Ann: GEM Share Placement, page-2

Interesting that the agreement between GEM and CIPI was called a binding Term Sheet - yet when CIPI decide not to take up the full 2nd tranche there seem to be limited consequences (for CIPI), apart from the selling down of Tranche 1 if they default on the amended subscription total.

According to the "binding" agreement CIPI was to subscribe for an additional 38M shares @ $3.88. After some negotiations they agree that CIPI only need to subscribe for 8.2M shares @ $3.88. CIPI have through this action avoided an immediate capital loss of around $12.9M or so - based on the share price prior to the suspension ($3.88 minus $3.45 times the ~30M shares they will now not take up). Wonder if CIPI will be able to buy shares on the open market (at lower prices) with the $117M which they will now not need to hand over to GEM (@$3.88)?

Existing shareholders will now wear the impact of the replacement-placement which will be carried out at $3.10 to $3.20.

Have I misunderstood the term "binding"? I would love to do business with companies like GEM where you can simply walk away from your commitments (with minimal consequences) when things do not play out in your favour.