1. Art and Diseño

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt about the contents of this document or what action you should take, you
should seek your own personal financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the Financial Services and
Markets Act 2000 (as amended).
If you have sold or otherwise transferred all of your ordinary shares of 1 pence each in Albion
Community Power PLC (the "Company"), please forward this document, together with the
accompanying forms of proxy, as soon as possible to the purchaser, transferee or stockbroker, bank
manager, or other agent through whom the sale or transfer was effected for onward transmission to
the purchaser or transferee.
Howard Kennedy Corporate Services LLP, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting for the Company and for no one else in connection with
the proposals described in this document and, accordingly, will not be responsible to any person other
than the Company for providing the protections afforded to customers of Howard Kennedy Corporate
Services LLP, or for providing advice in relation to such proposals.
_____________________________________________________________
ALBION COMMUNITY POWER PLC
(incorporated in England and Wales with company number 08239147)
APPROVAL OF CREATION OF A NEW CLASS OF I SHARES
FOR INSTITUTIONAL INVESTORS
APPROVAL OF WAIVERS OF OBLIGATIONS
UNDER RULE 9 OF THE CITY CODE ON TAKEOVERS AND MERGERS
APPROVAL OF TRANSACTION AGREEMENTS
NOTICES OF A GENERAL MEETING OF ALL SHAREHOLDERS AND A
SEPARATE GENERAL MEETING OF ORDINARY SHAREHOLDERS
_____________________________________________________________
Notices convening a general meeting of all shareholders of Albion Community Power
PLC to be held at 10.00 a.m. on 16 February 2015 at the offices of Albion Ventures LLP
at 1 King's Arms Yard, London EC2R 7AF, followed by a separate general meeting of the
holders of Ordinary Shares, are set out at the end of this document.
Shareholders are requested to complete and return their forms of proxy accompanying
this document to the Company's registrars, Share Registrars Limited of Suite E, First
Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL as soon as possible but, in any
event, to be valid, so as to be received by Share Registrars Limited by no later than
10.00 a.m. on 12 February 2015 in the case of the General Meeting and 10.15 a.m. on 12
February 2015 in the case of the Separate General Meeting. The return of a form or
forms of proxy will not preclude a member from attending and voting at the General
Meeting and the Separate General Meeting in person should he or she subsequently
decide to do so.
CONTENTS
Page
Expected Timetable of Principal Events ................................................................................... 3
Subscription Statistics ............................................................................................................... 4
Definitions ................................................................................................................................. 5
Part I Letter from the Chairman .............................................................................................. 11
Part II Summary of the Transaction Agreements ................................................................... 25
Part III Principal Changes to the Articles to reflect the I Share rights ................................... 36
Part IV Financial information on the Company...................................................................... 49
Part V Additional Information ................................................................................................ 50
Notice of General Meeting.......................................................................................................60
Notice of separate general meeting of Ordinary Shareholders ............................................... 63
2
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication and posting to Shareholders of this document
and Forms of Proxy
29 January 2015
Latest time and date for receipt of completed Form of Proxy
from Shareholders in respect of the General Meeting
10.00 a.m. on 12 February 2015
Latest time and date for receipt of completed Form of Proxy
from Ordinary Shareholders in respect of the Separate
General Meeting
10.15 a.m. on 12 February 2015
General Meeting
10.00 a.m. on 16 February 2015
Separate General Meeting
10.15 a.m. on 16 February 2015
(or as soon thereafter as the
General Meeting has been
concluded or adjourned)
3
SUBSCRIPTION STATISTICS
Number of Ordinary Shares in issue as at the date of this
document
Number of A Shares in issue as at the date of this document
Subscription Price
3,665,807
100
£1
Number of shares in issue immediately following the issue of
20,100,000 Subscription Shares
23,765,907*
20,100,000 Subscription Shares as a percentage of the
Company's issued share capital
84.6%*
Estimated net proceeds receivable by the Company in respect of
the issue of 20,100,000 Subscription Shares
£20,100,000*
* this is included for illustrative purposes only and assumes that: (a) initially an aggregate of 20,100,000
Subscription Shares are subscribed for by GIB, Strathclyde and Albion Ventures; (b) no further A Shares or
Ordinary Shares (including pursuant to the exercise of Ordinary Warrants) are issued or redeemed following the
date of this document; and (c) the Subscription Price for the Subscription Shares is £1. In practice, Subscription
Shares may be subscribed for on a number of occasions and the Subscription Price may be greater than £1. The
number of Subscription Shares which are subscribed for on each occasion will depend on the funding
requirements of particular Power Projects to be undertaken by the Company or the costs and expenses of the
Company allocated to the I Shares under the Articles.
4
DEFINITIONS
The following definitions apply throughout this document, unless the context otherwise
requires:
"2013 Offer"
the offer for subscription for Ordinary Shares pursuant
to a prospectus dated 6 June 2013 (as supplemented by
supplementary prospectuses dated 18 June 2013 and
21 October 2013), which closed on 30 April 2014
"2014 Offer"
the offer for subscription for Ordinary Shares pursuant
to a prospectus dated 20 May 2014, which closed on 28
November 2014
"A Shares"
non-redeemable A ordinary shares of 1 pence each in
the capital of the Company
"Aborted Project"
has the meaning set out in paragraph 2.3.3.4 of Part II
of this document
"Aborted Project Fee"
has the meaning set out in paragraph 2.3.3.4 of Part II
of this document
"Act"
Companies Act 2006 (as amended)
"Additionality Letter
the letter dated 11 December 2014 between the
Company, Albion Ventures and GIB relating to GIB's
'additionality' requirements
"Albion Ventures"
Albion Ventures LLP, a limited liability partnership
registered in England and Wales (registered number
OC341254) and having its registered office at 1 King's
Arms Yard, London EC2R 7AF, which is authorised
and regulated by the FCA
"Albion Ventures Subscription"
the proposed subscription by Albion Ventures for up to
500,000 I Shares at the Subscription Price pursuant to
the terms of the Investment Agreement
"Amended and Restated
Management Services Agreement"
the Amended and Restated Management Services
Agreement entered into between (1) GIB, (2)
Strathclyde, (3) the Company and (4) Albion Ventures
dated 29 January 2015 as described in paragraph 2 of
Part II of this document, amending and restating the
Management Services Agreement
"Articles"
the articles of association of the Company (as amended
from time to time)
"Central Overheads"
the central overhead costs and expenses of the
Company and the other members of the Group
including directors' and employees' remuneration,
registrars' fees, fees and disbursements payable to the
Power Project valuers and the Company's auditors,
inclusive of any recoverable VAT, but excluding the
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operating costs of the Power Projects, the Execution
Fee, the I Share Pool Management Services Fee, the
Ordinary Share Pool Management Services Fee, Third
Party Costs or any warrants issued by the Company
"Company" or "ACP" or "Albion
Community Power"
Albion Community Power PLC, a public company
incorporated in England and Wales (registered number
08239147) and having its registered office at 1 King's
Arms Yard, London EC2R 7AF
"Commitment Termination Notice"
has the meaning set out in paragraph 1.3 of Part II of
this document
"Conditions"
has the meaning set out in paragraph 1.1 of Part II of
this document
"Directors" or "Board"
the directors of the Company for the time being
"Employee"
any individual who (i) is or has been engaged by the
Company under an employment contract at any time,
or any director, shadow director or other office holder
of the Company or other person who is deemed by H.
M. Revenue & Customs to be or have been at any time
an employee of the Company for the purposes of the
Income Tax (Earnings and Pensions) Act 2003 and (ii)
is or has also been a member of Albion Ventures or an
employee (or deemed by H. M. Revenue & Customs to
be an employee) of Albion Ventures
"Exclusivity Agreement"
means the exclusive project development services
agreement dated 23 July 2014 between Greenenerco
Limited, Infinite Renewables Limited, Wind Direct
Limited, Albion Ventures, the Company and Alto
Prodotto Wind Limited.
"Execution Fee"
has the meaning set out in paragraph 2.3.3.3 of Part II
of this document
"FCA"
the Financial Conduct Authority of the United
Kingdom
"Forms of Proxy"
the forms of proxy for use by Shareholders in
connection with the General Meeting and by Ordinary
Shareholders in connection with the Separate General
Meeting
"FSMA"
the Financial Services and Markets Act 2000 (as
amended)
"General Meeting"
the general meeting of the Company convened for
10.00 a.m. on 16 February 2015 at the offices of Albion
Ventures, 1 King's Arms Yard, London EC2R 7AF (or
any adjournment thereof)
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"General Meeting Notice"
the notice convening the General Meeting appearing at
the end of this document
"GIB"
UK Green Investment Bank plc, a public company
registered in Scotland (registered number SC424067)
and having its registered office at Atria One, Level 7,
144 Morrison Street, Edinburgh EH3 8EX
"Group"
the Company and its subsidiary companies from time
to time, and "Group Company" means a company in
the Group
"Howard Kennedy"
Howard Kennedy Corporate Services LLP, which is
authorised and regulated by the FCA
"Independent Shareholders"
the Ordinary Shareholders excluding Albion Ventures
and any member or employee of Albion Ventures
"Investment Agreement"
the investment agreement entered into between (1)
GIB, (2) Strathclyde, (3) the Company and (4) Albion
Ventures dated 29 January 2015 as described in
paragraph 1 of Part II of this document
"Investors"
GIB, Strathclyde and any other person which adheres
as an "Investor" to the Investment Agreement from
time to time
"I ShareCo"
ACP I ShareCo Limited, a private company registered
in England and Wales (registered number 9330788)
and having its registered office at 1 King's Arms Yard,
London EC2R 7AF
"I Shareholder"
means a holder of I Shares
"I Shareholder Special Consent"
means:
(a)
consent in writing of the holders of threequarters in nominal value of the I Shares in
issue; or
(b)
a special resolution passed at a separate general
meeting of the holders of I Shares
"I Shareholder Unanimous Consent"
means consent in writing of the holders of all of the I
Shares in issue
"I Share Pool"
means on any day (i) the total amount paid up on
Subscription Shares which have been deployed by I
ShareCo to fund Power Projects (excluding any
Execution Fee); plus (ii) the total amount of any
monies allocated to the I Shares which have been
deployed by I ShareCo to fund Power Projects pursuant
to clause 3.10 of the Investment Agreement (excluding
any Execution Fee) less (iii) the total amount of any
monies allocated to the I Shares under the Articles
7
which have been deployed by I ShareCo to fund Power
Projects which have been written off in whole or in
part; less (iv) the total amount of any monies allocated
to the I Shares under the Articles which have been
deployed by I ShareCo to fund Power Projects which
have been realised, in each case on or prior to that day
"I Share Pool Management Services has the meaning set out in paragraph 2.3.3.2 of Part II
Fee"
of this document
"I Shares"
I ordinary shares of 1 pence each in the capital of the
Company
"I Shares Net Asset Value"
means the net asset value of the I Shares (being the
aggregate amount which would be allocated to the
holders of I Shares on an orderly return of assets on a
members' voluntary liquidation) as shown in the latest
available monthly management accounts of the
Company approved by the Board, calculated using the
latest available audited and unaudited valuations of the
Company's Power Projects which have been approved
by the Board as amended to reflect any material
change in circumstances as determined by the Board
"I Warrant Instrument"
the warrant instrument executed by the Company on
29 January 2015 relating to the issue by the Company
of I Warrants to Albion Ventures as described in
paragraph 3 of Part II of this document
"I Warrants"
warrants to subscribe for I Shares issued by the
Company pursuant to the I Warrant Instrument
"Key Person"
each of David Gudgin, Emil Gigov, Christoph Ruedig,
Patrick Reeve, Marco Yu and Vikash Hansrani and
such other persons who may be appointed as an
additional or replacement Key Person in accordance
with the Amended and Restated Management Services
Agreement
"Longstop Date"
has the meaning set out in paragraph 1.2 of Part II of
this document
"Management Services Agreement"
the management services agreement entered into
between (1) the Company and (2) Albion Ventures
dated 30 May 2013 pursuant to which Albion Ventures
provides management services to the Company
"Net Asset Value"
means the net asset value of the Company as shown in
the latest available monthly management accounts of
the Company approved by the Board, calculated using
the latest available audited and unaudited valuations of
the Company's Power Projects which have been
approved by the Board as amended to reflect any
material change in circumstances as determined by the
8
Board
"Ordinary ShareCo"
means ACP Ordinary ShareCo Limited, a private
company registered in England and Wales (registered
number 9330790) and having its registered office at 1
King's Arms Yard, London EC2R 7AF
"Ordinary Shareholder"
means a holder of Ordinary Shares
"Ordinary Share Pool Management has the meaning set out in paragraph 2.3.3.1 of Part II
Services Fee"
of this document
"Ordinary Shares"
redeemable ordinary shares of 1 pence each in the
capital of the Company
"Ordinary Shares Net Asset Value"
means the net asset value of the Ordinary Shares
(being the aggregate amount which would be allocated
to the holders of Ordinary Shares and A Shares on an
orderly return of assets on a members' voluntary
liquidation) as shown in the latest available monthly
management accounts of the Company approved by
the Board, calculated using the latest available audited
and unaudited valuations of the Company's Power
Projects which have been approved by the Board as
amended to reflect any material change in
circumstances as determined by the Board
"Ordinary Warrant Instrument"
the warrant instrument dated 30 May 2013 (as
amended by a deed of variation dated 29 January
2015) pursuant to which the Company has issued and
will issue Ordinary Warrants to Albion Ventures and
certain third party investors, as detailed in paragraph
5.1.2 of Part V of this document
"Ordinary Warrants"
warrants to subscribe for Ordinary Shares issued by
the Company under the Ordinary Warrant Instrument
"Panel"
The Panel on Takeovers and Mergers
"Power Projects"
individual power projects identified for funding by the
Company which satisfy the criteria set out in the
Investment Agreement
"Project Period"
has the meaning set out in paragraph 1.4 of Part II of
this document
"Project Policy"
the Company's new agreed policy for funding Power
Projects summarised in paragraph 3 of Part I of this
document
"Project Subsidiary"
a subsidiary of the Company which undertakes Power
Projects
"Resolutions"
the resolutions of the Company to be proposed to
9
Shareholders, as set out in the General Meeting Notice
"Separate General Meeting"
the separate general meeting of holders of Ordinary
Shares, as a class, to be held at 10.15 a.m. on 16
February 2015 (or as soon thereafter as the General
Meeting has been concluded or adjourned) at the
offices of Albion Ventures, 1 King's Arms Yard, London
EC2R 7AF (or any adjournment thereof)
"Shareholders"
holders of Ordinary Shares and A Shares
"Strathclyde"
Glasgow City Council (as the administering authority
for the Strathclyde Pension Fund) whose principal
office is located at City Chambers, George Street,
Glasgow G2 1DU
"Subscription Price"
£1 per Subscription Share until the earlier of 31
January 2016 and the date on which the amounts paid
up on issued I Shares exceeds £100,000,000, and,
thereafter, unless with I Shareholder Special Consent
(including GIB and Strathclyde), an amount per
Subscription Share equal to the I Shares Net Asset
Value
"Subscription Shares"
new I Shares to be issued at the Subscription Price
pursuant to the Subscriptions
"Subscriptions"
subscriptions for I Shares by Investors or Albion
Ventures pursuant to the Investment Agreement
"Takeover Code"
the City Code on Takeovers and Mergers as published
by the Panel
"Third Party Costs"
all third party expenses, charges or costs including the
costs of legal counsel, accountants or other
professional advisers or consultants
"Transaction Agreements"
the Investment Agreement, the I Warrant Instrument
and the Amended and Restated Management Services
Agreement
"Waivers"
the waivers granted by the Panel (subject to the
passing by Independent Shareholders of Resolutions 2
and 3 as set out in the General Meeting Notice) in
respect of the obligations of GIB and Strathclyde to
make mandatory offers under Rule 9 of the Takeover
Code in connection with their Subscriptions, as more
particularly described in Part I of this document
"Warrant Instruments"
the Ordinary Warrant Instrument and the I Warrant
Instrument
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PART I
LETTER FROM THE CHAIRMAN
ALBION COMMUNITY POWER PLC
(Incorporated and registered in England and Wales with number 08239147)
Directors:
Volker Beckers (Chairman)
Robert Armour OBE (Non-executive director)
Patrick Reeve (Chief Executive)
David Gudgin (Managing Director)
Vikash Hansrani (Finance Director)
Registered office:
1 King's Arms Yard
London
EC2R 7AF
29 January 2015
To Shareholders
Dear Shareholder,
Approval of creation of a new class of I Shares for institutional investors,
approval of waivers of obligations under Rule 9 of the City Code on Takeovers
and Mergers, approval of Transaction Agreements and notices of General
Meeting and Separate General Meeting
1.
Introduction
Following discussions with GIB and Strathclyde about a potential institutional
investment in the Company, your Board wishes to seek Shareholder approval (a) for
the creation of a new class of I Shares to be issued to institutional investors, (b) of
waivers proposed to be granted by the Panel of any obligation on the part of GIB and
Strathclyde to make a general offer to Shareholders under Rule 9 of the Takeover
Code which might otherwise arise upon the proposed subscriptions by GIB and
Strathclyde under the Investment Agreement, (c) of the Transaction Agreements and
(d) of the adoption of new Articles in connection with the transactions contemplated
by the Transaction Agreements.
The purpose of this document is to explain the background to and reasons for the
proposed creation, issue and allotment of the I Shares, the Subscriptions, the
Transaction Agreements, the adoption of new Articles and the Waivers and to seek
your approval for the Resolutions which are being proposed at the General Meeting
to be held at 10.00 a.m. on 16 February 2015 at the offices of Albion Ventures at 1
King's Arms Yard, London EC2R 7AF which will be followed by the Separate General
Meeting. Notices of those meetings are set out at the end of this document.
2.
Background to, and reasons for, recommending the proposed creation,
allotment and issue of the I Shares, the Subscriptions, the adoption of
new Articles and the Waivers
The Company has, to date, raised approximately £3.7 million (before expenses)
through the issue of Ordinary Shares and has been able to embark on its first four
projects, of which two are generating electricity. However, the Company has a
substantial pipeline of potential projects and wishes to take advantage of these as
soon as possible in order to maximise the potential returns from them. The Company
has, therefore, been in discussions with a number of potential institutional investors
with a view to their making substantial investments in the Company.
11
As a result of the discussions with GIB and Strathclyde, it is proposed that the
Company creates a separate class of I Shares for institutional investors. The I Shares
will constitute a new class of share, will be run as a separate pool segregated from the
Ordinary Shares, will have different fee arrangements from the Ordinary Shares and
will not be redeemable. The Company intends that this class of share will be available
in the future for any investor which commits to subscribe for at least £5 million of
share capital of the Company and adheres to the terms of the Investment Agreement.
Given the larger tranches of I Shares required to be subscribed by institutional
investors (relative to amounts which have normally been subscribed for Ordinary
Shares) and the need to separate the pools, this class of share will be afforded a
number of class rights to approve matters proposed to be undertaken by the
Company or other Group Companies, in particular which might affect the segregation
of the I Share Pool from the Ordinary Share Pool.
These new I Shares will be issued subject to the terms of amended Articles, proposed
to be adopted pursuant to Resolution 6, and which are described in paragraph 3 of
this Part I and in Part III of this document.
In connection with the first investment by institutional investors in I Shares, the
Company has entered into the Investment Agreement pursuant to which GIB and
Strathclyde have agreed, subject to your approval of the Resolutions and the other
terms and conditions described in paragraph 3 of this Part I and in Part II of this
document, to subscribe for Subscription Shares at the Subscription Price for total
initial subscription amounts of up to £25 million and £10 million, respectively. A
description of the Subscriptions is set out in paragraph 4 of this Part 1. Further
details concerning GIB and Strathclyde are set out below in paragraphs 7 and 8 of
this Part I.
The Company has also entered into the Amended and Restated Management Services
Agreement which, subject to satisfaction of the Conditions, will amend the existing
Management Services Agreement to set out the different fee arrangements for the I
Shares. The existing fee arrangements for the Ordinary Shares will remain
unchanged. The Amended and Restated Management Services Agreement is
described in paragraph 3 of this Part I and in Part II of this document.
In addition, the Company has executed the I Share Warrant Instrument under which
the Company will issue I Warrants to Albion Ventures as a performance incentive in
relation to the I Shares subscribed under the Investment Agreement. The I Share
Warrant Instrument is described in paragraph 3 of this Part I and in Part II of this
document.
The Directors consider that an increase in the capital base of the Company would
offer existing Shareholders a number of advantages as follows:
(i)
the Company will be able to fund many more projects and the amount
committed to future projects will normally be allocated between the Ordinary
Shares and the I Shares according to the level of funds available within each
class of share;
(ii)
Ordinary Shareholders should therefore achieve exposure to a wider spread of
projects than would otherwise be the case provided that further Ordinary
Shares are subscribed for resulting in funds allocated to the Ordinary Shares
being available for funding Power Projects in accordance with the Project
Policy;
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(iii)
the fixed overhead costs of the Company will relate to a larger portfolio of
Power Projects and the economies of scale should help to improve the
Company's potential for income dividends paid to Shareholders; and
(iv)
the increase in size of the Company and the number of shares should make a
future listing of the Company more feasible.
It is intended that the Ordinary Shares, the I Shares and the A Shares will merge to
create a single share class in the event of a listing of the Company.
In view of this significant new capital raising, the 2014 Offer was closed on
28 November 2014. The Directors intend to publish a new prospectus which will
seek to raise up to £5 million through the issue of new Ordinary Shares during 2015.
3.
The Transaction Agreements and the Articles
Transaction Agreements
The principal terms of the Transaction Agreements are summarised in Part II of this
document but Shareholders should note the following points in particular:
The Investment Agreement
This contains:

the arrangements for the subscriptions for I Shares by GIB and Strathclyde
and the conditions which need to be satisfied for each subscription;

the rights of Investors to terminate or suspend their subscription
commitments;

the circumstances in which the Investment Agreement can be terminated;

warranties given by the Company and Albion Ventures to GIB, Strathclyde
and other Investors from time to time;

a requirement for Albion Ventures to subscribe for and hold I Shares
equivalent to 0.5% of the aggregate amounts paid up on I Shares subscribed
by GIB, Strathclyde and other Investors from time to time;

requirements to provide GIB, Strathclyde and other Investors from time to
time with regular information on the Group;

a schedule of matters which cannot be undertaken without the prior consent
of a requisite majority of the holders of I Shares;

the right (but not the obligation) for GIB to appoint one Director;

amendments to the Company's existing project policy to a new, agreed, project
policy, which can only be amended with the prior consent of I Shareholders;
and

arrangements for further persons in the future to adhere, as Investors, to the
terms of the Investment Agreement provided that such persons meet certain
13
criteria, including that they agree to subscribe for Subscription Shares for a
total subscription amount of at least £5 million.
Shareholders should note that the Company's agreed Project Policy provides in
particular that:

the Company's objective is to be one of the United Kingdom's largest
producers of community scale renewable energy through a variety of energy
projects, building around 30MW at a cost of £100 million;

these community-scale (i.e. smaller) renewable projects will principally be in
the wind, hydro-electricity, biogas and solar sectors;

the Company shall use amounts invested in I Shares to fund wind, hydroelectricity and biogas projects;

for the avoidance of doubt, the Company may not use amounts invested in I
Shares to fund solar or biomass projects;

the Company may fund wind projects on brownfield sites or near existing
developments such as industrial estates rather than on greenfield
developments in remote areas;

the funding of a Power Project, to the extent allocated to I Shares, shall be
made by I ShareCo (and, in particular, such that I ShareCo acquires shares,
loan stock and other securities in the Project Subsidiary);

the funding of a Power Project, to the extent allocated to Ordinary Shares,
shall be made by Ordinary ShareCo (and, in particular, such that Ordinary
ShareCo acquires shares, loan stock and other securities in the Project
Subsidiary);

the loan of up to £750,000 provided by the Company under the Exclusivity
Agreement will be funded only from amounts invested in Ordinary Shares;

the Company shall only fund Power Projects based in Great Britain and
Northern Ireland;

no Power Project shall be larger than 5MW;

no Power Project in respect of anaerobic digestion shall be larger than 1.5MW
and total anaerobic digestion funding shall not exceed the lower of an amount
equal to 10% of funding committed by Investors under the Investment
Agreement but not yet drawn down and £7.5 million;

the Group's aggregate funding in landfill gas Power Projects shall not exceed
£2.5 million;

the Company may normally only fund a Power Project if the total funding
requirement for that Power Project is less than 15% of the total aggregate
commitments to subscribe for Subscription Shares (save that this shall not
apply to funding of up to £11.4 million proposed to be provided by the
Company to Chaorach Holdings Limited);
14

no Group Company (with the exception of Infinite Ventures (Blaencilgoed)
Limited, Alphagen Projects Limited and Infinite Ventures (Goathill) Limited)
may have any debt except as approved in accordance with the Articles.
The Amended and Restated Management Services Agreement
This contains:

the management services and administrative services to be provided by Albion
Ventures to the Company;

the time commitments to be made by Key Persons in delivering such services;

the separate fee arrangements which will apply to the I Shares and the
Ordinary Shares in respect of such services; and

the circumstances in which the Amended and Restated Management Services
Agreement can be terminated by the I Shareholders or the Company.
The I Warrant Instrument
This contains:

the Company's agreement to grant one I Warrant for every four I Shares
issued pursuant to Subscriptions;

the circumstances in which the I Warrants can be exercised (generally on a
sale or listing of the Company); and

the exercise price, which will be linked to a return to the holders of I Shares of
over 8%.
Amended Articles
The Articles will need to be amended to reflect (amongst other things) the creation of
the I Shares. Details of these changes are set out in Part III of this document, but
Shareholders should note the following points in particular:

dividends in respect of the Ordinary Shares will only be paid out of the income
or capital profits derived from the assets allocated to the Ordinary Shares;

dividends in respect of the I Shares will only be paid out of the income or
capital profits derived from the assets allocated to the I Shares;

on a return of assets on a winding-up or return of capital, the holders of the
Ordinary Shares shall be entitled to the surplus assets allocated to the
Ordinary Shares after payment of the liabilities allocated to the Ordinary
Shares;

on a return of assets on a winding up or return of capital, the holders of the I
Shares shall be entitled to the surplus assets allocated to the I Shares after
payment of the liabilities allocated to the I Shares;
15
4.

on a listing of the Company, the share capital will be reorganised so that the
value of the Company is allocated amongst the shareholders in the same
proportions as would apply on a winding up;

in order to support the segregation of assets and liabilities as between the
Ordinary Shares and the I Shares, assets allocated to the Ordinary Shares will
be held through Ordinary ShareCo and assets allocated to the I Shares will be
held through I ShareCo. Ordinary ShareCo and I ShareCo are both whollyowned subsidiaries of the Company;

the expenses and liabilities of the Company will be allocated between the
share classes as provided in the Amended and Restated Management Services
Agreement (as further described in paragraph 2 of Part II of this document)
in proportion to their respective net asset values;

the consent of Ordinary Shareholders and I Shareholders shall be required to
divide or consolidate shares;

the consent of specific majorities of I Shareholders will be required for a
number of other matters including amendments to the Project Policy,
borrowings, a listing of the Company, the termination of the Amended and
Restated Management Services Agreement and the appointment and removal
of directors;

GIB will have the right (but not an obligation) to appoint a Director; and

Article 46 of the amended Articles restricts any person from acquiring or
offering to acquire an interest in Ordinary Shares where such interest
represents more than one-third of the Ordinary Shares in issue unless he
makes a comparable offer to acquire the I Shares then in issue.
The Subscriptions
On the terms of the Investment Agreement:

GIB has agreed (subject to the Conditions and, with respect to each drawdown
by the Company as described below, the conditions to drawdown under the
Investment Agreement) to subscribe for Subscription Shares at the
Subscription Price for a total subscription amount of up to £25 million. GIB
may elect to increase this commitment to a total subscription amount of up to
£50 million. GIB's commitment to subscribe for Subscription Shares is
conditional on matched (or greater) funding from other Investors in I Shares.
GIB may at any time (and at its discretion) terminate its funding
commitment;

Strathclyde has (subject to the Conditions and, with respect to each drawdown
by the Company as described below, the conditions to drawdown under the
Investment Agreement) agreed to subscribe for Subscription Shares at the
Subscription Price for a total subscription amount of up to £10 million. If GIB
terminates its funding commitment, Strathclyde and certain other subscribers
for Subscription Shares may also suspend or terminate their funding
commitment;
16

Albion Ventures has agreed to subscribe for Subscription Shares at the
Subscription Price equal to 0.5% of GIB's, Strathclyde's and other Investors'
(if any) maximum subscription amounts; and

the Company will draw down subscription funds under the Subscriptions as
and when it requires funding for Power Projects or for the Company's costs
and expenses in each case during the Project Period (as further described in
paragraph 1 of Part II of this document), provided that the conditions for
drawdowns are met in the Investment Agreement. Accordingly, the
Subscriptions may be made in a number of tranches, at different times and for
different amounts.
The Subscriptions are conditional, inter alia, upon the Takeover Panel giving
approval to waivers of Rule 9 of the Takeover Code, together with the approval of a
"whitewash" circular setting out full details of the proposed waiver of the obligation
under Rule 9 of the Takeover Code, that would otherwise require GIB and Strathclyde
to make a general offer to Shareholders to acquire their shares in the Company.
Accordingly, the Subscriptions are also conditional on the passing of the Resolutions.
Further details of the Takeover Code considerations are set out in paragraph 5 below.
The proceeds of the Subscriptions will enable the Company to take advantage of some
of the projects in its pipeline which might otherwise be lost or result in lower returns
as a result of delays in undertaking them.
5.
Takeover Code considerations
Background
The Subscriptions give rise to certain considerations under the Takeover Code.
The Takeover Code is administered by the Panel. The Takeover Code applies to all
takeovers and mergers transactions where the offeree company is, inter alia, a public
company with its registered office in the United Kingdom and which has filed a
prospectus with the FCA, as the United Kingdom Listing Authority under FSMA. ACP
is such a company and its shareholders are entitled to the protections afforded by the
Takeover Code.
Under Rule 9 of the Takeover Code, except with the consent of the Panel, when (a) a
person acquires, whether by a series of transactions over a period of time or not, an
interest in shares which, taken together with shares in which he is already interested
and in which persons acting in concert with him are interested, carry 30% or more of
the voting rights of a company which is subject to the Takeover Code, or (b) a person,
together with persons acting in concert with him, is interested in shares which in the
aggregate carry not less than 30% of the voting rights of a company but does not hold
shares carrying more than 50% of such voting right and that person, or any person
acting in concert with him, acquires an interest in any other shares which increases
the percentage of shares carrying voting rights in which he is interest, that person is
normally required to make a general offer to all the remaining shareholders to
acquire their shares. An offer under Rule 9 must be made in cash and at the highest
price paid by the person required to make the offer (or any person acting in concert
with him) for any interest in shares of the Company during the 12 months prior to the
announcement of the offer.
GIB and Strathclyde do not currently hold any shares in the Company. However,
further to drawdown of funds by the Company under the Subscriptions, GIB and
17
Strathclyde may each acquire (pursuant to one or more drawdowns) Subscription
Shares carrying 30% or more of the voting rights of the Company and may then
(pursuant to further drawdowns) each acquire further Subscription Shares (which
would increase their respective percentage shareholdings).
Furthermore, as the Ordinary Shares are redeemable, any redemption occurring after
any subscriptions by GIB and Strathclyde under the terms of the Investment
Agreement, would result in an increase in each of GIB's and Strathclyde's respective
percentage holding in the Company's issued share capital. This could result in GIB
and/or Strathclyde acquiring Subscription Shares carrying 30% or more of the voting
rights of the Company or increasing their respective percentage holdings of voting
rights of the Company between 30% and 50%.
Illustration of GIB's and Strathclyde's voting rights – Subscriptions by GIB and
Strathclyde for £20 million in aggregate
Table A below shows the voting rights which would be held by GIB and Strathclyde
based on initial Subscriptions by them for £10 million each (an aggregate of £20
million).
Column (4) of Table A shows the maximum potential percentage of voting rights
which would be held by GIB and Strathclyde (before any Warrants are exercised and
before any redemptions of Ordinary Shares).
Column (6) shows the effect on such percentages if no Warrants were exercised but
all Ordinary Shares were redeemed (as theoretically could be the case).
Table A:
Maximum
shares with
voting rights
assuming no
Warrants are
exercised but
after
redemption of
all Ordinary
Shares
(5)
% issued share
capital with voting
rights assuming
no Warrants are
exercised but
after redemption
of all Ordinary
Shares
(6)
Existing
holdings of
shares with
voting rights
(1)
% Existing
holdings of
shares with
voting
rights
(2)
Shares with
voting rights
after £20m
subscription of I
Shares
(3)
% issued
share capital
with voting
rights at
£20m
subscription
of I Shares
(4)
GIB
0
0.00%
10,000,000
42.08%
10,000,000
49.75%
Strathclyde
0
0.00%
10,000,000
42.08%
10,000,000
49.75%
Notes:

The table assumes that each of GIB and Strathclyde subscribes 10 million Subscription Shares at a Subscription Price
of £1 each.

The table assumes that no further A Shares or Ordinary Shares are issued.

Each A Share, I Share and Ordinary Share carries one vote on a poll at a general meeting of the Company.
18
Illustration of GIB's and Strathclyde's voting rights – Subscriptions by GIB for £25
million in aggregate (that is, £15 million in addition to the £10 million referred to in
Table A above).
Table B below shows the voting rights which would be held by GIB and Strathclyde
based on Subscriptions by GIB for a further amount of £15 million in addition to the
£10 million referred to in Table A above (an aggregate subscription for GIB of £25
million).
Column (2) of Table B shows the maximum potential percentage of voting rights
which would be held by GIB and Strathclyde (before any Warrants are exercised and
before any redemptions of Ordinary Shares).
Column (4) shows the effect on such percentage if no Warrants were exercised but all
Ordinary Shares were redeemed (as theoretically could be the case).
Table B:
% issued share capital
with voting rights at
£50m subscription of I
Shares
(2)
Maximum shares with
voting rights assuming
no Warrants are
exercised but after
redemption of all
Ordinary Shares
(3)
% issued share capital with
voting rights assuming no
Warrants are exercised but
after redemption of all
Ordinary Shares
(4)
25,000,000
46.37%
25,000,000
49.75%
10,000,000
18.55%
10,000,000
19.90%
Shares with
voting rights
after £50m
subscription of I
Shares
(1)
GIB
Strathclyde
Notes:

As described in paragraph 4 of this Part I in this document, GIB's commitment to subscribe for Subscription Shares is
conditional on matched funding from other Investors in I Shares. Therefore, this table assumes that, in addition to
Strathclyde's Subscription for an aggregate amount of £10 million, one or more Investors subscribe for Subscription
Shares for an aggregate amount of £15 million.

The table assumes that GIB subscribes for 25 million Subscription Shares, and other Investors (including Strathclyde)
subscribe in aggregate 25 million Subscription Shares, in each case at a Subscription Price of £1 each.

The table assumes that no further A Shares or Ordinary Shares are issued.

Each A Share, I Share and Ordinary Share carries one vote on a poll at a general meeting of the Company.
Waiver
The Panel has agreed, subject to approval of Independent Shareholders, to waive the
obligation for GIB to make a general offer that would otherwise arise under Rule 9 of
the Takeover Code (a) in connection with the allotment and issue of up to
25,000,000 I Shares to GIB on or before 30 June 2016 under the Investment
Agreement (as amended from time to time) or (b) at any time as a result of an
increase in GIB's shareholding following redemptions of any Ordinary Shares, subject
to the resulting shareholding of GIB not exceeding 49.75% (being the percentage in
column 6 of Table A and column 4 of Table B above). Accordingly, Resolution 2 is
being proposed at the General Meeting, and will be taken on a poll.
19
Furthermore, the Panel has agreed, subject to approval of Independent Shareholders,
to waive the obligation for Strathclyde to make a general offer that would otherwise
arise under Rule 9 of the Takeover Code (a) in connection with the allotment and
issue of up to 10,000,000 I Shares to Strathclyde on or before 30 June 2016 under
the Investment Agreement (as amended from time to time) or (b) at any time as a
result of an increase in Strathclyde's shareholding following redemptions of any
Ordinary Shares, subject to the resulting shareholding of Strathclyde not exceeding
49.75% (being the percentage in column 6 of Table A above). Accordingly,
Resolution 3 is being proposed at the General Meeting, and will be taken on a poll.
For these purposes, the Independent Shareholders are all Shareholders other than
Albion Ventures and any member or employee of Albion Ventures. Albion Ventures
and its members and employees are not considered to be independent as the fees
which Albion Ventures will receive under the Amended and Restated Management
Services Agreement and the Warrants which will be issued under the I Warrant
Instrument will be based on the subscriptions for I shares made by GIB and
Strathclyde. Accordingly, the Panel requires that Resolutions 2 and 3 be considered
only by Independent Shareholders.
6.
Current trading
The core nature of the Company's business is to generate power. The business began
on 1 August 2013 with a view to identifying, developing, constructing,
commissioning, registering and subsequently operating renewable energy projects in
the United Kingdom. The focus has been on community-scale (i.e. smaller) renewable
projects principally in the wind, hydro-electricity, solar and biogas sectors. To date,
the Company has raised approximately £3.7 million (before expenses) and has
embarked on four projects.
Pursuant to the Investment Agreement, it is proposed that the Company will fund
Power Projects in accordance with the Project Policy which is described in paragraph
3 of this Part I and in Part II of this document.
The Group will fund future Power Projects using the proceeds from the Subscriptions
and other monies raised in the future. Revenues generated by the Group's operations
will be used to fund its on-going operations and, to the extent the Board resolves, to
pay dividends in accordance with the Articles.
7.
Information on GIB
GIB was established in 2012 by the UK Government, its sole shareholder, which has
committed an initial £3.8 billion of public funds. Its purpose is to accelerate the UK's
transition to a greener, stronger economy. It uses its finance to back green projects
on commercial terms and mobilise other private sector capital into the UK's green
economy. Its investments help fund the creation of new energy and waste
infrastructure across the UK and, with that, new jobs in construction and operations.
By 31 March 2014 it had provided capital to 5 funds and backed 26 green projects,
committing a total of £1.3 billion.
As at 31 March 2014, GIB employed 92 people. The current members of GIB board
are:
Lord Smith of Kelvin KT (Chairman)
Shaun Kingsbury (Chief Executive)
Tony Poulter (Senior Independent Director)
20
Anthony Odgers (Shareholder Representative Director)
Professor Dame Julia King DBE (Non-executive Director)
Fred Maroudas (Non-executive Director)
Tom Murley (Non-executive Director)
David Nish (Non-executive Director)
Professor Isobel Sharp CBE (Non-executive Director)
Tessa Tennant (Non-executive Director).
At 31 March 2014, GIB had net assets of £303 million.
Further information on GIB is available at www.greeninvestmentbank.com. Audited
consolidated accounts for GIB for the financial year ended 31 March 2014 and for the
period from 15 May 2012 to 31 March 2013, which was the first period of its
operations (which are incorporated into this document by reference) are available at
http://www.greeninvestmentbank.com/governance/governance-documents/annualreports/.
GIB has confirmed to the Board that it is not proposing any changes to the
employment rights of employees of the Company and its subsidiaries and that there
are no likely repercussions for the employment of the Company's employees or the
location of its place of business.
GIB has also confirmed its intention that the business of the Company should be
conducted consistently with the agreed policy in the Investment Agreement and that
the I Shares will be run as a separate pool segregated from the Ordinary Shares in
accordance with the Investment Agreement, the Amended and Restated Management
Services Agreement and the Articles, GIB has confirmed that it does not intend to
redeploy the Company's fixed assets.
GIB intends to fund the GIB Subscription by using available capital contributions
from its shareholder.
8.
Information on Strathclyde
The Strathclyde Pension Fund (the "Fund") was established in 1974 by Strathclyde
Regional Council and transferred to Glasgow City Council in 1996. The Fund is a pool
into which employees' and employers' contributions and investment income are paid
and from which pensions and other lump sum benefits are paid out to Local
Government Pension Scheme members. The Fund's investments are managed in
accordance with the Local Government Pension Scheme (Scotland) (Management
and Investment of Funds) Regulations 2010. Investments are mostly externally
managed by investment managers appointed by the council and overseen by the
investment team within the Strathclyde Pension Fund Office. The Head of Pensions
of the Fund is Richard McIndoe.
At 31 March 2014, the Fund had 204,844 members.
Glasgow City Council (the "Council") is the administering authority for the
Strathclyde Pension Fund. Certain functions of maintaining the Fund are delegated
by the Council to the Executive Director of Financial Services and Deputy Chief
Executive of the Council. The Executive Director of Financial Services and Deputy
Chief Executive of the Council is Lynn Brown.
21
At 31 March 2014 Strathclyde had net assets of £13.9 billion.
Further information on Strathclyde is available at www.spfo.org.uk. Audited
consolidated accounts for Strathclyde for the financial years ended 31 March 2013
and 31 March 2014 (which are incorporated into this document by reference) are
available at http://www.spfo.org.uk/index.aspx?articleid=9400.
Strathclyde has confirmed to the Board that it is not proposing any changes to the
employment rights of employees of the Company and its subsidiaries and that there
are no likely repercussions for the employment of the Company's employees or the
location of its place of business.
Strathclyde has also confirmed its intention that the business of the Company should
be conducted consistently with the agreed policy in the Investment Agreement and
that the I Shares will be run as a separate pool segregated from the Ordinary Shares
in accordance with the Investment Agreement, the Amended and Restated
Management Services Agreement and the Articles. Strathclyde has confirmed that it
does not intend to redeploy the Company's fixed assets.
Strathclyde intends to fund the Strathclyde Subscription by using its cash reserves.
9.
Action to be taken
General Meeting
Set out at the end of this document is a notice convening the General Meeting to be
held at 10.00 a.m. on 16 February 2015 at the offices of Albion Ventures at 1 King's
Arms Yard, London EC2R 7AF, at which the Resolutions will be proposed. The
Resolutions can be summarised as follows:

Resolution 1 is an ordinary resolution to approve the terms of the Transaction
Agreements;

Resolutions 2 and 3 are ordinary resolutions to approve the Waivers. These
resolutions will be taken on a poll of Independent Shareholders voting in
person or by proxy at the General Meeting;

Resolution 4 is a special resolution to authorise the Directors under the Articles
(in substitution for all existing authorities) to allot relevant securities up a
maximum nominal amount of £67,500 of Ordinary Shares and £1,256,250 of I
Shares;

Resolution 5 is a special resolution to authorise the Directors under the Articles
(in substitution for all existing authorities) to issue and allot otherwise than on
a pre-emptive basis further equity securities up to a maximum nominal amount
of £67,500 of Ordinary Shares and £1,256,250 of I Shares;

Resolution 6 is a special resolution to approve the adoption of new Articles
which will contain inter alia the rights and restrictions attaching to the I Shares
and the rights and restrictions attaching to the Ordinary Shares and the A
Shares.
Shareholders should note that all of the Resolutions are inter-conditional
and, if any one is not passed, the Subscriptions described in this letter
22
will not proceed. The Resolutions are also conditional on the passing of
the special resolution to be proposed at the Separate General Meeting.
Separate General Meeting
Set out at the end of this document is a notice convening a separate general meeting
of the holders of Ordinary Shares as a class to sanction any variation, modification or
abrogation of the rights of the Ordinary Shares arising from the creation of the I
Shares.
The holder of the A Shares has already passed a written resolution consenting to the
creation of the I Shares and any changes to the A Share rights.
Forms of Proxy
You will find the Forms of Proxy for use in connection with the General Meeting and
the Separate General Meeting accompanying this document. The Forms of Proxy
should be completed in accordance with the instructions printed thereon, whether or
not you intend to be present at the General Meeting and the Separate General
Meeting, and returned to the Company's registrars as soon as possible and in any
event so that they are received not later than 10.00 a.m. on 12 February 2015 (in the
case of the Form of Proxy in respect of the General Meeting) and not later than
10.15 a.m. on 12 February 2015 (in the case of the Form of Proxy in respect of the
Separate General Meeting). Completion and return of a Form of Proxy will not
prevent you from attending the General Meeting and the Separate General Meeting
and voting in person, if you so wish.
10.
Additional information
To facilitate the reporting requirements of GIB, and subject to the passing of the
resolutions at the General Meeting and the Separate General Meeting, the accounting
reference date of the Company will be changed to 31 January. The Company will issue
accounts for the year to 30 November 2014 and for the two month period to 31
January 2015 and annually thereafter.
Subject to the availability of sufficient distributable reserves, the Company intends to
pay dividends following the publication of the annual accounts for the year to 30
November 2014 and the interim accounts for the six months to 31 July 2015 and,
thereafter, following publication of the annual accounts to 31 January and interim
accounts to 31 July to those Shareholders who have been on the register for the
previous 12 months.
Your attention is drawn to the description of the Transaction Agreements in Part II of
this document, to the proposed changes to the Articles contained in Part III, to the
financial information regarding the Company contained in Part IV and to the
additional information contained in Part V which contains certain additional
information in respect of the Company and the Directors' interests. Shareholders are
advised to read the whole of this document and not to rely solely on the summary
information set out in this letter. Copies of the Transaction Agreements and the
proposed changes to the Articles will be available for inspection at the registered
office of the Company at 1 King's Arms Yard, London EC2R 7AF until the date of the
General Meeting and will also be available for inspection at the place of General
Meeting for 15 minutes prior to the meeting and during the meeting.
23
11.
Recommendation
The Directors, who have been so advised by Howard Kennedy, consider
that the Resolutions are fair and reasonable and in the best interests of
Shareholders and the Company as a whole. In providing advice to the
Directors, Howard Kennedy has taken account of the Directors'
commercial assessments. Accordingly, the Directors unanimously
recommend that Shareholders vote in favour of the Resolutions.
The Directors have irrevocably undertaken to the Company that they
intend to vote their own beneficial shareholdings in the Company,
amounting to 200,515 Ordinary Shares and A Shares (in aggregate),
which represent approximately 5.5% (in aggregate) of the voting rights of
the Company, in favour of the Resolutions save that Patrick Reeve, David
Gudgin and Vikash Hansrani, who are members or employees of Albion
Ventures and are therefore not Independent Shareholders, will not vote
on Resolutions 2 and 3.
In addition, Albion Ventures has irrevocably undertaken to the Company
that it intends to vote its beneficial shareholding in the Company,
amounting to 505,645 Ordinary Shares, which represents approximately
13.8% of the voting rights of the Company, in favour of the Resolutions
save that Albion Ventures will not vote on Resolutions 2 and 3 as it is not
an Independent Shareholder.
Yours faithfully
Volker Beckers
Chairman
24
PART II
SUMMARY OF THE TRANSACTION AGREEMENTS
The following is a summary of the principal terms of the Transaction Agreements.
1.
Investment Agreement
The principal terms of the Investment Agreement are as follows:
1.1
GIB and Strathclyde have agreed, conditional, inter alia, upon the Takeover Panel
giving approval to a waiver of Rule 9 of the Takeover Code in respect of the
Subscriptions in terms satisfactory to GIB and Strathclyde, the passing of the
Resolutions, the approval of the resolution to be proposed at the Separate General
Meeting and the Ordinary Warrant Instrument having been amended in terms
approved by GIB and Strathclyde (the "Conditions"), to commit, respectively,
£25,000,000 and £10,000,000 to be invested in the Company by way of
subscriptions for I Shares at the Subscription Price. GIB's commitment to subscribe
for Subscription Shares is further conditional on matched (or greater) funding from
other Investors. GIB also has the right to elect to commit a further amount of up to
£25,000,000 to be invested in the Company by way of subscription for I Shares at the
Subscription Price.
1.2
In the event that the Conditions are not satisfied on or before 28 February 2015 (or
such later date as may be agreed in writing by the Company, GIB and Strathclyde)
(the "Longstop Date"), each of GIB and Strathclyde may terminate the Investment
Agreement insofar as it relates to it by giving notice to other parties. Upon such
termination, GIB or Strathclyde shall cease to be a party to the Investment
Agreement but the agreement shall continue in full force and effect as between the
remaining parties until such time as both GIB and Strathclyde cease to a parties to
the Investment Agreement following which the Investment Agreement will terminate
automatically.
1.3
GIB shall have the right at any time to terminate its funding commitment under the
Investment Agreement by serving a commitment termination notice
("Commitment Termination Notice") on each party to the Investment
Agreement. Upon GIB serving a Commitment Termination Notice, GIB shall cease to
have any obligation under the Investment Agreement to subscribe for any I Shares
and the Company shall not be entitled to issue any drawdown notices to GIB for the
funding of Power Projects. Following GIB serving a Commitment Termination
Notice, Strathclyde and other Investors which commit to subscribe for the first £15
million of I Shares in addition to GIB's and Strathclyde's initial commitments, may
serve a notice on the Company either terminating or suspending their commitments
to subscribe for I Shares. Following such a notice, the Company shall not be entitled
to issue any drawdown notices to the relevant non-GIB Investors for the funding of
Power Projects (except, in the case of a suspension, where the relevant non-GIB
Investors resolve to cease such suspension).
1.4
Subject to: (i) the Conditions being satisfied prior to the Longstop Date; (ii) the prior
fulfilment of the specific drawdown conditions (including the form and content of
such drawdown notice); and (iii) the matters described in paragraph 1.3 of this Part
II, the Company may during the period from the date of the Investment Agreement to
1 October 2017 or, if earlier, the earliest Waiver Backstop Date (as defined in the
Investment Agreement) or such longer period up to 1 October 2018 as the Investors
may approve (the "Project Period") issue drawdown notices to GIB, Strathclyde
and other Investors, and to Albion Ventures setting out certain prescribed
25
information required pursuant to the Investment Agreement. The Company shall be
required to serve separate drawdown notices in respect of the funding of either a
Power Project or the funding of the costs and expenses of the Company which must
include certain prescribed information. Following receipt by the Investors of each
valid drawdown notice, the relevant Investor shall pay the amount set out in each
such drawdown notice to the Company and following receipt of the funds the
Company shall issue credited as fully paid such number of I Shares as set out in the
drawdown notice to the relevant Investor and the relevant Investor shall be entered
into the register of members of the Company as the holder of such number of I
Shares.
1.5
The Company may use available cash or any receivable of the Company and/or its
subsidiaries allocated to the I Shares to fund a Power Project. During the Project
Period, the Company may do this by serving a drawdown notice containing certain
prescribed information as set out in the Investment Agreement. After the Project
Period, the Company may only do this with a specific majority approval of the
Investors.
1.6
The Group's business shall be identifying, developing, constructing, commissioning,
registering and subsequently operating renewable energy projects in the UK in
accordance with the Project Policy. The Group may not vary its business without the
Investors' consent.
1.7
In certain circumstances (including, but not limited to: (i) termination of the
Amended and Restated Management Services Agreement; (ii) the Company or Albion
Ventures committing a breach of the Amended and Restated Management Services
Agreement, the Articles and/or Investment Agreement; (iii) an insolvency event
occurring in relation to Albion Ventures or any Group Company; or (iv) the Company
losing any professional or regulatory authorisation necessary to carry out the
business of the Company), the Project Period shall be suspended and the Company
shall not be entitled to issue a drawdown notice in respect of the funding of a Power
Project for such time as the Project Period is suspended. The Project Period will only
resume with a specific majority approval of the Investors.
1.8
Albion Ventures has agreed to subscribe for and hold I Shares equivalent to at least
0.5% of the aggregate amounts paid up by GIB, Strathclyde and other Investors for
their I Shares.
1.9
The Company and Albion Ventures will give certain warranties and representations
to GIB and Strathclyde as at the date of the Investment Agreement and a number of
these will be repeated as at the date of each drawdown notice. The Company and
Albion Ventures shall not be liable in respect of a claim to the extent that the facts
and circumstances giving rise to the claim are adequately disclosed in a disclosure
letter.
The maximum liability of the Company under the warranties and
representations will be capped at the amount invested by the Investors. The
maximum liability of Albion Ventures under the warranties and representations will
be capped at the greater of £3 million and the amounts of fees allocated to the I
Shares and paid to Albion Ventures under the Amended and Restated Management
Services Agreement.
1.10
The Company and Albion Ventures will give certain undertakings to GIB and
Strathclyde in relation to the operation of the Company including but not limited to
compliance with certain specific policies (e.g. the Project Policy, anti-conflicts of
interest policies; governance terms for subsidiaries; subsidiary co-investor
26
provisions, green investment and anti-corruption policy requirements) and
compliance with applicable laws.
1.11
The Investment Agreement shall automatically terminate insofar as it relates to an
Investor if, following the first issue of Subscription Shares to such Investor, neither it
nor its associated entities holds any shares in the capital of the Company. Upon such
termination, the Investor in question shall cease to be a party to the Investment
Agreement but it shall continue in full force and effect as between the remaining
parties.
1.12
The Company shall be restricted from taking certain actions unless with the prior
written consent of Investors holding the requisite percentage of the I Shares in issue
at the relevant time as prescribed in the Investment Agreement (being either 75%
(including both GIB and Strathclyde) or 100% of the I Shares in issue). These
investor consent matters cover actions such as: (i) the commencement by the
Company of any litigation; and (ii) the taking of any action by the Company or its
Group Company which is outside the defined scope of business described in the
Investment Agreement.
1.13
The Company shall be required to provide each Investor with varying types of
information within various specified time periods including: (i) estimates of
projections on drawdowns and distributions to each Investor for the following
calendar month; (ii) management accounts of the Company; (iii) the annual business
plan for the next financial year; and (iv) audited accounts.
1.14
At any time after the fifth anniversary of the Investment Agreement the Company
shall appoint, if required by GIB or Investors holding 50% or more of the I Shares, a
professional financial adviser (at the expense of the Company) to work to evaluate
strategic options and, in particular, to achieve a listing.
1.15
GIB shall have the right (but not an obligation) to appoint (and maintain at all times)
a non-executive Director.
2.
Amended and Restated Management Services Agreement
2.1
Pursuant to the Management Services Agreement dated 30 May 2013 entered into
between (1) the Company and (2) Albion Ventures, Albion Ventures agreed to provide
executive management and other administrative services to the Company for a fee
payable monthly in arrears in each year (together with any applicable VAT) at the
rate of 2% per annum of the Net Asset Value of the Company less the amount of
salaries paid by the Company to the executive directors and managers of the
Company.
2.2
Subject to the satisfaction of the Conditions, the Management Services Agreement
will be amended and restated pursuant to the Amended and Restated Management
Services Agreement and GIB and Strathclyde shall be added as parties to the
agreement.
2.3
The principal terms of the Amended and Restated Management Services Agreement
are as follows:
2.3.1
the Company shall appoint Albion Ventures to: (i) source and evaluate
potential Power Projects for possible funding by the Company in line with
its business objectives; (ii) assist the Company in monitoring and
27
developing projects; and (iii) act as secretary of the Company and provide
secretarial and administrative services to the Company;
2.3.2
Albion Ventures shall ensure that the Key Persons: (i) are made available to
the Company for the day to day operation of the Company; (ii) comply with
their respective time commitments as set out in the Amended and Restated
Management Services Agreement; and (iii) devote such time and attention
as is required for the due and proper performance of Albion Ventures'
duties under the Amended and Restated Management Services Agreement;
2.3.3
The Company shall pay to Albion Ventures by way of remuneration for the
services rendered the following fees:
2.3.3.1
a quarterly fee (the "Ordinary Share Pool Management
Services Fee") which shall be allocated to the Ordinary Shares
equivalent to 0.5% of the Ordinary Shares Net Asset Value;
2.3.3.2
a quarterly fee (the "I Share Pool Management Services
Fee") which shall be allocated to the I Shares equivalent to 0.5%
of the total of the I Share Pool until (and including) the last day
of the Project Period, following which the fee will reduce to
0.375% of the total amount of the I Share Pool. No I Share Pool
Management Services Fee shall be payable (i) until such time
that amounts paid up on Subscription Shares have been
deployed to fund Power Projects, or (ii) during and in respect of
the first 3 months of such time as the Project Period is
suspended under the Investment Agreement until such time as
the Project Period is resumed following any such suspension and
provided that after the three month period referred to in (ii)
above (and during such time as the Project Period is suspended
under clause 3.11 of the Investment Agreement), the I Share Pool
Management Services Fee shall be reduced to an amount equal
to 25% of the amount which would otherwise be payable under
clause 4.1.2 of the Amended and Restated Management Services
Agreement ;
2.3.3.3
a one-off execution fee of 2% of the amount of funding provided
by the Company to each Power Project (the "Execution Fee")
which shall be allocated to the Ordinary Shares and I Shares in
the respective proportions of the amounts paid up on the
Ordinary Shares and I Shares which the Company commits to
the Power Project in question. Any Execution Fee (or portion
thereof) allocated to the I Shares shall be deducted from the I
Share Pool Management Services Fee;
2.3.3.4
in the event that a proposed Power Project funding (falling
within the Project Policy) does not proceed (an "Aborted
Project"), Albion Ventures may from 1 February 2015 re-charge
to the Company the costs of legal counsel or other professional
advisers up to an aggregate maximum amount of £25,000 per
annum (the "Aborted Project Fee"). Any amounts payable by
the Company in respect of the Aborted Project Fee shall be
allocated to the I Shares;
28
2.3.3.5
in the event that a proposed Power Project funding proceeds
with funding provided by the I Shares in accordance with the
Project Policy, Albion Ventures may re-charge to the Company
an amount (the "I Shares Third Party Costs") equal to X% of
the costs of legal counsel or other professional advisers for due
diligence, or the preparation or negotiation of contracts, in
relation to the relevant Power Project, where X shall equal to the
I Shares' Relevant Proportion in respect of such Power Project.
The I Shares Third Party Costs shall be allocated to the I Shares;
and
2.3.3.6
in the event that a proposed Power Project funding proceeds
with funding provided by the Ordinary Shares in accordance
with the Project Policy, AVL may re-charge to the Company an
amount (the "Ordinary Shares Third Party Costs") equal to
X% of the costs of legal counsel or other professional advisers for
due diligence, or the preparation or negotiation of contracts, in
relation to the relevant Power Project, where X shall equal to the
Ordinary Shares' Relevant Proportion in respect of such Power
Project. The Ordinary Shares Third Party Costs shall be allocated
to the Ordinary Shares.
2.3.4
Any excess in Central Overheads allocated to the Ordinary Shares above
0.5% of the Ordinary Shares Net Asset Value shall either be paid by Albion
Ventures or refunded by way of a reduction in fees which are allocated to
the Ordinary Shares. Any excess in Central Overheads allocated to the I
Shares above £80,000 (or, after GIB has given a Commitment Termination
Notice under the Investment Agreement, £55,000) shall either be paid by
Albion Ventures or refunded by way of a reduction in fees payable by the
Company which are allocated to the I Shares.
2.3.5
Save as provided under 2.3.3.4, 2.3.3.5 and 2.3.3.6 above, Albion Ventures
shall also bear all Third Party Costs and shall indemnify and hold harmless
the Company against any Third Party Costs incurred by any Group
Company.
2.3.6
Albion Ventures' appointment under the Amended and Restated
Management Services Agreement shall expire on 31 January 2035 but the
Amended and Restated Management Services Agreement may be
terminated on two years notice given by the Company or Albion Ventures at
any time after 29 May 2018.
2.3.7
The Amended and Restated Management Services Agreement may be
terminated by (i) the Company or (ii) one or more Investors holding in
aggregate more than 50% of the I Shares in issue, giving written notice to
Albion Ventures if:
2.3.7.1
Albion Ventures commits a breach of the Amended and Restated
Management Services Agreement or the Investment Agreement
which is not capable of rectification;
2.3.7.2
Albion Ventures commits a breach of the Amended and Restated
Management Services Agreement or the Investment Agreement
(which is capable of rectification) and fails to rectify the same
within 15 Business Days of being requested to do so;
29
2.3.7.3
Albion Ventures is in persistent breach of any provision or
provisions of the Amended and Restated Management Services
Agreement or the Investment Agreement;
2.3.7.4
Albion Ventures commits an act of fraud, serious misconduct,
negligence, mismanagement or wilful default in relation to the
performance of its duties and obligations under the Amended
and Restated Management Services Agreement or the
Investment Agreement;
2.3.7.5
any warranty given under the Amended and Restated
Management Services Agreement is untrue or inaccurate as at
the date of the Amended and Restated Management Services
Agreement or any warranty or representation given by Albion
Ventures from time to time under the Investment Agreement
(including any warranty or representation which is deemed to be
repeated) is untrue or inaccurate when given (or deemed to have
been given);
2.3.7.6
Albion Ventures is or becomes a Prohibited Person (as defined in
the Investment Agreement);
2.3.7.7
any Key Person ceases to be a member or employee of Albion
Ventures (unless replaced in accordance with the Amended and
Restated Management Services Agreement);
2.3.7.8
any Key Person is convicted of a criminal offence or is or
becomes a Prohibited Person;
2.3.7.9
any Key Person or any of Albion Ventures' members is not or
ceases to be a UK tax resident;
2.3.7.10
any of Albion Ventures' members is convicted of a criminal
offence (other than an offence under road traffic legislation for
which a fine or non-custodial penalty is imposed) or is or
becomes a Prohibited Person;
2.3.7.11
Albion Ventures ceases to be authorised by the FCA or loses any
other licence, authorisation, permit, consent, registration or
authority or permit required to provide its services to the
Company under the Amended and Restated Management
Services Agreement;
2.3.7.12
an Insolvency Event (as defined in the Amended and Restated
Management Services Agreement) occurs in relation to Albion
Ventures;
2.3.7.13
Albion Ventures does not comply with the allocation letter
between Albion Ventures and the venture capital trusts managed
by Albion Ventures unless such non-compliance has been agreed
by the other parties to the allocation letter;
2.3.7.14
Albion Ventures or any member of the AVL Group (as defined in
the Amended and Restated Management Services Agreement) is
convicted of a criminal offence or is the subject of an
30
enforcement action by the FCA or any government authority or
body;
2.3.7.15
the Exclusivity Agreement terminates in connection with a
breach of the Exclusivity Agreement by Albion Ventures or
Greenenerco Limited;
2.3.7.16
there is a Listing (as defined in the Articles) of the Company; or
2.3.7.17
there is a change of control of the Company or an Asset Sale (as
defined in the I Share Warrant Instrument).
2.3.8
GIB may also terminate the Amended and Restated Management Services
Agreement by giving written notice to Albion Ventures (such notice to
provide reasonable details for such notification including an explanation of
the possible or likely effect on GIB's reputation) that Albion Ventures has
taken a demonstrable action in connection with the performance of its
duties under the Amended and Restated Management Services Agreement
which, in GIB's reasonable opinion, has caused damage to or adversely
affected, or will cause damage to or adversely affect, or is likely to cause
damage to or adversely affect, GIB's reputation. GIB will, to the extent
practicable, give prior notice of its intention to give such notice to Albion
Ventures and, if so requested, discuss the relevant circumstances with the
other Investors.
2.3.9
A fee (the "Formation Fee") of £350,000 in aggregate shall be allocated
among Investors and payable by Investors to Albion Ventures as follows:
2.3.9.1
GIB shall pay Albion Ventures £175,000 (£65,000 of which AVL
acknowledges it has received as at the date of this Agreement) in
cash in two equal instalments of £55,000 (after deduction of the
prior payment of £65,000), the first instalment being payable
within 10 (ten) Business Days of the first Drawdown Notice
validly issued to GIB under the Investment Agreement, and the
second instalment being payable within 10 (ten) Business Days
following the first date (the "Relevant Date") on which the
aggregate amount agreed to be subscribed by Investors under
clause 2.1 of the Investment Agreement equals or exceeds
£50,000,000 (save that GIB shall not be obliged to pay any
instalment if, at the relevant time, it has given a Commitment
Termination Notice);
2.3.9.2
Strathclyde shall pay Albion Ventures £70,000 (in cash) in two
equal instalments of £35,000, the first instalment being payable
within 10 (ten) Business Days of the first Drawdown Notice
validly issued to Strathclyde under the Investment Agreement,
and the second instalment being payable within 10 (ten)
Business Days following the Relevant Date (save that Strathclyde
shall not be obliged to pay any instalment if, at the relevant time,
it has given a notice terminating its funding commitment under
clause 2.9(c) of the Investment Agreement):
2.3.9.3
any successive Investor (until such time as the Formation Fee
has been paid in full to Albion Ventures) shall pay an amount
equal to the product of (a) (i) £350,000 minus (ii) any portion of
31
the Formation Fee which has already been paid by Investors; and
(b) the maximum aggregate amount it has agreed to subscribe
for under clause 2.1 of the Investment Agreement expressed as a
percentage of £15,000,000 (provided that if such percentage is
greater than 100%, (b) in such calculation shall be deemed to be
100%). Such amount shall be payable (in cash) within 10 (ten)
Business Days following the Relevant Date.
An Investor which pays any portion of the Formation Fee as above shall be a
"Founding Investor". The portion of the Formation Fee paid by a
Founding Investor shall be its "Founding Investor Amount", provided
for the avoidance of doubt that GIB's Founding Investor Amount is
£175,000 and Strathclyde's Founding Investor Amount is £70,000.
2.3.10
If any Investor agrees to subscribe for I Shares under clause 2.1 of the
Investment Agreement for up to an amount which, when added to all
maximum aggregate amounts agreed to be subscribed by Investors under
clause 2.1 of the Investment Agreement exceeds £50,000,000 but is not
more than £100,000,000 (such amount, the "Excess Amount"), that
Investor (other than GIB) shall pay an amount equal to: (x) £350,000
multiplied by (y) the Excess Amount expressed as a percentage of
£50,000,000, such resulting amount to be paid to Albion Ventures until
such time as Albion Ventures has been reimbursed the costs paid by Albion
Ventures to a third party fund raising adviser up to a maximum of £175,000
(the "AVL Third Party Formation Costs") and thereafter to the
Founding Investors pro rata to their Founding Investor Amounts. Such
Investor shall make such payment(s) within ten (10) Business Days of
making its commitment to subscribe. For illustrative purposes only, if the
AVL Third Party Formation Costs are £175,000 and if GIB has agreed to
subscribe for up to £25,000,000, Strathclyde has agreed to subscribe for up
to £10,000,000, a third Investor has agreed to subscribe for up to
£15,000,000 and a fourth Investor has agreed to subscribe for up to
£10,000,000, such fourth Investor shall pay AVL £35,000, GIB £17,500,
Strathclyde £7,000 and the third Investor £10,500.
2.3.11
In the event that an Investor ceases to be a party to the Investment
Agreement, it shall cease to be a party to the Amended and Restated
Management Services Agreement but the Amended and Restated
Management Services Agreement shall continue in full force and effect as
between the remaining parties.
2.3.12
Albion Ventures will give certain warranties and representations to the
Company, GIB and Strathclyde as at the date of the Amended and Restated
Management Services Agreement.
2.3.13
The Company shall indemnify Albion Ventures and its partners and
employees against all or any actions, proceedings, claims, demands and
liabilities whatsoever arising out of the proper performance of Albion
Ventures' duties and obligations under the Amended and Restated
Management Services Agreement which may be brought against Albion
Ventures except to the extent that they arise from or in connection with its
negligence, wilful default, fraud, breach of duty, bad faith or breach of the
Amended and Restated Management Services Agreement or the Investment
Agreement.
32
2.3.14
Albion Ventures shall indemnify and at all times keep the Company (and
each Group Company) fully indemnified against all or any losses, damage,
costs (including legal and other consultants' costs) and all expenses of any
nature whatsoever incurred or suffered by the Company arising out of or in
connection with Albion Ventures' or its members', directors', officers',
employees' or agents' (including for the avoidance of doubt delegates')
negligence, wilful default, fraud, breach of duty, bad faith or breach of the
Amended and Restated Management Services Agreement or the Investment
Agreement.
2.3.15
Albion Ventures shall indemnify and at all times (notwithstanding any
change in legislation with retrospective effect or any increase in the rate of
tax with retrospective effect) keep the Company and each Group Company
fully indemnified against any tax liability for which the Company or Group
Company is required to account to H. M. Revenue and Customs arising in
respect of:
2.3.16
3.
2.3.15.1
the acquisition, exercise, disposal, release or variation or any
warrant or other right to acquire Ordinary Shares or I Shares or
an interest in such shares by Albion Ventures;
2.3.15.2
any Employee relating to: (a) the acquisition, exercise, disposal
release or variation of, or the receipt of any benefit or any other
event occurring in respect of, any warrant or other right to
acquire Ordinary Shares or I Shares or an interest in such shares
which such Employee has acquired from Albion Ventures; (b) the
acquisition, disposal, release or variation of, or the receipt of any
benefit or any other event occurring at any time in respect of, any
warrant, shares, rights, attaching to shares or interest in shares
in the Company acquired as a result of the exercise of any
warrant or right or the vesting of any interest or right granted at
any time; and (c) any "relevant step" taken by a "relevant third
person" as defined in Part 7A of the Income Tax (Earnings and
Pensions) Act 2003; or
2.3.15.3
the failure after the date of the Amended and Restated
Management Services by any Employee to make good to the
Company (or any Group Company) any tax for which the
Company is required to account in respect of any notional
payment as defined in section 222 Income Tax (Earnings and
Pensions) Act 2003 and arising in respect of any warrant, shares,
options, rights, interests or arrangements referred to in any of
2.3.15.1 to 2.3.15.2.
Albion Ventures shall indemnify and at all times keep the Company (and
each Group Company) fully indemnified against all or any losses, damage,
costs (including legal and other consultants' costs) and expenses of any
nature whatsoever incurred or suffered by the Company arising out of or in
connection with any breach (by any person) of the allocation letter between
Albion Ventures and venture capital trusts managed by Albion Ventures
regarding the allocation of renewable energy projects.
I Warrant Instrument
The principal terms of the I Warrant Instrument are as follows:
33
3.1
The Company shall issue one I Warrant to Albion Ventures for every four
Subscription Shares allotted and issued under the Investment Agreement. I
Warrants will be issued by resolution of the Board on each occasion that Subscription
Shares are allotted and issued to Investors under the Investment Agreement.
3.2
Each I Warrant shall entitle the holder to either subscribe in cash at the exercise price
calculated pursuant to a formula set out in the I Warrant Instrument for one I Share
or exchange such subscription rights for the issue of I Shares carrying a value
calculated pursuant to a formula set out in the I Warrant Instrument, in each case
upon the occurrence of the following exercise events:
(a)
on a listing of the Company on a recognised stock exchange or on AIM (the
market of that name operated by the London Stock Exchange);
(b)
immediately prior to a change of control of the Company; or
(c)
immediately prior to the sale of all or substantially all of the assets and
undertaking of the Company;
3.3
No consideration shall be required from Albion Ventures in respect of the issue of
Warrants pursuant to the I Warrant Instrument.
3.4
The I Warrants are issued subject to the Articles and the Investment Agreement and
otherwise on the terms and conditions of the I Warrant Instrument which shall be
binding on the Company and each holder of I Warrants.
3.5
The Company shall do all such things and execute all such documents as far as it is
lawfully able to the extent necessary to give effect to the I Warrant rights in
accordance with the terms of the I Warrant Instrument.
3.6
The I Warrant Instrument shall terminate upon termination of the Investment
Agreement and/or the Amended and Restated Management Services Agreement
(save certain specified termination events under the Amended and Restated
Management Services Agreement).
3.7
Prior to the exercise of any I Warrants in relation to a Listing, each holder of I
Warrants must enter into a covenant in a form satisfactory to the Company that such
warrantholder will not sell, assign, transfer or otherwise dispose of any of the shares
issued by the Company pursuant to the exercise of the I Warrants until the fourth
anniversary of the Listing except and only to the extent required to raise cash
proceeds for the purposes of discharging any tax liability of such warrantholder in
respect of the grant, issue or transfer of I Warrants to such warrantholder, or the
exercise of his I Warrant rights (provided that the warrantholder shall give evidence
as the Company may reasonably require of such tax liability, the number of shares
required to be sold to discharge such tax liability and the discharge of such tax
liability).
3.8
No holder of I Warrants who is a director or employee of the Company may exercise
his I Warrants unless he enters into an indemnity in relation to any tax liabilities of
the Company, among other things, in relation to the acquisition, exercise, disposal,
release or variation of, or the receipt of any benefit or any other event occurring in
respect of, any I Warrant or other right to acquire I Shares or an interest in such
shares which such director or employee has acquired from Albion Ventures or
otherwise, and a security arrangement in a form satisfactory to the Company to
support such indemnity.
34
3.9
Albion Ventures may not exercise its I Warrants unless it enters into a security
arrangement in a form satisfactory to the Company to support the indemnity
described in 2.3.15 above.
35
PART III
PRINCIPAL CHANGES TO THE ARTICLES TO REFLECT THE I SHARE RIGHTS
The Articles will be amended by Resolution 6 to be proposed at the General Meeting to
reflect the rights attaching to the Ordinary Shares, the I Shares and the A Shares. Those
rights are contained in Articles 3, 4, 21.4 and 46 of the Articles which are reproduced below.
Article 3 includes the creation of the I Shares and contains the dividend rights, rights as to
capital and voting rights which attach to the various classes of shares. It also includes the
pre-emption rights on issue of new shares which apply to the share classes and provisions
whereby the share classes will convert on a listing of the Company to become a single class of
share.
Article 3 also provides for the assets of the Company to be allocated between the share
classes and specifies that assets allocated to the Ordinary Shares will be held through
Ordinary ShareCo and assets allocated to the I Shares will be held through I ShareCo. It also
sets out how expenses and liabilities of the Company will be allocated to the Ordinary Shares
and the I Shares. The Company is required to give undertakings to maintain its records and
bank accounts to ensure that the assets and liabilities can be identified and allocated as
mentioned above.
Finally, Article 3 sets out certain rights and restrictions which would apply if deferred shares
are required to be created to facilitate the conversion of shares on a listing.
The full text of Article 3 is as follows:
3.
SHARE CAPITAL
3.1
Share Capital
3.2
3.1.1
The share capital is divided into Ordinary Shares, I Ordinary Shares and A
Ordinary Shares and, if any Deferred Shares come into existence pursuant
to Article 3.7, Deferred Shares.
3.1.2
The Ordinary Shares, I Ordinary Shares, A Ordinary Shares and Deferred
Shares shall have the rights and shall be subject to the restrictions in this
Article 3.
3.1.3
The A Ordinary Shares shall rank pari passu in all respects with the
Ordinary Shares (as if the Ordinary Shares and the A Ordinary Shares
constituted one and the same class) but will not be redeemable.
3.1.4
The I Ordinary Shares will also not be redeemable.
Dividends
3.2.1
The holders of the Ordinary Shares shall be entitled to receive income and
capital profits resolved to be distributed and paid as dividends out of the
income or capital profits derived from the assets allocated to the Ordinary
Shares in accordance with Article 3.8 net of the costs, expenses, fees and
liabilities allocated to the Ordinary Shares in accordance with Article 3.9;
and
3.2.2
The holders of the I Ordinary Shares shall be entitled to receive income and
capital profits resolved to be distributed and paid as dividends out of the
36
income or capital profits derived from the assets allocated to the I Ordinary
Shares in accordance with Article 3.8 net of the costs, expenses, fees and
liabilities allocated to the I Ordinary Shares in accordance with Article 3.9.
3.2.3
3.3
3.4
The holders of the Deferred Shares shall not (in their capacity as such) have
any right to receive income and/or capital resolved to be distributed and
paid as dividends out of the income or capital profits of the Company.
Rights as to Capital
3.3.1
On a return of assets on a winding-up, reduction of capital or otherwise
(other than on a redemption or purchase of the Ordinary Shares), the
holders of the Ordinary Shares shall be entitled to the surplus assets
allocated to the Ordinary Shares in accordance with Article 3.8 after
payment of such proportion of the Company's liabilities, including the costs,
expenses and fees of a liquidation or other return of capital, as are allocated
to the Ordinary Shares in accordance with Article 3.9; and
3.3.2
On a return of assets on a winding-up, reduction of capital or otherwise
(other than on a redemption or purchase of the I Ordinary Shares), the
holders of the I Ordinary Shares shall be entitled to the surplus assets
allocated to the I Ordinary Shares in accordance with Article 3.8 after
payment of such proportion of the Company's liabilities, including the costs,
expenses and fees of a liquidation or other return of capital, as are allocated
to the I Ordinary Shares in accordance with Article 3.9.
3.3.3
The holders of the Deferred Shares shall not (in their capacity as such) have
any right to receive anything on a return of assets on a winding up,
reduction of capital or otherwise.
Voting Rights
The Ordinary Shares and the I Ordinary Shares shall rank pari passu as to rights to
receive notice of, to attend and to vote at any general meeting (including the annual
general meeting) of the Company. The Deferred Shares shall not confer on the
holders thereof (in their capacity as such) any right to receive notice of or to attend or
speak at any meeting of the Company.
3.5
Section 561 exclusion (pre-emption) – Ordinary Shares
3.5.1
The pre-emption provisions in section 561 of the 2006 Act and the
provisions of sub-sections 562(1) to 562(2) inclusive of the 2006 Act shall
not apply to any allotment of Ordinary Shares.
3.5.2
Unless with Ordinary Shareholder Consent and except in relation to any
allotment or issue of warrants or Ordinary Shares pursuant to the Ordinary
Share Warrant Instrument, any Ordinary Shares for the time being
unissued shall, before they are issued, be offered to the members holding
Ordinary Shares in proportion as nearly as the circumstances admit to their
existing holdings of Ordinary Shares. This offer shall be made by a notice in
writing which shall specify: (i) the number of shares offered; (ii) the
subscription price; and (iii) a period of not less than 21 days within which
the offer, if not accepted, will be deemed to be declined.
37
3.6
3.5.3
After the expiry of such period, any Ordinary Shares declined (or deemed to
be declined) shall be offered to the members holding Ordinary Shares who
have, within such period, accepted all the Ordinary Shares offered to them.
This further offer shall be made as between such members in proportion to
their existing holdings of Ordinary Shares and shall be made in the same
manner, and limited by the same period, as the original offer.
3.5.4
Any Ordinary Shares not accepted pursuant to such offer or further offer
shall be under the control of the directors who, subject to section 551 of the
2006 Act, may allot, grant options over or otherwise dispose of them to any
persons at those times and generally on the terms and conditions they think
proper.
3.5.5
References in this Article 3.5 to the allotment of, or offer of, Ordinary
Shares include the grant or offer of a right to subscribe for, or to convert any
securities into, Ordinary Shares and do not include the allotment of
Ordinary Shares pursuant to such a right.
Section 561 exclusion (pre-emption) – I Ordinary Shares
3.6.1
The pre-emption provisions in section 561 of the 2006 Act and the
provisions of sub-sections 562(1) to 562(2) inclusive of the 2006 Act shall
not apply to any allotment of I Ordinary Shares.
3.6.2
Unless with I Ordinary Shareholder Special Consent and except in relation
to any allotment or issue of I Ordinary Shares pursuant to the Investment
Agreement or any allotment or issue of warrants or I Ordinary Shares
pursuant to the I Share Warrant Instrument, any I Ordinary Shares for the
time being unissued shall, before they are issued, be offered to the members
holding I Ordinary Shares in proportion as nearly as the circumstances
admit to their existing holdings of I Ordinary Shares. This offer shall be
made by a notice in writing which shall specify: (i) the number of shares
offered; (ii) the subscription price; and (iii) a period of not less than 21 days
within which the offer, if not accepted, will be deemed to be declined.
3.6.3
After the expiry of such period, any I Ordinary Shares declined (or deemed
to be declined) shall be offered to the members holding I Ordinary Shares
who have, within such period, accepted all the I Ordinary Shares offered to
them. This further offer shall be made as between such members in
proportion to their existing holdings of I Ordinary Shares and shall be made
in the same manner, and limited by the same period, as the original offer.
3.6.4
Any I Ordinary Shares not accepted pursuant to such offer or further offer
shall be under the control of the directors who, subject to section 551 of the
2006 Act, may allot, grant options over or otherwise dispose of them to any
persons at those times and generally on the terms and conditions they think
proper.
3.6.5
References in this Article 3.6 to the allotment of, or offer of, I Ordinary
Shares include the grant or offer of a right to subscribe for, or to convert any
securities into, I Ordinary Shares and do not include the allotment of I
Ordinary Shares pursuant to such a right.
38
3.7
Listing
3.7.1
It is agreed that immediately prior to and conditionally upon a Listing, the
Listing Value shall be determined and the share capital of the Company
shall be re-organised to ensure that the Listing Value is allocated amongst
the members in the same proportions as the provisions of Article 3.3 would
provide on a return of assets on a winding-up.
3.7.2
Upon determination of the Listing Value, the Board shall calculate (with I
Ordinary Shareholder Special Consent) the aggregate amount of the Listing
Value to be allocated to each class of shares in accordance with the
provisions of Article 3.7.1 (it being agreed, for the avoidance of doubt, that
no amount of the Listing Value shall be allocated to any Deferred Shares)
(each calculation being a "Class Value").
3.7.3
In respect of each Class Value, the Board shall calculate the relevant Class
Value as a percentage (%) of the Listing Value (the "Class Proportional
Entitlement").
3.7.4
In implementation of Article 3.7.1, the shares shall then, on determination
by the Board, be automatically converted (whether through consolidation,
re-classification, sub-division or otherwise) on the Conversion Date as
follows:
3.7.4.1
the Ordinary Shares shall be converted into such number of
Conversion Shares as the Board may determine (with I Ordinary
Shareholder Special Consent) so that following conversion the
number of Conversion Shares held by the Ordinary Shareholders
(as they were known prior to such conversion for the purposes of
these Articles) as a percentage of the total number of Conversion
Shares in the capital of the Company shall equal (or be as close
as reasonably practicable to) the Class Proportional Entitlement
for the Ordinary Shares and any surplus Ordinary Shares shall be
converted into Deferred Shares. The total number of Conversion
Shares converted pursuant to this Article 3.7.4.1 shall be
allocated amongst the Ordinary Shareholders (as they were
known prior to conversion for the purposes of these Articles) pro
rata to the number of Ordinary Shares each Ordinary
Shareholder held prior to conversion;
3.7.4.2
the A Ordinary Shares shall be converted into such number of
Conversion Shares as the Board may determine (with I Ordinary
Shareholder Special Consent) so that following conversion the
number of Conversion Shares held by the A Ordinary
Shareholders (as they were known prior to such conversion for
the purposes of these Articles) as a percentage of the total
number of Conversion Shares in the capital of the Company shall
equal (or be as close as reasonably practicable to) the Class
Proportional Entitlement for the A Ordinary Shares and any
surplus A Ordinary Shares shall be converted into Deferred
Shares. The total number of Conversion Shares converted
pursuant to this Article 3.7.4.2 shall be allocated amongst the A
Ordinary Shareholders (as they were known prior to conversion
for the purposes of these Articles) pro rata to the number of A
39
Ordinary Shares each A Ordinary Shareholder held prior to
conversion;
3.7.4.3
the I Ordinary Shares shall be converted into such number of
Conversion Shares as the Board may determine (with I Ordinary
Shareholder Special Consent) so that following conversion the
number of Conversion Shares held by the I Ordinary
Shareholders (as they were known prior to such conversion for
the purposes of these Articles) as a percentage of the total
number of Conversion Shares in the capital of the Company shall
equal (or be as close as reasonably practicable to) the Class
Proportional Entitlement for the I Ordinary Shares and any
surplus I Ordinary Shares shall be converted into Deferred
Shares. The total number of Conversion Shares converted
pursuant to this Article 3.7.4.3 shall be allocated amongst the I
Ordinary Shareholders (as they were previously known prior to
conversion for the purposes of these Articles) pro rata to the
number of I Ordinary Shares each I Ordinary Shareholder held
prior to conversion.
3.7.5
In connection with the conversion of the shares to Conversion Shares and
Deferred Shares in accordance with this Article 3.7, the Board (acting
reasonably) shall have the discretion to round up or down each the number
of Conversion Shares and Deferred Shares required for each class of shares
so that the total aggregate nominal value of all Conversion Shares and
Deferred Shares converted pursuant to this Article 3.7 equals the total
aggregate nominal value of all shares immediately prior to conversion.
3.7.6
In connection with the allocation of the Conversion Shares and Deferred
Shares to each holder of a particular class of shares in accordance with this
Article 3.7, the Board (acting reasonably) shall have the discretion to round
up or down the number of Conversion Shares and Deferred Shares allocated
to each holder so that the total aggregate number of Conversion Shares and
Deferred Shares allocated to each holder equals the total number of
Conversion Shares and Deferred Shares converted from shares of that
relevant class.
3.7.7
On or before the Conversion Date each shareholder shall deliver the
certificate(s) (or an indemnity in a form reasonably satisfactory to the
Company) in respect of the shares being converted for Conversion Shares
and Deferred Shares (together with such other evidence (if any) as the
Board may reasonably require to prove good title to such shares) to the
Company at its registered office for the time being.
3.7.8
The conversion of shares in accordance with this Article 3.7 will be effective
only if a Listing takes place. If such Listing does not become effective or
does not take place, the conversion shall be deemed not to have occurred.
3.7.9
The Company shall on the Conversion Date enter the holder of any shares so
converted in accordance with this Article 3.7 in the register of members of
the Company as the holder of the appropriate number of Conversion Shares
and Deferred Shares and, subject to the relevant shareholder delivering the
relevant certificate(s) (or indemnity or other evidence) in respect of such
shares in accordance with Article 3.7, the Company shall within 10 Business
Days thereafter forward to any such holder of such shares by post to his
40
address shown in the register of members, at his own risk, free of charge,
definitive certificates for the appropriate number of Conversion Shares and
Deferred Shares.
3.8
Allocation of assets
3.8.1
Unless with I Ordinary Shareholder Special Consent, any amounts paid up
from time to time on Ordinary Shares, I Ordinary Shares and A Ordinary
Shares shall be allocated respectively to the Ordinary Shares, I Ordinary
Shares and the A Ordinary Shares (until such time as such amounts are
allocated by the Company to other assets).
3.8.2
Unless with I Ordinary Shareholder Special Consent, the following shall be
allocated to the I Shares:
3.8.3
3.8.4
3.9
3.8.2.1
the Company's shares in I ShareCo;
3.8.2.2
the amount of any dividend or other distribution by I ShareCo to
the Company; and
3.8.2.3
any shares, loan stock or other assets held by I ShareCo (or the
proceeds of the sale or other disposal of the same).
Unless with I Ordinary Shareholder Special Consent, the following shall be
allocated to the Ordinary Shares and the A Ordinary Shares:
3.8.3.1
the Company's shares in Ordinary ShareCo;
3.8.3.2
the amount of any dividend or other distribution by Ordinary
ShareCo to the Company; and
3.8.3.3
any shares, loan stock or other assets held by Ordinary ShareCo
(or the proceeds of the sale or other disposal of the same).
Any assets of the Company (other than assets allocated in accordance with
Articles 3.8.1 to 3.8.3) shall be allocated to the I Ordinary Shares and the
Ordinary Shares as the directors reasonably determine. For the avoidance of
doubt, no assets or amounts shall be allocated to the Deferred Shares.
Allocation of liabilities
3.9.1
Unless with I Ordinary Shareholder Special Consent:
3.9.1.1
the Ordinary Share Pool Management Services Fee shall be
allocated to the Ordinary Shares;
3.9.1.2
the I Share Pool Management Services Fee shall be allocated to
the I Ordinary Shares;
3.9.1.3
the Execution Fee, the I Shares Third Party Costs and the
Ordinary Shares Third Party Costs shall be allocated to the
Ordinary Shares and the I Ordinary Shares in accordance with
the Amended and Restated Management Services Agreement;
41
3.9.2
3.10
3.9.1.4
all central costs and expenses of the Company incurred or
accrued from the date of adoption of these Articles (including
directors' and employees' remuneration, registrars fees and
auditors fees (including value added tax)) shall be allocated to
the Ordinary Shares and the I Ordinary Shares in the ratio of
their respective Ordinary Shares Net Asset Value and I Ordinary
Shares Net Asset Value;
3.9.1.5
all liabilities of I ShareCo shall be allocated to the I Ordinary
Shares;
3.9.1.6
all liabilities of Ordinary ShareCo shall be allocated to the
Ordinary Shares; and
3.9.1.7
all costs, expenses, fees and liabilities incurred or accrued by any
Group Company (i) prior to the date of adoption of these Articles
or referable to the period prior to the date of adoption of these
Articles (including any loan agreed to be made by the Company);
(ii) arising out of or in connection with any claim made by a
holder of warrants pursuant to the Ordinary Share Warrant
Instrument in respect of its warrants; (iii) arising out of or in
connection with any claim made by a holder of Ordinary Shares
in respect of its subscription for, or the allotment or issue to such
holder, Ordinary Shares or (iv) in connection with a Prospectus,
shall be allocated to the Ordinary Shares.
Any costs, expenses, fees or liabilities of the Company (other than those
allocated in accordance with Article 3.9.1) shall be allocated to the I
Ordinary Shares and the Ordinary Shares as the directors reasonably
determine having regard to the allocation of the assets of the Company
under Article 3.8.
Undertakings
Without prejudice to its obligations under the 2006 Act, the Company shall:
3.10.1
procure that the Company's records and bank accounts shall be operated so
that the assets, costs, fees, expenses and liabilities allocated to the Ordinary
Shares and the I Ordinary Shares in accordance with these Articles can, at
all times, be separately identified in the management accounts, interim
accounts and audited accounts of the Company and, in particular but
without prejudice to the generality of the foregoing, the Company shall
procure that a separate cash pool account, investment settlement account,
income account, and tax allocation and apportionment account shall be
created and maintained in the books of the Company for the assets allocated
to the Ordinary Shares and the I Ordinary Shares;
3.10.2
procure (so far as practicable) that the Company's power projects shall be
valued as follows:
3.10.2.1
valuations of each power project as at the Company's accounting
reference date of each year shall be prepared by the Valuers,
audited by the Company's auditors and approved by the Board
within 90 days of the accounting reference date of each year; and
42
3.10.2.2
valuations of each power project as at the last day of the sixth
calendar month in each annual accounting period of the
Company (the "half year date") shall be prepared by a director
(nominated by the Board) and approved by the Board within 45
days of each half year date,
provided that the "Valuers" shall be a firm of internationally recognised
accountants or other valuers recognised as having expertise in renewable
energy projects and approved in each case by the Board with I Ordinary
Shareholder Special Consent;
3.10.3
only apply assets allocated to Ordinary Shares under Article 3.8 to satisfy
costs, expenses, fees and liabilities allocated to Ordinary Shares under
Article 3.9 (unless with I Ordinary Shareholder Special Consent);
3.10.4
only apply assets allocated to I Ordinary Shares under Article 3.8 to satisfy
costs, expenses, fees and liabilities allocated to I Ordinary Shares under
Article 3.9 (unless with I Ordinary Shareholder Special Consent);
3.10.5
only apply assets allocated to the Ordinary Shares under Article 3.8 in
respect of any redemptions of Ordinary Shares or purchases by the
Company of Ordinary Shares (unless with I Ordinary Shareholder Special
Consent);
3.10.6
only make investments of cash allocated to Ordinary Shares under Articles
3.8.1 and 3.8.3.2 to fund power projects through Ordinary ShareCo;
3.10.7
only make investments of cash allocated to I Ordinary Shares under Articles
3.8.1 and 3.8.2.2 to fund power projects through I ShareCo;
3.10.8
not take any action in respect of itself or any of its subsidiaries, which under
the terms of Articles 4.4 and 4,5 requires I Ordinary Shareholder Special
Consent or I Ordinary Shareholder Unanimous Consent, without I Ordinary
Shareholder Special Consent or I Ordinary Shareholder Unanimous
Consent (as the case may be);
3.10.9
and shall procure to the extent practicable that none of its subsidiaries shall
take any action, which under the terms of Articles 4.4 and 4,5 requires I
Ordinary Shareholder Special Consent or I Ordinary Shareholder
Unanimous Consent, without I Ordinary Shareholder Special Consent or I
Ordinary Shareholder Unanimous Consent (as the case may be);
3.10.10 determine the amounts available for distribution in respect of shares of any
class having regard to the allocation of assets, fees, costs, expenses and
liabilities of that class; and
3.10.11
3.11
give appropriate instructions to the Company's employees and service
providers to manage the Company's assets so that such undertakings can be
complied with by the Company.
Deferred Shares: Additional rights and restrictions
3.11.1
Each holder of Deferred Shares shall be deemed to have conferred
irrevocably authority on the Company at any time to appoint any person for
and on behalf of such holder to:
43
3.11.1.1
receive notice of, attend, vote and sign any written resolution of
any meeting of the class of Deferred Shares;
3.11.1.2
agree and execute any transfer (including, without limitation,
any stock transfer form) of and/or any agreement to purchase,
sell, transfer or otherwise dispose of some or all of the Deferred
Shares to such person(s) as the Company may determine
(including, but not limited to, the Company itself);
3.11.1.3
permit the Company to purchase and/or cancel all of the
Deferred Shares then in issue for not more than £1 for the
aggregate of all Deferred Shares held by each registered holder of
Deferred Shares; and/or
3.11.1.4
receive any consideration payable upon a sale, transfer or
purchase made pursuant to Articles 3.11.1.2 or 3.11.1.3 above and
to retain such consideration, or distribute it to any one or more
former holder(s) of Deferred Shares or to donate such
consideration to any organisation of the Company's choice which
is a charity for the purposes of the law of England and Wales,
Scotland or Northern Ireland,
in each case without obtaining the sanction of the holder, or holders, of such
Deferred Shares, and in respect of any sale, transfer and/or purchase, to
retain the certificates for such Deferred Shares.
3.11.2
The Company (or any such other person or persons as the Company in its
sole discretion may nominate) may, at any time (including on the
Conversion Date in connection with a Listing), at its option, purchase all of
the Deferred Shares then in issue at a price not exceeding £1 in aggregate
for all such Deferred Shares purchased at any one time and shall be entitled
to receive such purchase price and to retain it, or distribute it to any one or
more former holder(s) of Deferred Shares or to donate such purchase price
to any organisation of the Company's choice which is a charity for the
purposes of the law of England and Wales, Scotland or Northern Ireland.
3.11.3
Notwithstanding any other provision of these Articles, the holding of any
Deferred Share shall not give the holder thereof (in his capacity as such) any
pre-emption right in respect of any other share in the capital of the
Company.
3.11.4
In the event of any conflict or inconsistency between Articles 3.11.1, 3.11.2
and 3.11.3 and any other provision of these Articles, Articles 3.11.1 , 3.11.2
and 3.11.3 shall prevail in respect of any matter relating to the Deferred
Shares."
Article 4 sets out the procedure to be followed if the rights attached to any class of shares is
to be varied or abrogated – normally by way of a special resolution of the shareholders
concerned at a separate general meeting.
The Article provides that the consent of Ordinary Shareholders (as a class) and the consent
of I Shareholders (as a class) is required to divide, sub-divide, consolidate or redenominate
share capital.
44
In addition, Article 4 specifies a number of other matters which require the consent of a
specified majority of the I Shareholders.
The full text of Article 4 is as follows:
4.
VARIATION OF RIGHTS
4.1
Subject to the provisions of the 2006 Act, if at any time the capital of the Company is
divided into different classes of shares, the rights attached to any class may be varied
or abrogated, whether or not the Company is being wound up, either: (a) in such
manner (if any) as may be provided by such rights; or (b) in the absence of any such
provision with the consent in writing of the holders of three-quarters in nominal
value of the issued shares of that class (excluding any shares held in treasury), or with
the sanction of a special resolution passed at a separate general meeting of the
holders of the shares of the class, but not otherwise.
4.2
To every such separate meeting all the provisions of these Articles relating to general
meetings of the Company or to the proceedings at such meetings shall, so far as
applicable and with the necessary modifications, apply, except as provided for by the
provisions of Section 334 of the 2006 Act.
4.3
Ordinary Shareholder Consent and I Ordinary Shareholder Special Consent shall be
required to approve any division, sub-division, consolidation of share capital under
Article 12 or any redenomination of share capital other than pursuant to Article 3.7.
4.4
I Ordinary Shareholder Special Consent shall be required to approve:
4.4.1
any allotment or issue of any security convertible into or carrying a right to
subscribe for any share capital of the Company or any other right to
subscribe for or to acquire share capital of the Company other than
pursuant to the subscription for Ordinary Shares pursuant to a prospectus
issued by the Company, the exercise of subscription rights for I Ordinary
Shares in accordance with the terms of the Investment Agreement and any
warrants granted or to be granted to Albion Ventures LLP under the Share
Warrant Instruments;
4.4.2
any repayment, redemption or repurchase of any share capital of the
Company other than the redemption of Ordinary Shares in accordance with
these Articles;
4.4.3
any allotment or issue of any security convertible into or carrying a right to
subscribe for any share capital of I ShareCo or Ordinary ShareCo or any
other right to subscribe for or to acquire share capital of I ShareCo or
Ordinary ShareCo (other than to the Company);
4.4.4
any sale, transfer or other disposal by the Company of any interest in the
share capital of I ShareCo or Ordinary ShareCo;
4.4.5
the winding-up or striking off of any Group Company or the presentation of
any petition for its administration;
4.4.6
any sale, transfer or other disposal by the Company of any asset or interest
in any asset held by I ShareCo or any other asset or interest in any asset
allocated (in whole or in part) to the I Ordinary Shares;
45
4.4.7
any Group Company incurring any borrowings or indebtedness (other than
debentures or loan stock issued by a Group Company to I ShareCo or
Ordinary ShareCo in proportion to their respective shareholdings in such
Group Company);
4.4.8
the creation of any bonds, debentures, loan stock or other debt security by
any Group Company (other than debentures or loan stock issued by a Group
Company to I ShareCo or Ordinary ShareCo in proportion to their
respective shareholdings in such Group Company);
4.4.9
any change to the classification or status of a Group Company (other than
the Company) as a private company limited by shares;
4.4.10
any merger or consolidation or scheme of arrangement of any Group
Company;
4.4.11
the entry (or the making of any amendment thereto or the grant of any
consent or waiver thereunder) by any Group Company into any
arrangement, contract or transaction with any Albion Affiliate (or their
respective members, directors, officers, employees, principals or agents),
including the Warrant Instruments;
4.4.12
the entry (or the making of any amendment thereto or the grant of any
consent or waiver thereunder) by any Group Company into any
arrangement, contract or transaction with any fund manager, investment
manager, investment adviser and/or provider of services similar to those
provided by Albion Venture LLP to the Company from time to time, or any
of its affiliates (or their respective members, directors, officers, employees,
principals or agents);
4.4.13
the entry (or the making of any amendment thereto or the grant of any
consent or waiver thereunder) by I ShareCo, or any company in which I
ShareCo holds any shares, into any arrangement, contract or transaction
with Ordinary ShareCo or any company in which Ordinary ShareCo holds
any shares (including in relation to the transfer (by whatever means) of any
benefit (including any tax relief, allowance, deduction, exemption or set-off,
and any credit against or repayment of tax));
4.4.14
any transfer or loan of any asset or interest in an asset, or the conferring of
any right or benefit in respect of an asset or interest in an asset, in any case
allocated to the I Ordinary Shares to the pool of assets allocated to the
Ordinary Shares;
4.4.15
any transfer or loan of any asset or interest in an asset, or the conferring of
any right or benefit in respect of an asset or interest in an asset, in any case
allocated to the Ordinary Shares to the pool of assets allocated to the I
Ordinary Shares;
4.4.16
the entry (or the making of any amendment thereto) by any Group
Company into any guarantee, indemnity or other agreement to secure any
obligation of another person (including any other Group Company);
4.4.17
the assumption by a Group Company of any obligation of whatever nature of
another Group Company;
46
4.4.18
the creation of any Encumbrance over the shares of any Group Company or
(except under debentures or loan stock given in favour of another Group
Company) any of the property, rights or assets of any Group Company;
4.4.19
any Group Company establishing any profit-sharing, bonus or pension
scheme (or the making of any amendment thereto);
4.4.20
the entry (or the making of any amendment thereto) by any Group
Company into any arrangement, contract or transaction for any person to
act as its agent or intermediary;
4.4.21
the making by any Group Company of any loan or advance or the giving of
any credit to any person (other than to a wholly-owned subsidiary of the
Company);
4.4.22
the application by any Group Company for the listing or trading of any
shares or debt securities on any stock exchange or market;
4.4.23
the entry (or the making of any amendment thereto) by any Group
Company into any arrangement, contract or transaction to employ any
person other than as a director of any Group Company;
4.4.24
the Company taking any action to terminate the Amended and Restated
Management Services Agreement;
4.4.25
the appointment or dismissal of any director of any Group Company (other
than an appointment or removal of a director pursuant to Article 21.4) and
the terms of their appointment;
4.4.26
the appointment or dismissal of the Company's auditors or the Valuers and
the terms of their appointment;
4.4.27
any change to the accounting reference date of any Group Company;
4.4.28
where the aggregate amount paid up on I Ordinary Shares exceeds
£100,000,000, the allotment or issue of any I Ordinary Shares during the
period of 40 Business Days immediately prior to accounting reference date
and the half year date of each accounting period of the Company except in
accordance with the terms of the Investment Agreement; and
4.4.29
the Company consenting to any assignment by Albion Ventures LLP of
rights under, or the transfer of any interest in warrants, under the I Share
Warrant Instrument,
provided that each Article in Articles 4.4.1 to 4.4.29 shall be construed as separate
and independent and shall not be limited by reference to any other Article in Article
4.4, and the expression "allocated to the I Ordinary Shares" or "allocated to the
Ordinary Shares" means allocated to the I Ordinary Shares or the Ordinary Shares (as
the case may be) in accordance with Article 3.8.
4.5
I Ordinary Shareholder Unanimous Consent shall be required to approve:
4.5.1
any change to the classification or status of the Company as a public
company limited by shares;
47
4.5.2
any Group Company becoming resident for tax purposes, or establishing a
permanent establishment or branch, in a jurisdiction outside the United
Kingdom;
4.5.3
any change to the Project Policy, and any Group Company acquiring an
interest in or assuming any liability in relation to a power project other than
in accordance with the Project Policy;
4.5.4
the conduct of any business by any Group Company unrelated to the Project
Policy;
4.5.5
the making by any Group Company of any gift or political donation or
charitable donation; and
4.5.6
I ShareCo acquiring any interest or assuming any liability in relation to any
solar or biomass power project."
Article 21.4 provides that GIB shall have the right, but shall not be obliged, to appoint a
director for so long as it is a member of the Company. The full text of Article 21.4 is as
follows:
"21.4 For so long as it is a member, UK Green Investment Bank Plc shall have the right to
(but shall not be obliged to) appoint a director and shall have the right to remove any
director so appointed. Such director shall not be subject to retire by rotation. Any
appointment or removal of a director pursuant to this Article 21.4 shall be in writing
signed by or on behalf of UK Green Investment Bank plc and served on the Company
at its registered office. Any such appointment or removal shall take effect when
received by the Company or at such later time as may be specified in such notice."
Article 46 restricts any person from acquiring or offering to acquire an interest in Ordinary
Shares where such interest represents more than one-third of the Ordinary Shares in issue
unless he makes a comparable offer to acquire the I Shares then in issue.
48
PART IV
FINANCIAL INFORMATION ON THE COMPANY
Please refer to pages 26 to 42 (inclusive) of the Company's Report and Financial Statements
for the period ended 30 November 2013 and pages 6 to 24 (inclusive) of the Company's
interim report for the six months ended 31 May 2014.
These
documents
can
be
found
on
the
Company's
website
at:
www.albioncommunitypower.co.uk/investor-relations. You have the right to receive a hard
copy of these documents on request. Documents will not be sent in hard copy unless
requested. To request a hard copy, please contact Sarah Fitton at [email protected] or on 0207 601 1874.
49
PART V
ADDITIONAL INFORMATION
1.
RESPONSIBILITY
1.1
The Directors accept responsibility for the information set out in this document
relating to the Company. To the best of the knowledge and belief of the Directors
(who have taken all reasonable care to ensure that such is the case), such information
is in accordance with the facts and does not omit anything likely to affect the import
of such information.
1.2
GIB's directors, whose names are set out in paragraph 7 of Part I, each accept
responsibility for the information set out in this document relating to GIB and
themselves, their immediate families, related trusts and connected persons. To the
best of the knowledge and belief of GIB's directors (who have taken all reasonable
care to ensure that such is the case), such information is in accordance with the facts
and does not omit anything likely to affect the import of such information.
1.3
The Executive Director of Financial Services and Deputy Chief Executive of Glasgow
City Council and the Head of Pensions for Strathclyde Pension Fund, whose names
are set out in paragraph 8 of Part 1, each accept responsibility for the information set
out in this document relating to Strathclyde. To the best of their knowledge and belief
(who have taken all reasonable care to ensure that such is the case), such information
is in accordance with the facts and does not omit anything likely to affect the import
of such information.
2.
DIRECTORS
2.1
The Directors at the date of this document are:
Volker Bernd Beckers
Robert Malcolm Armour OBE
Patrick Harold Reeve
David Gudgin
Vikash Chandar Hansrani
Chairman
Non-executive director
Chief Executive
Managing Director
Finance Director
The business address of the Directors is the Company's registered address.
2.2
Absence of concert parties or related parties
Save for agreements, arrangements or understandings between the Company and
Albion Ventures, Patrick Reeve, David Gudgin and Vikash Hansrani, the Directors
confirm that they are unaware of any agreements, arrangements or understandings
between any of the Directors or Shareholders of the Company acting in concert with
any of the Directors.
3.
DISCLOSURE OF INTERESTS AND DEALINGS
3.1
Definitions and references
For the purposes of this paragraph 3:
3.1.1
"acting in concert" has the meaning given to it in the Takeover Code;
50
3.1.2
"arrangement" includes indemnity or option arrangements, and any
agreement or understanding, formal or informal, of whatever nature,
relating to relevant securities which may be an inducement to deal or refrain
from dealing;
3.1.3
"connected person" has the meaning given in section 252 of the Act;
3.1.4
"dealings" or "dealt" includes the following:
3.1.4.1
the acquisition or disposal of securities or the right (whether
conditional or absolute) to exercise or direct the exercise of the
voting rights attached to securities, or of general control of
securities;
3.1.4.2
the taking, granting, acquisition, disposal, entering into, closing
out, termination, exercise (by either party) or variation of an
option, (including a traded option contract) in respect of any
securities;
3.1.4.3
subscribing or agreeing to subscribe for securities;
3.1.4.4
the exercise or conversion, whether in respect of new or existing
securities, of any securities carrying conversion or subscription
rights;
3.1.4.5
the acquisition of, disposal of, entering into, closing out, exercise
of any rights under, or variation of, a derivative referenced,
directly or indirectly, to securities;
3.1.4.6
the entry into or termination or variation of the terms of any
agreement to purchase or sell securities; and
3.1.4.7
any other action resulting, or which may result, in an increase or
decrease in the number of securities in which a person is
interested or in respect of which he has a short position;
3.1.5
"derivative" includes any financial product the value of which, in whole or in
part, is determined directly or indirectly by reference to the price of an
underlying security;
3.1.6
"disclosure date" means close of business on 27 January 2015, being the
latest practicable date prior to the publication of this document;
3.1.7
"disclosure period" means the period commencing on 27 January 2014
(being the date twelve months prior to the disclosure date) and ending on 27
January 2015 (being the latest practicable date prior to the publication of
this document);
3.1.8
"interested" in securities includes if a person:
3.1.8.1
owns them;
3.1.8.2
has the right (whether conditional or absolute) to exercise or
direct the exercise of the voting rights attaching to them or has
general control of them;
51
3.1.9
3.1.10
3.2
3.1.8.3
by virtue of any agreement to purchase, option or derivative, has
the right or option to acquire them or call for their delivery or is
under an obligation to take delivery of them, whether the right,
option or obligation is conditional or absolute and whether it is
in the money or otherwise;
3.1.8.4
is a party to any derivative whose value is determined by
reference to their price and which results, or may result, in his
having a long position in them; or
3.1.8.5
has long economic exposure, whether absolute or conditional to
changes in the price of those securities (but a person who only
has a short position in securities is not treated as interested in
those securities);
"relevant securities" includes:
3.1.9.1
shares and any other securities in the Company conferring voting
rights;
3.1.9.2
equity share capital of the Company; and
3.1.9.3
any securities convertible into, or rights to subscribe for the
securities of the Company described in paragraphs 3.1.9.1 and
3.1.9.2 above; and
"short position" means any short position (whether conditional or absolute
and whether in the money or otherwise) including any short position under
a derivative.
Interests in relevant securities
3.2.1
At the close of business on the disclosure date, neither GIB nor Strathclyde
held any interest or short position in or right to subscribe for relevant
securities save as provided for under the Investment Agreement.
3.2.2
At the close of business on the disclosure date, the interests and rights to
subscribe of the Directors (and any person whose interests in the share
capital of the Company is taken to be interested in pursuant to Part 22 of
the Act and related regulations), all of which are beneficial unless otherwise
stated, in relevant securities were as follows:
Director
No. of Ordinary Shares and
A Shares
No. of Ordinary
Warrants
Volker Beckers
75,000
1,374
Robert Armour
51,000
934
Patrick Reeve
36,640
89,251
David Gudgin
35,375
89,251
2,500
14,280
Vikash Hansrani
52
Albion Ventures*
505,645
3,570
*Patrick Reeve and David Gudgin are partners of Albion Ventures and are interested in the shares and Ordinary
Warrants held by Albion Ventures as set out above. Vikash Hansrani is Director of Finance at Albion Ventures.
3.3
Dealings in relevant securities
3.3.1
There have been no dealings in the share capital of the Company by GIB or
Strathclyde during the disclosure period save for the conditional
subscriptions for I Shares under the Investment Agreement.
3.3.2
During the disclosure period, the following dealings in Ordinary Shares and
Ordinary Warrants by the Directors and Albion Ventures have taken place:
Name
Date
Nature of
trade
No. of
Ordinary
Shares
No. of
Ordinary
Warrants
Price paid
per Share
Volker Beckers
28 November 2014
Subscription
50,000
-
£1
Volker Beckers
31 January to 28
November 2014
Grant of
Ordinary
Warrants
-
1,039
-
Robert Armour
28 November 2014
Subscription
26,000
-
£1
Robert Armour
31 January to 28
November 2014
Grant of
Ordinary
Warrants
-
599
-
Patrick Reeve
30 September 2014
Subscription
pursuant to
dividend
reinvestment
scheme
540
-
£1
Patrick Reeve
28 November 2014
Allocation of
Ordinary
Warrants by
Albion
Ventures
-
89,251
-
David Gudgin
30 September 2014
Subscription
pursuant to
dividend
reinvestment
scheme
375
-
£1
David Gudgin
28 November 2014
Subscription
10,000
-
£1
David Gudgin
28 November 2014
Allocation of
Ordinary
Warrants by
Albion
Ventures
-
89,251
-
Vikash Hansrani
28 November 2014
Subscription
2,500
-
£1
Vikash Hansrani
28 November 2014
Allocation of
Ordinary
Warrants by
Albion
-
14,280
-
53
Name
Date
Nature of
trade
No. of
Ordinary
Shares
No. of
Ordinary
Warrants
Price paid
per Share
Ventures
3.4
Albion Ventures
19 March 2014
Subscription
113,500
-
£1
Albion Ventures
30 September 2014
Subscription
pursuant to
dividend
reinvestment
scheme
5,795
-
£1
Albion Ventures
31 January to 28
November 2014
Grant of
Ordinary
Warrants
-
189,819
-
Albion Ventures
28 November 2014
Allocation of
Ordinary
Warrants to
partners and
employees of
Albion
Ventures
-
(710,440)
-
General
As at the close of business on the disclosure date and save as set out in this paragraph
3:
3.4.1
none of:
3.4.1.1
the Company;
3.4.1.2
the Directors or their respective immediate families, related
trusts and any other connected persons;
3.4.1.3
any person acting in concert with the Company;
had any interest in or right to subscribe for any relevant securities or any
short position in any relevant securities nor has any such person dealt in
any relevant securities during the disclosure period;
3.4.2
none of:
3.4.2.1
GIB;
3.4.2.2
GIB's directors or their respective immediate families, related
trusts and any other connected persons;
3.4.2.3
any person acting in concert with GIB;
had any interest in or right to subscribe for any relevant securities or any
short position in any relevant securities nor has any such person dealt in
any relevant securities during the disclosure period;
3.4.3
none of:
54
3.4.3.1
Strathclyde;
3.4.3.2
the Executive Director of Financial Services and Deputy Chief
Executive of Glasgow City Council or the Head of Pensions for
Strathclyde Pension Fund, their immediate families, related
trusts and any other connected persons;
3.4.3.3
any person acting in concert with the persons referred to in
paragraph 3.4.3.2 or Strathclyde;
had any interest in or right to subscribe for any relevant securities or any
short position in any relevant securities nor has any such person dealt in
any relevant securities during the disclosure period;
3.4.4
neither the Company nor any person acting in concert with the Company
had borrowed or lent any relevant securities;
3.4.5
neither GIB nor any person acting in concert with GIB had borrowed or lent
any relevant securities;
3.4.6
neither the Executive Director of Financial Services and Deputy Chief
Executive of Glasgow City Council or the Head of Pensions for Strathclyde
Pension Fund, their immediate families, related trusts and any other
connected persons nor any person acting in concert with them or
Strathclyde has borrowed or lent any relevant securities;
3.4.7
the Company has not redeemed or purchased any relevant securities during
the disclosure period;
3.4.8
neither the Company nor any person acting in concert with the Company
had any arrangement of the kind referred to in Note 11 of the definition of
"acting in concert" in the Takeover Code;
3.4.9
neither GIB nor any person acting in concert with GIB had any arrangement
of the kind referred to in Note 11 of the definition of "acting in concert" in
the Takeover Code;
3.4.10
neither the Executive Director of Financial Services and Deputy Chief
Executive of Glasgow City Council, or the Head of Pensions for Strathclyde
Pension Fund, their immediate families, related trusts and any other
connected persons nor Strathclyde nor any person acting in concert with
Strathclyde had any arrangement of the kind referred to in Note 11 of the
definition of "acting in concert" in the Takeover Code; and
3.4.11
neither the Company nor any of the Directors (including their respective
immediate families, related trusts or any other connected persons) had any
interest in or right to subscribe for, or had any short position in relation to,
any shares in GIB (or derivatives referenced thereto) and securities
convertible into, rights to subscribe for and options (including traded
options) in respect thereof.
55
4.
DIRECTORS'
LETTERS
OF
APPOINTMENT
AND
SERVICE
AGREEMENTS AND OTHER ARRANGEMENTS WITH THE COMPANY
The Directors' letters of appointment and service agreements will be available for
inspection as set out in paragraph 8 below and are summarised below. There are no
other service contracts between the Directors and the Company or any of its
subsidiaries and no service contracts have been entered into nor have existing service
contracts been amended during the period of six months prior to the date of this
document.
4.1
Pursuant to a letter of appointment dated 18 September 2013, Volker Beckers agreed
to act as a non-executive Director and Chairman of the Company. The appointment
is terminable by either party on three months' written notice and is terminable
immediately on retirement by rotation or if removed as a Director in accordance
with the Articles and, inter alia, in the event of a serious breach by Mr Beckers. He
is entitled to a fee equal to the sum of £15,000 and 0.035% of the Net Asset Value,
provided that the total fee payable shall not exceed £50,000. There is a right to pay
Mr Beckers in lieu of fees during his notice period. Mr Beckers is not eligible to
participate in any Company share bonus or pension schemes or other benefit in
kind arrangements of the Company nor is he entitled to any compensation on loss
of office.
4.2
Pursuant to a letter of appointment dated 30 May 2013, Robert Armour agreed to act
as a non-executive Director of the Company. The appointment is terminable by
either party on three months' written notice and is terminable immediately on
retirement by rotation or if removed as a Director in accordance with the Articles
and, inter alia, in the event of a serious breach by Mr Armour. He is entitled to a fee
equal to the sum of £11,250 and 0.02375% of the Net Asset Value, provided that the
total fee payable shall not exceed £35,000. There is a right to pay Mr Armour in lieu
of fees during his notice period. Mr Armour is not eligible to participate in any
Company share bonus or pension schemes or other benefit in kind arrangements of
the Company nor is he entitled to any compensation on loss of office.
4.3
Pursuant to a service agreement dated 30 May 2013, Patrick Reeve agreed to act as a
Chief Executive of the Company. The appointment is terminable by either party on
three months' written notice and is terminable immediately on retirement by
rotation or if removed as a Director in accordance with the Articles and, inter alia,
in the event of a serious breach by Mr Reeve. He is paid an annual salary of £5,000
where the Net Asset Value is equal to £1.5 million and £30,000 where the Net Asset
Value is equal to or greater than £100 million. Where the Net Asset Value is
between £1.5 million and £100 million he will be paid an annual salary pro-rata.
There is a right to pay Mr Reeve in lieu of salary during his notice period. Mr Reeve
is not eligible to participate in any Company share bonus or pension schemes or
other benefit in kind arrangements of the Company nor is he entitled to any
compensation on loss of office.
4.4
Pursuant to a service agreement dated 30 May 2013, David Gudgin agreed to act as a
Managing Director of the Company. The appointment is terminable by either party
on three months' written notice and is terminable immediately on retirement by
rotation or if removed as a Director in accordance with the Articles and, inter alia,
in the event of a serious breach by Mr Gudgin. He is paid an annual salary of
£10,000 where the Net Asset Value is equal to £1.5 million and £80,000 where the
Net Asset Value is equal to or greater than £100 million. Where the Net Asset Value
is between £1.5 million and £100 million he will be paid an annual salary pro-rata.
There is a right to pay Mr Gudgin in lieu of salary during his notice period. Mr
56
Gudgin is not eligible to participate in any Company share bonus or pension
schemes or other benefit in kind arrangements of the Company nor is he entitled to
any compensation on loss of office.
4.5
5.
5.1
Pursuant to a service agreement dated 18 September 2013, Vikash Hansrani agreed
to act as a Finance Director of the Company. The appointment is terminable by
either party on three months' written notice and is terminable immediately on
retirement by rotation or if removed as a Director in accordance with the Articles
and, inter alia, in the event of a serious breach by Mr Hansrani. He is paid an
annual salary of £5,000 where the Net Asset Value is equal to £1.5 million and
£30,000 where the Net Asset Value is equal to or greater than £100 million. Where
the Net Asset Value is between £1.5 million and £100 million he will be paid an
annual salary pro-rata. There is a right to pay Mr Hansrani in lieu of salary during
his notice period. Mr Hansrani is not eligible to participate in any Company share
bonus or pension schemes or other benefit in kind arrangements of the Company
nor is he entitled to any compensation on loss of office.
MATERIAL CONTRACTS
Details of the material contracts (not being contracts entered into in the ordinary
course of business) which have been entered into by the Company since
incorporation and ending on 29 January 2015 (being the latest practicable date
prior to the publication of this document):
5.1.1
the Management Services Agreement entered into between the Company (1)
and Albion Ventures (2), pursuant to which Albion Ventures has agreed to
make available executive management and certain other services to the
Company for a fee payable monthly in arrears in each year (together with
any applicable VAT) at the rate of 2% per annum of the Net Asset Value of
the Company less the amount of salaries paid by ACP to the executive
directors and managers of the Company. The fee payable to Albion Ventures
under the Management Services Agreement is in addition to the Warrants
that have been and will be issued under the Ordinary Warrant Instrument
as provided below. Subject to the passing of the Resolutions, the
Management Services Agreement will be amended and restated pursuant to
the Amended and Restated Management Services Agreement (as described
in paragraph 2 of Part II of this document;
5.1.2
a warrant instrument dated 31 May 2013 (the "Ordinary Warrant
Instrument") issued by the Company, pursuant to which the Company has
issued and will issue Warrants over Ordinary Shares to Albion Ventures or,
if directed by Albion Ventures, to certain third parties. Albion Ventures is
entitled to Warrants to subscribe for one new Ordinary Share for every five
Ordinary Shares issued. The exercise price of each Warrant will be the Net
Asset Value per Ordinary Share on the date of issue of the Warrant, though
the exercise price will be adjusted downwards, on a penny-for-penny basis,
to the extent to which cumulative dividends thereafter exceed 3 pence per
annum. The Warrants may be exercised within a period of 20 years from
issue. The Ordinary Warrant Instrument was amended by a deed of
variation dated 29 January 2015 which provides that the Ordinary Warrants
must be exercised on a listing, a change of control or the sale of the business
of the Group and that the holders of the Ordinary Warrants must give the
same covenants and indemnities as apply to the I Warrants as described in
paragraphs 3.7, 3.8 and 3.9 of Part II of this document;
57
5.2
6.
5.1.3
an agreement dated 30 May 2013 (as amended on 12 June 2013 (the "2013
Offer Agreement") made between the Company (1), the Directors (2) and
Albion Ventures (3) pursuant to which Albion Ventures undertook as
promoter of the Company to assist in procuring subscribers for the 2013
Offer. Albion Ventures furthermore undertook to underwrite up to
£500,000 under the 2013 Offer. Albion Ventures was paid a total of £12,772
under the 2013 Offer Agreement. The 2013 Offer closed on 30 April 2014
and the 2013 Offer Agreement terminated with effect from that date;
5.1.4
an agreement dated 15 May 2014 (the "2014 Offer Agreement") made
between the Company (1), the Directors (2) and Albion Ventures (3)
pursuant to which Albion Ventures undertook as promoter of the Company
to assist in procuring subscribers for the 2014 Offer. Albion Ventures was
paid a total of £17,052 under the 2014 Offer Agreement. The 2014 Offer
closed on 28 November 2014;
5.1.5
the I Warrant Instrument (as described in paragraph 3 of Part II of this
document; and
5.1.6
the Investment Agreement (as described in paragraph 1 of Part II of this
document.
Except as set out above, no contracts have been entered into by the Company, other
than in the ordinary course of business, within the period of two years prior to the
publication of this document which are or may be material.
SIGNIFICANT CHANGES
There has been no significant change in the financial or trading position of the
Company since the interim report for the Company for the six months ended 31 May
2014 was published.
7.
7.1
7.2
GENERAL
Howard Kennedy has given and has not withdrawn its written consent to the issue of
this document with the inclusion of its name and references to it in this document
in the form and context in which they appear.
Save as set out in the Investment Agreement, the Amended and Restated
Management Services Agreement, the Additionality Letter and an agreement between
GIB and Strathclyde to share certain due diligence costs in relation to the Company,
no agreement, arrangement or understanding (including any compensation
arrangement) exists between GIB (or any person acting in concert with it) or
Strathclyde (or any person acting in concert with it) and the Directors, Albion
Ventures, Howard Kennedy, recent directors, Shareholders or recent shareholders of
the Company having any connection with or dependence upon the proposals set out
in this document.
7.3
As at 27 January 2015 (being the latest practicable date prior to the publication of
this document) the Company had 733,160 Ordinary Warrants in issue which it is
expected, on exercise, will be satisfied by the issuing of new Ordinary Shares.
7.4
As at 27 January 2015 (being the latest practicable date prior to the publication of
this document), neither of GIB or Strathclyde had any agreement, arrangement or
58
understanding to transfer the I Shares to be subscribed by them pursuant to the
Investment Agreement.
7.5
8.
All announcements relating to the Resolutions and the Waivers required to be made
under the Takeover Code will be found on the Company's website at
www.albioncommunitypower.co.uk/investor-relations.
DOCUMENTS ON DISPLAY
Copies of the following documents are available for inspection at the registered office
of the Company at 1 King's Arms Yard, London EC2R 7AF until the date of the
General Meeting and will also be available for inspection at the place of General
Meeting for 15 minutes prior to the meeting and during the meeting. These
documents
can
also
be
found
on
the
Company's
website
at
www.albioncommunitypower.co.uk/investor-relations. You have the right to receive
a hard copy of these documents on request. To request a hard copy, please contact
Sarah Fitton at [email protected] or on 0207 601 1874.
8.1
this document;
8.2
the articles of association of the Company;
8.3
the memorandum and articles of association of GIB;
8.4
the audited consolidated accounts of the Company for the financial year ended 30
November 2013 and the unaudited interim report for the six months ended 31 May
2014;
8.5
the Directors' letters of appointment and service agreements referred to in paragraph
4 above;
8.6
the consent letter from Howard Kennedy referred to in paragraph 7.1 above;
8.7
the material contracts referred to in paragraph 5 above; and
8.8
the irrevocable commitments from the Directors and Albion Ventures referred to in
the last paragraph of Part I of this document.
29 January 2015
59
ALBION COMMUNITY POWER PLC
(Registered in England and Wales with number 08239147)
(the "Company")
NOTICE OF GENERAL MEETING
Notice is hereby given that a general meeting of the Company will be held at 10.00 a.m. on 16
February 2015 at the offices of Albion Ventures LLP, 1 King's Arms Yard, London EC2R 7AF,
for the purpose of considering and, if thought fit, passing the following resolutions, of which
resolutions 1, 2 and 3 will be proposed as ordinary resolutions (resolutions 2 and 3 to be
taken on a poll and to be voted on only by the Independent Shareholders) and resolutions 4,
5 and 6 as special resolutions:
Ordinary resolutions
1.
THAT the terms of the Transaction Agreements (as defined in the circular to
shareholders of the Company dated 29 January 2015) be and are hereby approved.
2.
THAT the waiver granted by The Panel on Takeovers and Mergers of any obligation
which might fall on UK Green Investment Bank plc ("GIB") to make a general offer
to the shareholders of the Company pursuant to Rule 9 of the City Code on Takeovers
and Mergers (a) in connection with the allotment and issue of up to 25,000,000 I
ordinary shares of one pence each in the capital of the Company ("I Shares") to GIB
on or before 30 June 2016 under an investment agreement dated 29 January 2015
between GIB, Glasgow City Council (as Administering Authority for the Strathclyde
Pension Fund) ("Strathclyde"), the Company and Albion Ventures LLP (as
amended from time to time) (the "Investment Agreement") or (b) at any time as a
result of an increase in its shareholding following redemptions of ordinary shares of
one pence each in the capital of the Company ("Ordinary Shares"), resulting in a
holding of voting rights of the Company of up to 49.75%, be and is hereby approved.
3.
THAT, the waiver granted by The Panel on Takeovers and Mergers of any obligation
which might fall on Strathclyde to make a general offer to the shareholders of the
Company pursuant to Rule 9 of the City Code on Takeovers and Mergers (a) in
connection with the allotment and issue of up to 10,000,000 I Shares to Strathclyde
on or before 30 June 2016 under the Investment Agreement or (b) at any time as a
result of an increase in its shareholding following redemptions of Ordinary Shares,
resulting in a holding of voting rights of the Company of up to 49.75%, be and is
hereby approved.
Special resolutions
4.
THAT, subject to the passing of resolutions 1, 2, 3, 5 and 6 to be proposed at the
general meeting of the Company convened for 16 February 2015, for the purposes of
the New Articles (as defined in resolution 6), the Directors be, and they are, generally
and unconditionally authorised to allot:
(a)
Ordinary Shares up to a maximum nominal amount of £50,000 to such
persons at such times and on such terms as they think proper;
(b)
Ordinary Shares up to a maximum nominal amount of £17,500 to be allotted
on the exercise of warrants to subscribe for Ordinary Shares issued pursuant
to a warrant instrument dated 30 May 2013;
60
(c)
I Shares up to a maximum nominal amount of £1,005,000 pursuant to the
terms of the Investment Agreement; and
(d)
I Shares up to a maximum nominal amount of £251,250 to be allotted on the
exercise of warrants to subscribe for I Shares issued pursuant to a warrant
instrument dated 29 January 2015,
provided that this authority shall, unless renewed, varied or revoked by the Company,
expire on the fifth anniversary of the date of this resolution being passed, save that
the Company may at any time before such expiry make an offer or agreement which
would or might require Ordinary Shares and I Shares to be allotted after such expiry
and the Directors may allot Ordinary Shares and I Shares in pursuance of such offer
or agreement as if the authority conferred hereby had not expired.
5.
THAT, subject to the passing of resolutions 1, 2, 3 , 4 and 6 to be proposed at the
general meeting of the Company convened for 16 February 2015, the Directors be and
they are hereby generally authorised to allot Ordinary Shares and I Shares pursuant
to the authorities conferred by resolution 4 above as if the restrictions on the
allotment of Ordinary Shares and I Shares under Articles 4.4.1 and 4.4.2 respectively
of the New Articles did not apply, provided that this power shall:
(a)
be limited to the allotment of Ordinary Shares up to an aggregate nominal
amount of £50,000 pursuant to the authority conferred by paragraph (a) of
resolution 4 above;
(b)
be limited to the allotment of Ordinary Shares up to an aggregate nominal
amount of £17,500 pursuant to the authority conferred by paragraph (b) of
resolution 4 above;
(c)
be limited to the allotment of I Shares up to an aggregate nominal amount of
£1,005,000 pursuant to the authority conferred by paragraph (c) of resolution
4 above;
(b)
be limited to the allotment of I Shares up to an aggregate nominal amount of
£251,250 pursuant to the authority conferred by paragraph (d) of resolution 4
above,
provided that this authority shall, unless renewed, varied or revoked by the
Company, expire on the fifth anniversary of the date of this resolution being
passed (unless renewed, varied or revoked by the Company prior to or on that
date), save that the Company may, before such expiry make an offer or
agreement which would or might require equity securities to be allotted after
such expiry and the Directors may allot equity securities in pursuance of such
offer or agreement notwithstanding that the power conferred by this
resolution has expired.
6.
THAT, subject to the passing of resolutions 1, 2, 3, 4 and 5 to be proposed at the
general meeting of the Company convened for 16 February 2015 and the special
resolution to be proposed at a separate general meeting of the holders of Ordinary
Shares convened for the same date (or any adjournment thereof), the draft articles of
association produced to the General Meeting and, for the purposes of identification,
initialled by the Chairman (the "New Articles"), be adopted as the articles of
association of the Company in substitution for, and to the exclusion of, the existing
articles of association.
61
By order of the Board
Registered office:
Albion Ventures LLP
Company Secretary
1 King's Arms Yard
London
EC2R 7AF
29 January 2015
Notes:
1.
Voting on resolutions 2 and 3 will be by means of a poll of Independent Shareholders and each Independent
Shareholder will be entitled to one vote for each share held.
2.
Pursuant to Regulation 41 of The Uncertificated Securities Regulations 2001, the Company specifies that only those
shareholders registered in the register of members of the Company as at:

6.00 p.m. on 12 February 2015; or,

if this Meeting is adjourned, at 6.00 p.m. on the day two days prior to the adjourned meeting,
shall be entitled to attend and vote at the Meeting,
Appointment of proxies
3.
A member of the Company is entitled to attend, speak and vote at the General Meeting and is entitled to appoint one
or more proxies to exercise all or any of their rights to attend, speak and vote in his stead. Each member of the
Company should have received the Form of Proxy with this General Meeting Notice. A proxy need not be a member
of the Company. You can only appoint a proxy using the procedures set out in these notes and the notes to the Form
of Proxy. If you wish your proxy to speak on your behalf at the General Meeting you will need to appoint your own
choice of proxy (not the Chairman) and give your instructions directly to them.
4.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different
shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than
one proxy, each different proxy appointment form must be received by the Company's Registrars, Share Registrars
Limited of Suite E, First Floor, Lion and Lamb Yard, Farnham, Surrey GU9 7LL not less than 48 hours before the
time appointed for the General Meeting.
5.
A vote withheld is not a vote in law which means that the vote will not be counted in the calculation of votes for or
against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her
discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is
put before the General Meeting.
6.
To be valid, the Form of Proxy and any power of attorney or other authority under which it is signed (or a duly
certified copy of such power of attorney or such other authority) must be lodged with the Company's Registrars, Share
Registrars Limited of Suite E, First Floor, Lion and Lamb Yard, Farnham, Surrey GU9 7LL so as to be received not
less than 48 hours before the time appointed for the General Meeting. The return of the Form of Proxy will not
preclude a member of the Company from attending and voting at the General Meeting in person should he
subsequently decide to do so.
7.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the
names of the joint holders appear in the Company's register of members in respect of the joint holding (the firstnamed being the most senior).
Changing proxy instructions
8.
To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note
that the cut-off time for receipt of proxy appointments (see above) also applies in relation to amended instructions;
any amended proxy appointment received after the relevant cut-off time will be disregarded.
62
ALBION COMMUNITY POWER PLC
(Registered in England and Wales with number 08239147)
(the "Company")
NOTICE OF SEPARATE GENERAL MEETING OF ORDINARY SHAREHOLDERS
Notice is hereby given that a separate general meeting of holders of ordinary shares of 1
pence each in the Company will be held at 10.15 a.m. on 16 February 2015 (or as soon
thereafter following the conclusion or adjournment of a general meeting of the Company
convened for the same date) at the offices of Albion Ventures LLP, 1 King's Arms Yard,
London EC2R 7AF, for the purpose of considering and, if thought fit, passing the following
resolution which will be proposed as a special resolution.
Special resolution
THAT, in accordance with section 630 of the Companies Act 2006 and Article 4 of the
articles of association of the Company, this separate general meeting of the holders of the
ordinary shares of one pence each the capital of the Company ("Ordinary Shares"), hereby
irrevocably consents to and sanctions the passing of resolution 6 set out in the notice of
general meeting of the Company to be held on 16 February 2015 (a copy of which has been
produced to the meeting) and every variation, modification or abrogation of the rights,
privileges and restrictions attaching to the Ordinary Shares as a class of shares which will or
may be effected thereby.
By order of the Board
Registered office:
Albion Ventures LLP
Company Secretary
1 King's Arms Yard
London
EC2R 7AF
29 January 2015
Notes:
1.
Pursuant to Regulation 41 of The Uncertificated Securities Regulations 2001, the Company specifies that only those
shareholders registered in the register of members of the Company as at:

6.00 p.m. on 12 February 2015; or

if this Meeting is adjourned, at 6.00 p.m. on the day two days prior to the adjourned meeting,
shall be entitled to attend and vote at the Meeting.
Appointment of proxies
2.
A member of the Company is entitled to attend, speak and vote at the Separate General Meeting and is entitled to
appoint one or more proxies to exercise all or any of their rights to attend, speak and vote in his stead. Each member
of the Company should have received the Form of Proxy with this Separate General Meeting Notice. A proxy need not
be a member of the Company. You can only appoint a proxy using the procedures set out in these notes and the notes
to the Form of Proxy. If you wish your proxy to speak on your behalf at the Separate General Meeting you will need to
appoint your own choice of proxy (not the Chairman) and give your instructions directly to them.
3.
You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different
shares. You may not appoint more than one proxy to exercise the rights attached to any one share. To appoint more
63
than one proxy, each different proxy appointment form must be received by the Company's Registrars, Share
Registrars Limited of Suite E, First Floor, Lion and Lamb Yard, Farnham, Surrey GU9 7LL not less than 48 hours
before the time appointed for the Separate General Meeting.
4.
A vote withheld is not a vote in law which means that the vote will not be counted in the calculation of votes for or
against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her
discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is
put before the Separate General Meeting.
5.
To be valid, the Form of Proxy and any power of attorney or other authority under which it is signed (or a duly
certified copy of such power of attorney or such other authority) must be lodged with the Company's Registrars, Share
Registrars Limited of Suite E, First Floor, Lion and Lamb Yard, Farnham, Surrey GU9 7LL so as to be received not
less than 48 hours before the time appointed for the Separate General Meeting. The return of the Form of Proxy will
not preclude a member of the Company from attending and voting at the Separate General Meeting in person should
he subsequently decide to do so.
6.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the
names of the joint holders appear in the Company's register of members in respect of the joint holding (the firstnamed being the most senior).
Changing proxy instructions
7.
To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note
that the cut-off time for receipt of proxy appointments (see above) also applies in relation to amended instructions;
any amended proxy appointment received after the relevant cut-off time will be disregarded.
64