Thirdforce PLC - Preference Share Agreement

RNS Number:8207A
Thirdforce PLC
03 April 2006


ThirdForce plc
31 March 2006


In March 2003, when ThirdForce plc (the 'Company') acquired The Electric Paper
Company Limited, the Chairman of the Company, Mr. Pat McDonagh, entered into a
preference share agreement, pursuant to which he agreed, in certain
circumstances, to subscribe for preference shares in the Company, which shares
were convertible into ordinary shares, at the discretion of Mr. McDonagh, if not
redeemed within 3 years from the date of their subscription (the 'Agreement').
Details of the Agreement were set out in the circular to shareholders of the
Company dated 7th March 2003. The Agreement provided that the board of the
Company could, in its absolute discretion, by a resolution passed by 75% or more
of the directors, decide to defer all or part of Mr. McDonagh's obligation to
subscribe for preference shares.

The board has, by a unanimous vote, on which Mr. McDonagh abstained, agreed to
terminate the Agreement on the basis that Mr. McDonagh enters into a new
agreement which provides that:

-          Mr. McDonagh shall, between 1 April 2006 and 31 March 2009, pay
(either directly or by way of reimbursing the Company) the interest charged to
the Company on outstanding loan balances of up to Euro4m;

-          Mr. McDonagh maintains the guarantee of the Company's increased
overdraft facility up to a limit of Euro7.5m until 31 March 2009 and up to a
limit
of Euro5m from then until 31 March 2011; and


-          In the event that during the period in which Mr. McDonagh is
guaranteeing the facility the Company's bank issues a demand notice, Mr.
McDonagh will lend to the Company the shortfall between the amount of the demand
and the amount the Company can pay from its own funds up to a maximum of the
limit guaranteed. Any such loan will be interest free until 31 March 2009 and
thereafter will bear interest at a normal commercial rate. Such loan may be
converted into ordinary shares in the Company at any time after 31 March 2009,
on similar terms as to payment as the conversion rights under the Agreement,
subject to receiving any appropriate waivers and to the passing by shareholders
of resolutions, inter alia, authorising the allotment of shares upon exercise of
the conversion rights, and, if the loans are not so converted, they will be
repayable in full on 1 April 2011 to the extent the Company's financial position
permits. However, if the said appropriate waivers and shareholders resolutions
are not obtained and/or passed, then the loans will be repayable in full on 1
April 2011'.

The independent directors believe that the new agreement reached is advantageous
to the Company and other shareholders as it has secured Mr. McDonagh's
continuing support of its banking facilities and interest payments while
reducing the likelihood of the potential dilution of other shareholders in the
Company through the potential conversion of the preference shares to ordinary
equity. Accordingly, the independent directors, having consulted with Dolmen
Securities Limited, the Company's nominated adviser, consider that the terms of
the transaction are fair and reasonable insofar as its shareholders are
concerned.


Ends.


Enquiries:

Brendan O'Sullivan
CEO ThirdForce plc
Dublin, Ireland
Tel. +353 1 2891989

This announcement has been issued through the Companies Announcement Service of

                           the Irish Stock Exchange.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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