Beansprout Company ™ Rules (“Beansprout”)

These Beansprout Rules (“Rules”) have been created by The Share Republic.com Ltd. (“TSRC”) and apply to any Applicant that proposes to call itself a Beansprout Company™ and be quoted or listed on an Agreed Market. A Beansprout Company™ must comply with these rules and the rules of the Agreed Market on which it is to be quoted or listed.

Each Founder Director and Founder Shareholder will be required to sign a Statement of Responsibility agreeing to comply with these Rules until the completion of a Permitted Transaction.

1                    Beansprout Company™

1.1              Purpose

(a)                A Beansprout is an investment company set up by its Founder Directors with a view to complete a Permitted Transaction and which is traded on an Agreed Market.

(b)               A Beansprout must obtain shareholder approval to complete a Permitted Transaction.

(c)                A Beansprout’s enlarged share capital must be accepted for Subsequent Market Admission to an Agreed Market before it can proceed to complete a Permitted Transaction.

(d)               A Beansprout must complete a Permitted Transaction within 24 months of the Admission.

(e)                A Beansprout must be liquidated and its remaining capital returned to its shareholders in accordance with Beansprout Rule 1.3(c) if it fails to complete a Permitted Transaction within 24 months of Admission.

1.2              Restrictions

(a)                A Beansprout Applicant shall not have carried on any business prior to the Beansprout Admission and shall have been incorporated for less than six months.

(b)               Until Permitted Transaction Completion, a Beansprout must not carry on any business other than the identification and evaluation of assets or businesses with a view to completing a Permitted Transaction.

(c)                A Beansprout may not complete a Permitted Transaction unless it meets the requirements set out in section 8.

1.3              Requirements

(a)                A Beansprout must be an EU or EEA company, which complies with and may lawfully issue Beansprout shares to investors pursuant to the rules of incorporation in its home jurisdiction.

(b)               A Beansprout must have a par value. If no par value then a minimum permitted share issue price of either £0.01 or €0.01 per share depending on the denomination of its share capital.

(c)                A Beansprout’s Articles must provide that any return of capital to shareholders on a liquidation or winding up is proportionate to the total paid up capital and share premium received through the individual subscription per Beansprout Share in issue rather than being based on the number of Beansprout Shares in issue.

(d)               A Beansprout must have at least 3 and no more than 6 Founder Directors.  Each Founder Director must be an individual who has previously acted as a director or officer of a public company that is or was traded on a Market, or is an accountant, lawyer or investment professional subject to a regulatory regime, or alternatively has served as an executive director of a medium-sized private enterprise (as defined by the European Commission Recommendation 2003/361/EC of 6 May 2003).

(e)                In determining the acceptability of the Beansprout Board, TSRC will consider whether the directors collectively possess:

(i)                  an appropriate and specific Investment Policy;

(ii)                an appropriate track record of involvement with quoted micro and/or small companies (as defined by the European Commission Recommendation 2003/361/EC of 6 May 2003),  which must be fully and honestly disclosed in the Beansprout Prospectus;

(iii)               the ability to raise financing;

(iv)              a clean record of corporate governance and regulatory history;

(v)                sufficient technical experience or advisory support in the industry sector or sectors covered by the Investment Policy;

(vi)              the ability and/or advisory support to locate and develop appropriate acquisition opportunities for the Beansprout; and

(vii)             such other matters as may be required by the Agreed Market.

(f)                Prior to a Beansprout Admission, the Beansprout will issue Founder Shares for cash as seed capital.  No fewer than 5,000,000 and no more than 25,000,000 Founder Shares may be issued at a minimum issue price of £0.01 or €0.01 per share.

(g)               A Founder Director must subscribe for a minimum of 500,000 Founder Shares in cash. The Founder Directors and the Founder Shareholders must subscribe for an aggregate minimum of 5,000,000 Founder Shares.  A professional adviser to the Beansprout may not subscribe for or acquire Founder Shares.

(h)               Founder Shares shall be subject to lock-in provisions until 6 months after the completion of a Permitted Transaction.

1.4              Admission Document

(a)                A Beansprout Admission Document must comply with the Rules of the Agreed Market with the additions and derogations set out in this section 1.4; all laws and securities regulations applicable in all applicable jurisdictions, including financial promotion and prospectus rules. A Beansprout Admission Document will contain:

(i)                  An audited or certified opening balance sheet confirming that the Founder Shares have been issued fully paid;

(ii)                An Investment Policy acceptable to the Agreed Market; and

(iii)               A working capital statement prepared by the Directors, confirming that following Beansprout Admission the Beansprout will be able to pay all costs and expenses reasonably anticipated to be incurred before Permitted Transaction Completion.

(iv)              The information set out in  these Beansprout Rules and address the matters set out in section 1.3(e) above

(v)                Any additional requirements of the Agreed Market’s Rules; and

(vi)              The Beansprout’s intention to raise further equity capital by way of an issue of Beansprout Shares at the Issue Price and to undertake a Permitted Transaction in accordance with the Investment Policy.

(b)               Beansprout Shares must be shares of the same class and rank pari-passu with Founder Shares other than as provided in 1.3(c) above .

(c)                The Issue Price of Beansprout Shares shall not exceed 2.5 times the price at which the Founder Shares were issued.

(d)               Beansprout Admission cannot be completed unless within 3 months of the Beansprout Admission Document being published:

(i)                  A minimum of 30,000,000 and a maximum of 125,000,000 Beansprout Shares have been subscribed for in cash at the Issue Price; and

(ii)                The Beansprout has a minimum of 75 shareholders that are not Connected Persons, made up of:

(A)               Individual shareholders with a minimum investment of £1,000 (€1,000) or 50,000 Beansprout shares, whichever is the lesser; and/or

(B)               Individual members of Investment clubs or platforms with an aggregate Beansprout minimum shareholding of £5,000.

(e)                The Beansprout Directors must take reasonable steps to ensure that upon Admission:

(i)                  No holder of Founder Shares owns or has an interest directly or indirectly in Beansprout Shares; and

(ii)                No holder of Beansprout Shares has an interest directly or indirectly, together with that holder’s associates and affiliates, in more than 3% of the enlarged issued share capital of the Beansprout.

(f)                Other than Ordinary shares, the only additional securities that may be issued by a Beansprout are share Options as permitted by section 4 below.

(g)               If following a Beansprout Admission and prior to Subsequent Agreed Market Admission a holder of Beansprout Shares becomes interested, directly or indirectly, together with that holder’s associates and affiliates, in 3% or more of the enlarged issued share capital of the Beansprout:

(i)                  The shareholder must, on each occasion their interest changes, notify the Directors in writing as soon as they become aware; and

(ii)                The Directors must ensure that the votes exercised directly or indirectly in General Meeting by such shareholder together with that holder’s associates and affiliates, do not exceed 5% of the enlarged issued share capital of the Beansprout.

2                    Beansprout Admission

2.1              An Applicant seeking Beansprout Admission must file with the Agreed Market and/or the Agreed Market’s Regulator:

(a)                all documentation, including the Beansprout Admission Document, required to be filed under the Beansprout Rules pursuant to the Agreed Market’s rules and these Beansprout Rules; and

(b)               a written undertaking from the Beansprout and each of its Directors that they will comply with the restrictions in section 5.2 belowin connection with the expenditure of funds raised prior to the Permitted Transaction Completion.

2.2              The Agreed Market may impose additional eligibility requirements on the Beansprout Applicant where the Agreed Market considers that it is appropriate.

2.3              The Beansprout Admission to the Agreed Market is subject to:

(a)                The Agreed Market and/or the Agreed Market’s Regulator agreement to grant the Beansprout Applicant Admission to the Agreed Market

(b)               The Beansprout meeting the conditions set out in section 1.4(d) abovewith regards to minimum funds raised and minimum number of Shareholders required.

2.4              Beansprout Admission becomes effective once the Agreed Market has issued an Admission notice on the Agreed Market’s website .

3                    Financial Adviser

3.1              A Beansprout must have a Financial Adviser at all times while it is quoted on the Agreed Market.

3.2              Financial Adviser’s compensation and commission

(a)                Any corporate finance fee or other compensation paid or to be paid to the Financial Adviser in connection with the Beansprout Admission Document must be disclosed in the Admission Document and satisfied from the proceeds of the Founder Shares.  Any such fees or compensation must be appropriate and proportionate in the light of the proposed market capitalisation of the Beansprout Company™.

(b)               The maximum sales commission and marketing fees payable in connection with the sale of Beansprout Shares shall not exceed 10% of the gross proceeds raised from such sales.

(c)                The annual retainer payable by a Beansprout to its Financial Adviser shall not exceed £15,000 per annum.

(d)               Any corporate finance fee or other compensation paid or to be paid to the Financial Adviser in its capacity as adviser in connection with the Permitted Transaction, and/or the Transaction Document, must be fairly disclosed in the Transaction Document and largely contingent upon Permitted Transaction Completion.

(e)                Other than Options provision  in section 4 below, no securities of the Beansprout can be issued or granted to the Financial Adviser or its associates or affiliates.

4                    Options

4.1              Options may only be issued to the Founder Directors and/or to the Financial Adviser.

4.2              The total number of Beansprout Shares reserved under Option for issuance under this section 4 may not exceed 15% of the total of the Founder Shares and Beansprout Shares in issue.

4.3              No Option or other right to subscribe for securities of a Beansprout may be granted unless:

(a)                the Option or right is a single, non-transferable Option or right;

(b)               the number of Beansprout Shares issuable upon exercise of the Option or right to a single person does not exceed 5% of the total Beansprout Shares in issue; and

(c)                the exercise price per Beansprout Share is not less than the Issue Price.

4.4              An Option granted to a Founder Director pursuant to this section 4, may be exercised 6 months after Permitted Transaction Completion.  The Option  will expire 36 months after the Permitted Transaction Completion.  If the Option holder ceases to be a Director, officer or employee of the Beansprout, the Option will expire 12 months after Permitted Transaction Completion, or 3 months after ceasing to be a Director, officer or employee to the Beansprout, whichever is later.

4.5              An Option granted to a Financial Adviser under this section 4 may be exercised following Permitted Transaction Completion and shall expire 12 months after Permitted Transaction Completion.

5                    Use of Beansprout Share Proceeds and restrictions on payments

5.1              Until Permitted Transaction Completion, the Beansprout Share Proceeds may only be used to:

a)      meet the fees, costs and commissions of the Financial Adviser

b)        meet the costs of legal and accounting services in connection with proposed Permitted Transactions.

c)         meet expenses incurred in activities relating to the identification and evaluation of assets or businesses and the obtaining of shareholder approval for a proposed Permitted Transaction, such as:

(i)                  valuations or appraisals;

(ii)                business plans;

(iii)               feasibility studies and technical assessments;

(iv)              Expert’s reports; and

(v)                financial and commercial due diligence.

d)       meet the cost of running the Beansprout Company in accordance the all applicable rules and regulations pursuant to rules 5.2 to 5.5.

5.2              Restrictions on use of Beansprout Share Proceeds

(a)                Until Permitted Transaction Completion, the maximum aggregate amount permitted to be used from the Beansprout Share Proceeds for purposes other than set out in section 5.1 shall be £150,000 or, if greater, 20% of the Beansprout Share Proceeds.  For greater clarification, the following expenditure is not included in section 5.1 above:

(i)                  Exchange fees and regulatory fees relating to the Agreed Market quotation/listing both in term of application, admission and ongoing obligations costs; and

(ii)                administrative and general expenses, including (without limitation):

(A)               office supplies, office rent and related utilities;

(B)               printing costs, including printing of the Beansprout Admission Document, the Transaction Document, share certificates and any documents relating to the Permitted Transaction;  and

(C)               fees for legal advice and accounting services relating to matters other than those described in section.

(b)               The Beansprout may not acquire or lease any fixed assets or equipment (including vehicles).

(c)                The restrictions in this section 5 on expenditure and the use of Beansprout Share Proceeds shall continue to apply until Permitted Transaction Completion.

(d)               If, following Permitted Transaction Completion, the expenditure relates to services rendered or obligations incurred before or in connection with the Permitted Transaction, such expenditure shall not be recoverable unless permitted by a majority of the Beansprout Shareholders present and voting in General Meeting.

(e)                Following Permitted Transaction Completion, the Beansprout may use any Beansprout Share Proceeds remaining after identifying and evaluating properties or businesses, to finance or partly finance the acquisition of, or participation in, the Target Assets.

5.3              Prohibited Payments to Connected Parties

(a)                no payment of any kind may be made, directly or indirectly, by a Beansprout prior to Permitted Transaction Completion to a Connected Beansprout Party whether in respect of salaries, consulting fees, management contracts, finder’s fees, loans, advances, bonuses or similar payments; except as permitted pursuant to section 5.4 below.

5.4              Exceptions to the prohibitions on payments to Connected Beansprout Parties

Subject to the maximum limits set out in section 5.2(a) above , a Beansprout may reimburse a Founder Shareholder for:

(a)                reasonable expenses for office supplies, office rent and related utilities; and

(b)               reasonable out-of-pocket expenses incurred in pursuing the business of the Beansprout as referenced in section 1.1

5.5              Deposits, loans and advances to the Vendor or Target Asset

(a)                Subject to prior approval from TSRC, a Beansprout may advance a refundable deposit or secured loan to a Vendor or Target Asset, as the case may be, in connection with a Permitted Transaction provided that:

(i)                  the Permitted Transaction has been announced pursuant to section 8.2; and

(ii)                the Financial Adviser has advised the Company that the terms proposed are fair and reasonable; and

(iii)               no more than £125,000 in aggregate is outstanding at any one time.

5.6              Investment of Beansprout Share Proceeds

Until required for the Beansprout’s purposes, Beansprout Share Proceeds may only be invested in securities of, or those guaranteed by, governments or governmental authorities, or in certificates of deposit or interest-bearing accounts of banks, building societies, trust companies or credit unions.

6                    Restrictions on trading

6.1              For so long as the Beansprout is admitted to trading on an Agreed Market, only Beansprout Shares may be issued or traded prior to Permitted Transaction Completion.

6.2              Founder Shares shall be subject to lock-in provisions until 6 months after the completion of a Permitted Transaction.

7                    Follow-on issues of Beansprout Shares

7.1              After the closing of the fundraising pursuant to the Beansprout Admission Document and until the Permitted Transaction Completion, a Beansprout may issue further Beansprout Shares for cash up to the aggregate maximum permitted amount set out in section1.4(d)(i) providing that the issue price of such Beansprout Shares is not lower than any previously set Issue Price.

7.2              Following publication of the news release per section 8.2, a Beansprout may pre-place additional securities conditional on Permitted Transaction Completion providing that the issue price of such securities is not lower than any previous Issue Price.

8                    Permitted Transaction

8.1              A Permitted Transaction must:

(a)                comprise the acquisition of one or more Target Assets such that the Beansprout as enlarged by the Permitted Transaction will be suitable for a Subsequent Market Admission as an Operating Company;

(b)               result in at least one of the Directors of the Beansprout remaining on the Board (whether in an executive or a non-executive capacity) for a period of 12 months from Subsequent Market Admission;

(c)                be undertaken (unless otherwise agreed by a majority of the Beansprout Shareholders in General Meeting) substantially via the issue of Beansprout Shares at no less than the Issue Price;

(d)               obtain Permitted Transaction Approval from the shareholders as follows:

(i)                  If in accordance with the Investing Policy, and with sections 8.1(a) and 8.1(b) above, by a majority vote of ordinary shareholders of the Beansprout in General Meeting; or

(ii)                If not in accordance with either the Investing Policy or sections 8.1(a) or 8.2(b) above, by a 66.6% vote by Beansprout Shareholders in General Meeting; and

(iii)               If applicable, such additional shareholder approval as is required to comply with the provisions of any applicable laws or regulations.

In all cases Connected Transaction Parties who are shareholders of the Beansprout may not vote; and

(e)                not proceed if a Connected Beansprout Party has an interest in the Target Assets, until the Financial Adviser has confirmed to the Board that the terms of the proposed Permitted Transaction are fair and reasonable for all Beansprout Shareholders.

8.2              Announcement of Agreement to a proposed Permitted Transaction

When a Permitted Transaction Agreement is reached, the Beansprout must immediately prepare and submit to the Agreed Market and/or the Agreed Market’s Regulator, for review, a comprehensive news release, which must include:

(a)                the proposed date of the Permitted Transaction Agreement;

(b)               a description of the proposed Target Assets, including (if applicable) location, employees, a summary of any available financial information relating to the Target Assets (with an indication as to whether such information is audited or unaudited and the currency of such information) and their current trading and prospects;

(c)                the terms of the proposed Permitted Transaction, including the proposed consideration, with an indication of how the consideration is to be satisfied and the amounts to be financed by way of cash, securities, indebtedness or other means;

(d)               the intended Board following Permitted Transaction Completion including brief profiles of each Director or proposed Director and an indication of the Board’s intentions in respect of subsequent Market Admission;

(e)                identification of:

(i)                  the principal Vendors of the Target Assets and if any of the Vendors is a company, the full name and jurisdiction of incorporation or creation of that company and its ultimate controlling parties;

(ii)                any direct or indirect beneficial interest of any of the Connected Beansprout Parties or Beansprout Shareholders in the proposed Target Assets;

(iii)               any Connected Beansprout Parties or Beansprout Shareholders that are acting in concert with the Vendors or the Target Asset; and

(iv)              any relationship between or among the Connected Beansprout Parties and the Connected Transaction Parties;

(f)                a description of any external financing arrangements for or in conjunction with the Permitted Transaction including the amount, security, terms, use of proceeds and details of the Financial Adviser’s compensation;

(g)               a description, including the principal terms, of any deposit, advance or loan to be made pursuant to section 5.5 above, and the proposed use of such advance or loan;

(h)               any significant conditions to be satisfied prior to Permitted Transaction Completion;

(i)                 specifying that the Permitted Transaction Completion is subject to Shareholder Transaction Approval and Subsequent Market Admission;

(j)                 any other terms or requirements specified by the Agreed Market or to comply with the requirements of any applicable laws and/or regulations; and

(k)               the following statement:

“Completion of the transaction is subject to a number of conditions, including but not limited to, admission of the Company’s enlarged issued share capital to a public market permitted by TSRC and with shareholders approval. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.  Trading in the securities of a Beansprout Company should be considered highly speculative.

The [Agreed Market] or [Regulator] has in no way passed opinion upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.”

8.3              Market Documentation

The following documents must be published no later than 14 days after the public announcement of the Permitted Transaction Agreement, failing which trading in the Beansprout Shares may be halted until all required documents have been filed. The Agreed Market may or may not suspend the trading in the Beansprout Company shares regardless of such delay:

(a)                A letter from the Board of the Beansprout confirming:

(i)                  the Agreed Market on which it is proposed that the share capital of the Beansprout as enlarged by the Permitted Transaction will be admitted to trading;

(ii)                whether the Permitted Transaction places a value per ordinary share in the Beansprout of at least the Issue Price;

(iii)               whether the Permitted Transaction complies with the Investment Policy;

(iv)              whether any Connected Transaction Party is also a Connected Beansprout Party or is otherwise a Beansprout Shareholder;

(v)                that at least one Director of the Beansprout has contracted to serve on the enlarged board for at least twelve months; and

(vi)              either:

(A)               that Permitted Transaction Completion is conditional majority vote of ordinary shareholders in General Meeting 8.1(d)(i); or

(b)               if the proposed acquisition is not in accordance with the Investment Policy, or is undertaken below the Issue Price, or if a Connected Beansprout Party is also a Connected Transaction Party, that Permitted Transaction Completion is conditional on approval by 66.6% of the Beansprout ordinary shareholders 8.1(d)(ii), and the approval of the Agreed Market is being sought;A letter from the Financial Adviser stating that in its opinion the proposed transaction is a Permitted Transaction and if the proposed Permitted Transaction is connected to a Beansprout Connected Party, confirming that the terms of the proposed transaction are fair and reasonable; and

(c)                A draft copy of the Transaction Document which must contain the information set out in section 9 of these Beansprout Rules as well as any additional information required for Admission to the Agreed Market and, any other applicable laws or regulations.

8.4              Agreed Market and Regulator Review

The Beansprout may not file the Shareholder Documentation set out in section 8.5 below until it has cleared all comments raised by the Agreed Market and its Regulator in connection with it.    For the avoidance of doubt, where Subsequent Market Admission is on an Equivalent Market, the Agreed Market will not comment except to the extent required to satisfy itself that the matters set out in section 8.2 above and 8.3 above have been adequately addressed. It will be the responsibility of the Beansprout and its advisers to take all necessary steps to ensure that the information in the Transaction Document is sufficient to permit Subsequent Market Admission within the specified timetable.

8.5              Shareholders Documentation

The Beansprout will be required to file the following documents with the Agreed Market, and where applicable, mail copies to its Shareholders, no later than 28 days after the public announcement of the Permitted Transaction Agreement:

(a)                A copy of the final Transaction Document including the notice of the General Meeting and the form of proxy to be mailed to Beansprout Shareholders; and either

(b)               Any additional documents required by the rules of any relevant Agreed Market to which the shares of the Beansprout will be admitted following Permitted Transaction Completion; or

(c)                Confirmation in a form satisfactory to the Equivalent Market that the enlarged share capital of the Beansprout will be admitted to trading on such Equivalent Market post Permitted Transaction Completion.

8.6              Permitted Transaction Completion

(a)                Following the conclusion of a General Meeting at which Shareholder Transaction Approval is obtained; and satisfaction or waiving of any other pre-completion conditions, the Beansprout may proceed to Permitted Transaction Completion.

(b)               Immediately following Permitted Transaction Completion, the Beansprout must issue an Announcement which:

(i)                  (unless previously announced) sets out the result of the General Meeting and confirms Shareholder Transaction Approval has been given;

(ii)                announces that Permitted Transaction Completion has occurred; and

(iii)               sets out the details for commencement of trading in its shares on an Agreed Market immediately following cancellation of its trading facility as a Beansprout which must take place on a date no later than 5 business days after Permitted Transaction Completion.

8.7              The following documentation is required to be published , following the Permitted Transaction Completion, within the time period prescribed by the Agreed Market and/or the Agreed Market’s Regulator:

(a)                Directors letter confirming that Shareholder Transaction Approval was received for the Permitted Transaction; and

(b)               a legal opinion or Directors’ certificate confirming that all other closing conditions for the Permitted Transaction have been satisfied or waived.

9                    Transaction Document

9.1              General

The Transaction Document submitted to the Agreed Market and/or its Regulator and mailed to shareholders in connection with a proposed Permitted Transaction must be prepared and despatched in accordance with the provisions of the Beansprout Rules and the rules of the Agreed Market and/or the Agreed Market’s Regulator and other applicable legal requirements.

9.2              Takeover regulations

If the proposed Permitted Transaction is subject to takeover directives or regulations in any jurisdiction, the Transaction Document must contain any information required pursuant thereto.

9.3              Amendments to Transaction Document

(a)                In the event there is a change in the material information included in a previously published Transaction Document, the Beansprout shall provide a written notice to the Agreed Market and/or the Agreed Market’s Regulator describing the change or changes in the material information so as to enable the Agreed Market and/or the Agreed Market’s Regulator to determine the applicable treatment of such change or changes.

(b)               After receiving the information referred to in section (a) above, the Agreed Market and/or the Agree Market’s Regulator will advise the Beansprout as to the conditions that will be required to be satisfied in respect of the treatment of any change or changes in the material information included in the Transaction Document.

10                Other Requirements

10.1          Refusal to proceed with Permitted Transaction

As part of the review of a proposed Permitted Transaction, TSRC will review the expenses, disclosure, trading history and other transactions undertaken by the Beansprout during its admission on the Agreed Market to determine compliance with these Beansprout Rule requirements.  The Agreed Market and/or TSRC may, in its own discretion, refuse to accept a Permitted Transaction if significant concerns arise from its review, which need not be limited to concerns with the items specifically listed in the Beansprout Rules.

10.2          At all times whilst admitted to an Agreed Market, or post any Permitted Transaction, the Directors of the Beansprout must ensure that the rules of the Agreed Market and/or the Agreed Market’s Regulator are strictly adhered to.

 

 

Glossary

Terms Definition
 

Acting in Concert

 

means acting pursuant to an agreement or understanding (whether formal or informal), to co-operate, obtain or consolidate control of a company (being 30% or more of the voting rights in the issued equity of the company).

 

Agreed Market means a Market on which it is agreed between Founder Directors and the Financial Adviser, that the Beansprout Share shall be quoted or listed.

 

Articles means the articles of association, or the statutes or bye-laws of a company analogous to the articles of association (a UK term).

 

Beansprout Admission means admission of the shares of a Beansprout Applicant to trading on the relevant Agreed Market as a Beansprout Company™.

 

Beansprout Admission Document means the admission document of the Beansprout prepared in accordance with the Beansprout Rules and the rules of the relevant Agreed Market.

 

Beansprout Applicant means a company seeking Beansprout Admission.

 

Beansprout Company™/Beansprout means a company which has no assets other than cash and no operating business, quoted or listed on an Agreed Market, with a view to acquire an operating business and seek a subsequent Admission to an Agreed Market subject to Beansprout specific rules.

 

Beansprout Rules means these specific rules for Beansprout companies.

 

Beansprout Share Proceeds means the gross cash proceeds of the issue of Founder Shares and Beansprout Shares.

 

Beansprout Shareholders means the holders of Beansprout shares from time to time.

 

Beansprout Shares means the shares sold pursuant to the Beansprout Admission Document as permitted in section 1 of these Beansprout Rules or issued prior to Permitted Transaction Completion in compliance with section 8.

 

Board means the board of directors of the Beansprout from time to time.

 

Connected Beansprout Parties means Founders, Founder Directors, officers, employees, Experts and Financial Advisers of and to the Beansprout and the Directors, and associates or affiliates of all such parties.

 

Connected Persons means an individual, corporation, partnership, association or trust established acting together to secure or exercise control of a company shall be treated in relation to that company as connected with one another and with any person acting on the directions of any of them to secure or exercise control of the company.

 

Connected Transaction Parties means the Vendor(s), Target Assets, their advisers and other persons acting in concert with the Vendor(s) and/or interested in the Target Assets.

 

Enlarged Beansprout means the Beansprout Company™ as enlarged by the Permitted Transaction.

 

Equivalent Market means a Recognised Investment Exchange or any multilateral trading facility providing investor protection and liquidity at least equivalent to the Agreed Market.

 

Expert means any auditor, accountant, engineer, appraiser or other similar expert.

 

Financial Adviser means TSRC or such other financial adviser as shall be appointed from time to time with TSRC’s consent. Such advisor may be a Corporate Adviser or a Nominated Adviser (NOMAD).

 

Founder means an individual who is an initial shareholder subscribing for Shares at the initial price, prior to the production of an Admission Document and the further issue of Beansprout Shares at a higher price.

 

Founder Directors means at least three and up to six individuals who incorporate the Beansprout and who serve as directors of the Beansprout on Beansprout Admission and take responsibility for the Beansprout Admission Document.

 

Founder Shares means the Shares issued to the Founder Directors and other initial shareholders following incorporation of the Beansprout pursuant to sections 1.3(f) and 1.3(g) of these Rules, and before the issue of Beansprout Shares at a higher price prior to gaining Admission to an Agreed Market.

 

General Meeting means a general meeting of the Beansprout Shareholders from time to time.

 

Investment Policy means the type of Target Assets which the Beansprout will attempt to identify as a Permitted Transaction which must be defined either by market sector or asset class.

 

Issue Price means the price at which Beansprout Shares are proposed to be issued pursuant to the Beansprout Admission Document.

 

Market means a recognised stock exchange or other regulated stock market.

 

Option/Options means the right granted by the Beansprout pursuant to section 4 of these Beansprout Rules that give Founder Directors and/or Financial Advisers the right but not the obligation to buy Beansprout Shares at an agreed-upon price within a certain period or on or before a specific date.

 

Permitted Transaction means a transaction or series of transactions whereby a Beansprout acquires Target Assets, predominantly through the issue of shares.

 

Permitted Transaction Agreement means any enforceable sale and purchase agreement or any other agreement or similar commitment between the Beansprout and the Vendors which:

(a) is in respect of Target Assets the acquisition of which would reasonably appear to constitute a Permitted Transaction;

(b) quantifies the consideration to be paid for the Target Assets or otherwise identifies the means by which the consideration will be determined; and

(c) in respect of which there are no material conditions to Permitted Transaction Completion (other than Shareholder Transaction Approval and Subsequent Market Admission), the satisfaction of which are beyond the reasonable control of the Connected Beansprout Parties or the Connected Transaction Parties.

 

Permitted Transaction Completion means the completion date of the Permitted Transaction.

 

Report means a report, opinion or valuation prepared or rendered by an Expert.

 

Share or Shares means an ordinary share in the capital of the Beansprout.

 

Shareholder Transaction Approval means approval by the Beansprout Shareholders in General Meeting of a Permitted Transaction pursuant to section 8.3(a)(vi)

 

Shareholders Documentation means the documentation set out in section 8.5.

 

SME means small and medium-sized enterprises – as defined in EU law (European Commission Recommendation 2003/361/EC of 6 May 2003 [Official Journal L 124 of 20.05.2003].
Subsequent Market Admission means admission of the Enlarged Beansprout’s shares to trading on a Market or an Equivalent Market.

 

Target Assets means one or more companies, trading assets or businesses which, when acquired by the Beansprout would result in the Beansprout meeting the requirements for a Permitted Transaction.

 

Transaction Document means the document(s) comprising a circular to shareholders of the Beansprout prepared in accordance with these Beansprout Rules and the rules of the Agreed Market or the prospective Agreed Market which set out information relating to the Beansprout, the Target Assets and the Permitted Transaction and, whether separately or by incorporation, the admission document or prospectus prepared in accordance with the rules of the Agreed Market or Equivalent Market to which the Beansprout will be admitted following Permitted Transaction Completion.

 

TSRC means The Share Republic.com Ltd.

 

Vendor or Vendors means the beneficial owner(s) of the Target Assets.