior to
Admission, as soon as practicable following Admission and, in any
event, by midday on the second Business Day following the day of
Admission, BC shall from the proceeds of the New Shares, In the
following order of priority:-
(a) as agent for the Company pay to BC the fees and expenses
(including BC's legal expenses and disbursements) to which BC
is entitled pursuant to Clauses 9.1, 9.2 and 9.3:
(b) retain such fees, commissions and expenses to which BC is
entitled pursuant to Clause 9.4 and to the terms of its
appointment; and
(c) pay to the Company the balance of the monies received from
Placees in respect of the New Shares such payment to be made
to the Company's UK Bank account details of which the Company
shall inform BG in writing: 00 Xxx Xxxxxx, Xxxxxxx, Xxxxx,
XX00 0XX, account numbergl2SOlSQ, Sort: 80-17-28, Eurotelecom
Corporation Ltd.
8.5 The payment of the monies mentioned in sub-clause 8.4(c) shall
constitute a complete discharge of BG's obligations.
8.6 If this Agreement does not become unconditional by the Closing Date (or
such later date as the Company and BG may agree, being not later than
the Longstop Date) BG shall immediately thereafter, or immediately upon
earlier termination, return without interest all monies received by it
in respect of the New Shares in accordance with the provisions of this
Agreement, to the first named Placee in the relevant acceptance form by
crossed cheque drawn by BG in favour of such Placee and shall send each
such cheque to such Placee through the post.
9 FEES, COMMISSIONS AND EXPENSES
9.1 In consideration of the agreement of BG to procure placees to take up
the Placing Shares and their services under this Agreement in
connection with the Placing and Admission and subject to this Agreement
becoming unconditional in all respects the Company shall pay to BG:
(a) a commission of 2% (two per cent.) of the aggregate Issue
Price in respect of the Placing Shares; and
(b) a corporate advisory fee of (pound)250,000 of which
(pound)75,000 is to be satisfied by the issue, credited as
fully paid, to BG of 50,000 New Shares.
together, in each case, with any value added tax chargeable on such
amount against provision of a VAT invoice.
9.2 The commissions and fee referred to in Clause 9.1 (together with any
VAT thereon) shall be paid in cleared funds not later than the third
Business Day after the Closing Date (or, if earlier, on the date on
which BG's obligations under this Agreement cease and determine
pursuant to Clause 2.3 or are terminated pursuant to Clause 16). The
Company hereby authorises BG, at its option, to deduct some or all of
the commissions and expenses (including in relation to VAT, if any)
payable to them pursuant to this Clause 9 from the proceeds of the
Placing.
9.3 The Company shall pay all other fees, expenses, charges, duties and
disbursements incidental to the Placing and Admission and the
arrangements referred to herein or contemplated hereby (together with
any VAT thereon) including (without limitation) the fees and expenses
payable in connection with Admission, and (whether or not BG's
obligations hereunder become unconditional or terminate) the
accountancy, legal and other professional fees and expenses of the
Company,
10.7 Any release, waiver or compromise or any other arrangement of any kind
whatsoever which BG or any other Relevant Person may agree to or effect
in connection with the Warranties and the Indemnity shall not affect
the rights of BG or any other Relevant Person as regards any other
person liable thereunder.
10.8 Where any of the Warranties is qualified by reference to the awareness,
knowledge or belief of any Director (or similar expression) such
qualification shall only operate if the Directors have made due and
careful enquiries of the Company's senior or management employees,
agents and professional advisers and anyone else who might reasonably
be expected to have better knowledge than the Directors of a particular
matter.
10.9 The maximum aggregate liability of the Directors shall be limited in
time to a period of 18 months following Admission and in amount to the
sum of (pound)5,000,000. Any claim for breach of Warranty may be
satisfied (to the extent possible) by the Directors by the sale of
their Shares through BG.
11 INDEMNITY
11.1 No claim shall be made against BG, or any subsidiary or holding company
of BG or any subsidiary company of such holding company, or any of its
or their directors, officers, employees, or advisers (each a "Relevant
Person") by the Company to recover any damage which the Company or any
person may suffer by reason of, arising out of or otherwise in
connection with, the allotment and issue of the New Shares, the issue
and distribution of the Placing Documents and any other document in
connection with the Placing or otherwise in connection with the
carrying out by BG of their obligations (or exercise of their rights)
under this Agreement, provided in any such case that such damage does
not arise as a result of breach of any provisions of this Agreement by,
or the negligence or wilful default of BG or any other Relevant Person
or the breach by BG of their duties and/or obligations under this
Agreement (including under clause 4.4 or under the, law or any
applicable regulatory system.
11.2 The Company hereby undertakes with BG (for itself and as agent for each
and every Relevant Person) to indemnify it and each other Relevant
Person and hold it and them harmless from and against:
(a) all and any costs, claims, demands, actions, proceedings,
liabilities or judgements ("claims') brought or established
against BG or any other Relevant Person (whether or not
successful, compromised, settled or reversed) by any
subscriber, allottee or sub-underwriter of any of the New
Shares or any subsequent purchaser or transferee thereof or by
any other person, government agency or regulatory body
whatsoever;
(b) all taxes (including stamp duty and stamp duty reserve tax and
VAT) which BG or the Relevant Person may suffer or incur as a
result of any such claims; and
(c) all out of pocket costs, charges and expenses which BG or any
other Relevant Person may pay or incur (including without
limitation those properly or reasonably paid or incurred by BG
or the Relevant Person in seeking advice as to and in
defending or disputing any claims, whether or not such claims
are defended or disputed successfully);
which in any case arise out of or in connection with or by reason of:
(a) the issue or the despatch of the Placing Documents, or the
making of the Placing or the allotment or issue of the New
Shares; or
(b) any breach by the Company of any of its obligations or
undertakings under this Agreement; or
(c) any breach of any of the Warranties; or
(c) where the payment or reimbursement is in respect of costs or
expenses incurred by BG as agent for the Company, such amount
as equals the amount included in the costs or expenses in
respect of VAT provided that BG has procured that the person
supplying the goods or services has issued it with a VAT
invoice or BG shall have issued the Company with an
appropriate VAT invoice.
13 SELLING RESTRICTIONS
13.1 BG and the Company acknowledge to and with each other that, as part of
the distribution of New Shares at any time, none of the New Shares has
been or will be registered with the United States securities and
Exchange Commission under the Securities Act of 1933 of the United
States as amended ("the Securities Act") and no New Shares may be
offered, sold, taken up or delivered directly or indirectly into or
within the United States or to a U.S. person except in certain
transactions specified only in Regulation S or pursuant to an exemption
from or in a transaction not subject to the registration requirements
of the Securities Act.
13.2 BG undertakes to the Company that, prior to the expiration of the
one-year distribution compliance period relevant to the New Shares as
set out at Rule SOS(S) of the Securities Act;
(a) neither it, its affiliates nor any person acting on its or
their behalf has offered or sold, or will offer or sell, any
of the Placing shares except in accordance with the provisions
of Rules 903 or 904 in an off-shore transaction outside the
United States;
(b) it, its affiliates and each person acting on its or their
behalf shall procure, in so far as it is within its or their
capacity to do so, that any certificate in respect of any New
shares will bear a legend to the following effect (unless the
Company determines otherwise in compliance with applicable
law):
"THE SHARES OF CLASS A COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE US SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT') AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN
AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES LAWS. HEDGING
TRANSACTIONS INVOLVING THE COMMON STOCK OR THE CLASS A COMMON
STOCK OF THE COMPANY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.'
(c) neither it, its affiliates nor any person acting on its or
their behalf has engaged or will engage in any directed
selling efforts with respect to the New Shares;
(d) neither it, its affiliates nor any person acting on its or
their behalf has engaged or will engage in any hedging
transactions with respect to the New Shares except in
compliance with the Securities Act;
(e) any Placee shall be required by BG to confirm in writing to BG
in respect of the Placing shares that it is not a U.S. person
and is not acquiring the Placing shares for the account or
benefit of a U.S. person (or otherwise that it is a U.S.
person who purchased the Placing Shares in a transaction that
did not require registration under the Securities Act);
(f) any Placee shall be notified by BG in writing that, in the
case of a resale of the Placing shares pursuant to Rule 904 by
a dealer (as defined in Section 2(a) (12) of the Securities
Act) or a person receiving a selling concession, it shall be
required to obtain confirmation
(g) it will not sell or deliver any New Letter or New Shares; and
(h) it will rot distribute or publish any offering Prospectus,
prospectus, advertisement or other offering material in
relation to the Placing Letter or New Shares,
in each case either directly or indirectly in Australia or to any
person whom it knows to have a registered address in Australia and
further undertakes to the Company that any sub-underwriter procured by
it will agree that the restrictions set out in this sub-clause will
apply to it.
13.8 BG further acknowledges to the Company that the New Shares may not be
offered or sold directly or indirectly in Canada or to persons in
Canada and that the Placing Letter may not be renounced in Canada or in
favour of a resident of Canada and undertakes to the Company that, in
the event that it subscribes for New Shares, it would not be acquiring
any of the New Shares for resale into Canada, will not renounce any
Placing Letter in favour of a person whom it knows to be a resident of
Canada, and that any sub-underwriter procured by it will agree that the
restrictions set out in this sub-clause will apply to it.
13.9 Nothing in this clause shall preclude a sale on the London Stock
Exchange not knowingly made to a North American Person or a person with
a registered address in Australia, Japan or the Republic of Ireland.
14 RESTRICTIONS ON DISPOSAL OF SHARES
14.1 The Directors hereby severally undertake to the Company and BG that,
except in accordance with Clause 14.2, he will not during the period
from Admission until the earlier of (i) publication of the preliminary
announcement of the Company's unaudited annual results for the year
ending 30 June 2001 or (ii) 30 September 2001 (`the First Period")
dispose or agree to dispose of any of the Shares held by him or any
interest in them or charge or agree to charge or otherwise encumber any
of such Shares otherwise than with the prior written consent of BG,
save in the event of an intervening court order, a takeover offer
relating to the Company's shares becoming or being declared
unconditional or the death of the Director. Each of the Directors
undertakes to BG that, where applicable, he will abide by the
restrictions on dealings relevant to him contained in the US Securities
Exchange Act of 1934.
14.2 Notwithstanding the other provisions of this clause 14, a Director may
at any time transfer all or part of his Shares to the trustee(s) of a
Family Trust provided that such trustee shall be required to enter into
a Deed of Adherence in a form reasonably satisfactory to BG in terms
that the trustee and any beneficiary or potential beneficiary under the
trusts will be bound by this clause 14 as if such person(s) were the
Director concerned.
14.3 In the event of the Company consolidating or sub-dividing its shares
within the period specified in Clause 14.1 above, then the undertakings
herein given shall extend to the consolidated or subdivided shares in
the Company derived from the Shares. This undertaking shall also apply
to any shares or other securities otherwise acquired by a Director in
respect of his Shares, including by way of a bonus, capitalisation or
rights issue or open offer.
14.4 If a Director wishes to sell any of his Shares after the First Period,
then in order to maintain an orderly market, any such sale shall be
notified to BG.
14.5 The Directors severally covenant and undertake to BG to comply and act
in accordance with `The Model Code for AIM Companies" set out in
Appendix 12 of the Rules of the London Stock Exchange.
14.6 For the purposes of this clause 14:
(a) "Family Trust" shall mean a trust (whether arising under a
settlement, declaration of trust or other instrument by
whomsoever or wheresoever made or under a testamentary
fees referred to in Clause 9 and the Company shall remain liable to pay
and, if appropriate, to reimburse to BG the amount of any expenses
referred to in Clause 9.3 (together in all cases with any applicable
VAT thereon).
17 UNDERTAKINGS
17.1 Each of the Directors and the Company severally undertakes with BG that
none of them will, and shall (insofar as it is reasonably within their
power to do so) procure that no other member of the Group will, at any
time during the period up to and including Admission, unless and to the
extent required to do so by any applicable law or the AIM Rules or
other applicable regulation make public any information which will, or
may, affect the market price of the Company's securities without the
prior written consent of BG.
17.2 The Company hereby undertakes with SO that it will, and each of the
Directors (so long as they remain directors of the Company) severally
undertakes to procure. (insofar as he is reasonably able so to do) that
the Company will, at all times whilst BG remains as nominated adviser
to the Company pursuant to sub-clause 4.1:
(a) notify BG in advance of any public announcement relating to,
and discuss with BG, any matter which it may be necessary to
be made known to the investing public in order to enable the
investing public to appraise the position of the Company or
which could lead to a substantial movement in the price of the
Shares;
(b) forward to BG for comment proofs of all documents to be sent
to holders of the Company's securities;
(c) notify BG in advance of, and discuss with BG any announcement
of profits or losses or dividends in respect of the financial
periods of the Company and any other announcement proposed to
be made to the public;
(d) discuss with BG any proposed transaction, acquisition,
disposal, or other arrangement or course of conduct proposed
to be undertaken or adopted otherwise than in the ordinary
course of business which is or may be material in the context
of the Group as a whole or which will or may require any
announcement to be made pursuant to the foregoing provisions
of this sub-clause 17.2 prior to such transaction,
acquisition, disposal or other arrangement having or taking
legal effect;
(e) prepare and send to BG within three weeks of the end of each
calendar month, a financial statement and management accounts
for the Group made up to and as at the end of that calendar
month, incorporating a breakdown of turnover and profits by
trading activities and identifying variances in sales,
revenues, costs and other material items from the Company's
financial projections and annual budgets in respect of that
month;
(f) comply with the continuing obligations imposed by the AIM
Rules following Admission
(g) hold meetings of the Board which a representative of BG shall
be entitled to attend at the expense of the Company at least
once in every calendar quarter of which not less than ten
Business Days prior notice shall be given to BG and supply to
BG, at the same time as the giving of such notice, the agenda
for such meeting and copies of all papers relevant for such
meeting;
(h) not make any material amendments to the covenants and
undertakings set out in the service contracts of the Directors
other than in prior consultation with BG (such approval not to
be unreasonably withheld or delayed);
(i) within 3 months of Admission, appoint a further non-executive
director of the Company, such appointment to be approved in
advance by BG; and
18.3 This Agreement and/or the rights and/or obligations of the Parties or
any of them shall not be capable of assignment or charging or
encumbering in any way by any of the Parties without the prior
agreement in writing of all the Parties.
18.4 This Agreement may be amended, superseded or cancelled or any of its
terms varied or waived only by written agreement of the Parties or, in
the case of a waiver, by the Party or Parties effecting the waiver.
18.5 The failure, omission or delay by any Party on any occasion to insist
upon the performance of any term, provision or condition of this
Agreement or to exercise any right, power, privilege or remedy
conferred by this Agreement shall not thereby be treated as a waiver of
any related breach or an acceptance of any consequential variation nor
shall it impair any such right, power, privilege or remedy nor shall
any single or partial exercise or waiver of any right, power, privilege
or remedy preclude its further exercise or the exercise of any other
right or remedy. The rights, powers, privileges and remedies of the
Parties provided in this Agreement are cumulative and not exclusive of
any rights or remedies provided by law.
18.6 Time shall be of the essence as regards any date or period mentioned in
this Agreement and any date or period substituted for the same by
agreement between the Parties as provided for herein.
18.7 All provisions of this Agreement shall (so far as they are capable of
being performed or observed) continue in full force and effect
notwithstanding Admission except in respect of those matters then
already performed.
18.8 The illegality of any part of this Agreement or of any agreement or
arrangement of which it forms part shall not affect the legality or
validity of the remainder of the same.
18.9 The various Clauses, sub-clauses, paragraphs and sub-paragraphs of this
Agreement are severable and if any of the same or an identifiable part
thereof is held to be invalid or unenforceable in any court of
competent jurisdiction then such invalidity or unenforceability shall
not affect the validity or enforceability of the remaining provisions
or identifiable parts thereof in this Agreement.
18.10 If any provision of this Agreement proves to be void, illegal or
unenforceable, such provision shall be deemed to be deleted from this
Agreement and the remaining provisions of this Agreement shall continue
in full force and effect. Notwithstanding the foregoing, the parties to
this Agreement shall thereupon negotiate in good faith in order to
agree the terms of a mutually satisfactory provision to be substituted
for the provision so found to be void, illegal or unenforceable.
18.11 Nothing in this Agreement shall constitute or be deemed to constitute a
partnership between any of the Parties.
18.12 The rights and obligations of the Parties or any of them shall enure
for the benefit of, be enforceable against and shall be binding on
their respective personal representatives, successors, estates and
assigns.
18.13 The Company agrees that all monies payable to it under the Placing or
hereunder, shall not be treated as client money subject to any
regulations made under or pursuant to the Financial Services Xxx 0000.
19 LAW AND JURISDICTION
This Agreement shall be governed by and construed and interpreted in
accordance with English law and the Parties agree to submit to the
exclusive jurisdiction of the High Court of Justice in England and
Wales in relation to any claim, dispute or difference which may arise
hereunder.
20.2 Any notice may be given (a) by facsimile transmission and such notice
shall take effect at the expiration of three hours after transmission
(b) by hand delivery and such notice shall take effect at the time of
such delivery or (c) by first class prepaid post and such notice shall
take effect 48 hours after such notice is introduced into the postal
system.
IN WITNESS whereof this Agreement has been executed as a deed by the Directors
and the Company and under hand by BG and shall be deemed to be duly delivered
when dated.
SCHEDULE 2
WARRANTIES
----------
The recitals to this Agreement are true or (as the case may be) will be
true by the time that they fall to be performed.
2 Save as set out in the Prospectus, there are not in force any options
or other agreements which call for the issue of, or accord to any
person the right to call for the issue of any shares in the capital or
other securities of the Company.
3 The Company has power under its Certificate of Incorporation and
Certificate of Designations, Powers, Preferences and Rights to create,
allot and issue the New Shares, to effect the Proposals in the manner
proposed and to enter into and perform this Agreement and no further
consents or sanctions are required for the allotment and issue of the
New Shares.
4 The creation, allotment and issue of the New Shares in the manner
contemplated in the Prospectus will comply with the laws of the US
which are capable of applying to their lawful creation, allotment and
issue, the Financial Services Xxx 0000 (to the extent applicable), the
AIM Rules, the POS Regulations and all other relevant laws and
regulations of the United Kingdom and US, will not breach any
regulation binding on the Company nor infringe any restrictions imposed
on or the terms of any contractor commitment whatsoever of the Company
or give rise to any obligation under any such contractor commitment.
5 No member of the Group has entered into or assumed or incurred any
contract, commitment, borrowings, indebtedness in the nature of
borrowing, guarantee, liability (including contingent liability) or
other obligation which, in any such case, has not been discharged at
the date of this Agreement or will not be discharged prior to Admission
and the disclosure of which to a potential subscriber for New Shares is
required in order to prevent the Prospectus from being inaccurate or
misleading in any material respect.
6 The Shares are freely transferable in accordance with the Company's
Charter and By-laws save in respect of the restrictions set out at
Clauses 13 and 14 hereof and in the Prospectus.
7 The Company has sufficient arrangements in place to ensure that,
following Admission, transfers of New Shares will be registered within
14 days of receipt.
8 The cashflow and working capital projections which form the basis of
the report dated 29 March 2000 (the Working Capital Report'), have been
properly and carefully compiled by the Directors on the basis of the
assumptions set out in the projections (and no other material
assumptions) and, in the opinion of the Directors, such assumptions are
fair and reasonable and there are no facts known or which on reasonable
enquiry could have been known to the Company or the Directors which
have not been taken into account in the preparation of such projections
and which could reasonably be expected to have a material effect
thereon.
9 The information contained in the Press Announcement, the Prospectus and
the Placing Agreement is true and accurate in all material respects and
is not misleading in any material respect and all expressions of
opinion, intention and expectation expressed in it are honestly held,
made fairly and on reasonable grounds after due consideration and there
are no other facts known (or which on reasonable enquiry could be
known) to the Company or the Directors the omission of which would make
any statement in the Press Announcement or the Prospectus or the
Placing Letter misleading or which, in the circumstances of the Placing
and Admission, would be material for disclosure to a prospective
allottee of New Shares including 80.
10 All statements contained in any other press announcement or any
supplementary prospectus made or published on or after the date hereof
by the Company before the commencement of dealings in the New Shares
were true and accurate in all material respects and not misleading in
any material properly discussed with BDO and/or BG and which would
reasonably be expected to have an effect on it.
19 The Accountants Reports in Parts land Ill of the Prospectus have been
prepared with all due care and attention and approved by the Directors,
all statements of fact in them are true and accurate in all material
respects, all expressions of opinion, intention or expectation in them
are honestly held, made fairly on reasonable grounds and there are no
facts or matters known (or which could on reasonable enquiry have been
known) to the Company or the Directors which have not been taken into
account in the preparation of the Accountants Reports and which would
reasonably be expected to have an effect on it.
20 Since the Accounts Date and except as disclosed in the Accounts and the
Prospectus (i) the businesses of the Group have been carried on in the
ordinary and usual course, (ii) there has been no adverse change in the
financial or trading position of the Group and (iii) other than as
disclosed in the Prospectus, no contracts or commitments have been
entered into by any member of the Group which are of an onerous or
unusual nature and of material importance in the context of the issue
of the New Shares or the obligations of BG under this Agreement.
21 Since the Accounts Date, so far as the Directors are aware, no member
of the Group has to their knowledge carried out any transaction
otherwise than in conformity with its constitutional documents or
infringed to any material extent any law, contract or instrument to
which it or any of its assets is subject.
22 The Verification Notes have been prepared or approved by persons having
the appropriate knowledge and responsibility to enable them properly to
provide such replies and all such replies given by the Directors have
been given in good faith and the Company has no reason to believe that
such replies or any information contained or referred to therein are
not true and accurate in all material respects and that any material
fact has been omitted.
23 No member of the Group is engaged in any legal or arbitration
proceedings which may have, or have had during the twelve months
immediately preceding the date of this Agreement, a significant effect
on the financial position or prospects of the Group or which,
individually or collectively, are or may be of material importance in
relation to the issue of the New Shams and, so far as the Directors are
aware, no such proceedings are pending, nor are there any circumstances
known to the Company or the Directors (having made all reasonable
enquiries) which are likely to give rise to any such proceedings.
24 No member of the Group has taken any action nor have any steps been
taken or legal proceedings started against any member of the Group for
their winding up or dissolution or for any member of the Group to enter
into any arrangement or composition for the benefit of creditors or for
the appointment of a receiver, trustee, administrator, examiner or
similar officer of any member of the Group or any of their properties,
revenues or assets.
25 So far as the Directors are aware and save as clearly disclosed in the
Long Form Reports, no circumstances have arisen such that any
indebtedness in respect of borrowed money of any member of the Group is
or will, or would with the giving of notice, lapse of time, or the
satisfaction of any other condition, become repayable before its stated
maturity and no person to whom any indebtedness in respect of borrowed
money is owed by any member of the Group which is repayable on demand
has demanded or threatened to demand repayment.
26 No member of the Group is or will be under any material liability in
respect of any Taxation in relation to or in consequence of any actual
or deemed income, profits or gains earned, accrued or received on or
before the date of this Agreement or in relation to or in consequence
of any event occurring on or before the date of this Agreement but
after the Accounts Date other than corporation tax payable in respect
of normal trading profits earned by it or VAT which has been collected
from customers for on similar businesses for such amounts as would in
the circumstances be prudent for such other companies, the Directors
consider that such insurances provide satisfactory cover against the
risks of the respective businesses of each member of the Group no
member of the Group has done or omitted to do or suffered anything to
be done or not to be done which has or might render any policies of
insurance effected by it void or voidable.
36 There are in force no options or other agreements which call for the
issue of or accord to any person the right to call for the issue of any
shares or other securities in the capital of the Company or any of its
subsidiaries now or at any time hereafter and no shareholder of the
Company has any rights, in its capacity as such, in relation to the
Group other than as are set out in the Articles of Association of the
Company.
37 No material contracts (other than those disclosed in the Prospectus)
will be entered into nor will the terms of any such subsisting material
contracts (other than as aforesaid) be varied prior to the commencement
of fully paid dealings in the Shares.
38 There are no agreements or arrangements in existence to which any
member of the Group is a party which are subject to the provisions of
the Restrictive Trade Practices Acts 1976 and 1977 nor is any course of
conduct being pursued by any such company which contravenes Articles 81
or 82 of the Treaty of Rome or will, when in force, contravene the
Competition Xxx 0000 or any other anti-trust, anti-monopoly, or
anti-cartel or competition statute, order, regulation or law of any
territory in which any member of the Group carries on business.
39 There have been no proceedings, actions or claims pending or threatened
or capable of being threatened in respect of the title, validity or
enforceability of any intellectual property owned or used by the Group
or claiming any right or interest in any of the foregoing and there are
no unusual terms in relation to any licence or other agreement granted
by any third party to any such company in respect of Intellectual
property used in connection with the business of the relevant company.
40 There has been disclosed to BG or its advisers details of all
properties occupied by any member of the Group or in respect of which
the Company or any member of the Group has any material liability
(contingent or otherwise).
41 Save as described in the Prospectus, no event has occurred or is
subsisting or is about to occur which constitutes or results in or
would, with the giving of notice and/or lapse of time, constitute or
result in a default or the acceleration or breach of any obligation
under any agreement, instrument or arrangement to which any member of
the Group is a party or by which any of its properties. revenues or
assets are bound and which would, in any such case, have, or be likely
to have, a material and adverse effect on the business, assets or
prospects (save in respect of matters in the public domain) of the
Group taken as a whole.
42 No member of the Group has incurred any liability for taxation which
has arisen otherwise than in the ordinary course of normal trading.
43 The Prospectus contains all information concerning actual or potential
conflicts of interest between the Company, or other member of the
Group, and any Director or persons connected with him (within the
meaning of Section 346 of the Companies Act).
44 The Prospectus contains details of the relationship between the Company
and advisers and any promoter of the Company and details of any payment
or other benefit paid or given, or to be paid or given, to any
promoter.
45 Each of the Directors severally warrants to BG that the Prospectus
contains all the directorships and partnerships of that Director held
at any time in the five years preceding the date of this Agreement, any
unspent convictions of that Director, details of any bankruptcies or
individual voluntary arrangements of that Director and details of any
receiverships administrations, voluntary
ATTESTATIONS
Signed as a Deed by
Xxxxxx Xxxxxxx Limited
acting by:
Director
Director/Secretary
Signed as a Deed by
EuroTelecom Communications, Inc.
Acting by
Director
Director/Secretary
Signed as a Deed by
XXXX XXXXXXXX
in the presence of:
Witness' Signature
Witness' Name:
Witness' Address:
Witness' Occupation:
Signed as a Deed by
XXXXXX DERPY
in the presence of:
Witness' Signature:
Witness' Name:
Witness' Address:
Witness' Occupation:
Signed as a Deed by
XXXXX XXXXXXX XXXXXX
in the presence of:
Witness' Signature:
Witness' Name:
Witness' Address:
Witness' Occupation:
Signed as a Deed by
XXXXX XXXXXXX XXXXXX
in the presence of:
Witness' Signature:
Witness' Name:
Witness' Address:
Witness' Occupation:
Signed as a Deed by
XXXXXX XXXX FORD
in the presence of:
Witness' Signature:
Witness' Name:
Witness' Address:
Witness' Occupation:
Signed as a Deed by
XXXXXX KRAWCHU
in the presence of:
Witness' Signature:
Witness' Name:
Witness' Address:
Witness' Occupation:
