ACQUISITION AGREEMENT BETWEEN
ACQUISITION
AGREEMENT BETWEEN
1.
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The
Four Rivers BioEnergy Company
Inc.
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2.
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VARIOUS
SHAREHOLDERS
(Shareholders)
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3.
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MED-TECH
SOLUTIONS, INC.
(Purchaser)
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THIS
AGREEMENT IS NOT A PROSPECTUS PURSUANT TO SECTIONS 5 OR 10 OF THE SECURITIES
ACT
OF 1933, AS AMENDED (THE “1933 ACT”). NONE OF THE SECURITIES TO WHICH THIS
AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE
SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION D PROMULGATED UNDER THE 1933 ACT, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS.
AN
AGREEMENT dated 26 March of 2007
AMONG
1.
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THE
FOUR RIVERS BIOENERGY COMPANY INC., a Kentucky corporation with the
Kentucky organization number of 0659433, with its principal office
located
at c/o Xxxx Xxxxxxx, 0 Xxxx Xxxx, Xxxxxx, Xxxxxxxx 00000 (the “Company”);
and
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2.
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THE
PERSONS WHOSE NAMES AND ADDRESSES are set out in the first column
of
Schedule 2 being all of the shareholders of the Company (the
“Shareholders”).
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3.
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MED-TECH
SOLUTIONS, INC., a corporation incorporated and registered in accordance
with the laws of the State of Nevada, USA and having its principal
office
located at Suite 2200-1177 West Hastings Street, Vancouver, British
Columbia, Canada, V6E 2K3, USA (the “Purchaser”);
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WHEREAS:
A.
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The
Company has developed plans for the construction, ownership and management
of seed processing facilities and refineries for the production of
ethanol
and bio-diesel products and for the sale and distribution of such
products.
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B.
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The
Purchaser is a United States developmental stage reporting company
which
wishes to diversify its business interests and has agreed to collaborate
in developing the Company’s activities. The Purchaser intends to assist
the Company by raising finance in support of the Company’s planned
activities.
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C.
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The
Parties consider that their mutual interests will be best served
if the
Purchaser acquires ownership of all of the issued and outstanding
shares
of the Company’s common stock.
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D.
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Accordingly
the Parties have agreed to enter into this Agreement to provide for
the
financing of the Company’s planned activities and the acquisition by the
Purchaser of all of the Company’s issued and outstanding shares of common
stock.
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NOW,
THEREFORE, IT IS AGREED AS FOLLOWS:
1.
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Definitions
and Interpretations
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1.1
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In
this Agreement:
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“Acquisition
Shares”
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means
the 850 Shares to be acquired, on Completion, by the Purchaser from
the
Shareholders.
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“Agreement”
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means
this agreement, dated March 26, 2007.
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“Allotment
Shares”
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means
the 150 Shares to be allotted and issued to the Purchaser and which
shall
on allotment and issue on Completion constitute 15% of all of the
issued
and outstanding Shares of the Company (including Shares beneficially
owned
by the Shareholders).
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“Business”
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means
the business activities which the Company plans to undertake and
which the
Purchaser will acquire, including building and commissioning an ethanol
and a biodiesel production plant and associated facilities in the
State of
Kentucky, U.S.A. and engagement in the sale and distribution of such
ethanol and biodiesel products together with other associated and
complementary activities, and consisting of the business activities
described in the Business Plan.
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2
“Business
Day”
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means
any day other than Saturday, Sunday or other day on which commercial
banks
in The City of New York are authorized or required by law to remain
closed.
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“Business
Plan”
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means
the business plan prepared on behalf of the Company as set out in
Schedule
8.
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“Business
Transfer Agreement”
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means
the agreement relating to the transfer of the Pre Completion Business
from
the Purchaser to a subsidiary company established for the purpose
of
receiving the Pre Completion Business.
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“Claim”
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means
a claim or claims pursuant to the Warranties.
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“Company
Financial Statements”
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means
the consolidated financial statements of the Company for the period
from
inception to March 31, 2007 (or such other period as may be permitted
in
writing by the Purchaser), reviewed and audited by an independent
registered certified public accounting firm which is registered with,
and
has audited the consolidated financial statements in accordance with
the
standards of, the Public Company Accounting Oversight Board (United
States
of America) (“PCAOB”).
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“Completion
Agreements”
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means
the agreements set out in Schedule 7.
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“Company’s
Lawyers”
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means
the law firm appointed by the Company.
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“Completion
Date”
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means
date upon which Completion is to take place as identified in Clause
8.2.
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“Completion”
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means
completion of the sale and purchase of the Acquisition
Shares.
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“Consideration
Shares”
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means
40,665,000 Securities of the Purchaser to be issued and allotted
to the
Shareholders pursuant to Clause 8.7
in
the proportions and numbers identified in Schedule 2.
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“Disclosure
Letter”
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means
any disclosure letter to be delivered to the Purchaser by the Company
containing disclosures made by the Company and the Shareholders pursuant
to this Agreement in accordance with clause 8.
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“Encumbrance”
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means
any interest or equity of any person (including any right to acquire,
option or right of pre-emption) or any mortgage, deed of trust, claim,
charge, pledge, lien, assignment, hypothecation, security interest,
covenant, restriction, easement, preemptive right, title retention,
security agreement or any other encumbrance or charge of any
kind.
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“Financial
Statements”
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means
statements relating to the Company for the period from inception
to June
30, 2007, which have been reviewed by an independent registered certified
public accounting firm in accordance with PCAOB standards.
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“Initial
Funding”
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means
an amount equal to US$2,000,000 which the Purchaser intends to raise
for
the purposes of this Agreement through the Private Placement to be
used
for the purposes set out and contemplated in this Agreement.
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“Initial
Funding Agreements”
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means
the agreements and the list of expenditures set out in Schedule 6
(Parts I
and II).
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3
“Initial
Funding Completion”
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means
the transfer of the Initial Funding to the Company and issue of the
Allotment Shares in accordance with Clause 5 hereof.
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“Interim
Period”
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means
a period of time starting on the date of the Initial Funding Completion
and ending on Completion Date.
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“Management
Accounts”
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means
the accounts to be periodically supplied to the Purchaser during
the
Interim Period, and to be used for the purposes of supplementary
due
diligence, including at the end of the Interim Period a balance sheet
setting out the Company’s assets and liabilities.
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“Main
Funding”
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means
the raising through Private Placement of a minimum of US$35,000,000
or
such larger amount as may be agreed to by the Parties.
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“Purchaser’s
Lawyers”
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means
the law firm appointed by the Purchaser.
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“Purchaser
Representative”
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means
a director of the Company or his alternate appointed from time to
time by
the majority of the board of directors of the Purchaser then in
place.
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“Party”
and “ Parties”
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means
the Purchaser, the Company and the Shareholders being collectively
referred to as the “Parties”.
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“Pre-Completion
Business”
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means
the business conducted by the Purchaser immediately prior to execution
of
the Business Transfer Agreement.
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“Principal
Market”
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means
the Over-The-Counter Bulletin Board quotation service, or if the
Securities are then traded on another quotation service or on a national
securities exchange, such quotation service or national securities
exchange.
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“Private
Placement”
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means
the private placement of Securities of the Purchaser in order to
achieve
the Initial Funding and Main Funding in aggregate of not less than
US$40,800,000, to accredited investors pursuant to Regulation S
promulgated under the Securities Act of 1933, or as may be agreed
to
otherwise by the Parties.
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“Project
Overview”
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means
the Project Overview section contained in Part 1 of the Business
Plan.
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“Purchaser
Warranties”
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means
the warranties extended by the Purchaser to the Shareholders as set
out in
Schedule 5.
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“Restriction
Provisions”
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means
in the case of the Shareholders, the restriction provisions on the
sale
and transfer of the Consideration Shares set out in Clause 9 and
in the
case of the Purchaser the restriction provisions on the sale and
transfer
of the Allotment Shares and the Acquisition Shares set out in Clause
9.
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“Shares”
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means
the shares of common stock, $0.001 par value per share, of the
Company.
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“Shareholders”
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means
the persons whose names and addresses are set out in the first column
of
Schedule 2 and being all of the registered owners of the Shares and
all of
the shareholders of the Company as set out opposite their names in
Schedule 2.
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“Securities”
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means
the shares of common stock, $0.001 par value per share, of the
Purchaser.
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“Subsidiary”
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means
The Four Rivers BioEthanol Company Limited, a company formed and
registered under the laws of England and Wales, the entire share
capital
of which is owned by the Company.
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“Warranties”
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means
the warranties extended by the Shareholders to the Purchaser and
by the
Purchaser to the Shareholders as the context requires as such warranties
are set out in Schedule 4 and Schedule 5 as applicable.
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1.2
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Any
reference, express or implied, to an enactment includes references
to:
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(a)
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that
enactment as amended, extended or applied by or under any other enactment
before or after this Agreement;
and;
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(b)
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any
enactment which that enactment re-enacts (with or without modification);
and
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4
(c)
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any
subordinate legislation made (before or after this Agreement) under
any
enactment, including one within (a) or (b)
above.
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1.3
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Words
denoting persons shall include corporate bodies and unincorporated
associations of persons.
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1.4
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The
headings and section references in this Agreement are for convenience
of
reference only and do not form a part of this Agreement and are not
intended to interpret, define or limit the scope, extent or intent
of this
Agreement or any provision thereof.
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1.5
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Reference
to a document being in the agreed form is to a document initialed
by or on
behalf of the Parties for the purposes of
identification.
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1.6
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Save
where specifically provided otherwise all obligations undertaken
by more
than one individual being a Party to this Agreement are undertaken
jointly
and severally.
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1.7
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Upon
termination for any reason, the Parties shall be relieved of any
further
obligations or commitments pursuant to this Agreement including,
but
without limitation, save and except for the obligations of either
of the
Parties to compensate the other pursuant to Clause 16.5 and 16.6
and to
the continuation of the confidentiality obligations contained in
Clause
20.6.
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2.
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Allotment
Shares and Acquisition Shares
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2.1
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Subject
to the terms of this Agreement the Purchaser
shall:
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2.1.1
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simultaneously
with Initial Funding Completion subscribe for and be issued and allotted
the Allotment Shares credited as fully paid at par value of $0.001
each.
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2.1.2
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on
Completion Date simultaneously with Completion acquire the Acquisition
Shares from the Shareholders.
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On
Completion Date simultaneously with Completion, the Shareholders shall transfer
to the Purchaser the number of Acquisition Shares set out opposite their
respective names in Schedule 2.
2.2
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The
Purchaser shall not be obliged to accept the transfer of any of the
Acquisition Shares or release the Main Funding to the Company unless
the
transfer of all of the Acquisition Shares takes place simultaneously
with
Completion, unless agreed to otherwise in writing by the
parties.
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2.3
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The
Acquisition Shares shall be transferred by the Shareholders free
from any
Encumbrances and each of the Shareholders hereby waives any right
of
pre-emption or other restriction on transfer in respect of the Acquisition
Shares or any of them conferred on each of the Shareholders pursuant
to
the corporate laws of the State of Kentucky or otherwise.
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2.4
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The
Shareholders individually and collectively hereby acknowledge
that:
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2.4.1
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the
authorized amount of capital stock of the Company shall not be increased
or altered in any way between the date of Initial Funding Completion
and
the earlier of (i) the Completion Date and (ii) the last day of the
Interim Period;
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2.4.2
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the
issued and outstanding amount of capital stock of the Company shall
not be
increased or altered in any way between the date of Initial Funding
Completion and the earlier of (i) the Completion Date and (ii) the
last
day of the Interim Period;
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5
2.4.3
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none
of the Shareholders shall transfer or otherwise dispose of his or
its
interest in the Acquisition Shares between the date of this Agreement
and
the earlier of (i) the Completion Date and (ii) the last day of the
Interim Period.
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2.5
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It
is acknowledged that the agreement of the Shareholders to transfer
the
Acquisition Shares and of the Purchaser to acquire them represent
irrevocable commitments subject only to the conditions precedent
to
Completion set out in Clause 8.1 and to termination of this Agreement
before Completion pursuant to clauses 16.2, 16.3 or
16.5.
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3.
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Consideration
for the Acquisition Shares
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3.1
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The
consideration for the transfer of the Acquisition Shares to the Purchaser
shall be the issue and allotment by the Purchaser to the Shareholders
or
their nominees on Completion of the number of Consideration Shares
set out
opposite to their respective names in Schedule
2.
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3.2
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The
Consideration Shares shall be issued by the Purchaser as fully paid
and
non-assessable and shall rank pari passu in all respects with the
issued
and outstanding Securities of the Purchaser at
Completion.
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3.3
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The
Consideration Shares shall, at the Completion Date represent 31.75%
percent of all of the issued and outstanding Securities of the
Purchaser.
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4.
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Finance
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4.1
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The
Initial Funding to the extent not already raised prior to the date
hereof
shall be raised by Private Placement as soon as practicable following
the
date of this Agreement. The Initial Funding shall be used during
the
Interim Period to meet expenditure connected with setting up and
establishing the Business. The Business Plan contains details of
expenditure to be incurred during the Interim Period and Schedule
6 Part
II contains a list of expenditure for which the Initial Funding may
be
used. Certain items of expenditure identified as certain pre contract
expenses incurred by the Subsidiary prior to December 31, 2006 shall
only
be settled and paid on Completion, and certain pre contract expenses
incurred by the Subsidiary after January 1, 2007 as more fully identified
in this list in Schedule 6 Part II shall only be settled and paid
on
Initial Funding Completion. If there is any discrepancy between the
Business Plan and the list of items in Schedule 6 Part II, for the
purposes of interpretation, this list shall prevail.
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4.2
|
It
is intended that the Initial Funding shall be transferred and made
available to the Company in exchange for the Allotment Shares. The
Initial
Funding of US$2,000,000 shall be applied on Initial Funding Completion
in
payment for the Allotment Shares pursuant to Clause
5.
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4.3
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As
and with effect from Initial Funding Completion, the Purchaser shall
be
entitled to be represented, at its option, on the board of directors
of
the Company, by the Purchaser Representative, whose appointment shall
be
secured by having each of the Shareholders enter into a voting agreement
for the sole purpose contemplated in this Clause 4.3, a form of which
is
annexed hereto as Exhibit 1. The Purchaser shall be entitled to remove
the
Purchaser Representative and appoint a replacement at any time by
having
all of the Shareholders vote to remove the Purchaser Representative
and
appoint a replacement upon notification of such by the Purchaser.
Any
subsequent appointment to the initial appointment and any removal
shall be
made by notice in writing served on the Company and shall take effect
upon
service of the notice. The Company, all if its directors and all
of the
Shareholders shall take any and all actions necessary to approve
such
subsequent appointment. The Purchaser Representative, or his duly
appointed alternate, shall have the same right to attend Company
board
meetings and to call upon the board of the Company to convene meetings
as
the other directors and shall have the same rights of access to the
Company’s accounts, records and papers as other directors.
The board of directors shall meet regularly (as necessary by telephone
conference call) during the Interim Period, and
not
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6
less
often than once a month. During the Interim Period the Purchaser Representative
(or his alternate) shall be a necessary attendee for a quorum and for the
purposes of this Agreement the Company’s By-laws shall be deemed to have been
adopted and amended accordingly.
4.4
|
The
Purchaser intends to raise the Main Funding during the Interim Period
and
undertakes with the Company with respect to such arrangements as
follows:
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4.4.1
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to
endeavor to raise the Main Funding through a Private Placement of
its
Securities;
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4.4.2
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that
such Private Placement shall be solicited based on the offering documents
(prepared by the Purchaser’s designated attorneys) and shall be managed
and administered in conformity with US securities laws and rules
and
regulations applicable to the issuance of stock in corporations quoted
on
the Principal Market and their state of
incorporation;
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4.4.3
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that
in collaboration with its agents and representatives it will proceed
diligently with actions required to achieve the Main Funding within
the
Interim Period;
|
4.4.4
|
that
it will advise the Company as to the progress of the Main Funding
initiatives in response to requests for information;
|
4.4.5
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that
it will provide the Company with a draft copy of the Private Placement
Memorandum to be used in the Main Funding at least 2 Business Days
before
it is released to potential
investors;
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4.4.6
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that
it will incorporate reasonable amendments to the Private Placement
Memorandum requested by the Company’s directors before issuance to
potential investors, unless such amendments would cause or could
lead to a
violation of any law or regulation in the opinion of, or are otherwise
reasonably deemed unnecessary by, the Purchaser’s Lawyers;
and
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4.4.7
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that
as soon as practicable after obtaining confirmation that the Private
Placement funds for the full amount of the Main Funding together
with the
copies of the appropriate offering documents executed by all of the
potential investors have been received by the Purchaser’s Lawyers and the
escrow agent for the Main Funding, it will advise the Company that
such
funds have been received.
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4.5
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Availability
of the Main Funding will depend upon the Purchaser through the placement
agents attracting investors willing to invest, in total, an amount
equal
to such Main Funding. Success may be affected by, amongst other factors,
volatility in the markets. As the Company and the Shareholders hereby
acknowledge, that the Purchaser does not undertake or guarantee that
it
will necessarily be successful in its endeavors to raise the Main
Funding
and they further acknowledge that the Purchaser does not accept any
liability towards them if it fails in its endeavors.
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5.
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Initial
Funding Completion
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5.1
|
Initial
Funding Completion shall be conditional upon execution of the Initial
Funding Agreements. The Shareholders shall take appropriate action
to
ensure that the Company and the Subsidiary enter into the Initial
Funding
Agreements as soon as practicable following the date of this Agreement.
Following execution of all of the Initial Funding Agreements, the
Company
shall notify the Purchaser in writing that they have been executed
and
shall provide certified copies of them with such notification.
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5.2
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Initial
Funding Completion shall take place at the offices of Purchaser’s Lawyers
on a date to be agreed between the Parties which shall be within
7 days of
the date of notification pursuant
to
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7
Clause
5.1 above. In the absence of agreement as to a date, Initial Funding Completion
shall take place on the date which is 7 days after the date of notification
pursuant to clause 5.1 or the first Business Date to occur thereafter. If
Initial Funding Completion has not taken place within 28 days of the date of
this Agreement, each of the Parties shall be entitled to terminate this
Agreement by service of a notice in writing on the others pursuant to clause
16.2.
5.3
|
The
subscription price for the Allotment Shares shall be the amount of
the
Initial Funding and shall be paid to the Company on the date of Initial
Funding Completion.
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5.4
|
On
Initial Funding Completion in consideration for and subject to the
payment
of the subscription price in accordance with Clause 5.3 above, the
Company
shall:
|
5.4.1
|
allot
and issue to the Purchaser the Allotment Shares credited as fully
paid and
non assessable;
|
5.4.2
|
deliver
to the Purchaser a duly executed share certificate in respect of
the
Allotment Shares; and
|
5.4.3
|
deliver
to the Purchaser a certified copy of the minutes of the meeting of
its
board of directors as referred to in Clause 5.5
below.
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5.5
|
On
or before the Initial Funding Completion the directors of the Company
shall hold a meeting at the offices of the Company’s Lawyers or a mutually
agreed location to:
|
5.5.1
|
approve
the allotment and issue to the Purchaser of the Allotment
Shares;
|
5.5.2
|
instruct
the secretary of the Company to enter the Purchaser into the corporate
book of the Company as the owner of the Allotment Shares;
|
5.5.3
|
approve
the appointment of the Purchaser Representative to the Company’s board of
directors (if the Purchaser shall elect to exercise his right to
do so
pursuant to Clause 5.6 below); and
|
5.5.4
|
and
file appropriate filings with the Secretary of State of the State
of
Kentucky.
|
The
Purchaser shall, on Initial Funding Completion, subscribe in cash US$2,000,000
as consideration for the Allotment Shares.
5.6
|
On
or before the Initial Funding Completion, the Purchaser shall be
entitled
to appoint at its option the Purchaser Representative to the board
of
directors of the Company and the Shareholders shall take any and
all
actions necessary to approve such
appointment.
|
5.7
|
The
Shareholders undertake with the Purchaser to procure that the Company
complies with its obligations as set out in this Clause
5.
|
6.
|
Interim
Period Management
|
6.1
|
The
Parties recognize the importance to the success of the Business
of:
|
6.1.1
|
ensuring
that the provisions of the Interim Funding Agreements are implemented
in
accordance with their terms and within the periods of time for the
implementation of such provisions as identified in the Business Plan;
and
|
8
6.1.2
|
signing
the Completion Agreements during the Interim Period and implementing
the
provisions of such Completion Agreements to the extent such provisions
are
capable of being implemented within the Interim
Period.
|
6.2
|
During
the Interim Period the Company and its Business shall be actively
and
diligently managed with a view to achieving the objectives set out
in the
Business Plan. In particular the Company:
|
6.2.1
|
shall
use its best efforts to execute an agreement or agreements for the
acquisition of an interest freehold/leasehold in a site for the
construction of the Plant.
|
6.2.2
|
shall
use its best efforts to execute agreements with the suppliers of
feedstock/raw materials and with customers for ethanol and bio-diesel
products on terms which are consistent with the financial projections
and
financial model contained in the Business Plan;
and
|
6.2.3
|
shall
not establish and/or form any subsidiary affiliate or associate companies
and shall not enter into any joint ventures or other forms of partnership
with any third parties unless approved by the Purchaser in
writing.
|
6.2.4
|
shall
only enter into any other arrangement or agreement with the intention
of
meeting the objectives set out in the Business Plan.
|
6.2.5
|
shall
not create any Encumbrances over any of the Company’s or the Subsidiary’s
assets without the consent of the
Purchaser;
|
6.2.6
|
shall
introduce and enforce proper and effective generally accepted accounting
systems and procedures, and shall ensure that all expenses, payments
and
outgoings made and incurred are consistent with the provisions of
the
Business Plan and are restricted to payments of the type identified
in
Schedule 6;
|
6.2.7
|
shall
introduce and implement policies and procedures for the proper and
effective management of the Business by the Company's officers and
employees, and by third parties instructed on behalf of the Company
and such policies and procedures shall provide for the management of
the Business during the Interim Period and following Completion in
compliance with all relevant laws and regulations and in accordance
with
best practice corporate governance and relevant social obligations,
including but not limited to, US Securities Exchange Commission’s rules
and regulations;
|
6.2.8
|
shall
cause monthly Management Accounts to be prepared containing full
details
of the Company’s expenditure and shall submit the same to its board of
directors and the Management Accounts shall fairly and with reasonable
accuracy set out the liabilities of the Company incurred as of the
date to
which they relate and not less than 7 Business Days prior to Completion,
shall present the Purchaser with a final set of Management Accounts
and
prior to or on Completion, shall deliver the Company Financial Statements
and if Completion Date is on or after August 13, 2007 in addition
to the
Company Financial Statements shall deliver true copies of the Financial
Statements for the Company for the period from inception to June
30,
2007;
|
6.2.9
|
shall
comply in all material respects with applicable laws, including,
without
limitation, environmental laws;
|
6.2.10
|
shall
keep the Purchaser fully and promptly informed with respect to all
changes
and revisions to the Business Plan introduced during the Interim
Period
and not less than
|
9
seven
Business Days prior to Completion Date provide the Purchaser with the then
current version of the Business Plan, and;
6.2.11
|
shall
respond to all enquiries and questions raised by the Purchaser concerning
issues relating to progress made towards establishment of the
Business.
|
6.3
|
The
Company, the directors and managers of the Company and in particular
the
directors and managers of the Subsidiary pursuant to the terms of
their
employment agreements shall during the Interim Period dedicate sufficient
working time to the management of the Company and its Business as
may be
required to deliver the objectives set out in the Business Plan in
accordance with the provisions of Clause 6.2
and during the Interim Period shall use their best endeavors to achieve
the objectives set for the Business in the Business
Plan.
|
6.4
|
Neither
the Company nor the Shareholders shall during the Interim Period
enter
into any agreements or arrangements with third parties which would
be
prejudicial or likely to be prejudicial to the best interests of
the
Company, the Subsidiary or the future of the Business. The Completion
Agreements and any other material contracts and undertakings between
the
Company and/or its Subsidiaries shall be signed on a basis which
ensures
that the commitments and obligations of the Company and/or its
Subsidiaries are made conditional upon Completion pursuant to this
Agreement.
|
6.5
|
The
Company and the Shareholders expressly undertake and covenant with
the
Purchaser to procure that the Company and its directors and managers
comply with and perform its, and /or their, obligations as set out
in this
Clause 6. The
Shareholders acknowledge and accept that the provisions set out in
this
Clause 6 as they relate to the management of the Company and the
Business
shall apply equally to the activities of the Subsidiary.
|
7.
|
Purchaser’s
Termination Right
|
If
during
the Interim Period the Purchaser, in its absolute sole discretion, decides
that
the prospects for success of the Business do not justify release of the Main
Funding and/or proceeding to Completion, the Purchaser shall so advise the
Company and the Shareholders in writing, and following such advice shall be
entitled at any time to terminate this Agreement in accordance with Clause
16.3.
8.
|
Completion
|
8.1
|
Completion
shall be conditional upon:
|
8.1.1
|
the
Purchaser being satisfied with the prospects for the Business in
accordance with Clause 7 and its not having served a notice terminating
this Agreement pursuant to Clause 16.3;
|
8.1.2
|
the
(i) Purchaser raising the Main Funding through the private placement
of
Securities equal to or more than the amount of the Main Funding,
closing
of which shall be a condition of, and simultaneously closed on,
Completion, (ii) the Main Funding having been deposited at Completion
into
a restricted bank account of the Company agreeable to the Purchaser,
(iii)
the Company presenting evidence satisfactory to the Purchaser that
the
requirements of the Purchaser’s designated representative’s (or his dully
appointed replacement) signature is an irrevocable and absolute
requirement for purposes of said restricted bank account of the Company,
in order to properly govern the manner and terms upon which the funds
to
be raised in the Main Funding may be drawn down and disbursed from
said
restricted bank account (i.e., require the approval of a designated
representative of the Purchaser); and (iv) the Company presenting
evidence
satisfactory to the Purchaser that the disposition of any or all
of the
Main Funding from the said
|
10
restricted
bank account of the Company shall be conditional on the bank operating said
restricted bank account receiving Release Notice instructions part of the
Release Notice Agreement and substantially in the form of Exhibit 2, unless
prior to Completion agreed to otherwise in writing solely by the Purchaser;
8.1.3
|
the
Company and the Purchaser, having fulfilled their respective obligations
with respect to the Completion Agreements and other documents as
set out
in Schedule 7;
|
8.1.4
|
all
documents or copies of documents required to be executed and delivered
to
the Purchaser hereunder having been so executed and
delivered;
|
8.1.5
|
all
of the terms, covenants and conditions of this Agreement required
to be
complied with or performed by the Company and the Shareholders at
or prior
to the Completion having been complied with or performed;
|
8.1.6
|
there
not having occurred:
|
(a)
|
any
material adverse change in the financial position or condition of
the
Company or the Purchaser, its liabilities or its assets or any damage,
loss or other change in circumstances materially and adversely affecting
the Company or the Purchaser, the Business or the assets of the Company
or
the Company’s right to carry on the Business, other than changes in the
ordinary course of business, none of which have been materially adverse
to
the Company or the Purchaser; or
|
(b)
|
any
damage, destruction, loss or other event, including changes to any
laws or
statutes applicable to the Purchaser, the Company or the Business
(whether
or not covered by insurance) materially and adversely affecting the
Purchaser, the Company, the Business or the assets of the Company;
|
8.1.7
|
the
transactions contemplated hereby having been approved by any regulatory
authorities having jurisdiction over the transactions contemplated
in this
Agreement, if applicable;
|
8.1.8
|
there
being no disclosures in any draft Disclosure Letter delivered to
the
Purchaser on or before the Completion Date which will have, or may
be
likely to have in the sole discretion of the Purchaser, a material
adverse
effect upon the value of the Company and/ or the Business or which
in the
sole discretion of the Purchaser, may adversely effect the Company’s
ability to deliver the Business Plan or which in the sole discretion
of
the Purchaser, may have the effect of altering or amending any of
the
Company’s and the Shareholders’ obligations or commitments pursuant to
this Agreement; and
|
8.1.9
|
the
delivery of the Company Financial
Statements;
|
8.2
|
Subject
to the Purchaser having fulfilled Condition 8.1.2 above, it shall
be
entitled to waive fulfillment of any of the conditions precedent
to
Completion including waiver of any of the requirements set out in
Schedule
7 with the exception of the obligation imposed on the Purchaser in
Schedule 7 para 13. Any
such waiver shall be exercised by service of a notice in writing
by the
Purchaser on the Company in accordance with Clause 19 and following
service of such notice the condition precedent referred to in the
notice
shall be deemed to have been fulfilled with immediate
effect.
|
8.3
|
Completion
shall take place on a date to be agreed between the Parties being
a date
which shall be not earlier than 2 Business Days and not later than
10
Business Days after the date when all of the conditions precedent
set
forth in Section 8.1 have been fulfilled. If the Parties fail to
agree
upon a
|
11
date
which is within the aforementioned 10 Business Day period, Completion shall
take
place on a date which shall be 15 Business Days after fulfillment of all of
the
conditions precedent to Completion set forth in Section 8.1 or if such date
is
not a Business Day the first Business Day thereafter.
8.4
|
If
Completion has not occurred within a period of five months from the
date
hereof due to non fulfillment of any one or more of the conditions
precedent to Completion set out in Clause 8.1
above and the Purchaser has not served a notice pursuant to 16.2,
then:
|
8.4.1
|
the
Purchaser shall be entitled to serve notice on the Company and the
Shareholders calling upon them to meet and discuss actions which
can be
taken to fulfill the outstanding condition or conditions precedent
which
is or are preventing Completion from taking place;
and
|
8.4.2
|
the
Company shall be entitled to serve an equivalent notice, to the notice
described in 8.4.1,
on the Purchaser.
|
8.5
|
Following
service of a notice pursuant to Clause 8.4
the Parties and or their representatives shall meet to discuss, in
good
faith, actions which can be taken to resolve the difficulties which
are
preventing Completion from taking place. If the Parties either have
not
met or have not resolved such difficulties within a period of 28
Business
Days from the date of service of a Clause 8.4
notice they shall be entitled to serve notice terminating this Agreement
in accordance with Clause16.3.
|
8.6
|
On
Completion, which shall take place at the offices of
the Purchaser’s Lawyers
|
8.6.1.
|
the
Shareholders shall transfer their Acquisition Shares with full title
guarantee, free from any Encumbrances and together with all rights
that
attach, or may in future attach, to them including the right to receive
all dividends and distributions declared, made or paid on them on
or after
the date of this Agreement;
|
8.6.2
|
the
Shareholders and the Company shall produce a copy of a certificate
of good
standing with respect to the Company issued by the Secretary of the
State
of the Kentucky;
|
8.6.3
|
the
Company, and the Shareholders shall deliver the final Disclosure
Letter in
the form of the draft accepted by the Purchaser to the Purchaser;
|
8.6.4
|
produce
to the Purchaser a certified copy of the resolution of the board
of the
Company authorizing the allotment and issue of the Allocation Shares
to
the Purchaser and approving this Agreement and all of the transactions
contemplated hereunder;
|
8.6.5
|
the
Company and the Purchasers shall deliver to the Purchaser a stock
certificate duly executed by the appropriate officers of the Company
in
respect of the Allocation Shares to which the Purchaser is entitled;
|
8.6.5
|
the
Company and the Shareholders shall produce such other documents as
the
Purchaser may reasonably request.
|
8.7
|
On
Completion, the Purchaser shall:
|
8.7.1
|
deliver
to each of the Shareholders a stock certificate in respect of the
Consideration Shares to which each Shareholder is entitled;
|
8.7.2
|
produce
to the Shareholders a certified copy of the resolution of the board
of the
Purchaser authorizing the allotment and issue of the Consideration
Shares
to the
|
12
Shareholders
and appointing Xxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx,
Xxxxxxxx Xxxx and Xxxx Xxxxxxx as directors of the Purchaser; and
8.7.3
|
produce
a copy of the duly executed Business Transfer
Agreement.
|
9.
|
Restriction
Provisions on Transfer/Sale of the Securities
|
9.1
|
Each
Shareholder agrees not to dispose of any of the Consideration Shares
within a period of 2 years from Completion Date, save pursuant to
an offer
made to all the holders of Securities in the Purchaser and thereafter
only
to dispose of Consideration Shares in accordance with the provisions
of
this Clause 9.
|
9.2
|
After
the 2 year period referred to in clause 9.1 has elapsed, each Shareholder
will be able to dispose of his Consideration Shares free of any
restrictions imposed by this Agreement, but subject to such restrictions
as shall apply under US Securities laws or
regulations.
|
9.3
|
Notwithstanding
the restrictions set out in Clauses 9.1
and 9.2,
each Shareholder agrees not to dispose of any of the Consideration
Shares
in a manner which is inconsistent with the provisions set forth in
Clause
14.
|
9.4
|
Each
director and officer of the Purchaser as of the date of this Agreement,
agrees not to dispose of any of the Securities beneficially owned
by such
director or officer within a period of twenty four months from the
Completion Date, save pursuant to an offer made to all the holders
of
Securities in the Purchaser and thereafter only to dispose of any
of the
Securities beneficially owned in accordance with the provisions of
this
Clause 9 or Clause 14.3.
|
9.5
|
Notwithstanding
the restrictions set out in this Section 9, the Purchaser agrees
not to
dispose of any Allotment Shares or Acquisition Shares so as to contradict
the provisions of Clause 14.3.
|
10.
|
Directors
|
On
Completion and for a twenty four month period thereafter shareholders of the
Purchaser (excluding the Shareholders) holding in the aggregate not less than
25% of the total issued share capital of the Purchaser shall have the right
to
call a special meeting of the Purchaser’s shareholders for the purpose of
electing said shareholders nominated directors to the board of directors of
the
Purchaser, in accordance with the Purchaser’s statutes of incorporation and SEC
laws and regulations. During the twelve-month period each of the Shareholders
agrees to exercise all votes exercisable by each of them as a director and/or
shareholder of the Purchaser in favor of the appointment as directors of the
Purchaser as shall be nominated pursuant to this provision.
11.
|
Warranties
and Purchaser Warranties
|
11.1
|
The
Shareholders jointly and severally warrant to the Purchaser that
each of
the statements set out in Part I of Schedule 4 is true and accurate
in all
respects as of the date of this Agreement.
|
11.2
|
Immediately
prior to Completion, and the Shareholders shall be deemed to have
jointly
and severally warranted to the Purchaser, subject to those matters
fully
and fairly disclosed in the Disclosure Letter, based on the facts
in
existence at that time, that each of the Warranties in the form set
out in
Part 2 of Schedule 4 is true and accurate as at the Completion Date.
|
11.3
|
Immediately
prior to Completion, the Purchaser shall be deemed to have warranted
to
the Shareholders that, subject to those matters fully and fairly
disclosed
and based on the facts in existence at the time, each of the statements
set out in Schedule 5 is true and accurate in all respects as at
the
Completion Date.
|
13
11.4
|
Each
of the Shareholder’s liability for the Warranties shall be limited as set
out in Clause 12.
|
11.5
|
The
Purchaser’s liability for the Purchaser’s Warranties shall be limited as
set out in Clause 13.
|
12.
|
Limitations
on Claims
|
12.1
|
The
Shareholders shall not be liable in respect of any Claim unless and
until
they shall have received from the Purchaser written notice containing
details of the relevant Claim including the amount of the Claim and
full
details of the matter or default which gives rise to the Claim on
or
before the first anniversary of this
Agreement.
|
12.2
|
Any
Claim shall (if not previously satisfied, withdrawn or settled) be
deemed
to have been withdrawn and waived by the Purchaser unless legal
proceedings in respect of such Claim have been commenced (by being
both
issued and served on the Company) within twelve months of the notification
of such Claim to the Company.
|
12.3
|
The
Shareholders shall not be liable in respect of any Claim unless the
amount
of their individual liability in respect of an individual Claim exceeds
$50,000 (in which event, they shall be liable for the whole amount
of such
Claim and not only the excess over such amount; such that a joint
and
several claim filed against the Shareholders shall be considered
an
individual Claim against each of the shareholders).
|
12.4
|
Notwithstanding
any other provision of this Agreement the individual liability of
each of
the Shareholders shall not in any circumstances exceed $114,000.
Individually and collectively their liability in the aggregate shall
not
in any circumstances exceed
$550,000.
|
12.5
|
The
Purchaser shall not be entitled to recover damages in respect of
any Claim
for breach of a Warranty or otherwise obtain reimbursement or restitution
more than once in respect of any one breach of that Warranty arising
out
of or in connection with the same
circumstances.
|
12.6
|
The
Shareholders shall not be liable in respect of any
Claim:
|
(a)
|
to
the extent that recovery is made by the Purchaser or the Company
under any
policy of insurance; or
|
(b)
|
to
the extent that the Purchaser or the Company have already obtained
reimbursement or restitution in respect of such claim from any third
party.
|
13.
|
Limitations
on Purchaser Warranty
Claims
|
13.1
|
The
Purchaser shall not be liable in respect of any Claim unless and
until it
shall have received from the Shareholders written notice containing
details of the relevant Claim including the amount of the claim and
full
details of the matter or default which gives rise to the claim on
or
before the first anniversary of the Completion
Date.
|
13.2
|
Any
Claim shall (if not previously satisfied, withdrawn or settled) be
deemed
to have been withdrawn and waived by the Shareholders unless legal
proceedings in respect of such Claim have been commenced (by being
both
issued and served on the Purchaser) within twelve months of the
notification of such Claim to the Purchaser pursuant to Clause
13.1.
|
13.3
|
The
Purchaser shall not be liable in respect of any Claim unless the
amount of
the liability of the Purchaser for such Claim exceeds $50,000 (in
which
event, the Purchaser shall be liable for the whole amount of such
claim
and not only the excess over such amount).
|
14
13.4
|
Notwithstanding
any other provision of this Agreement the aggregate liability of
the
Purchaser under this Agreement shall not in any circumstances exceed
$550,000.
|
13.5
|
Neither
the Shareholders nor the Company shall be entitled to recover damages
in
respect of any Claim for breach of a Warranty or otherwise obtain
reimbursement or restitution more than once in respect of any one
breach
of that Warranty arising out of or in connection with the same
circumstances.
|
13.6
|
The
Purchaser shall not be liable under this Agreement in respect of
any
Claim:
|
(a)
|
to
the extent that recovery is made by the Purchaser, the Company, the
Shareholders under any policy of insurance;
or
|
(b)
|
to
the extent that the Company, the Shareholders have already obtained
reimbursement or restitution in respect of such claim from any third
party.
|
14.
|
US
Securities Act Provisions,
|
14.1
|
Each
of the Shareholders agrees, and undertakes to procure that any nominee
appointed by him pursuant to Clause 3.1
shall agree, that they are acquiring the Consideration Shares for
investment purposes and will not offer, sell or otherwise transfer,
pledge
or hypothecate any of the Consideration Shares issued to it (other
than
pursuant to an effective Registration Statement under the Securities
Act
of 1933, as amended) directly or indirectly subject to any other
restrictions and limitations set forth in this Agreement
unless:
|
(a)
|
the
sale is to the Purchaser;
|
(b)
|
the
sale is made pursuant to the exemption from registration under the
Securities Act of 1933, as amended, provided by Rule 144 thereunder;
|
(c)
|
the
sale is made pursuant to the exemption from registration under the
Securities Act of 1933, as amended, provided by Regulation S promulgated
thereunder; or
|
(d)
|
the
Consideration Shares are sold in a transaction that does not require
registration under the Securities Act of 1933, as amended, or any
applicable United States state laws and regulations governing the
offer
and sale of securities, and the vendor has furnished to the Purchaser
an
opinion of counsel to that effect or such other written opinion as
may be
reasonably required by the
Purchaser.
|
14.2
|
Each
of the Shareholders acknowledges that the certificates representing
the
Consideration Shares shall bear the following
legend:
|
NO
SALE,
OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL
BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE TO
SAID SHARES.
14.3
|
The
Purchaser agrees that it is subscribing for acquisition of the Allotment
Shares and the Acquisition Shares for investment purposes and will
not
offer, sell or otherwise transfer, pledge or hypothecate any of the
Allotments Shares or Acquisition Shares issued or transferred to
them
(other than pursuant to an effective Registration Statement under
the
Securities Act of 1933, as amended) directly or indirectly
unless:
|
15
(a)
|
the
sale is made pursuant to the exemption from registration under the
Securities
Act of 1933,
as amended, provided by Rule 144 thereunder;
|
(b)
|
the
sale is made pursuant to the exemption from registration under the
Securities
Act of 1933, as amended,
provided by Regulation S promulgated thereunder;
or
|
(c)
|
the
Allotment Shares or Acquisition Shares are sold in a transaction
that does
not require registration under the Securities
Act of 1933, as amended,
or any applicable United States state laws and regulations governing
the
offer and sale of securities, and the vendor has furnished to the
Company
an opinion of counsel to that effect or such other written opinion
as may
be reasonably required by the
Purchaser.
|
14.4
|
The
Purchaser acknowledges that the certificates representing the Allotment
Shares and the Acquisition Shares shall bear the following
legend:
|
NO
SALE,
OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL
BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE TO
SAID SHARES.
15.
|
Taxation
|
The
Parties intend that the acquisition of the Acquisition Shares in exchange for
the Consideration Shares shall be a “tax free” exchange transaction within the
meaning of Section 368 of the Internal Revenue Code of 1986 of the United States
of America.
16.
|
Termination
|
16.1
|
This
Agreement shall come into effect on the date hereof and subject to
termination pursuant to Clauses 16.2, 16.3, 16.4 or 16.5 below shall
continue in effect until all of the respective obligations of the
Parties
have been fully discharged.
|
16.2
|
If
Initial Funding Completion has not occurred within 28 days of the
date of
this Agreement, each of the Parties shall be entitled to terminate
the
Agreement by service of a notice in writing on the others, unless
agreed
to otherwise in writing by the Parties.
|
16.3
|
If
pursuant to Clause 7, the Purchaser in its sole discretion decides
for any
reason that it is unable or unwilling to proceed to Completion and
has so
advised the Company and the Shareholders in writing in accordance
with
Clause 7, it shall be entitled to terminate this Agreement forthwith
by
service of a notice in writing on the Company and the Shareholders,
which
termination shall be effective immediately upon the service of such
notice.
|
16.4
|
If
Completion has not taken place within five months of the date hereof
and
the Parties have not resolved the difficulties preventing Completion
from
taking place pursuant to Clause 8.3 and 8.4, the Parties shall each
be
entitled to terminate this Agreement forthwith
by
service of a notice in writing on the other Party.
|
16.5
|
If
prior to Completion the Shareholders or the Company are in breach
of any
of the terms or conditions of this Agreement, or fail to comply in
any
material respect with any of its or their covenants or undertakings
as set
out in this Agreement, the Purchaser shall be entitled to serve notice
on
the Company requiring it and the Shareholders to comply with such
covenants and undertakings within a period of twenty eight calendar
days
from the date of service of the
notice
|
16
and
if
the Shareholders or the Company fails to rectify such breach or failure within
the period of twenty eight calendar days specified in the notice by the
Purchaser, the Purchaser shall be entitled to terminate this Agreement forthwith
by service of a further notice in writing on the Company or the Shareholders,
which termination shall be effective immediately upon the service of such
notice.
16.6
|
If
this Agreement is terminated pursuant to Clauses 16.2, 16.3 or 16.4
above,
the Parties shall have no liability to each other for any claims,
losses,
damages or expenses suffered or incurred prior to or following termination
of this Agreement except and to the extent that such claims, losses,
damages or expenses are attributable to a breach or material failure
by
one or more of the Parties in which case the Party responsible for
such
breach or material failure shall have liability to the Party making
such
claim or incurring such losses, damages or expenses.
|
16.7
|
The
Parties’ rights to make claims and or recover losses or damages,
attributable to a breach of this Agreement or attributable to a material
failure by one or more of the other Parties to discharge their respective
obligations pursuant to this Agreement including but not limited
to claims
in respect of the Warranties shall continue notwithstanding termination
pursuant to Clauses 16.2, 16.3 or 16.4
above.
|
17.
|
Entire
Agreement
|
This
Agreement and the documents annexed to it represent the entire agreement between
the Parties relating to the transactions contemplated by this Agreement and
supersede all previous agreements between the Parties relating to those
transactions and each Party acknowledges that it does not rely on any statement,
representation, assurance or warranty of any person (whether a Party to this
Agreement or not) other than as expressly set out in this Agreement. Each Party
agrees and undertakes to the other Parties that the only rights and remedies
available to it arising out of or in connection with this Agreement or its
subject matter shall be solely for breach of contract.
18.
|
Third
Party Rights
|
This
Agreement and the documents referred to in it are made for the benefit of the
Parties and their successors and permitted assignees and are not intended to
benefit, or be enforceable by, anyone else.
19.
|
Notices
|
19.1
|
All
notices served on the Company shall be addressed to the address set
forth
in 19.3.2 below.
|
19.2
|
The
Shareholders and each of them, as they hereby acknowledge and accept,
shall be deemed to have received copies of all notices served pursuant
to
this Agreement provided that they have been served upon the Company.
|
19.3
|
The
Purchaser as it hereby acknowledges and accepts shall be deemed to
have
received copies of all notices served pursuant to this Agreement
provided
that they have been served upon and addressed to the Purchaser at
the
following address:
|
19.3.1
|
To
the Purchaser:
|
Suite
2200 - 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx
Xxxxxx
X0X 0X0
17
With
a
copy to: Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
19.3.2 To
the
Company:
The
Four
Rivers BioEnergy Company Inc.
000
Xxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxxxxxxxxx XX0 0XX
Attention:
Xxxx Xxxxxx
Telephone:
Facsimile:
With
a
copy to:
The
Four
Rivers BioEnergy Company Inc.
x/x
Xxxx
Xxxxxxx
00
Xxxx
Xxxx
Xxxxxx,
Xxxxxxxx, 00000
Attention:
Xxxx X. Xxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
19.4
|
Any
notice or other document to be served under this Agreement may be
delivered by hand or sent by first class recorded delivery post to
the
Party to be served at its address appearing in this Agreement or
at such
other address as it may have notified to the other Parties in accordance
with this clause.
|
19.5
|
All
notices set out pursuant to this Agreement shall take
effect:
|
19.5.1
|
if
delivered by hand, upon delivery;
|
19.5.2
|
if
posted, at 10 a.m. on the second Business Day after posting or if
posted
to an address in another country at 10 a.m. on the fifth Business
Day
after posting.
|
19.6
|
In
proving service of a notice or document it shall be sufficient to
prove
that delivery was made or that the envelope containing the notice
or
document was properly addressed and posted as a prepaid first class
recorded delivery letter or that the telex or facsimile message was
properly addressed and dispatched and the correct answerback or identity
code is received as the case may
be.
|
20.
|
General
|
20.1
|
Each
of the obligations and undertakings set out in this Agreement which
is not
fully performed at Completion will continue in force after
Completion.
|
20.2
|
None
of the Parties shall be entitled to assign or transfer its rights
or
obligations under this Agreement without the prior written consent
of the
other Parties.
|
18
20.3
|
Any
announcements concerning the transaction provided for in this Agreement
by
or on behalf of the Shareholders, the Purchaser or the Company shall
be
subject to the approval of the other Parties except that the approval
of
the Shareholders and/or the Company shall not be required as to (i)
any
statements or information which the Purchaser submits to its stockholders,
or (ii) any statements, reports, publications or disclosures, including
applicable filings with the US Securities and Exchange Commission,
that
the Purchaser is required to make pursuant to any applicable state
or
federal laws or regulations or (iii) any statements reports or disclosure
that the Purchaser is required to make pursuant to any applicable
state or
federal court order, subject to any applicable limitations and privileges.
|
20.4
|
Following
signature of this Agreement the Purchaser shall have no liability
to pay
for any expenses incurred by the Company including the fees of advisors,
agents, lawyers (save in respect of fees incurred in the preparation
and
negotiations of this Agreement), and accountants employed by the
company
and or the Shareholders except as separately agreed by the
Purchaser.
|
20.5
|
Time
shall be of the essence of this Agreement both as regards dates and
periods mentioned and as regards any dates and periods which may
be
substituted for them in accordance with this Agreement or by variation
or
amendment to this Agreement.
|
20.6
|
Notwithstanding
any provision herein to the contrary, the Parties agree that the
existence
and terms of this Agreement are confidential and that if this Agreement
is
terminated pursuant to Clause 16 or otherwise, the Parties agree
to return
to one another any and all financial, technical and business documents
delivered to the other party or parties in connection with the negotiation
and execution of this Agreement and shall keep the terms of this
Agreement
and all information and documents received from the Company and the
Purchaser and the contents thereof confidential and not utilize nor
reveal
or release same, provided, however, that the Purchaser will be required
to
issue a news release regarding the execution and consummation of
this
Agreement and file a Current Report on Form 8-K with the Securities
and
Exchange Commission respecting the proposed Completion contemplated
hereby
together with such other documents as are required to maintain the
currency of the Purchaser’s filings with the Securities and Exchange
Commission.
|
20.7 Except
as
otherwise provided in this Agreement, the Sellers and the Purchaser shall each
bear its own expenses incurred in connection with the negotiation and execution
of this Agreement and each other agreement, document and instrument contemplated
by this Agreement and the consummation of the transactions contemplated hereby
and thereby, it being understood that in no event shall the Company bear any
of
such costs and expenses.
20.8
|
If
any provision of this Agreement is invalid or unenforceable, the
balance
of this Agreement shall remain in
effect.
|
21.
|
With
the exception of the Shareholders having an ability solely to hold
a
direct or indirect equity interest not exceeding 5% in any publicly
traded
company, the Company and each of the Shareholders undertake and covenant
to the Purchaser that the Company and each of the Shareholders, will
not,
and that they will procure that, no company or business enterprise
in
which they have an interest whether directly or indirectly, except
as
disclosed, will not, during a period starting from the date of this
Agreement and ending on a date which shall be two years from the
Completion Date, directly or indirectly, be involved with the construction
and/or operation of either a bioethanol or biodiesel manufacturing
plant, company, business enterprise or other, located in the US States
of
Kentucky, Arkansas, Missouri, Illinois, Indiana and Tennessee in
competition, whether direct or indirect, with the Company, the Purchaser
and or the Business. The Company and each of the Shareholders acknowledge
that this restriction is reasonable and necessary
for the protection of the interests of the Purchaser, but if it shall
be
held to be void but would be valid if deleted in part or reduced
in its
application territorially or in time, such restrictions shall apply
modified as may be necessary to make it valid and enforceable.
The provisions of this
|
19
Clause
shall cease to have effect on termination of this Agreement pursuant to the
provisions of Clause 16.
22.
|
Counterparts
|
This
Agreement may be executed in any number of counterparts and by the parties
on
separate counterparts (which may be facsimile copies) but shall not be effective
until each of the parties has executed at least one counterpart. Each
counterpart shall constitute an original of this Agreement but all the
counterparts shall together constitute but one and the same
instrument.
23.
|
Governing
Law and Jurisdiction
|
23.1
|
Submission
to Jurisdiction; Consent to Service of
Process.
|
23.1.1
|
The
Parties hereto hereby irrevocably submit to the non-exclusive jurisdiction
of any federal or state court located within the State of New York
over
any dispute arising out of or relating to this Agreement or any of
the
transactions contemplated hereby and each Party hereby irrevocably
agrees
that all claims in respect of such dispute or any suit, action proceeding
related thereto may be heard and determined in such courts. The Parties
hereby irrevocably waive, to the fullest extent permitted by applicable
law, any objection which they may now or hereafter have to the laying
of
venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the
Parties hereto agrees that a judgment in any such dispute may be
enforced
in other jurisdictions by suit on the judgment or in any other manner
provided by law.
|
23.1.2
|
Each
of the Parties hereto hereby consents to process being served by
any Party
to this Agreement in any suit, action or proceeding by the mailing
of a
copy thereof in accordance with the provisions of Section
19.
|
23.1.3
|
This
Agreement shall be governed by and construed in accordance with the
laws
of the State of New York.
|
24.
|
Post-Initial
Funding Completion Matters
|
24.1
|
Forthwith
after Initial Funding Completion, the Purchaser, the Company and
the
Shareholders all agree to use their best efforts
to:
|
(a)
|
issue
a news release reporting the Completion;
and
|
(b)
|
file
a Form 8-K within 4 business days of the execution of this Agreement
with
the Securities and Exchange Commission disclosing the terms of this
Agreement and any other information of Company and Purchaser as required
by the rules and regulations of the Securities and Exchange Commission.
|
25.
|
Pre
and Post-Completion
Matters
|
25.1
|
Forthwith
after Completion, the Purchaser, the Company and the Shareholders
all
agree to use their best efforts to:
|
(a)
|
issue
a news release reporting the Completion;
|
(b)
|
file
a Form 8-K within 4 business days of the Completion Date with the
Securities and Exchange Commission disclosing the terms of this
Agreement
|
20
with
audited financial statements of Company as well as any required pro forma
financial information or other information of Company and Purchaser as required
by the rules and regulations of the Securities and Exchange Commission;
and
(c)
|
not
less than 10 days prior to the date the Shareholders shall take office
as
the directors of the Purchaser, file with the Securities and Exchange
Commission a report on Form 14(f) disclosing the change in control
of
Purchaser and
use all commercially reasonable efforts to mail the definitive Form
14(f)
to shareholders as soon as permissible and practicable after the
filing of
the Form 14(f).
|
[Remainder
of Page Left Intentionally Blank]
21
AS
WITNESS WHEREOF
this
Agreement has been signed by and on behalf of the Parties the day and year
first
before written.
SIGNED
for and on behalf of )
|
|||
/s/ Xxxx X. XxXxxxx | |||
Xxxx X. XxXxxxx |
|||
Chief Executive Officer |
SIGNED
for and on behalf of )
The
Four Rivers BioEnergy Company Inc.)
|
|||
/s/ Xxxx Xxxxxx | |||
Xxxx Xxxxxx |
|||
President
|
SIGNED
by )
/s/
Xxxxx Xxxx Xxxxxxxxx
Xxxxx
Xxxx Xxxxxxxxx )
SIGNED
by )
/s/
Xxxx X. Xxxxxxx
Xxxx
X
Xxxxxxx )
SIGNED
by )
/s/
Xxxx Xxxxxx
Xxxx
Xxxxxx )
SIGNED
by )
/s/
Xxxxxxxx X. Xxxx
Xxxxxxxx
X Xxxx )
SIGNED
by )
/s/
Xxxxxxx Xxxx Xxxxxxx
Xxxxxxx
Xxxx Xxxxxxx )
SIGNED
by )
/s/
Xxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx )
Schedule
1
22
Details
of the Company
Name
|
The
Four Rivers BioEnergy Company Inc
|
Registered
Number
|
0659433
|
Authorized
Share Capital
|
1,000
shares of $0.001each
|
Issued
Share Capital
|
850
|
Directors
|
Xxxx
Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxxx
Xxxx
and Xxxx Xxxxxxx
|
Secretary
|
Xxxxx
Xxxx Xxxxxxxxx
|
Schedule
2
23
Details
of the Shareholders
Name
|
Address
|
No.
of Acquisition Shares
|
No.
Consideration Shares
|
Xxxxxxxxx,
Xxxxx Xxxx
|
00
Xxxxxxxxxx Xxxxx, Xxxxxx-xx-Xxxxxx, Xxxxxx XX00 0XX, Xxxxxx
Xxxxxxx
|
98
|
4,688,435
|
Xxxxxxx,
Xxxxxx Xxxxxxx
|
Xxxx
Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxx XX0 0XX, Xxxxxx Xxxxxxx
|
81
|
3,875,135
|
Xxxxxxx,
Xxxx X.
|
00
Xxxx Xxxx, Xxxxxx, Xxxxxxxx, 00000 Xxxxxx Xxxxxx of America
|
61
|
2,918,312
|
Xxxxxx,
Xxxx
|
000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxxxx XX0 0XX, Xxxxxx
Xxxxxxx
|
216
|
10,333,694
|
Xxxx,
Xxxxxxxx X.
|
Xxxxxxx
Xxxxx, Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxx XX00 0XX, Xxxxxx
Xxxxxxx
|
178
|
8,515,729
|
Xxxxxxx,
Xxxxxxx Xxxx
|
Xxxxxxxxx
Xxxx Farm, Xxxxxx Road, Bishops Itchington, Xxxxxxx, Xxxxxxxxxxxxx,
XX00
0XX, Xxxxxx Xxxxxxx
|
38
|
1,817,966
|
Xxxxxxxxx,
Xxxxxx
|
Xxxxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxx, Xxxx, XX00 0XX, Xxxxxxxxx, Xxxxxx
Xxxxxxx
|
178
|
8,515,729
|
Schedule
3
24
Details
of the Purchaser
Name
|
|
Registered
Number
|
00-0000000
(IRS Employer Identification Number)
|
Issued
Securities at date of Completion
|
128,042,778
|
Directors
|
Xxxx
X. XxXxxxx
|
Secretary
|
Xxxx
X. XxXxxxx
|
Schedule
4
25
Shareholders
Warranties
Part
I
Warranties
The
Shareholders (hereinafter in this Schedule collectively referred to as
“Warrantors”) hereby jointly and severally warrant in all material respects and
represent to the Purchaser with the intent that it will rely thereon in entering
into this Agreement and in approving and completing the transactions
contemplated hereby, that as of the date of the Agreement:
1.
|
The
Company - Company Status and
Capacity
|
1.1
|
The
Company is a company duly incorporated and validly subsisting under
the
laws of the State of Kentucky, and the Subsidiary is a Company duly
incorporating and validly subsisting under the laws of England and
Wales.
|
1.2
|
The
Company has the legal power, capacity and authority to own its assets
and
to carry on the Business and to enter into and complete this Agreement,
and the Subsidiary has the legal power, capacity and authority to
own its
assets;
|
1.3
|
The
details of the Company set out in Schedule 1 are true and accurate
in all
respects.
|
1.4
|
The
Subsidiary is a wholly owned subsidiary of the
Company.
|
2.
|
The
Company - Capitalization
|
2.1
|
The
authorized capital of the Company consists of 1,000 shares of common
stock, $0.001 par value per share, of which 850 shares (being the
Acquisition Shares) have been issued to the Shareholders and are
credited
as fully paid. The Allotment Shares will, on issue and allotment,
be free
from any Encumbrances and the Acquisition Shares are, at the date
of this
Agreement, and will remain on Completion free from any Encumbrances
save
in the case of the Allotment Shares, for the preemptive rights attached
to
such shares in the Company’s Articles of Incorporation which have been
waived by the Shareholders to allow for allotment of the Allotment
Shares.
|
2.2
|
The
authorized capital of the Subsidiary consists of 1,000 ordinary shares
of
£1.00 each of which 1,000 shares have been issued to the Company and
are
credited as fully paid. The 1,000 share of Subsidiary issued to the
Company will, on issue and allotment, be free from any Encumbrances,
and
at the date of this Agreement, and will remain on Completion free
from any
Encumbrances.
|
2.3
|
No
legal person, firm or corporation has any agreement, option, warrant
or
any other right capable of becoming an agreement, option, warrant
pre-emptive right or right for the acquisition of the Shares held
by the
Shareholders or for the purchase, subscription or issuance of any
of the
unissued shares in the capital of the Company or the
Subsidiary.
|
3.
|
The
Company Records
|
3.1
|
The
Articles of Incorporation and Bylaws of the Company and the Memorandum
and
Articles of Association of the Subsidiary have not been altered since
their respective incorporation dates..
|
3.2
|
The
minute books of the Company and the Subsidiary are complete in all
material respects and each of the minutes contained therein accurately
reflect in all material respects the actions that were taken at a
duly
called and held meeting or by consent without a meeting. The Company
and
|
26
the
Subsidiary is not in violation or breach of, or in default with respect to,
any
term of its Articles of Incorporation or Bylaws or the Memorandum and Articles
of Association, as applicable. The statutory books and records of the Company
have been kept up to date and maintained in accordance with the requirements
of
the laws of Kentucky. All necessary filings have been made to the relevant
authorities or organizations with responsibility for regulation. The statutory
books of the Subsidiary have been maintained in the same manner as the Company
and in accordance with the laws of England and Wales and all necessary filings
have been made with the Companies Registry.
4.
|
Directors
and Employees
|
The
directors of the Company are Xxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxxxx,
Xxxxx Xxxxxxxxx, Xxxxxxxx Xxxx and Xxxx Xxxxxxx. The remuneration and expenses
paid to the directors is as set out in the contracts with the Company or the
Subsidiary and as otherwise disclosed to the Purchaser. Except as disclosed
to
the Purchaser the directors of the Company and of the Subsidiary are not in
receipt of any remuneration or benefits of any kind from the Company, or for
which the Company is or may be made responsible and the level of their
remuneration remain fixed for the duration of the interim period. There are
no
employees of the Company and/or the Subsidiary and other than the remuneration
to be paid to the directors as referred to above, and neither the Company nor
the Subsidiary have any responsibility to pay for the services of any third
parties acting as consultants to the Company and/or the Subsidiary or in any
other capacity except as disclosed.
5.
|
Trading
|
Neither
the Company nor the Subsidiary are, or have been, since their respective dates
of incorporation, a party to any agreement or obligation which is of an unusual
or abnormal nature or outside the ordinary and normal course of business or
which is not of an entirely arms length nature.
6.
|
Execution
and Performance of
Agreement
|
The
execution and delivery of this Agreement, and the completion of the transactions
contemplated hereby, have been duly and validly authorized by all necessary
corporate action on the part of the Company, and:
(i)
|
does
not violate the Articles of Incorporation or Bylaws of the Company
or
result in any material breach of, or default under, any loan agreement,
mortgage, deed of trust, or any other agreement to which the Company
is a
party;
|
(ii)
|
give
any person any right to terminate or cancel any material agreement
including any right or rights enjoyed by the Company and its
Subsidiary;
|
(iii)
|
result
in any alteration of the Company's and or the Subsidiary’s obligations
under any agreement to which the Company and or its Subsidiary is
a party;
|
(iv)
|
result
in the creation or imposition of any lien, Encumbrance or restriction
of
any nature whatsoever in favor of a third party upon or against the
Company’s and or the Subsidiary’s assets;
|
(v)
|
result
in the imposition of any tax liability to the Company and or the
Subsidiary, nor violate any court order or decree to which either
the
Company and or the Subsidiary is subject
to;
|
27
7.
|
Business
Plan and Project Overview
|
The
Business Plan and the Project Overview including the financial model and
assumptions contained therein, have been prepared carefully and in good faith
based upon information available to the Company and the Shareholders which
to
the best of their knowledge is accurate and complete.
28
Part
II
Warranties
Each
of
the Warrantors hereby jointly and severally warrant in all material respects
and
represent to the Purchaser with the intent that it will rely thereon in entering
into this Agreement and in approving and completing the transactions
contemplated under the Agreement, as of the Completion Date, as follows (Various
references are made below to the Subsidiary and in the absence of such
references, where the context permits, references to the Company shall include
references to the Subsidiary):
1.
|
Part
I Warranties
|
The
statements set out in Part I of this Schedule 4 relating to the Company remain
true and accurate in all material respects except that the Company has pursuant
to the terms of this Agreement issued and allotted the Allotment Shares and
has
entered into employment contracts and made appointments and or engaged the
services of various individuals as disclosed to the Purchaser and has entered
into the Completion Agreements. In particular, but without prejudice to the
generality of the foregoing, the statement set out in paragraph 7 remains true
and accurate with respect to the Business Plan as revised and or amended during
the Interim Period to the extent that it has been revised and or amended.
2.
|
Records
and Financial Statements
|
2.1
|
The
Articles of Incorporation or Bylaws of the Company and the Memorandum
and
Articles of Association of the Subsidiary have not been altered since
their respective incorporation dates, except as filed in the record
books
of the company.
|
2.2
|
The
minute books of the Company and the Subsidiary are complete in all
material respects and each of the minutes contained therein accurately
reflect in all material respects the actions that were taken at a
duly
called and held meeting or by consent without a
meeting.
|
2.3
|
Neither
the Company nor the Subsidiary is in violation or breach of, or in
default
with respect to, any term of their respective Articles of Incorporation,
Bylaws or Memorandum and Articles of
Association.
|
2.4
|
The
statutory books and/or records of the Company and the Subsidiary
are up to
date and maintained in accordance with good
practice.
|
3.
|
Subsidiary
Companies
|
The
Subsidiary is the only subsidiary company owned by the Company and there are
no
other companies or undertakings in which the Company has an interest, and no
contracts or arrangements in existence, or under consideration for the Company
to acquire an interest in any other companies or undertakings. The nature of
the
Business does not require the Subsidiary to register or be qualified to carry
on
business in any other jurisdiction.
4.
|
Litigation
|
4.1
|
Neither
the Company nor the Subsidiary is engaged in any material litigation
or
arbitration, prosecution or other legal proceedings and after making
due
and careful enquiries there are no facts which are likely to give
rise to
any such proceedings.
|
29
5.
|
The
Company - Records and Management Accounts and Financial
Statements
|
5.1
|
The
Management Accounts have been prepared with due care and attention
and
they show with reasonable accuracy the financial liabilities and
commitments of the Company as at the date to which they were prepared.
|
5.2
|
All
of the bank accounts of the Company, their locations, numbers and
authorized signatories have been disclosed to the Purchaser and except
as
disclosed to the Purchaser, the Company and the Subsidiary have no
other
bank accounts.
|
5.3
|
No
dividends or other distributions on any shares in the capital of
the
Company have been made, declared or authorized since the date of
the last
set of Management Accounts.
|
5.4
|
No
payments of any kind have been made or authorized since the date
of the
last Management Accounts to or on behalf of the Warrantors or to
or on
behalf of officers, directors, shareholders or employees of the Company
or
under any management agreements with the Company, except payments
made in
the ordinary course of business and at the regular rates of salary
or
other remuneration payable to them.
|
5.5
|
There
are no pension, profit sharing, group insurance or similar plans
or other
deferred compensation plans affecting the Company, except as set
forth in
the last Management Accounts.
|
5.6
|
The
Company is not indebted to the Warrantors nor to any director or
officer
of the Company or any connected person except in respect of bona
fide
business transactions incurred in the normal course of business and
no
Shareholder, director or officer is under any financial obligation
to the
Company except for advances in the normal course of
business.
|
5.7
|
The
Company Financial Statements, and to the extent required the Financial
Statements, are true and accurate in all material respects and that
the
Company Financial Statements have been audited for the period from
inception to March 31, 2006 (or such other period as may be permitted
in
writing by the Purchaser), by an independent registered certified
public
accounting firm who is registered with, and has audited the Company
Financial Statements in accordance with the standards of, the Public
Company Accounting Oversight Board (United States of America), and
that
the Financial Statements from inception to June 30, 2007, if required,
have been reviewed in accordance with the PCAOB and are in conformity
with
accounting principles generally accepted in the
US.
|
5.8
|
Since
the date of the last Management
Accounts:
|
(i)
|
there
has not been any material adverse change in the consolidated financial
position or condition of the Company, its liabilities or the Company
assets or any damage, loss or other change in circumstances materially
affecting the Company, the Business or the Company’s assets or the
Company’s right to carry on the Business, other than changes in the
ordinary course of business;
|
(ii)
|
there
has not been any damage, destruction, loss or other event (whether
or not
covered by insurance) materially and adversely affecting the Company,
the
Business or the Company’s assets;
|
(iii)
|
there
has not been any increase in the compensation payable or to become
payable
by the Company to the Warrantors or to any of the Company 's officers,
employees or agents or any bonus, payment or arrangement made to
or with
any of them;
|
(iv)
|
the
Business has been and continues to be carried on in the ordinary
course;
|
30
(v)
|
the
Company has not waived or surrendered any right of material
value;
|
(vi)
|
the
Company has not discharged or satisfied or paid any lien or encumbrance
or
obligation or liability other than current liabilities in the ordinary
course of business, and
|
(vii)
|
no
capital expenditures in excess of US $10,000 individually or US $50,000
in
total have been authorized or made.
|
6.
|
The
Company - Income and Corporate Tax
Matters
|
6.1
|
All
tax returns and reports of the Company and its Subsidiary required
by law
to be filed have been filed and are true, complete and correct in
all
material respects, and any taxes payable in accordance with any return
filed by the Company or its Subsidiaries or in accordance with any
notice
of assessment or reassessment issued by any taxing authority have
been
paid when due.
|
7.
|
The
Company - Applicable Laws and Legal
Matters
|
7.1
|
The
Company and the Subsidiary have complied with all laws in the
jurisdictions in which they operate and are not in material breach
of any
such laws. The Company and the Subsidiary hold all material approvals,
licenses and permits as may be requisite for carrying on the Business
which approvals, licenses and permits have been in all material respects
maintained and continue to be in good standing except where the failure
to
obtain or maintain such licenses or permits would not have a material
adverse effect on the Business.
|
7.2
|
Neither
the Company nor the Subsidiary have been charged with or received
notice
of breach of any laws, ordinances, statutes, regulations, by-laws,
orders
or decrees to which they are subject or which applies to them the
violation of which would have a material adverse effect on the Business,
and neither the Company nor the Subsidiary are in breach of any laws,
ordinances, statutes, regulations, by-laws, orders or decrees the
contravention of which would result in a material adverse impact
on the
Business.
|
7.3
|
There
is no material litigation or administrative or governmental proceeding
pending against or relating to the Company or the Subsidiary or the
Business and there has not been any deliberate act or omission of
the
Company or the Subsidiary that would form any material basis for
any such
action or proceeding.
|
7.4
|
Neither
the Company nor the Subsidiary have made any voluntary assignment
or
proposal under applicable laws relating to insolvency and no insolvency
petition has been filed or presented against the Company or the Subsidiary
and no order has been made or a resolution passed for the winding-up,
dissolution or liquidation of the Company or the Subsidiary and neither
the Company nor the Subsidiary are aware of any circumstances which
could
give rise to such orders or
resolutions.
|
7.5
|
Neither
the Company nor the Subsidiary is a party to any collective agreement
relating to the Business with any labor union or other association
of
employees and no part of the Business has been certified as a unit
appropriate for collective bargaining or has made any attempt in
that
regard.
|
7.6
|
Neither
the Company nor the Subsidiary is a party to any agreement which
provides
for the payment of finder's fees, brokerage fees, commissions or
other
fees or amounts which are or may become payable to any third party
in
connection with the execution and delivery of this Agreement and
the
transactions contemplated herein.
|
31
8. The
Company Assets - Ownership and Condition
8.1
|
Neither
the Warrantors nor any other person, firm or corporation own any
assets
used by the Company and or the Subsidiary in operating the Business
which
are material to the Company and or the
Subsidiary.
|
8.2
|
The
Company and the Subsidiary are the legal and beneficial owners of
their
respective assets from and clear of all mortgages, liens, charges,
pledges, security interests, encumbrances or other claims
whatsoever.
|
8.3
|
No
person, firm or corporation has any agreement or option or a right
capable
of becoming an agreement for the purchase of any of the assets of
the
Company or the Subsidiary.
|
8.4
|
The
Company and/or the Subsidiary maintain public liability insurance
and
insurance against loss or damage to the Company’s and/or the Subsidiary’s
assets.
|
8.5
|
The
Company has entered into the Completion Agreements and has performed
and
as necessary has taken action to ensure that the Parties to such
Completion Agreements have performed all of the provisions of such
Agreements which are material to progress pursuant to the provisions
of
the Business Plan, and neither the Company nor the other Parties
to such
Agreements are in breach of any of the terms and provisions of the
Completion Agreements
|
8.6
|
There
has not been any default in any material obligation of the Company
and/or
the Subsidiary or any other party to be performed under any contract
material to the Company or the Subsidiary and the Company and the
Warrantors are not aware of any default in the obligations of any
other
party to any of the contracts material to the
Business.
|
8.7
|
There
are no agreements, commitments or understandings relating to severance
pay
or separation allowances on termination of employment of any employee
of
the Company and/or the Subsidiary. Neither the Company nor the Subsidiary
are obliged to pay benefits or share profits with any employee after
termination of employment except as required by
law.
|
9.
|
The
Company Assets - The Company Goodwill and Other
Assets
|
9.1
|
The
Company and the Subsidiary carry on the Business under the name
“The
Four Rivers BioEnergy Company Inc.”
and variations thereof and under no other business or trade names.
The
Warrantors do not have any knowledge of any infringement by the Company
or
the Subsidiary of any patent, trademark, copyright or trade
secret;
|
9.2
|
Except
for the Subsidiary, the Company does not own any subsidiaries and
does not
otherwise own, directly or indirectly, any shares or interest in
any other
corporation, partnership, joint venture or
firm.
|
9.3
|
Since
the date of the last Management Accounts the business has been carried
on
in the ordinary course and the Company has not entered into any material
agreement or commitment except in the ordinary
course.
|
10.
|
The
Company - Health and
Safety
|
The
Company and/or its Subsidiaries have complied in all material respects with
the
requirements of all health and safety legislation operative in the U.S. and
the
other jurisdictions in which the Company operates. There are no outstanding
claims or matters which represent a breach of such laws and there are no
circumstances or events which could give rise to such claims.
32
Schedule
5
Purchaser’s
Warranties
Except
as
set forth in the Attachments to this Schedule (the “Attachment Schedules”) which
Attachment Schedules shall be deemed a part hereof and to qualify any
representation or warranty otherwise made herein to the extent of such
disclosure, and except as set forth in the SEC Reports, the Purchaser hereby
makes the representations and warranties set forth below to the Company and
each
of the Shareholders:.
1.
|
Corporate
Matters
|
1.1
|
The
Purchaser has full power and authority to enter into and perform
this
Agreement and any agreement or document to be entered into by the
Purchaser pursuant to this Agreement. This Agreement and the other
documents to be executed by the Purchaser pursuant to this Agreement
constitute or, when executed, will constitute, valid and binding
obligations on the Purchaser which are enforceable in accordance
with
their respective terms.
|
1.2
|
The
Purchaser has taken all corporate and other action necessary to enable
it
to enter into and perform this Agreement and any agreement or document
to
be entered into pursuant to this Agreement and has obtained all approvals
and consents required by it for the performance by it of the transactions
contemplated by this Agreement and any agreement or document to be
entered
into pursuant to this Agreement.
|
1.3
|
The
execution and delivery of, and the performance by the Purchaser of
its
obligations under, this Agreement and any agreement or document entered
into pursuant to this Agreement will
not:
|
(i)
|
result
in a breach of any provision of the constitutional documents of the
Purchaser; or
|
(ii)
|
result
in a breach of any order, judgment or decree of any court or governmental
agency or Encumbrance to which the Purchaser is a party or by which
the
Purchaser or any of its assets is
bound.
|
1.4
|
The
Purchaser has not created or granted or agreed to create or grant
any
Encumbrance in respect of any of its
Securities.
|
1.5
|
Except
as contemplated by this Agreement, there are no agreements or arrangements
in force which provide for the present or future allotment, issue,
transfer, redemption or repayment of, or grant to any person of the
right
(whether conditional or otherwise) to require the allotment, issue,
transfer, redemption or repayment of, any Securities or loan capital
of
the Purchaser (including any option or right of pre-emption or
conversion).
|
1.6
|
The
Purchaser is not, nor has it ever been the holder or beneficial owner
of,
nor has it agreed to acquire:
|
(i)
|
any
share or loan capital of any corporate body (whether incorporated
in the
United States of America or elsewhere);
or
|
(ii)
|
any
interest in any firm, partnership, association, organization or
trust.
|
1.7
|
The
Purchaser does not control or take part in the management of any
corporate
body, firm, partnership, association, organization or
trust.
|
1.8
|
The
details of the Purchaser set out in Schedule 3 are true and accurate
in
all respects.
|
33
1.9
|
The
Purchaser has at all times carried on business and conducted its
affairs
in all respects in accordance with its constitution for the time
being in
force and any other documents to which it is or has been a
party.
|
1.10
|
The
Purchaser is empowered and duly qualified to carry on business in
all
jurisdictions in which it now carries on
business.
|
1.11
|
Due
compliance has been made with all legal requirements in connection
with
the formation of the Purchaser, the allotment or issue of any of
its
Securities and other securities and the payment of
dividends.
|
1.12
|
Except
as set forth in the Attachment Schedule 1.12 all returns, particulars,
resolutions and documents required to be filed with any authority
in the
United States of America, or any other authority, in respect of the
Purchaser have been duly filed within the relevant time limits and
were
true, accurate and correct in all material
respects.
|
1.13
|
The
authorization, allotment and issue of the Consideration Shares complies,
to the extent applicable, with the constitutional documents of the
Purchaser and all relevant legal and regulatory
requirements.
|
1.14
|
The
Consideration Shares will be allotted fully paid and issued free
from all
claims, expenses and Encumbrances and together with all rights attached
to
them at the date of this Agreement and
subsequently.
|
1.15
|
The
Consideration Shares on issue will rank pari passu in all respects
with
the Purchaser’s current issued Securities, including the right to
participate in all dividends and other distributions thereafter made
or
paid in respect of the Securities.
|
The
Purchaser and its Directors have full power and authority under the Purchaser’s
constitutional documents and from resolutions passed by its members in general
meeting to allot and issue the Consideration Shares without any other sanction
or consent by members of the Purchaser or any class of them for the allotment
and issue of the Consideration Shares which has not been unconditionally
obtained.
1.16
|
The
allotment and issue of the Allotment Shares and the transfer of
Acquisition Shares to the Purchaser complies with all relevant legal
and
regulatory requirements.
|
2.
|
Finance
|
2.1
|
Except
for the commitments contained in this Agreement, which are conditional
upon the Purchaser securing support for its private placement fundraising
activities, the Purchaser has no outstanding capital commitments.
The
Purchaser has not made or agreed to make any capital expenditure
or
incurred or agreed to incur any capital
commitments.
|
2.2
|
The
Purchaser has not lent any money which has not been repaid to
it.
|
2.3
|
There
are no liabilities (including contingent liabilities) which are
outstanding on the part of the
Purchaser.
|
2.4
|
The
Purchaser has no outstanding loan capital, nor has it agreed to create
or
issue any such loan capital.
|
2.5
|
Since
the date of its incorporation the Purchaser has
not:
|
34
(i)
|
incurred
or agreed to incur any borrowing or indebtedness which it has not
repaid
or satisfied;
|
(ii)
|
lent
or agreed to lend any money which has not been repaid to it;
or
|
(iii)
|
acquired
the benefit of any debt, present or
future.
|
2.6
|
Except
as set forth in the Attachment Schedule 2.6, since the date of its
incorporation, the Purchaser is not a party to nor has it any outstanding
obligation under nor has it agreed to enter
into:
|
(i)
|
any
loan agreement, debenture, bond, stock, acceptance or documentary
credit
facility, xxxx of exchange, promissory note, finance lease, debt
or
inventory financing, discounting or sale of receivables or factoring
agreement or sale and lease back arrangement;
or
|
(ii)
|
any
other arrangement, except as contemplated in this Agreement, the
purpose
of which is to raise money or provide finance or
credit.
|
3.
|
Business
Transfer Agreement
|
Since
incorporation the Purchaser has not conducted any business other than the
Pre-Completion Business. The Purchaser having entered into the Business Transfer
Agreement has transferred all assets and liabilities to the Subsidiary company
which is a party to the Business Transfer Agreement. As a result of transferring
all of the assets and liabilities associated with the Pre-Completion Business
out of the Purchaser under the terms of the Business Transfer Agreement prior
to
the Completion Date, as well as assigning all agreements related thereto, the
Purchaser has no remaining liabilities or obligations relating to the
Pre-Completion Business.
4.
|
Trading
|
4.1
|
The
Purchaser is not and has not since its date of incorporation been
a party
to any agreement, arrangement or obligation which is of an unusual
or
abnormal nature or outside the ordinary and normal course of business
or
which is not of an entirely arms length
nature.
|
4.2
|
The
Purchaser has not entered into any guarantee or agreement for indemnity
or
for suretyship in respect of any debt, liability or obligation of
any
third party.
|
4.3
|
No
third party has entered into or provided any guarantee or agreement
for
indemnity or for suretyship or performance bond or other security
in
respect of any debt, liability or obligation of the
Purchaser.
|
4.4
|
The
Purchaser is not, nor will it with the lapse of time become, in default
under any agreement to which it is a party and, so far as the Purchaser
is
aware, there are no facts, matters or circumstances which are likely
to
give rise to any such default.
|
4.5
|
To
the best of the Purchaser’s knowledge and belief is not nor will it with
the lapse of time become liable in respect of any representation
or
warranty (whether express or implied) or any matter giving rise to
a duty
of care on its part.
|
4.6
|
Except
as set forth in the Attachment Schedule relevant to this statement
4.6 no
party to any agreement with the Purchaser is in material default
under
such agreement and, so far as the Purchaser is aware there are no
facts,
matters or circumstances which are likely to give rise to any such
default.
|
35
4.7
|
The
Purchaser has obtained all licenses, permissions, authorizations
and
consents from any person, authority or body which are necessary for
the
carrying on of its business and all such licenses, permissions,
authorizations and consents are in full force and effect and the
Purchaser
is not in breach of any of the terms or conditions of any such license,
permission, authorization or
consent.
|
4.8
|
No
party is or will be entitled to terminate or revoke any such license,
permission, authorization or consent as a result of the entry into
or
performance of this Agreement or any of the transactions contemplated
by
this Agreement.
|
4.9
|
Neither
the Purchaser (nor any person for whose acts or defaults the Purchaser
may
be vicariously liable) is involved or since the date of incorporation
of
the Purchaser has been involved in any legal or administrative or
arbitration proceedings (whether as plaintiff or defendant or otherwise)
and no such proceedings are pending or threatened and, so far as
the
Purchaser is there are no facts, matters or circumstances which are
likely
to give rise to any such
proceedings.
|
4.10
|
There
is no unfulfilled or unsatisfied judgment or court order or undertaking
or
assurance given to any court or government or governmental agency
or
regulatory body outstanding against the
Purchaser.
|
4.11
|
No
governmental or official investigation or inquiry concerning the
Purchaser
or any of its directors or employees is in progress or pending and
so far
as the Purchaser is aware there are no facts, matters or circumstances
which are likely to give rise to any such investigation or
inquiry.
|
4.12
|
The
Purchaser has conducted and is conducting its business in accordance
with
all applicable laws in the United States of America and
Canada.
|
4.13
|
The
Purchaser is not in breach of any order, decree or judgment of any
court
or any governmental or regulatory authority (whether of the United
States
of America or Canada).
|
4.14
|
The
Purchaser has not made any voluntary assignment or proposal under
the
applicable laws relating to insolvency and no bankruptcy petition
has been
filed or presented against the Company and no order has been made
or a
resolution passed for the winding-up, dissolution or liquidation
of the
Purchaser.
|
5.
|
Employment
|
5.1
|
The
Purchaser has no employees.
|
5.2
|
No
outstanding offer of employment has been made by the Purchaser to
any
person nor has any person accepted an offer of employment made by
the
Purchaser but who has not yet commenced such
employment.
|
5.3
|
Except
as set forth in the Attachment Schedule relevant to this statement
5.3
there are no contracts for services (including without limitation
consultancy agreements) between the Purchaser and any
person.
|
5.4
|
The
Purchaser does not have in existence or participate in any share
incentive
scheme or share option scheme.
|
6.
|
Pensions
|
The
Purchaser has not prior to the date of this Agreement paid, provided or
contributed towards, and the Purchaser has not proposed nor is it under any
obligation, liability or commitment whether established by trust contract,
board
resolution, service agreement, ex-gratia arrangement or
36
otherwise
and whether or not legally enforceable to pay, provide or contribute towards,
any retirement, death or disability benefit for or in respect of any present
or
past officer or employee (or any spouse, child or dependent of any of them)
of
the Purchaser and no such pension or payment is now being made voluntarily
and
no ex-gratia payments in respect of any pension have been or are proposed to
be
made by the Purchaser to any such persons.
7.
|
Assets
|
7.1
|
No
claim has been or will be made by any person to be entitled to any
Encumbrance on or over any of the assets, property or undertaking
of the
Purchaser.
|
7.2
|
There
is no dispute, directly or indirectly, between the Purchaser and
any
person relating to any of the assets of the
Purchaser.
|
8.
|
Insurance
|
8.1
|
As
of the Completion Date, to the best of the Purchaser’s knowledge and
belief, the Purchaser is not required to obtain nor does it maintain
any
policies of insurance.
|
8.2
|
Subsequent
to Completion, the Purchaser shall use its best efforts to obtain
all
required policies of insurance, as would be obtained or carried on
by a
same type of business, and shall at all material times thereafter
adequately insure against accident, damage, injury, third party loss
(including, with limitation, product liability), loss of profits
and other
risks normally insured against by persons carrying on the same type
of
business as that carried on by the Purchaser. In addition, the Purchaser
shall use its best efforts to have all policies of insurance effected
by
or for the benefit of the Purchaser in the future to be then in full
force
and effect and shall use its best efforts not to take any action
or omit
to take any action which could make any such policy of insurance
void or
voidable or which would likely to result in an increase in premium.
|
9. SEC
Reports
“SEC
Reports” shall mean all reports, schedules, forms, statements and other
documents filed by the Purchaser with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, or the Exchange Act of 1934,
as
amended, from inception on January 28, 2005 through the Completion
Date.
37
ATTACHMENT
SCHEDULES TO
SCHEDULE
5 “PURCHASER WARRANTIES”
OF
THE ACQUSITION AGREEMENT DATED MARCH 26, 2007
Schedule
1.12
The
Purchaser believes that not all returns, particulars, resolutions and documents
required to be filed with any authority in the United States of America, or
any
other authority, in respect of the Purchaser have been duly filed within the
relevant time limits and were true, accurate and correct in all material
respects.
See the
Purchaser’s SEC Reports, including but not limited to Note 2 to the Purchaser’s
Financial Statements filed as part of the Purchaser’s Annual Report on Form
10-KSB for the fiscal year ended October 31, 2006, filed with the SEC on
February 13, 2007, relating to the Purchaser’s treatment of “income taxes”.
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109, “Accounting
for Income Taxes”. A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting. Deferred income
taxes
and tax benefits are recognized for the future tax consequences attributable
to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases, and for tax loss and credit
carry-forwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The Company
provides for deferred taxes for the estimated future tax effects attributable
to
temporary differences and carry-forwards when realization is more likely than
not.
To the
best of the Purchaser’s knowledge, the Purchaser’s failure to file, if any, of
the returns, particulars, resolutions and documents required to be filed with
any authority in the United States of America, or any other authority, if
applicable, will not cause a material adverse effect on the
Purchaser.
In
addition, the Purchaser did not file within the applicable time periods its
Quarterly Report on Form 10-QSB for the nine months ended July 31,
2006.
Schedule
2.6
See
the
Purchaser’s SEC Reports, including but limited to, the Annual Report on Form
10-KSB for the fiscal year ended October 31, 2006, filed with the SEC on
February 13, 2007.
Schedule
4.6
The
British Columbia Securities Commission (“BC Commission”) issued to MDMI
Technologies Inc. (“MDMI”) an Investigation Order (the “Investigation Order”) on
February 28, 2005 and a Cease Trade Order (the “Trade Order”; the Trader Order
and Investigation Order shall be collectively referred to as the “Orders”) on
June 15, 2005, on MDMI’s privately traded securities. The Purchaser believes
that the Orders were issued as a result of MDMI’s failure to file a Report of
Exempt Distribution and possibly various other reports with the BC Commission.
The Purchaser further believes that if MDMI fails to resolve the issues with
respect to the Orders, and until the BC Commission revokes the Orders, its
results and operations may be significantly impacted as a result of it having
an
exclusive license agreement with MDMI pursuant to which it acquired the
exclusive worldwide license, right and permission to manufacture, market, and
distribute a medical pessary device for the treatment of urinary incontinence
called the “Gynecone”, and a manufacturing agreement with MDMI under the terms
of which the Purchaser agreed for an indefinite term to purchase products
developed by MDMI according to its specifications at a price of $10 per urinary
incontinence apparatus unit produced. As described in the Recent Corporation
Developments section and “Plan of Operations” section of the Purchaser’s Annual
Report on Form 10-KSB, the Purchaser’s current plan of operation is to develop
and market the Gynecone device and secure agreements and/or working
relationships with potential distributors of the Gynecone device. If
aforementioned results in a serious constraint on MDMI’s ability to finance
their business and operations and impair their ability to continue as a going
concern, the Purchaser’s ability plan of operation will be
38
impaired
and its results of operations and its financial position will be significantly
impacted, and it maybe forced to cease its operations.
Schedule
5.3
Effective
as of the date of this Agreement, the Purchaser entered into an Employment
Agreement with Xxxx X. XxXxxxx, its Chief Executive Officer, Chief Financial
Officer, Secretary and Treasurer. The terms of Xxxx X. XxXxxxx’x Employment
Agreement is set forth in the Purchaser’s SEC filings.
39
Schedule
6
Part
I
Initial
Funding Agreements
Initial
Funding Completion shall be conditional upon execution of the agreements set
out
in paragraphs 1 and 2 below. For the purposes of this Schedule 6 execution
means the signature, dating, exchange between the parties to such agreements,
of
the agreements, and having such parties take all corporate and other action
necessary to enable them to enter into and perform such agreements and any
agreement or document to be entered into in connection with such agreements.
No.
|
Condition
|
1
|
Employment
Agreements to be entered into during the Interim Period between Company
and each of Xxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxx Xxxx and Xxxx Xxxxxxx.
|
2
|
An
option agreement on the site, subject to successful Initial Funding,
or an
agreement in principle (which may be in the form of correspondence)
indicating a high level of certainty that one or both of the sites
will
become available for the project described in the Business
Plan.
|
40
Part
II
Detailed
schedule of expenditures for which the Initial Funding may be used
for.
Initial
Funding Budget (2 Pages)
41
Schedule
7
Completion
Agreements
Completion
shall be conditional upon execution of the agreements (in the case of the EPC
document referred to as a “contract”) and the provision of the documents and in
the case of item 13, the confirmation, referred to below. For the purposes
of
this Schedule, execution means the signature, dating and exchange between the
parties to such agreements, of the agreements. In the case of the agreements
to
be executed and documents to be provided by the Company, the conditions shall
become satisfied upon delivery of copies thereof to the Purchaser in a form
acceptable to the Purchaser, and in the case of the confirmation to be provided
by the Purchaser (see item 13) on the date of provision of such confirmation
by
the Purchaser to the Company. It is acknowledged by the Purchaser that the
agreements to be executed by the Company will need to be made conditional upon
Completion of this Agreement.
No.
|
Condition
|
|
1
|
General
|
All
the conditions set forth in Schedule 6 have been satisfied.
|
2
|
Company
|
Execution
of Agreements with banks or other financial institutions which provide
for
the extension of loan financing or a credit facility to the
Company/Purchaser in amounts and subject to terms which, with the
Main
Funding to be provided by Purchaser, will be sufficient to fund the
Project based on the costs and expenses identified in the Business
Plan
and the Budget (see 3 below).
|
3
|
Company
|
Completion
and delivery to the Purchaser of a detailed Budget for the Project.
|
4
|
Company
|
Execution
of employment agreements between the Purchaser and each of Xxxx Xxxxxx,
Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxxx Xxxx
and Xxxx
Xxxxxxx, including at the option of the Company,
with
one of, a US GAAP qualified and SEC and Sarbanes Oxley familiar CFO,
or, a
competent CFO and a US GAAP qualified and SEC and Sarbanes Oxley
familiar
consultant to assist that CFO.
|
5
|
Company
|
Provision
to the Purchaser of a thorough environmental analysis which reveals
no
fatal flaws in the project, i.e. contains nothing which would
fundamentally obstruct or prevent implementation.
|
6
|
Company
|
Execution
of an EPC (Engineering, Procurement and Construction) Contract with
a
contractor which provides for delivery by that contractor of all
of the
deliverable items and services including process technology and which
satisfies the criteria for such Agreement as identified in Attachment
5 to
the PO “EPC
Contract and O&M Philosophy”
|
7
|
Company
|
Preparation
of a strategy and procedure for provision of operation and maintenance
services providing for necessary operation and maintenance services
to
ensure operation and maintenance of the plant.
|
8
|
Company
|
Execution
of agreements providing for the acquisition and/or the lease of a
site
meeting criteria as referred to in the Project Overview for the sites
under consideration as referred to in the Part I Conditions Precedent
to
this Agreement.
|
9
|
Company
|
Written
confirmation that all approvals and permits (including in particular
an
air permit) which are essential prerequisites to the commencement
of plant
construction at the site, have either been obtained or the provision
of
satisfactory assurances that all such permits and approvals can and
will
be obtained prior to construction commencement. Such confirmation
to be
supported by details of the permits obtained or of correspondence
or
records of meetings and discussions relating to such approvals and
permits.
|
10
|
Company
|
Execution
of initial supply agreements and offtake agreements providing for
the
supply of process feedstock in the case of the supply agreements
and for
the sale/distribution of finished products in the case of offtake
agreements. Such agreements to contain provisions as to quantities
and pricing mechanisms which are consistent with achieving the financial
assumptions and forecasts contained in the Business Plan. Alternatively,
the delivery to Purchaser by Company of a detailed strategy for
acquisition of processed feedstocks and the sale/distribution of
finished
products which identifies potential suppliers and customers willing,
in
principle, to enter into agreements with Company on terms which are
consistent with achieving the financial assumptions and forecasts
contained in the Business Plan.
|
11
|
Company
|
Execution
of Agreements with all necessary companies and/or authorities providing
for the transport to and from the sites of process feedstock and
finished
products in quantities sufficient to support the reasonableness of
the
financial assumptions and forecasts contained in the Business Plan,
including as necessary transportation arrangements by water, road
and
rail.
|
12
|
Company
|
Agreements
in principle for the supply of necessary utilities to the site or
provision of satisfactory assurances that sufficient supplies of
power,
water and communication facilities can and will be made available
to the
site.
|
13
|
Purchaser
|
The
Purchaser to have successfully confirmed that an additional $35,000,000
net has been deposited into a designated escrow account.
|
50
42
Schedule
8
Business
Plan
43
Exhibit
1
Voting
Agreement
TO: The
Four
Rivers BioEnergy Company Inc. and Med-Tech Solutions, Inc.
To
Whom
It May Concern:
This
letter Agreement (“Agreement”) will confirm my agreement to vote all shares of
The Four Rivers BioEnergy Company Inc., a Kentucky corporation (“4Rivers”),
voting stock over which I have voting control during period beginning on the
date of this Agreement and until the Completion Date (as defined in the
Acquisition Agreement (the “Acquisition Agreement”) dated March 26, 2007 entered
into by and among 4Rivers, Med-Tech Solutions, Inc. (“Med-Tech”) and all of the
shareholders of 4Rivers signatories thereto) (the “Term”) in favor of a
resolution presented to the shareholders of 4Rivers for the purposes of (i)
electing a Purchaser Representative (as defined in the Acquisition Agreement)
on
the board of directors of 4Rivers, or (ii) removing the Purchaser Representative
from the board of directors of 4Rivers and appointing a replacement Purchaser
Representative, in accordance with the directions of a majority of the directors
of Med-Tech then in place. This Agreement is given in consideration of, and
as a
condition to enter into such Acquisition Agreement and is not revocable by
me
for any reason during the Term of the Agreement.
NAME
OF SHAREHOLDER:
__________________________________________
By:
_______________________________________
Name:
Title:
Number
of Shares of Voting
Stock
Beneficially Owned:
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44
Exhibit
2
Main
Funding Release Agreement
RELEASE
NOTICE AGREEMENT
THIS
RELEASE NOTICE AGREEMENT (this “Agreement”)
is
made as of _________________ ____, 2007, by and among The Four Rivers BioEnergy
Company Inc., a Kentucky corporation (the “Company”), Med-Tech Solutions, Inc.,
a Nevada corporation (“Med-Tech”; Med-Tech and together with the Company, the
“Parties”) and the person signatory hereto, an individual.
W
I T N E S S E T H:
WHEREAS,
the Company and Med-Tech have entered into the Acquisition Agreement dated
March
___, 2007 pursuant to which Med-Tech intends to acquire of all of the issued
and
outstanding shares of the Company’s common stock, $0.001 par value per share;
WHEREAS,
Med-Tech intends to raise the Main Funding (as defined in the Acquisition
Agreement) during the Interim Period (as defined in the Acquisition Agreement);
WHEREAS,
the Parties agree that in the event of Completion the proceeds of the Main
Funding shall be deposited at Completion into a designated bank account of
the
Company (the “Designated Account”) agreeable to Med-Tech, and subject to the
terms of this Agreement;
WHEREAS,
the Company has agreed to, and it is a condition of Completion, to present
evidence satisfactory to Med-Tech that the requirements of Med-Tech’s designated
representative’s (or his dully appointed replacement) (the “Representative”)
signature is an irrevocable and absolute requirement for purposes of disposition
of any portion or all of the amount of the Main Funding from said Designated
Account (the “Disbursement”), in order to properly govern the manner and terms
upon which the funds to be raised in the Main Funding may be drawn down and
disbursed from said Designated Account (i.e., require the approval of a
designated representative of Med-Tech) (the “Main Funding
Signatory”);
WHEREAS,
the Company has agreed to, and it is a condition of Completion, to present
evidence satisfactory to Med-Tech that any Disbursement from said Designated
Account shall be conditional on the bank operating said Designated Account
(the
“Bank”) receiving a Release Notice, in the form attached hereto as Exhibit
X,
signed
by a duly appointed Representative, in accordance with the terms set forth
in
the Acquisition Agreement and herein; and
WHEREAS,
the Representative is willing to act as the Main Funding Signatory on and
subject to the terms of this Agreement;
WHEREFORE,
the Parties and the Representative agree as follows:
TERMS
OF THE AGREEMENT
1.2 The
parties hereby agree, in the event of Completion, to establish a Designated
Account with the terms and the Bank agreeable to Med-Tech where the Main Funding
shall be deposited into at Completion, whereby the Bank shall hold the Main
Funding, as contemplated by the Acquisition Agreement and pursuant to the terms
of this Agreement.
1.3 The
Company agrees, and it is a condition of Completion for the Company, to present
evidence satisfactory to Med-Tech that the requirements of Representative’s (or
his dully appointed replacement) signature is an irrevocable and absolute
requirement for purposes of any Disbursement from said Designated Account,
in
order to properly govern the manner and terms upon which the Main Funding may
be
drawn down and disbursed from said Designated Account (i.e., require the
approval of the Representative or his dully appointed replacement), such that
the Company shall present to the Representative in writing the amount of the
Disbursement (the “Request”).
1.4 The
Company agrees and acknowledges, and it is a condition of Completion for the
Company, to present evidence satisfactory to Med-Tech that any Disbursement
from
the said Designated Account shall be
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conditional
on the Bank receiving a Release Notice, in the form attached hereto as
Exhibit
X,
signed
by a duly appointed Representative (or his dully appointed replacement), in
accordance with the terms set forth in the Acquisition Agreement and
herein.
1.4 The
Company agrees and acknowledges, and it is a condition of Completion, that
any
Disbursement, shall solely be made per the terms of this Agreement and the
Acquisition Agreement.
1.5
The
Parties agree and acknowledge, that upon
receipt by the
Parties mutually selected Bank
of
the Release Notice signed by the Representative,
the
Parties shall instruct the Bank to deliver the amount of the Disbursement from
the Main Funding, per the signed written instructions of the Company and
Med-Tech.
1.6
In
the
event the Representative
reasonably determines in his sole discretion that it is necessary or appropriate
to reject the Request, the Representative
shall
deliver written notice of such rejection to the Company and Med-Tech which
notice shall include the reason for such rejection;
notwithstanding the foregoing, if any Request for any Disbursement is of a
type
and amount of expenditure specifically set forth in the EPC contract pursuant
to
which such expenditures from the Main Funding shall be paid (to be agreed to
by
the parties on or before Completion), the Representative shall not unreasonably
reject the Request for the Disbursement and withhold his/her signed Release
Notice.
1.7 The
Parties hereby agree to appoint the person whose name is set forth on Schedule
I
annexed hereto as the Representative.
1.8 Notwithstanding
any of the foregoing, the Parties agree and acknowledge that the Bank shall
not
be required to receive a signed Release Notice from the Representative if the
amount of the Disbursement in the Request does not exceed $10,000 per Request
and $50,000 for every 30 calendar days.
ARTICLE
II
MISCELLANEOUS
2.1 No
waiver
or any breach of any covenant or provision herein contained shall be deemed
a
waiver of any preceding or succeeding breach thereof, or of any other covenant
or provision herein contained. No extension of time for performance of any
obligation or act shall be deemed an extension of the time for performance
of
any other obligation or act.
2.2
All
notices or other communications required or permitted hereunder shall be in
writing, and shall be sent as set forth in the Acquisition Agreement and this
Agreement.
2.3
This
Agreement shall be binding upon and shall inure to the benefit of the permitted
successors and Agreement is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may
not
be modified, changed, supplemented or terminated, nor may any obligations
hereunder be waived, except by written instrument signed by the parties to
be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein.
2.4
Whenever
required by the context of this Agreement, the singular shall include the plural
and masculine shall include the feminine. This Agreement shall not be construed
as if it had been prepared by one of the parties, but rather as if all parties
had prepared the same. Unless otherwise indicated, all references to Articles
are to this Agreement.
2.5
The
parties hereto expressly agree that this Agreement shall be governed by,
interpreted under and construed and enforced in accordance with the laws of
the
State of New York. Any action to enforce, arising out of, or relating in any
way
to, any provisions of this Escrow Agreement shall only be brought in a state
or
Federal court sitting in New York City.
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2.6
The
Representative’s duties hereunder may be altered, amended, modified or revoked
only by a writing signed by the Company, Med-Tech and the Representative
(or
his
dully appointed replacement).
2.7
The
Representative shall be obligated only for the performance of such duties as
are
specifically set forth herein and may rely and shall be protected in relying
or
refraining from acting on any instrument reasonably believed by the
Representative to be genuine and to have been signed or presented by the proper
party or parties. The Representative shall not be personally liable for any
act
the Representative may do or omit to do hereunder as the Representative while
acting in good faith and in the absence of gross negligence, fraud and willful
misconduct, and any act done or omitted by the Representative pursuant to the
advice of the Representative’s attorneys-at-law shall be conclusive evidence of
such good faith, in the absence of gross negligence, fraud and willful
misconduct.
2.8
The
Representative is hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and is hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In
case the Representative obeys or complies with any such order, judgment or
decree, the Representative shall not be liable to any of the parties hereto
or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
2.9 The
Representative shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting
to
execute or deliver the Request, any documents contemplated by this Agreement
or
the Acquisition Agreement or any documents or papers deposited or called for
thereunder in the absence of gross negligence, fraud and willful
misconduct.
2.10 The
Representative shall be entitled to employ such legal counsel and other experts
as the Representative may deem necessary properly to advise the Representative
in connection with the Representative’s duties hereunder, may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation;
provided that the costs of such compensation shall be borne by the
Representative.
2.11 The
Representative’s responsibilities hereunder shall terminate if the
Representative shall resign by giving written notice to the Company and
Med-Tech. In the event of any such resignation, the Company, Med-Tech and the
Representative shall mutually appoint a successor Representative and the
Representative shall deliver to such successor Representative any documents
held
by the Representative.
2.12 If
the
Representative reasonably requires other or further instruments in connection
with this Agreement or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.
2.13 It
is
understood and agreed that should any dispute arise with respect to the terms
of
this Agreement or the Acquisition Agreement or the delivery of the Release
Notice and/or ownership or right of possession of the documents held by the
Representative hereunder, the Representative is authorized and directed in
the
Representative’s sole discretion (1) to retain in the Representative’s
possession without liability to anyone all or any part of said documents until
such disputes shall have been settled either by mutual written agreement of
the
parties concerned by a final order, decree or judgment or a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but the Representative shall be under no duty whatsoever to institute
or defend any such proceedings or (2) to deliver the escrow funds and any other
property and documents held by the Representative hereunder to a state or
Federal court having competent subject matter jurisdiction and located in the
City of New York in accordance with the applicable procedure
therefore
2.14 The
Company and Med-Tech agree jointly and severally to indemnify and hold harmless
the Representative and its employees, agents and representatives from any and
all claims, liabilities, costs or expenses in any way arising from or relating
to the duties or performance of the Representative hereunder or the transactions
contemplated hereby or by the Acquisition Agreement other than any such claim,
liability, cost or expense to the extent the same shall have been determined
by
final, unappealable judgment of a court of competent jurisdiction to have
resulted from the gross negligence, fraud or willful misconduct of the
Representative.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of date
first written above.
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By:__________________________________________
Name:
Title:
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With
a copy to (which shall not constitute notice):
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THE
FOUR RIVERS BIOENERGY COMPANY INC.
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By:__________________________________________
Name:
Title:
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With
a copy to (which shall not constitute notice):
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REPRESENTATIVE:
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By:__________________________________________
Name:
Title:
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47
Exhibit
X
to
Agreement
RELEASE
NOTICE
The
UNDERSIGNED, pursuant to the Agreement, dated as of ________________ ___, 2007,
among The Four Rivers BioEnergy Company Inc. (the “Company”), Med-Tech
Solutions, Inc. (“Med-Tech”), and the Representative signatory thereto (the
“Agreement”;
capitalized terms used herein and not defined shall have the meaning ascribed
to
such terms in the Agreement and the Acquisition Agreement dated March 26, 2007
entered into by and among the Company, Med-Tech and the signatories thereto
(the
“Acquisition Agreement”)), hereby notify the Bank that the conditions precedent
to
the draw
down, disbursement or other disposition of the Disbursement set
forth
in the Agreement and the Acquisition Agreement have been satisfied. The
Representative hereby authorizes the release of the amount of $_____________
per
the Company’s and Med-Tech’s joint written instructions. This Release Notice
shall not be effective until executed by the Representative.
IN
WITNESS WHEREOF, the undersigned has caused this Release Notice to be duly
executed and delivered as of this _____ day of _____________
200___.
REPRESENTATIVE:
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By:__________________________________________
Name:
Title:
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SCHEDULE
I
[________________________]