EXHIBIT 4.6
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
------------------------------------
Box A Box B
Firm Shares Open Offer Shares
4,864,371 5,135,629
------------------------------------
29 May 2001
Richard Wilmot Esq
Newton
71 Queen Victoria Street
London
EC4V 4DR
For the attention of: Richard Wilmot
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate In the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
Information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
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[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Companys sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
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[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons falling within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ Andrew C Chapman
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director -- Corporate Finance
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[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN6
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
4,864,371 5,135,629
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price")(the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 31st May, 2001
---------------------------------- --------
For and on behalf of NEWTON INVESTMENT MANAGEMENT LTD
--------------------------------
8
[LOGO OF HOARE GOVETT] Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
----------------------------------------
Box A Box B
Firm Shares Open Offer Shares
24,321,858 25,678,142
----------------------------------------
29 May 2001
Robert Olive Esq
Fidelity
25 Cannon Street
London
EC4M 5TA
For the attention of: Robert Olive
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
Regulated by the Securities and Futures Authority
[LOGO OF HOARE GOVETT]
Member of ABN AMRO Group
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
Member of ABN AMRO Group
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT}
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons falling within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ ILLEGIBLE SIGNATURE
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director -- Corporate Finance
7
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN2
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
24,321,858 25,678,142
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We hereby acknowledge receipt of your letter of 29 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May , 2001
---------------------------------- ----------
For and on behalf of FIDELITY INVESTMENT SERVICES LIMITED
------------------------------------
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
----------------------------------------
Box A Box B
Firm Shares Open Offer Shares
4,864,371 5,135,629
----------------------------------------
29 May 2001
Andy Crossley Esq
Invesco
11 Devonshire Square
London
EC2M 4YR
For the attention of: Andy Crossley
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent, of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placee's interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
CommissIons
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principalLy in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
If you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may Involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons failing within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director -- Corporate Finance
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts. IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN7
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
4,864,371 5,135,629
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We hereby acknowledge receipt of your letter of 29 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30/5 , 2001
---------------------------------- ----------
For and on behalf of INVESCO ASSET MANAGEMENT LIMITED
--------------------------------
11 Davonshire Square
London EC2M 4YR
8
[LOGO OF HOARE GOVETT] Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
-------------------------------------
Box A Box B
Firm Shares Open Offer Shares
9,728,743 10,271,257
-------------------------------------
29 May 2001
Nigel Thomas Esq
ABN AMRO
Private Clients
1st Floor
250 Bishopsgate
London EC2M 4AA
For the attention of: Nigel Thomas
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchanges main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained In the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placee's interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons falling within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director -- Corporate Finance
7
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN1
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
9,728,743 10,271,257
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We hereby acknowledge receipt of your letter of 29 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30 . 5 . , 2001
---------------------------------- ----------
For and on behalf of ABN AMRO ASSET MAN LTD
--------------------------------
ABN AMRO ASSET MANAGEMENT
LIMITED
30 MAY 2001
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
-------------------------------------
Box A Box B
Firm Shares Open Offer Shares
2,188,967 2,311,033
-------------------------------------
29 May 2001
Bob Brown Esq
R C Brown
Buchanans North
Redcliff Backs
Bristol
BS1 6HN
For the attention of: Bob Brown
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govetts reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) in Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placee's interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your PlacIng Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not otter any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only In accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons failing within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
[LOGO OF HOARE GOVETT LIMITED]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts. IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN12/JRCT
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
8,158,987 2,311,033
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May, 2001
---------------------------------- ----------
For and on behalf of R.C. BROWN INVESTMENT MANAGEMENT
--------------------------------
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
-------------------------------------
Box A Box B
Firm Shares Open Offer Shares
15,565,989 16,434,011
-------------------------------------
29 May 2001
Nick Ross Esq
Electra Flemming
65 Kingsway
London
WC2B 6QT
For the attention of: Nick Ross
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limiteds rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons failing within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
7
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts. IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No: ABN3
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
15,565,989 16,434,011
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We hereby acknowledge receipt of your letter of 29 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May, 2001
---------------------------------- ----------
For and on behalf of ELECTRA QUOTED MANAGEMENT
--------------------------------
8
[LOGO OF HOARE GOVETT] Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
-------------------------------------
Box A Box B
Firm Shares Open Offer Shares
4,621,153 4,878,847
-------------------------------------
29 May 2001
Rob Giles Esq
Singer & Friedlander
21 New Street
London
EC2M 4HR
For the attention of: Rob Giles
Dear Sirs
Bright Station plc ("the Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent, of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate In the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
Information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained In the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for Its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govetts
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this Letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
CommissIons
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out In this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or Indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, soil or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not otter any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons falling within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director -- Corporate Finance
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN11
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
4,621,153 4,878,847
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We hereby acknowledge receipt of your letter of 29 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30/5, 2001
---------------------------------- ----------
For and on behalf of
--------------------------------
For and on behalf of
Singer & Friedlander
Investment Management Ltd
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
-------------------------------------
Box A Box B
Firm Shares Open Offer Shares
15,565,989 16,434,011
-------------------------------------
29 May 2001
Stuart Fraser Esq
Shell Pension Fund
Shell House
London
SE1 7NA
For the attention of: Stuart Fraser
Dear Sirs
Bright Station plc ("the Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canharn (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Companys Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent, of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
Information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained In the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this Letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons failing within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this Cotter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
7
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN8
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
15,565,989 16,434,011
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price")(the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May, 2001
---------------------------------- --------
For and on behalf of [ILLEGIBLE]
----------------------------
8
Hoare Govett Limited
[LOGO OF HOARE GOVETT] 250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
---------------------------------------
Box A Box B
Firm Shares Open Offer Shares
8,755,869 9,244,131
---------------------------------------
29 May 2001
Glen Nimmo Esq
Friends Ivory (Scotland)
1 Charlotte Square
Edinburgh
Scotland
EH2 4DZ
For the attention of: Glen Nimmo
Dear Sirs
Bright Station plc (the Company)
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canharn (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent of the
issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
places' interests individually; and
3
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this Letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (In whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the place, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons falling within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ Andrew C Chapman
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN5
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
8,755,388 8,244,131
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price")
(the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May, 2001
---------------------------------- --------
For and on behalf of [ILLEGIBLE]
----------------------------
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
--------------------------------------
Box A Box B
Firm Shares Open Offer Shares
4,864,371 5,135,629
--------------------------------------
29 May 2001
David Taylor Esq
HSBC
6 Bevis Marks
London
EC3A 7JQ
For the attention of: David Taylor
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this Letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Gcvett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons falling within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
7
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN4
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
4,864,371 5,135,629
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price")(the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May, 2001
---------------------------------- --------
For and on behalf of HSBC Asset Management Europe.
----------------------------
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
-------------------------------------
Box A Box B
Firm Shares Open Offer Shares
2,432,186 2,567,814
-------------------------------------
29 May 2001
Katie Potts
Herald Investment Trust
12 Charterhouse Square
London
EC1M 6AX
For the attention of: Katie Potts
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govetts reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) in Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Austraila and may not be offered, sold, taken up or delivered, directly
or Indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not otter any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term Is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may Involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons falling within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Companys auditors and
accordingly may not necessarily be on a basis which is consistent with the
Companys accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
7
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN13
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
2,432,186 2,567,814
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price")(the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May, 2001
---------------------------------- --------
For and on behalf of HERALD INVESTMENT TRUST PLC
----------------------------
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
--------------------------------------
Box A Box B
Firm Shares Open Offer Shares
24,321,858 25,678,142
--------------------------------------
29 May 2001
Mark Bradshaw Esq
Bradshaw Asset Management
30 St James Street
London
SW1A 1HB
For the attention of: Mark Bradshaw
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
Regulated by The Securities and Futures Authority
Registered Office: As above, Registered in England No. 2026375
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jetferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canharn (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Companys Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing CommItments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate In the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
Information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
(Listing Rules);
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA) and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained In the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this Letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act) or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, soil or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not otter any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Gcvett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons failing within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Companys auditors and
accordingly may not necessarily be on a basis which is consistent with the
Companys accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this Cotter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN14
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
24,321,858 26,678,142
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price")(the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May, 2001
---------------------------------- --------
For and on behalf of [ILLEGIBLE]
----------------------------
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
-------------------------------------
Box A Box B
Firm Shares Open Offer Shares
5,837,246 6,162,754
-------------------------------------
29 May 2001
Robert Sanders Esq
Smith & Williamson
1 Riding House Street
London
W1A 3AS
For the attention of: Robert Sanders
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and 274,337 respectively, which amounts they have
agreed will be applied in paying up such number of new Ordinary Shares
in the Company as equals the amount of their respective payments divided
by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of 7.4
million ((pound)16.3 million at 31 December 2000). The Company announced
on 2 May 2001 that they had available cash of 2.9 million as at 30 April
2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing Commitments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
2
[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
3
[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
4
[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Company's sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out in this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring "best
execution", "suitability" and "risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Australia and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, sell or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not offer any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
5
[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Govett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons falling within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
6
[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
7
[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN10
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
5,837,246 6,162,754
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price")(the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 30th May, 2001
--------------------------------- --------
For and on behalf of Smith Williamson Smaller Securities Trust
-----------------------------------------
8
[LOGO OF HOARE GOVETT]
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
Telephone +44(0)20 7678 8000
Facsimile +44(0)20 7678 1587
STRICTLY PRIVATE AND CONFIDENTIAL
TOTAL PLACING COMMITMENT
------------------------------------
Box A Box B
Firm Shares Open Offer Shares
3,405,060 3,594,940
------------------------------------
29 May 2001
Matthew Beardmore-Grey Esq
Prudential
Governor's House
Laurence Poultney Hill
London
EC4R 0EU
For the attention of: Matthew Beardmore-Grey
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price") (the "Placing")
We refer to our telephone conversation and to the recent presentation made by
the Company to you in connection with the above fund raising (the
"Presentation").
It is currently proposed that 270,000,000 New Ordinary Shares will be issued in
connection with a placing and open offer to raise (pound)13.5 million (gross).
Under the proposed open offer (the "Open Offer"), up to 138,661,969 of the New
Ordinary Shares will be offered to qualifying shareholders (the "Open Offer
Shares") at the Issue Price on the basis of 4 Open Offer Shares for every 5
existing Ordinary Shares held. Accordingly, the Open Offer Shares are being
conditionally placed with institutional investors by Hoare Govett as agent for
the Company, subject to clawback under the Open Offer, and the remaining
131,338,031 New Ordinary Shares are being placed firm (the "Firm Shares"). The
New Ordinary Shares will rank pari passu in all respects with the Company's
existing ordinary shares.
It is currently proposed that a circular comprising a prospectus will be
published by the Company containing further details of the Placing and Open
Offer and other proposals (see below) on or before 29 June 2001 ("Circular").
The Circular will contain a notice convening an extraordinary general meeting of
the Company to approve the Placing and Open Offer and related proposals ("EGM").
Application will also be made for the New Ordinary Shares to be admitted to
listing on the Official List of the UK Listing Authority ("UKLA") and to trading
on the London Stock Exchange's main market for listed securities ("Admission").
On the basis that the Circular is published by the above date, it is expected
that Admission will become effective by no later than 23 July 2001.
[LOGO OF HOARE GOVETT]
In addition to the Placing and Open Offer, it is also proposed that:
(a) other than Mr Lomnitz, all of the current Directors will resign on
Admission (Mr Lomnitz will remain as an executive Director). Messrs
Jefferies (Non-executive Chairman), Hill (Chief Executive Officer),
Canham (Chief Financial Officer) and Bair (non-executive Director) will
be appointed to the Company's Board on Admission;
(b) the total "pool" of share options capable of being issued under the
Company's share option schemes will be increased from 10 per cent. of
the issued share capital from time to time to 15 per cent;
(c) the Company closes its OfficeShopper and Sparza operations, trading now
having ceased;
(d) between the date of this letter and completion of the Placing and Open
Offer, the Company may be required to secure a temporary credit line and
or debt bridge facility, which may be provided by some or all of the
existing directors, to provide cash liquidity pending completion of the
Placing and Open Offer;
(e) in connection with the termination of their arrangements with the
Company and the cancellation of their outstanding share options, Dan
Wagner and Dave Mattey will be entitled, subject to completion of the
Placing and Open Offer, to certain payments from the Company amounting
to (pound)220,580 and (pound)274,337 respectively, which amounts they
have agreed will be applied in paying up such number of new Ordinary
Shares in the Company as equals the amount of their respective payments
divided by the Issue Price;
(f) as of 31 March 2001, the Group had available cash resources of
(pound)7.4 million ((pound)16.3 million at 31 December 2000). The
Company announced on 2 May 2001 that they had available cash of
(pound)2.9 million as at 30 April 2001.
(g) The audit report for the year ended 31 December 2000, while unqualified,
contains an explanatory paragraph making reference to a fundamental
uncertainty concerning the going concern basis of preparation of the
financial statements being dependent upon the successful conclusion of
bridge funding and the Placing and Open Offer.
We have pleasure, as agent for the Company, in now offering you the number of
Firm Shares set out in Box A above and the number of Open Offer Shares set out
in Box B above, (together "Placing Commitment") (free of all expenses) at the
Issue Price subject to the terms and conditions in this letter and in the Form
of Confirmation and to the Money Laundering Regulations 1993. The Open Offer
Shares (but not the Firm Shares) will be subject to recall under the terms of
the Open Offer and the right is accordingly reserved to qualifying shareholders
to recall before the closing date for the Open Offer all or any of the Open
Offer Shares conditionally placed with you.
This letter, the terms of which are conditional (amongst other things) on a
draft press announcement ("Press Announcement") being released by the Company
confirming securing Placing CommItments of (pound)13.5 million, sets out the
basis on which you undertake to accept the Placing Commitment offered to you by
the Company (as set out above).
The Placing Commitments shall be made on the terms of this letter and any
additional terms and conditions as may be required to comply with the
requirements of the City Code on Takeovers and Mergers, the Financial Services
Authority acting in its capacity as the United Kingdom Listing Authority
("UKLA") and the London Stock Exchange.
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[LOGO OF HOARE GOVETT]
You should note that the Placing and Open Offer is not being underwritten.
The Placing
The Circular is currently expected to be published by the Company no later than
29 June 2001. You are therefore making your decision whether or not to
participate in the Placing solely on the basis of the information contained in
the Presentation and in this letter. The Presentation may not have contained all
information necessary for you to make an informed assessment of the Company and
its prospects. It is a term of your participation in the Placing that you accept
this fact. However, your participation in the Placing will be conditional on the
following:
(a) an announcement in relation to the Placing and Open Offer and related
proposals being made in accordance with the Listing Rules of the UKLA
("Listing Rules");
(b) the Circular being published in accordance with the Financial Services
Act 1986 ("FSA") and the Listing Rules and containing a working capital
statement in accordance with 6.E.16 of the Listing Rules which is
unqualified except as to Admission;
(c) the Circular (a) complying with the Listing Rules and section 146 of the
FSA and (b) in Hoare Govett's reasonable opinion being and remaining
until Admission accurate and not misleading in any material respect;
(d) In Hoare Govett's reasonable opinion, there being no information in or
omissions from the Circular which, when taken as a whole, are materially
inconsistent with the information or position contained in the
Presentation;
(e) the resolutions being passed at the EGM without amendment which Hoare
Govett reasonably regards as material;
(f) the resignation of all of the Company's Directors with effect from
Admission (other than Mr Lomnitz who will remain as an executive
director);
(g) prior to Admission, so far as Hoare Govett is aware, no order having
been made or resolution passed in respect of the Company or any of its
material subsidiaries for its or their winding up or dissolution or for
it or them to enter into any arrangement or composition for the benefit
of creditors, or the appointment of a receiver, administrative receiver,
trustee or similar officer;
(h) commitments being received by the Company (or its duly appointed agents)
pursuant to the Placing for (pound)13.5 million (gross);
(i) Admission becoming effective by no later than 31 August 2001.
Hoare Govett and the Company reserve the right to agree and extend the time for
the satisfaction of any of the above conditions provided that such time may not
be extended beyond 31 August 2001. In that event, we will inform you at the
earliest opportunity and all subsequent dates mentioned in this letter will be
adjusted appropriately.
You agree that where a condition is expressed to be subject to Hoare Govett's
reasonable opinion:
(a) Hoare Govett will exercise its opinion in its absolute discretion,
having regard to the Placing and Open Offer as a whole, and not to
placees' interests individually; and
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[LOGO OF HOARE GOVETT]
(b) provided that Hoare Govett exercises its discretion in good faith, it
shall not incur any liability to you whatsoever.
By signing and returning the attached Form of Confirmation, you will confirm
your agreement with us, on the terms, and subject to the conditions, of this
letter and subject to the Memorandum and Articles of Association of the Company,
to subscribe under the Placing for the number of New Ordinary Shares set out in
Boxes A and B on page 1 of this letter at the Issue Price. Subject only to the
above conditions being satisfied or waived, your Placing Commitment will be
irrevocable.
Commissions
No commission will be payable to you in respect of your participation in the
Placing.
Hoare Govett will be paid a commission by the Company in relation to the Placing
equal to seven per cent. of the total funds raised under the Placing and Open
Offer. In order to retain cash within the Company and to align its interests
with those of institutional investors who are giving Placing Commitments, Hoare
Govett has agreed to take this commission principally in the form of equity at
the Issue Price provided that the total number of new Ordinary Shares received
by Hoare Govett shall be less than 3 per cent. of the then issued share capital
of the Company, with the remainder taken in cash.
Timetable
The date the Circular is posted will determine the timetable for the Open Offer
and EGM.
As soon as possible after the closing of the Open Offer, we will inform you of
the amount recalled by qualifying shareholders under the Open Offer and of the
number of Open Offer Shares and Firm Shares which are required to be taken up by
you ("Trade Confirmation"), together with the funds payment to be made.
Please note that ABN AMRO Equities (UK) Limited will act as our execution and
settlement agent. As such, all trades will be matched and settled with its CREST
Participant ID 590 (five nine zero). Trade confirmations will be issued by ABN
AMRO Equities (UK) Limited in the normal manner. Settlement will be free of all
charges, commissions and duties.
In the event that you have any queries in respect of settlement, please call
Rhys Thomas on 020 7678 7043 or Kevin Gant on 020 7678 0584.
Interest may be charged in respect of payments not received by us for value by
the required time referred to above at a rate equal to the London Inter-Bank
Offered Rate for seven day deposits in sterling plus five per cent. per annum as
determined by us.
In the event that the conditions are not fulfilled by 31 August 2001, the
Placing will not proceed and your rights and obligations under this letter shall
cease and determine. In such event, all funds delivered to us pursuant to this
letter will be returned to you by telegraphic transfer on your instructions or
by cheque.
Confirmations
By signing and returning the Form of Confirmation, you will be confirming that,
as a term of the acceptance of your Placing Commitment:
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[LOGO OF HOARE GOVETT]
(a) you have entered into this commitment solely on the basis of the
information contained in the Presentation and this letter and you have
not relied on any other representation or warranty in reaching your
decision to acquire New Ordinary Shares under your Placing Commitment;
(b) neither Hoare Govett nor the Companys sponsor, PricewaterhouseCoopers
Corporate Finance, is acting for you in connection with the Placing and
will not be responsible to you in respect of the Placing for providing
protections afforded to their customers. In particular, you acknowledge
that neither Hoare Govett nor PricewaterhouseCoopers Corporate Finance
has made any recommendation to you in relation to the Placing and is not
advising you with regard to the suitability or merits of the transaction
or in connection with the arrangements set out In this letter. In
addition, you acknowledge that you do not expect Hoare Govett or
PricewaterhouseCoopers Corporate Finance to have any duties or
responsibilities towards you similar or comparable to those imposed by
The Securities and Futures Authority Limited's rules requiring best
execution, suitability and risk warnings";
(c) that you, or each person or body on whose behalf you accept your Placing
Commitment (in whole or in part) or to whom you allocate such Placing
Commitment (in whole or in part) has capacity and authority to enter
into and perform the terms of such commitment and that you are entitled
to accept your Placing Commitment under the laws of all relevant
jurisdictions which apply to you, have complied and will fully comply
with all such laws in relation to your Placing Commitment (including,
where applicable, the Money Laundering Regulations 1993) and have
obtained all governmental and other consents which may be required in
relation to your Placing Commitment;
(f) none of the New Ordinary Shares has been or will be registered under the
Securities Act of 1933 of the United States (as amended) (the
"Securities Act") or any of the relevant securities, laws of Canada or
Austraila and may not be offered, sold, taken up or delivered, directly
or indirectly, into or within the United States except pursuant to an
exemption from, or in transactions not subject to, the registration
requirements of the Securities Act, and you represent, warrant and
undertake that unless you are taking up New Ordinary Shares pursuant to
such an exemption: (i) you are not within the United States, Canada,
Japan or Australia and you are not a US person or a citizen of Canada,
Japan or Australia; (ii) you have not offered, sold or delivered and
will not offer, soil or deliver any of the New Ordinary Shares to
persons within the United States, directly or indirectly, or into
Canada, Japan or Australia; (iii) neither you, your affiliates, nor any
persons acting on your behalf, have engaged or will engage in any
directed selling efforts with respect to the New Ordinary Shares; (iv)
you are not taking up the New Ordinary Shares for resale in or into the
United States, Canada, Japan or Australia; and (v) you will not
distribute any offering material, directly or indirectly, in or into the
United States, Canada, Japan or Australia or to any persons resident in
such countries. Terms and expressions used in this paragraph have the
meanings given to them by Regulation S made under the Securities Act;
(g) you will not procure the acquisition of any New Ordinary Shares by or
for the account of any person with an address in Australia, Canada or
Japan, you will not otter any New Ordinary Shares to any such person and
you will not otherwise treat any New Ordinary Shares in any manner that
would contravene any applicable Australian, Canadian, Japanese or other
securities legislation;
(g) you are a person who falls within paragraph 11(3) of the Financial
Services Act 1986 (Investment Advertisements)(Exemptions) Order 1996 or
of the kind described in Article 8(1) of the Financial Services Act 1986
(Investment Advertisements)(Exemptions)(No.2) Order 1995;
(h) all notices, remittances and documents of title are sent at your own
risk;
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[LOGO OF HOARE GOVETT]
(i) that to the extent you are a shareholder in Bright Station Plc, you will
vote in favour of the resolutions to be put forward at the EGM to effect
the proposals (as contemplated);
(j) Hoare Gcvett may at its absolute discretion refuse or scale back your
application for a Placing Commitment by any amount it deems fit; and
(k) that your remittance will be honoured on first presentation.
Without prejudice to any of the above undertakings, you agree that, to the
extent you are or become a distributor of New Ordinary Shares (including
underwriters, dealers and all other persons who receive remuneration in respect
of securities sold) during the "distribution compliance period" (as such term is
defined under Regulation S of the United States Securities Act of 1933 (as
amended)) you will make all offers and sales of New Ordinary Shares during the
"distribution compliance period" only in accordance with Regulation S or an
exemption under the United States Securities Act of 1933 (as amended) or
pursuant to an effective registration statement under the said act. In addition,
if you shall sell New Ordinary Shares to a distributor, dealer or a person
receiving a selling concession you shall procure the purchaser is subject to the
same restrictions on offers and sales that apply to you.
You agree that settlement, or a series of settlements, with an aggregate value
of (pound)8,500 or greater, settled by way of third party payments, for example,
bankers draft, building society cheque or a cheque drawn by someone other than
the placee, are liable to be subject to verification of identity requirements to
comply with the Money Laundering Regulations 1993. This may involve verification
of names and addresses through a reputable agency. By returning the Letter of
Confirmation, you undertake to provide such evidence of identity, within such
reasonable time (in each case to be determined at the discretion of Hoare
Govett) as may be requested to ensure compliance with the Money Laundering
Regulations 1993. If satisfactory evidence and identity has not been obtained
within a reasonable time, then such settlement will not proceed any further but
without prejudice to the rights of Hoare Govett or the Company to take
proceedings to recover any loss suffered by any of them as a result of failing
to provide satisfactory evidence. In such event the settlement monies (without
interest) will be returned to the bank or building society account from which
payment was made.
The presentation and any accompanying materials distributed by the Company were
directed solely at persons failing within certain exemptions to section 57 of
the Financial Services Act 1986 and it was not and is not intended that they
should be acted upon in any way by persons who do not have professional
experience in matters relating to investments and who do not fall within the
relevant exemptions.
Any forward looking statements, including any projections, contained in the
Presentation have not been commented or reported on by the Company's auditors
and accordingly may not necessarily be on a basis which is consistent with the
Company's accounting policies. Actual results may differ substantially from
figures used for planning purposes only and accordingly any such forward looking
projections or projections should not be relied on in any manner whatsoever.
Time is of the essence as regards obligations set out in this letter and the
Letter of Confirmation.
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[LOGO OF HOARE GOVETT]
This letter, the enclosed Letter of Confirmation and any contract which has been
or may be entered into between you and the Company on the terms of or pursuant
to this letter will be governed by and construed in accordance with English Law
and you have agreed to submit to the exclusive jurisdiction of the English
courts as regards any claim, dispute or matter arising out of or relating to
such contract, this letter and/or the enclosed Letter of Confirmation.
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THE ENCLOSED FORM OF CONFIRMATION IS COMPLETED, SIGNED AND
RETURNED TO US (FOR THE ATTENTION OF KEVIN GANT) BY FACSIMILE (020 7678 1134) OR
BY HAND IN RESPECT OF YOUR TOTAL PLACING COMMITMENT NOT LATER THAN 5.00 P.M. on,
30 May 2001.
Yours faithfully
/s/ [SIGNATURE ILLEGIBLE]
For and on behalf of
Hoare Govett Limited
Andrew C Chapman
Director - Corporate Finance
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[LOGO OF HOARE GOVETT]
FORM OF CONFIRMATION
Whether or not this allocation is to be split amongst several accounts, IT IS
IMPERATIVE THAT THIS FORM IS COMPLETED, SIGNED AND RETURNED TO US FOR THE
ATTENTION OF KEVIN GANT BY FACSIMILE (020 7678 1134) OR BY HAND IN RESPECT OF
THE TOTAL PLACING COMMITMENT SO AS TO BE RECEIVED BY US NOT LATER THAN 5:00 P.M.
ON 30 MAY 2001.
To: Hoare Govett Limited Ref No.: ABN5
199 Bishopsgate
London EC2M 3XW
For the attention of Kevin Gant
- -------------------------------
---------------------------------------------
Box A Box B
Firm Shares Open Offer Shares
3,405,060 3,584,340
---------------------------------------------
Dear Sirs
Bright Station plc (the "Company")
Placing of 270,000,000 new ordinary shares of 1p each ("New Ordinary Shares") on
behalf of the Company at 5p per share (the "Issue Price")(the "Placing")
We hereby acknowledge receipt of your letter of 23 May 2001 (the "Placing
Letter"), the definitions contained in which shall apply in this Form of
Confirmation. We confirm that subject to and only on the basis of the terms and
conditions contained therein, we irrevocably agree to subscribe for the number
of New Ordinary Shares set out in Box A and in Box B (subject, in the case of
Box B, to clawback from qualifying shareholders).
This Form of Confirmation is binding upon receipt by you of this form.
We understand and accept the contents of the Placing Letter and in making this
confirmation give the acknowledgement and agreement required by that letter and
the confirmations required by the paragraph headed "Confirmations" in that
letter.
In the event of us/the funds managed or advised by us being required to take up
any New Ordinary Shares in respect of our/their Placing Commitment, we agree to
pay on demand the full amount due in respect of such participation in accordance
with the terms of the Placing Letter.
Signed: /s/ [ILLEGIBLE SIGNATURE] 31st May, 2001
---------------------------------- --------
For and on behalf of [ILLEGIBLE]
----------------------------
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