(e) Conditionality of the Greenstone Placing and events of
default - Completion of the Greenstone Placing is subject to the
Conditions being waived or satisfied (as more fully described in
paragraph 2 above). The Convertible Loan Notes are also subject to
a number of events of default, as more fully summarised in Appendix
I below.
(f) Greenstone fee and interest on the Convertible Loan Notes -
as more fully set out in Appendix I below, the Convertible Loan
Notes bear compound interest at a rate of 10 per cent. per annum.
In addition, under the terms of the Greenstone Placing, Greenstone
may deduct from the Tranche One Notes amount (being US$1.2 million)
(on payment thereof in accordance with the terms of the
Subscription Agreement) the sum of US$200,000 (being 5 per cent. of
the total amount of Greenstone's commitment of US$4.0 million
pursuant to the Greenstone Placing) in consideration for the
obligations of Greenstone under the Subscription Agreement.
Pursuant to the terms of the Subscription Agreement and
Convertible Loan Notes, the Tranche One Notes will, either in full
or in part, convert automatically into new Ordinary Shares on
completion of the proposed Open Offer and Placing, but only so far
as will not cause Greenstone to hold more than 29.99 per cent. of
the then Issued Share Capital. Any such conversion will reduce the
total amount of the Convertible Loan Notes outstanding, and the
amount on which the Company pays interest.
Furthermore, depending on the level of acceptances under the
Open Offer and participation in the Placing, the Underwriting
Facility may not be required in full or at all. The fewer
Convertible Loan Notes that are issued, the smaller the amount of
interest accruing thereon.
(g) Potential for Greenstone to trigger a Mandatory Offer - as
noted above, any conversion of the Convertible Loan Notes which
causes Greenstone's shareholding to reach 30 per cent or more of
the then Issued Share Capital will trigger a requirement for
Greenstone to make a Mandatory Offer. Depending when any such
requirement to make a Mandatory Offer is triggered, the offer price
prescribed by the Code may be the Conversion Price or a higher
price. However, Greenstone's maximum total shareholding would be
the same, following conversion of the Convertible Loan Notes
without a Whitewash as it would have been with a Whitewash and,
unlike following a Whitewash, Greenstone will be required to make a
Mandatory Offer on conversion of the Convertible Loan Notes if such
conversion causes Greenstone to hold 30 per cent. or more of the
then Issued Share Capital. Shareholders will, therefore, have the
opportunity to accept or reject any such Mandatory Offer (if
required to be made) as they wish depending on the then prevailing
price per Ordinary Share and other relevant circumstances at that
time.
The Independent Directors consider the Resolution to be in the
best interests of the Company and its Shareholders as a whole.
Accordingly, the Independent Directors unanimously recommend that
the Shareholders vote in favour of the Resolution, as the
Independent Directors intend to do so in respect of their own
beneficial holdings and those of their connected persons.
The Independent Directors consider, having consulted with Strand
Hanson, that the terms of the Greenstone Placing are fair and
reasonable insofar as Shareholders are concerned.
Further Information
Your attention is drawn to the Summary of the Key Terms of the
Greenstone Placing and Risk Factors relating to the Greenstone
Placing set out Appendices I and II below.
APPENDIX I
TERMS OF THE GREENSTONE PLACING
The following summarises the key terms of the agreements
comprising the Greenstone Placing (it being noted that these
summaries do not purport to present comprehensive or complete
descriptions of relevant documents):
A Subscription Agreement
Pursuant to the Subscription Agreement:
1. Greenstone will, subject to Shareholders approving the
Resolution and satisfaction or waiver of the Conditions, summarised
above:
(a) subscribe for the Tranche One Notes at par within 12
Business Days after the tranche one completion date (being
approximately 14 Business Days); and
(b) subscribe for such number of Underwriting Loan Notes, at
par, by which the Phase One Fundraising amount (being US$4.0
million) exceeds the aggregate of: (i) the Tranche One Notes; and
(ii) the gross proceeds of the Open Offer and the Placing
(excluding, for the avoidance of doubt, any conversion of the
Tranche One Notes) on the Business Day following the date on which
the Company announces the results of the Open Offer and Placing
(with payment due within approximately 12 Business Days
thereafter).
2. Greenstone has the sole right to determine whether the
Conditions have been satisfied or have become incapable of
satisfaction.
3. Following completion of the Open Offer and the Placing, and
subject to the continued satisfaction of the Conditions, Greenstone
shall be required to convert (and the Company and Greenstone will
agree the extent to which Greenstone shall be required to convert)
the Tranche One Notes into Ordinary Shares in accordance with the
terms of the Convertible Loan Note Instrument to the extent that
Greenstone would, following such conversion, be interested in
exactly (and no more than) 29.99 per cent. of the then Issued Share
Capital. Greenstone has undertaken with the Company that, on such
agreement being reached, Greenstone will promptly exercise its
conversion rights attaching to the Tranche One Notes to that, and
only to that, extent. In the event of any dispute between the
Company and Greenstone as to the extent to which the Tranche One
Notes shall be converted, such dispute will be decided by the
Company's auditors.
4. The Company undertakes to Greenstone that:
(a) it will not knowingly do, or omit to do, anything which
would result in the occurrence of an event of default under the
Convertible Loan Note Instrument (as summarised below);
(b) it will use all reasonable endeavours to progress: (i) the
work programme agreed between the Company and Greenstone (the "Work
Programme") in accordance with the timescales contained therein;
and (ii) the Recruitment Process so as to conclude the same to the
reasonable satisfaction of Greenstone by 30 October 2015; and
(c) it will not use the funds invested by Greenstone pursuant to
the Greenstone Placing or received by the Company under the Open
Offer and the Placing for any purposes other than the purposes set
out in the Work Programme without Greenstone's prior written
consent.
5. The parties agree that the Relationship Agreement shall, with
immediate effect from the time any Convertible Loan Notes are
issued, be amended such that the existing restrictions on
acquisitions by Greenstone and its group contained therein (which
apply for such time as Greenstone holds a Significant Interest) are
deleted and replaced with the following restrictions, which shall
apply for such time as Greenstone holds a Significant
Interest):
(a) Greenstone agrees that it shall not acquire any interest in
Ordinary Shares at any time prior to conversion, repayment or
redemption in full of the Convertible Loan Notes except:
(i) pursuant to the terms of the Subscription Agreement and the
Convertible Loan Note Instrument;
(ii) on any conversion of Convertible Loan Notes (in full or in
part) by Greenstone in accordance with the terms of the Convertible
Loan Note Instrument;
(iii) pursuant to any acquisition by Greenstone of Ordinary
Shares from other shareholders of the Company as a result of any
Mandatory Offer required to be made, and duly made, by Greenstone
in accordance with Rule 9 of the Code following any conversion of
Convertible Loan Notes (in full or in part) by Greenstone in
accordance with the terms of the Convertible Loan Note
Instrument;
(iv) pursuant to any exercise by Greenstone of its rights under
the Relationship Agreement to participate pro-rata in any future
issue of Ordinary Shares carried out by the Company; or
(v) pursuant to a voluntary offer by Greenstone made in
accordance with the Code or the obtaining of undertakings from
other shareholders to accept such an offer if made, or pursuant to
market purchases of Ordinary Shares (where permitted by the Code)
following the announcement by Greenstone of a firm intention to
make such an voluntary offer for the Company;
(b) Greenstone further agrees not to acquire Ordinary Shares at
any time after the conversion, repayment or redemption in full of
the Convertible Loan Notes if such acquisition would increase its
aggregate shareholding by more than one (1) per cent. of the then
total Issued Share Capital without giving the Company prior written
notice (so that the Company can make the necessary disclosures
regarding shareholders' shareholdings required by law) except in
the circumstances set out in 5(a)(iii) to 5(a)(v) above.
The restrictions set out in (a) above will cease to apply: (i)
following conversion, repayment or redemption in full of the
Convertible Loan Notes; and (ii) in the event that Greenstone has,
in compliance with (a) or (b) above, acquired a majority of the
Ordinary Shares in issue.
The Company and Greenstone have agreed that, in the event that
the Company issues Ordinary Shares to a third party which,
following such issue, represents 15 per cent. or more of the then
Issued Share Capital, the Company will disclose to Greenstone the
precise terms of any restrictions accepted by such third party on
the acquisition of additional Ordinary Shares, and Greenstone may
elect that such provisions applying to the third party apply
equally to Greenstone, rather than the restrictions set out in (a)
and (b) above.
North River (LSE:NRRP)
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