MERGER IMPLEMENTATION AGREEMENT DATED: AUGUST 17, 2009
(Purchaser)
AND
WHITE
ENERGY COMPANY LIMITED
ACN
071 527 083
(White
Energy)
DATED:
AUGUST 17, 2009
THIS AGREEMENT is made and
entered into this 17th day of
August 2009
|
BETWEEN
|
ASIA SPECIAL SITUATION ACQUISITION
CORP., a Cayman Islands exempted company (the “Purchaser”), having its
registered office at XX Xxx 000XX, Xxxxxx Xxxxx, Xxxxx Church Street, Xxxxxx
Town, Grand Cayman, Cayman Islands;
and
WHITE ENERGY COMPANY LIMITED
(ACN 071 527 083), an Australian
corporation (“White Energy”), having an
office at Xxxxx 00, 000 Xxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxx
Xxxxx.
|
RECITALS
|
|
X.
|
Xxxxx
Energy is a company listed on the Australian Securities Exchange (ASX).
|
|
B.
|
The
Purchaser is a company listed on NYSE Alternext, and is a special purpose
acquisition corporation (SPAC) formed for the
purpose of consummating an acquisition or related business combination
with an entity doing business in
Asia.
|
|
C.
|
The
Purchaser has agreed to acquire all of the White Energy Shares by means of
the White Energy Shares Scheme (as defined
herein).
|
|
D.
|
The
Purchaser and White Energy have agreed in good faith to work to implement
the Schemes and the Convertible Notes Offers upon and subject to the terms
and conditions of this Agreement.
|
NOW THEREFORE, in
consideration of the mutual covenants and agreements contained herein, the
Parties hereto intending to be bound thereby, it is mutually agreed as
follows:
1. DEFINITIONS
AND INTERPRETATION
|
1.1
|
Definitions
|
In
addition to the other terms defined in this Agreement, the following capitalized
terms shall have the meaning and shall be defined as set forth
below:
$ or Dollars shall mean the
currency of the United States, expressed in U.S. dollars.
Acquisition means the
acquisition of all of the White Energy Shares by the Purchaser (and/or its
Nominee) through implementation of the White Energy Shares Scheme.
Adaro/Itochu Joint Venture Agreements
means the collective reference to:
|
|
(a)
|
the
Heads of Agreement, dated 2 March 2006 between BCBC and Itochu
Corporation;
|
|
|
(b)
|
the
Joint Venture Deed, dated 19 January 2007 among BCBC, Itochu Corporation
and PT Alam Tri Abadi to form and operate the Adaro/Itochu Joint Venture
Companies (the Xxxxx XX
Deed);
|
|
|
(c)
|
various
other agreements among BCBC and other parties that are described in the
Xxxxx XX Deed, including a tolling joint venture deed, coal supply
agreement, a tolling agreement, a management agreement, an EPC agreement,
an operational and maintenance agreement, a technology consulting
agreement, a sub-license agreement, an upgraded coal sale agreement, and a
product marketing agreement, all of which as at the Execution Date, are in
draft form;
|
2
Adaro/Itochu Joint Venture Companies
means the corporations or other entities to be incorporated or formed
under the Adaro/Itochu Joint Venture Agreements to establish, own and operate
Coal Upgrading Plants in Indonesia utilising the Technology.
Additional Purchaser Securities
means any ordinary shares, notes, debentures or other securities of the
Purchaser that are or may be issued and sold by the Purchaser between the
Execution Date of this Agreement and the Merger Implementation Date; in each
case, upon such terms and conditions as shall be acceptable to the Purchaser and
not in violation of this Agreement.
Additional White Energy Securities
means any White Energy Shares, notes, debentures or other securities of
White Energy that are issued by White Energy between the Execution Date of this
Agreement and the Second Court Date; in each case, upon such terms and
conditions as shall be acceptable to White Energy and not in violation of any
other provision of this Agreement.
Adjusted Funds means, as at
the Effective Date, the Purchaser’s Funds, less the
sum of:
|
|
(a)
|
amounts
payable on or after consummation of the Schemes to shareholders of the
Purchaser who have properly exercised their redemption rights with respect
to the Purchaser Shares held by them in accordance with the instructions
set forth in the Purchaser Proxy
Statement;
|
|
|
(b)
|
the
amount of all other liabilities (contingent or otherwise) of the
Purchaser, including, but not limited to, the amounts referred to in Schedule A of
Exhibit
2, indebtedness, and other expenses of Purchaser, including legal
and accounting fees, printing fees, and fees relating to due diligence,
identification and research of prospective target businesses and other
third party expenses.
|
Affiliates shall have the
meaning as is defined in Rule 405 promulgated under the Securities
Act.
Agreement means the agreement
constituted by this document and includes the Exhibits and Schedules hereto and
the Recitals hereof.
ASIC means the Australian
Securities and Investments Commission.
Associates means an
'associate' as that expression is defined in sections 11 and 15 of the
Corporations Act and an 'associated entity' as defined in section 50AAA of the
Corporations Act.
ASX means ASX Limited and the
Australian Securities Exchange, as the context requires.
AUS GAAP means generally
accepted accounting and auditing principles in Australia in effect as at the
Execution Date of this Agreement.
Australian Dollars or AUS $
means dollars expressed in the currency of the continent of
Australia.
Authorisation means any
permit, approval, authorisation, consent, exemption, filing, licence,
notarisation, registration or waiver however described and any renewal or
variation to any of them.
Authorised Share Increase
means the increase in the number of the Purchaser’s authorised Purchaser
Shares as further described in paragraph (c) of the definition of Purchaser
Shareholder Approvals.
3
Bayan Joint Venture Agreements means the collective reference to the Coal Briquette
Joint Venture Deed between BCBC Singapore and PT
Bayan Resources, dated 12 September 2006, and the various other agreements
relating to the joint venture between BCBC Singapore and PT
Bayan International Pte Ltd. and PT Bayan Resources, as the case may be, all of
which are reflected or set forth on the White Energy
Disclosure Schedule as may be amended from
time to time.
Bayan Joint Venture
Companies means PT Kaltim Supacoal, a company
formed under the laws of Indonesia, PT Kaltim Supacoal Singapore Pte. Ltd., a
company formed under the laws of Singapore, and such other joint venture companies to be organized
by the parties under the Bayan Joint Venture Agreements to establish, own and
operate Coal Upgrading Facilities in Indonesia utilizing the
Technology.
BCBC means Binderless Coal
Briquetting Company Pty Limited (ABN 111 821 044) an Australian
corporation.
Buckskin Agreement means the
sub-lease and services agreement, dated 24 December 2008 and the coal supply
agreement dated 24 December 2008 among White Energy Coal North America, Inc.,
one of the Subsidiary Corporations (WECNA), with Buckskin Mining
Company (an indirect wholly-owned Subsidiary of Xxxxxx
Corporation).
Business means, as the context
requires (a) as to White Energy, the Commercialisation of the Technology
throughout the world, and (b) as to the Purchaser, the seeking of a business
combination, in each case as at the Execution Date and the Second Court
Date.
Business Day means a day that
is not a Saturday, Sunday or public holiday in New South Wales or the United
States.
Change in Control means any
transaction whereby Persons (other than the Purchaser) who are not Affiliates or
Associates of White Energy would be in a position to elect a majority of the
members of the board(s) of directors of White Energy.
Claim means in relation to any
Person, a claim, action or proceeding, judgment, damage, loss, cost, expense or
liability incurred by or to or made or recovered by or against the Person,
however arising and whether present, unascertained, immediate, future or
contingent.
Coal Upgrading Facility means
a coal upgrading plant or facility owned, designed, operated, managed or in
which White Energy otherwise has an interest, which utilises the
Technology.
Commercialise the Technology or
Commercialisation of the Technology means, as applicable and as the
context requires, the exclusive right anywhere in the world to (a) develop,
design, construct, operate and manage Coal Upgrading Facilities and market and
sell Upgraded Coal, (b) use and exploit the Technology and Intellectual Property
Rights, and (c) license or sub-license the Technology.
Conditional Subscription
Agreement means the subscription agreement between White Energy and
Peabody dated on or about 14 May 2009.
Conditions means the
conditions precedent set out in Section 3.1 of this
Agreement.
Confidential Information means
any trade secrets, lists of information pertaining to clients of White Energy or
suppliers, specifications, drawings, inventions, ideas, records, reports,
software, patents, designs, copyright material, secret processes or other
information, whether in writing or otherwise, relating to White Energy or any of
its Subsidiary Corporations.
Consideration Shares means an
aggregate number of fully paid authorized and previously unissued Purchaser
Shares to be issued to White Energy Shares Scheme Participants as White Energy
Shares Scheme Consideration pursuant to the White Energy Shares
Scheme.
4
Convertible Notes Offers means
the offers to be made by the Purchaser for the White Energy Convertible Notes
substantially on the terms set out in Section 4.5.
Corporations Act means the
Xxxxxxxxxx Xxxxxxxxxxxx Xxx 0000 (Cth).
Counsel for Purchaser means
Xxxxxxx Xxxx LLP, New York, New York.
Counsel for White Energy means
Steinepreis Paganin, Perth, Australia.
Court means the Supreme Court
of New South Wales, the Federal
Court of Australia or such other Court as the parties agree.
Court Convened Meetings means
the meeting(s) ordered to be convened by the Court pursuant to each of the
Schemes.
Deed Poll means the White
Energy Shares Scheme Deed Poll and the Options Scheme Deed Poll.
|
|
Dilutive Issuance means
the issuance or sale of any Additional White Energy Securities between the
Execution Date and the Second Court Date that consist
of:
|
|
(a)
White Energy Shares that are issued or sold at a per share
price that is less
than US$2.50, or
|
|
(b)
any other White Energy Shares that are issuable at any time upon the
conversion of any Additional White Energy Securities into White Energy
Shares or exercise for White Energy Shares, at a per share conversion
price or exercise price that is less
than US$2.50;
|
|
|
provided,
however, that White Energy Shares issuable upon exercise of White
Energy Convertible Notes, White Energy Options or any other White Energy
securities issued prior to the Effective Date of this Agreement will not
constitute a Dilutive Issuance.
|
Disclosure Schedule
means:
|
|
(a)
|
in
respect of the Purchaser – the written material disclosed on a Disclosure
Schedule (the Purchaser
Disclosure Schedule) to be delivered by the Purchaser to White
Energy pertaining to the business, operations and financial condition of
the Purchaser;
|
|
|
(b)
|
in
respect of White Energy – the written material disclosed on a Disclosure
Schedule (the White
Energy Disclosure Schedule) to be delivered by White Energy to the
Purchaser in respect of the business, operations and financial condition
of White Energy, which shall be deemed to include all information
contained on the White Energy website, the White Energy online data room
and information disclosed in writing to the
ASX.
|
Effective when used in
relation to each of the Schemes, means the coming into effect, pursuant to
sub-section 411(10) of the Corporations Act, of the order of the Court made
under sub-section 411(4)(b) of the Corporations Act, but in any event at no time
before an office copy of the order of the Court is lodged with the
ASIC.
Effective Date means the date
on which all of the Schemes shall become Effective.
Encumbrance means any
encumbrance, mortgage, pledge, charge, lien, assignment, hypothecation, security
interest, title retention, preferential right or trust arrangement and any other
security or agreement of any kind given or created and including any possessory
lien in the ordinary course of business whether arising by operation of law or
by contract.
End Date means 5:00 p.m.
(AEST) on December 31, 2009.
5
Event of Insolvency
means:
|
|
(a)
|
a
receiver, manager, receiver and manager, trustee, administrator,
controller or similar officer
is appointed in respect of a Party or any asset of a
Party;
|
|
|
(b)
|
a
liquidator or provisional liquidator is appointed in respect of a
Party;
|
|
|
(c)
|
any
application, that is not withdrawn or dismissed within twenty (20)
Business Days, which is made to a court for an order, or an order of a
court is made, for the purposes of:
|
|
|
(i)
|
appointing
a Person referred to in paragraphs (a) or
(b);
|
|
|
(ii)
|
winding
up a Party; or
|
|
|
(iii)
|
proposing
or implementing a creditors scheme of
arrangement.
|
|
|
(d)
|
any
event or conduct occurs which would enable a court to grant a petition, or
an order is made, for the bankruptcy of a Party or its estate under any
Insolvency Provision;
|
|
|
(e)
|
a
moratorium of any debts of a Party, or an official assignment, or a
composition, or an arrangement (formal or informal) with a Party’s
creditors, or any similar proceeding or arrangement by which the assets of
a Person are subjected conditionally or unconditionally to the control of
that Person’s creditors or a trustee, is ordered, declared, or agreed to,
or is applied for and the application is not withdrawn or dismissed within
twenty (20) Business Days;
|
|
|
(f)
|
a
Party becomes, or admits in writing that it is, is declared to be, or is
deemed under any applicable law to be, insolvent or unable to pay its
debts; or
|
|
|
(g)
|
any
writ of execution, garnishee order, mareva injunction or similar order,
attachment, distress or other process is made, levied or issued against or
in relation to any asset of a
Party.
|
Exchange Rate means the rate
of exchange between one Australian dollars and United States dollars, which as
at the Execution Date is one Australian dollar equals 0.823 US
dollar.
Execution Date means the date
of execution of this Agreement by all of the Parties.
Existing Purchaser
Shareholders means those Persons holding 100% of the issued and
outstanding Purchaser Shares immediately prior to the Second Court
Date.
Expert means Xxxxx Xxxxxxxx
Corporate Finance Pty Limited of Xxxxx 00, 000 Xxxx Xxxxxx, Xxxxxx, XXX,
0000.
Head Licences means the
licence agreements reflected or set forth on the White Energy Disclosure
Schedule, including the License Agreement, pursuant to which White Energy, WET
or BCBC, as the context requires, has obtained or may obtain the exclusive right
to use, but not the ownership of, any of the Intellectual Property Rights
referred to in paragraphs (a) to (d) inclusive of the definition of that term,
that are necessary for White Energy to carry on the Business.
Independent Expert’s Report
means the report to be prepared by the Expert for inclusion in the Scheme
Booklet that shall set forth, whether in the opinion of the Expert any or all of
the White Energy Shares Scheme and the Options Scheme is in the best interests
of the relevant Scheme Participants.
Insider Warrants shall mean
the warrants to purchase an aggregate of 5,725,000 Purchaser Shares which (a)
have an exercise price of $7.50 per Purchase Share, and (b) contain “cashless
exercise” provisions.
6
Insiders Shares means the
existing 2,500,000 Purchaser Shares issued to certain Persons prior to the
Purchaser’s initial public offering as set forth in the Purchaser’s
Prospectus.
Insolvency Provision means any
law relating to insolvency, sequestration, liquidation or bankruptcy (including
any law relating to the avoidance of conveyances in fraud of creditors or of
preferences, and any law under which a liquidator or trustee in bankruptcy may
satisfy or avoid transactions), and any provision of any agreement, arrangement
or scheme, formal or informal, relating to the administration of any of the
assets of any Party.
Intellectual Property Rights
means:
|
|
(a)
|
the
business names, copyrights or tradenames owned or used by White Energy
and/or the Subsidiary Corporations or the Purchaser, as the context
requires;
|
|
|
(b)
|
the
Confidential Information owned or used at any time by White Energy and/or
the Subsidiary Corporations or the Purchaser, as the context
requires;
|
|
|
(c)
|
the
Patents, Patent applications, Patent rights, inventions, registered
designs, unregistered designs, know-how, trade secrets, Trademarks,
Trademark applications, service marks, service names, trade names and all
other similar rights owned or used by White Energy and/or the Subsidiary
Corporations or the Purchaser, as the context requires;
and
|
|
|
(d)
|
the
Head Licences.
|
Licence Agreement means the
licence agreement between BCBC, Commonwealth Scientific and Industrial Research
Organisation, The Xxxxxxx Coal Mining Company Limited, Tra-Det Inc and XX
Xxxxxxx Inc. dated 17 January 2006, as may be amended from time to
time.
Material Adverse Effect shall
mean any event or condition which has or could reasonably be expected to have a
material adverse effect upon (a) the business, assets, properties, financial
condition, business prospects or value of the ordinary or common shares, of
either White Energy and the Subsidiary Corporations (when taken as a
consolidated group) or the Purchaser, as applicable, or (b) the ability of the
Parties to consummate the Schemes and/or other transactions contemplated by this
Agreement, other than any exogenous events.
Material Contracts means all contracts and agreements which as at the
Execution Date and the Second Court Date are material to the Commercialisation
of the Technology throughout the world to
which White Energy and any one or more of the Subsidiary Corporations are a
party, and shall include, without
limitation, the Adaro/Itochu Joint Venture Agreements, the Bayan Joint Venture
Agreements, the Buckskin Agreement and those other contracts reflected or
listed on the White Energy Disclosure Schedule.
Material Purchaser Liabilities
means the collective reference to: (a) the indebtedness, liabilities or
obligations of Purchaser (contingent or otherwise) set forth on Schedule A to Exhibit
2 to this Agreement; and (b) any other liability (contingent or
otherwise) incurred or reasonably expected to be incurred by the Purchaser on or
before the Second Court Date which individually or when taken together exceed
$250,000 in the aggregate (other than expenses incurred and to be incurred by
Purchaser for the purposes of implementing the Schemes contemplated by this
Agreement).
Merger Implementation Date
means on or before that date which is 5 Business Days after the Record
Date (or such other date as agreed between the parties).
Minimum Amount has the meaning
given to that term in Section 3.1(d) of this
Agreement.
7
Name Change means the change
of the Purchaser’s name as described in paragraph (d) of the definition of
Purchaser Shareholder Approvals.
Nominee means a wholly owned
Subsidiary company of the Purchaser, and agreed to by White Energy, to acquire
the White Energy Shares.
NYSE means the New York Stock
Exchange.
Officer, in relation to a
corporation, has the same meaning given to that term in Section 9 of the
Corporations Act.
Opinion of Counsel means the
separate legal opinions of (a) Counsel for White Energy, and (b) Counsel for the
Purchaser, in each case to be delivered on or before the Effective Date, and in
form and content as shall be reasonably satisfactory to White Energy and the
Purchaser.
Options Scheme means the
scheme or schemes (as appropriate) of arrangement proposed to be entered into
between White Energy and Options Scheme Participants, as described in Section
4.1 of this Agreement, under Part 5.1 of the Corporations Act.
Options Scheme Consideration
means the consideration the Purchaser is required to provide to Options
Scheme Participants under Section 4.2(b) of this
Agreement.
Options Scheme Deed Poll means
the deed poll/s described in Section 9.2(b)(ii).
Options Scheme Participant
means a holder of White Energy Options registered in the Register on the Record
Date.
Other Warrants has the meaning
given to that term in Section 1(d) of Exhibit
2.
Party means White Energy and
the Purchaser who are the parties to this Agreement and Parties has a corresponding
meaning.
Patent Document means
PCT/AU2004/000158 filed on 11 February 2004, with a priority date of 11 February
2003, titled “Briquetting
Process”.
(A) Patents shall mean (i) letters
patent issued in any country, all registrations and recordings thereof and all
applications for letters patent of any country, including, without limitation,
registrations, recordings and applications in any Patent or Trademark office or
agency of any country; (ii) reissues, divisions, continuations, renewals,
continuations in part or extensions thereof; (iii) xxxxx patents, divisionals
and patents of addition; (iv) patents to issue in any such applications; (v)
income, royalties, damages, claims and payments now and hereafter due and/or
payable with respect to patents, including, without limitation, damages, claims
and recoveries for past, present or future infringement; and (vi) rights to xxx
for past, present and future infringements of any patent.
Peabody means Peabody
Investment Corp.
Percentage Interest shall have
the meaning set forth in Section 4.3(a)(iii) of
this Agreement.
Person shall mean any
individual, corporation, partnership, limited liability company, institution or
other entity.
8
Prohibited Occurrence means
any of the following actions or events affecting White Energy or the Subsidiary
Corporations or the Purchaser, as the context requires and except as otherwise
contemplated or permitted by this Agreement:
(a) splitting
or converting all or any of its shares into a larger or smaller number of
shares;
(b) resolving
to reduce its share capital in any way;
|
|
(c)
|
except
as contemplated by clause (f) below, entering into a buy back agreement
for its outstanding Purchaser Shares or White Energy
Shares;
|
|
|
(d)
|
except
as contemplated by clause (f) below, resolving to approve the terms of a
buy back agreement;
|
|
|
(e)
|
making
an allotment of, or granting an option to subscribe for, any of its shares
or agreeing to make such an allotment or grant such an option, other than
in respect of the issue of up to a maximum of 250,000 options to employees
of White Energy or the Subsidiary Corporations in the ordinary course of
business at an exercise price of not less than
A$3.50;
|
|
|
(f)
|
except
as otherwise permitted by Section 11.2(f)
hereof, the Purchaser issuing, or agreeing to issue any Additional
Purchaser Securities;
|
|
|
(g)
|
disposing,
or agreeing to dispose, of the whole, or a substantial part, of its
Business or property;
|
|
|
(h)
|
breaching
in any material respect any of its obligations under, in the case of White
Energy, any Material Contract or Material License, or in the case of the
Purchaser, any material contract, and such breach having not been
rectified after appropriate notice of the breach has been provided to the
relevant party under the relevant contract or the breach is not capable of
rectification;
|
|
|
(i)
|
encumbering,
or agreeing to encumber, the whole, or a substantial part, of its Business
or property;
|
|
|
(j)
|
resolving
that it be wound up;
|
|
|
(k)
|
appointing
an administrator or provisional
liquidator;
|
|
|
(l)
|
being
the subject of a winding up order by a
court;
|
|
|
(m)
|
executing
a deed of company arrangement; or
|
|
|
(n)
|
having
a receiver, or a receiver and manager appointed, in relation to the whole,
or a substantial part, of its
property.
|
Public
Warrants means the 11,500,000 issued and outstanding warrants
of the Purchaser as at the date of this Agreement and the Second Court Date
issued to the public under the Purchaser Prospectus, and entitling the holders
to purchase for cash up to an aggregate of 11,500,000 Purchaser Shares at an
exercise price of USD $7.50 per share.
Purchaser’s Balance Sheet
means the balance sheet of Purchaser included in the financial statements of
Purchaser included in Purchaser’s Annual Report on Form 20-F for the year ended
December 31, 2008 (the Balance
Sheet Date) filed on April 1, 2009.
Purchaser Board means the
board of directors of the Purchaser.
9
Purchaser Convertible Notes
means the convertible notes of the Purchaser issued to holders of the White
Energy Convertible Notes upon consummation of the Convertible Notes
Offer.
Purchaser’s Funds means the
sum
of the aggregate amount of cash made available at the Effective Date to the
Purchaser and White Energy that (i) is not subject to any encumbrances or claims
by any other Person whatsoever, and (ii) is derived from any one or more of the
following sources:
|
|
(a)
|
the
aggregate amount of cash in the Purchaser’s trust account on the Effective
Date that is directly attributable to the Purchaser; plus
|
|
|
(b)
|
the
aggregate amount of any additional cash made available to the Purchaser as
a result of the sale and issuance by the Purchaser of any Additional
Purchaser Securities between the Execution Date of this Agreement and the
Effective Date.
|
Purchaser Information means
such information regarding the Purchaser provided by the Purchaser to White
Energy to enable the application for the Regulatory Approvals and the Scheme
Booklet to be prepared and completed.
Purchaser’s Investment Bankers
means the collective reference to Canaccord Xxxxx Capital LLC, Xxxx Capital
Partners, LLC or their Affiliates and associates.
Purchaser Options means the
options to purchase fully paid Purchaser Shares issued to holders of the White
Energy Options upon consummation of the Options Scheme, on the terms set out in
Section 4.3(c) (which for the avoidance of doubt,
will allow the holder of the Purchaser Option to exercise the Purchaser Option
in either Australian dollars or US dollars in accordance with Section 4.3(c)(ii) and which shall have the same expiry date
as the current White Energy Options which the relevant Purchaser Options shall
replace).
Purchaser’s Organizational Documents
means the amended and restated memorandum and articles of association or
other organizational documents of the Purchaser as then currently in
effect.
Purchaser Outstanding Shares
means the aggregate number of Purchaser Shares that are issued and outstanding
on the Effective Date and which are not subject to any unprocessed redemption
claims or the like plus:
|
|
(o)
|
any
Purchaser Shares that are to be issued after the Effective Date but on or
before the Merger Implementation Date;
and
|
|
|
(p)
|
any
Purchaser Shares that the Purchaser has agreed to issue or may be required
to issue after the Effective Date as a result of the exercise or
conversion of any warrants, options and/or convertible
securities;
|
but
excluding:
|
|
(q)
|
the
Consideration Shares; and
|
|
|
(r)
|
any
Purchaser Shares that the Purchaser may be required to
issue:
|
|
|
(i)
|
upon
the exercise of the Purchaser
Options;
|
|
|
(ii)
|
upon
the exercise of the Purchaser Convertible
Notes;
|
|
|
(iii)
|
upon
the exercise of the Insider Warrants and the Public Warrants;
and
|
|
|
(iv)
|
to Peabody in accordance with the
arrangement set out in clause 4.6.
|
10
Purchaser’s Prospectus means
the prospectus, dated January 16, 2008 of the Purchaser as declared effective by
the SEC.
Purchaser Proxy Statement
means the proxy and disclosure statement or such other form, statement or
report that is sent by the Purchaser to the Record Purchaser Shareholders in
advance of the Purchaser Shareholders Meeting to be held by Purchaser to obtain
Purchaser Shareholder Approvals.
Purchaser Shareholder
Approvals means, collectively:
|
|
(a)
|
the
affirmative vote of the holders of a majority of the publicly traded
Purchaser Shares voting in person or by proxy at the Purchaser
Shareholders Meeting in favour of this Agreement and the Schemes and
shareholders holding Purchaser Shares issued prior to the consummation of
Purchaser’s initial public offering shall have voted their Purchaser
Shares in the same manner as the requisite majority of the Purchaser’s
Shares issued in Purchaser’s initial public offering, in accordance with,
and as required by, that certain Letter Agreement dated January 16, 2008,
delivered by Insiders (as such term is used in the Purchaser’s Prospectus)
of the Purchaser to Maxim Group LLC and the
Purchaser,
|
|
|
(b)
|
the
affirmative vote of Purchaser's shareholders disclosed in the Purchaser
Proxy Statement as necessary under the Purchaser’s Organizational
Documents and applicable law to satisfy the provisions of Section 6.1 of this Agreement (the directors to be
appointed pursuant to Section 6.1, the Post-Closing Purchaser
Directors),
|
|
|
(c)
|
the
affirmative vote of Purchaser's shareholders disclosed in the Purchaser
Proxy Statement as necessary to amend Purchaser's Organizational
Documents:
|
|
|
(i)
|
to
increase the number of authorized Purchaser Shares to a number reasonably
requested by White Energy and expected to be greater than the sum of the
number of (i) Purchaser Shares issued and outstanding immediately prior to
the Merger Implementation Date, (ii) Purchaser Shares issuable upon the
exercise or conversion of any other outstanding securities of Purchaser,
including, but not limited to, the Purchaser Warrants and the Other
Warrants, (iii) Consideration Shares, (iv) Purchaser Shares issuable upon
exercise of the Purchaser Options, (v) Purchaser Shares into which the
Purchaser Convertible Notes are convertible, and (vi) Purchaser Shares
issuable under Section 5(c), and
|
|
|
(ii)
|
to
incorporate such other changes to Purchaser’s Organizational Documents as
reasonably requested by White Energy;
and
|
|
|
(d)
|
the
affirmative vote of Purchaser’s shareholders disclosed in the Purchaser
Proxy Statement as necessary to effectuate a legal change in Purchaser’s
name to White Energy Coal
Technology Corporation (or such other name as mutually agreed upon
by Purchaser and White Energy).
|
Purchaser Shareholders Meeting
means the meeting of the Record Purchaser Shareholders to be held after the
White Energy Shareholder Approval is obtained and prior to the Second Court Date
Application Date for the purpose of obtaining Purchaser Shareholder
Approvals.
Purchaser Shares means any of
the 50,000,000 ordinary shares, $0.0001 par value per share, of the Purchaser
presently authorized for issuance, plus all additional ordinary shares of
Purchaser that shall be authorized for issuance in connection with obtaining the
Purchaser Shareholder Approvals.
Purchaser Takeover Proposal
means any proposal (whether or not confidential, incomplete or subject to
conditions) for a takeover bid, share purchase, scheme, capital reconstruction,
purchase of assets, merger, amalgamation, consolidation or other business
combination involving the Purchaser or any of its subsidiaries, any issue by the
Purchaser or a material amount of its equity securities as consideration for the
assets or securities of another person or any proposal or offer to acquire in
any manner, directly or indirectly, a material equity interest in, any voting
securities of, or a substantial portion of the assets of the Purchaser or any of
its subsidiaries, other than the transactions involving White Energy
contemplated by this Agreement.
11
Record Date means 5.00 pm on
the 5th Business Day following the Effective Date.
Record Purchaser Shareholders
means the shareholders of Purchaser as of the record date for
determination of existing shareholders of Purchaser entitled to vote with
respect to approval of the White Energy Shares Scheme and the other matters
contemplated by the Purchaser Shareholder Approvals.
Register means, as applicable,
the register of holders of White Energy Shares, the register of holders of White
Energy Convertible Notes, and the register of White Energy Options.
Regulatory Approvals means
such consent, approvals or other acts by a Regulatory Authority necessary to
satisfy the Regulatory Conditions.
Regulatory Authority
includes:
(a) a
government or governmental, semi-governmental or judicial entity or
authority;
(b) a
minister, department, office, commission, delegate, instrumentality, agency,
board, authority or organisation of any government;
(c) any
bank or financier;
(d) any
regulatory organisation established under statute; and
(e) the
ASX, ASIC, NYSE and the SEC.
Regulatory Conditions means
the conditions precedent specified in Sections 3.1(t), 3.1(u), 3.1(y) and 3.1(z).
Revenue Authority means any
federal, state, territory or local government authority or instrumentality in
respect of Tax.
RG 60 and RG 142 means
Regulatory Guide 60 and 142 issued by the ASIC on 15 July 1993 and 4 August 1999
respectively.
Sale of Control means a sale
of all or substantially all of the assets or securities of White Energy or any
of the Subsidiary Corporations, whether through sale of assets, securities
purchase, merger, consolidation, tender offer or similar arrangements, in any
transaction whereby Persons (other than the Purchaser) who are not Affiliates or
associates of White Energy would be in a position to elect a majority of the
members of the board(s) of directors of White Energy or such Subsidiary
Corporations.
Scheme Booklet means, in
respect of each of the Schemes, the information described in Section 9.1(a) to be dispatched to all of the White Energy
Shares Scheme Participants and the Options Scheme Participates and approved by
the Court which must include appropriate descriptions of the Schemes, an
explanatory statement complying with the requirements of the Corporations Act,
the Independent Expert’s Report on each of the Schemes, the Deed Poll and a
notice of meeting and proxy form in such form as the parties may
agree.
12
Schemes means the collective
reference to the White Energy Shares Scheme and the Options Scheme.
Schemes Consideration means
the White Energy Shares Scheme Consideration and the Options Scheme
Consideration.
Scheme Participants means the
collective reference to all of the White Energy
Shares Scheme Participants and the Options Scheme Participants.
SEC means the United States
Securities and Exchange Commission.
Second Court Date means the
last day on which the Court hears the application for an order approving the
Schemes pursuant to sub-section 411(4)(b) of the Corporations Act or, if the
application is adjourned or subject to appeal for any reason, the last day on
which the adjourned or appealed application is heard .
Second Court Date Application Date means a date
to be agreed in writing by White Energy and the Purchaser, which date shall be
not later than one (1) month after the White Energy Shareholder Approval is
obtained.
Securities Act means the
United States Securities Act of 1933, as amended.
Securities Exchange Act means
the United States Securities Exchange Act of 1934, as amended.
Share Exchange Agreement means
the share exchange agreement between the Purchaser, White Energy and WET dated
13 March 2009, and any amendments or restatements thereof.
Share Issue Ratio means the
result of dividing the total number of Consideration
Shares by the White Energy Diluted Shares.
Statutes means all legislation
of any country, state or territory enforced at any time, and any rule,
regulation, ordinance, by law, statutory instrument, order or notice at any time
made under that legislation.
Subsidiary of any Person means
another Person, an amount of the voting securities, other voting ownership or
voting partnership interests of which is sufficient to elect at least a majority
of its Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first Person.
Subsidiary Corporation or Subsidiary Corporations
means, as applicable, the individual or collective reference to: the
Subsidiaries of White Energy, including: (a) WET, (b) BCBC, (c) Coking BCB Pty Ltd., an
Australian corporation, (d) BCBC Pty Ltd., an Australian
corporation, (e) White Energy
Coal North America Inc., a Delaware United States corporation, (f) BCBC Singapore Pte Ltd., a
Singapore corporation, (g) PT
Kaltim Supacoal Singapore Pte. Ltd., a Singapore corporation, (h) PT Kaltim Supacoal, an
Indonesian corporation, (i) White Manufacturing Pty Ltd.,
an Australian corporation, (j) White Investments North America Pty
Ltd., an Australian corporation, (k) White Energy Coal Project Company,
LLC, a United States Delaware limited liability company, (l) White Energy Coal Wyoming,
LLC, a United States Delaware limited liability company, (m) River Energy JV Limited, a
Mauritian corporation, (n) White Energy China Limited, a
Hong Kong corporation, (o) Amerod Resources Pty Ltd., an
Australian corporation, (p) Amerod Exploration Ltd., an
Australian corporation, (q) Amerod Holdings Pty Ltd., an
Australian corporation, (r) Spike Services Pty Ltd., an
Australian corporation, (s) Spike Licenses, Inc., a
Delaware United States corporation, and (t) any other direct or indirect
Subsidiary of White Energy or of any of the Subsidiary Corporations acquired or
created by White Energy following the Execution Date and prior to the Second
Court Date.
13
Subsidiary Corporation Shares
means fully paid ordinary shares in the capital of any of the Subsidiary
Corporations.
Tax means any tax, levy,
charge, impost, duty, fee, deduction, compulsory loan, withholding, stamp,
transaction, registration, duty or similar charge which is assessed, levied,
imposed or collected by any government agency and includes, but is not limited
to, any interest, fine, penalty, charge, fee or any other accounting imposed on,
or in respect of, any of the above.
Technology means certain
technology, knowledge and designs, including Intellectual Property rights and
associated know-how, relating to the preparation, drying, briquetting and
stabilisation of coal without binder to form an agglomerated product that is
lower in moisture and chemically and physically stable in transport and storage,
owned or licensed by White Energy, including, without limitation, those rights
and inventions in respect of the Patent Document.
Total Adjusted Outstanding Shares
has the meaning given to that term in Section 4.3(a)(iv) of
this Agreement.
Trading Days means any days on
which White Energy Shares trade on the ASX and Purchaser Shares trade on the
NYSE Alternext Exchange.
Trademark or Trademarks shall mean (i)
trademarks, tradenames, corporate names, company names, business names, trade
styles, service marks, logos, other source or business identifiers, prints and
labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature, registrations and recordings thereof and any
applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States,
Australia, Indonesia, Singapore, Malaysia, Vietnam, the Philippines any State
thereof or any other country, (collectively, the Marks); (ii) any reissues,
extensions or renewals thereof, (iii) income, royalties, damages, claims and
payments now and hereafter due and/or payable with respect to the Marks,
including, without limitation, damages, claims and recoveries for past, present
or future infringement and (v) rights to xxx for past, present and future
infringements of the Marks.
Transaction Documents means
this Agreement and the Scheme Booklet.
Transaction Value means the
sum of (a) the White Energy Market Value, and (b) the Adjusted Funds as at the
Second Court Date.
Unacceptable Circumstances has
the meaning given in section 657A of the Corporations Act.
United States Dollars or US $ means dollars expressed
in the currency of the United States of America.
Upgraded Coal means upgraded
coal produced from a Coal Upgrading Facility.
WET means White Energy
Technology Ltd (ABN 62 114 203 904).
White Energy Board means the
board of directors of White Energy.
White Energy Convertible Notes
means the 180 convertible notes issued to various parties pursuant to the
convertible note deed dated 10 October 2007 each of which has a face value of
AUD$250,000.
14
White Energy Dataroom means
the online dataroom containing various documents relating to White
Energy.
White Energy Diluted Shares
means the number of:
|
|
(a)
|
the
aggregate of 192,277,902 White Energy Shares as at the Execution Date;
plus
|
|
|
(b)
|
any
additional White Energy Shares that are issued between the Execution Date
and the Second Court Date;
|
provided,
however, that the term White Energy Diluted Shares shall specifically
exclude
any White Energy Shares that are or may be issuable upon the conversion into
White Energy Shares or exercise of any warrants, options or rights to purchase
White Energy Shares.
White Energy Information means
such information regarding the White Energy Group and its operations as is
contained in the Scheme Booklet or to enable preparation of the applications for
the Regulatory Approvals.
White Energy Majority Shareholders
Consents shall mean the written approval by the holders of a majority of
the issued and outstanding White Energy Shares, of the White Energy Shares
Scheme.
White Energy Market Value
shall mean the product of multiplying: (a) the number of White Energy Diluted
Shares as at the Effective Date, by (b) the White Energy Per Share
Value.
White Energy Optionholder
means a holder of a White Energy Option registered in the Options Register on
the Record Date.
White Energy Options means an
option to acquire a White Energy Share.
White Energy Per Share Value
shall mean United States Two Dollars and Fifty Cents (US$2.50); provided,
however, that if, between the Execution Date and the Effective Date,
White Energy shall, without the prior written consent of Purchaser, elect to
issue or sell any Additional White Energy Securities that would result in a
Dilutive Issuance then the White Energy Per Share Value shall be reduced to a
price determined by multiplying
the White Energy Per Share
Value in effect
immediately prior to the
Dilutive Issuance
(initially US$2.50) by a
fraction:
(a) the
numerator of which is an amount equal to the sum of (i) the number of White
Energy Shares actually outstanding immediately prior to the Dilutive Issuance,
plus (ii) the quotient of the aggregate consideration received by White Energy
from such Dilutive Issuance divided by the White Energy Per Share Value in
effect immediately prior to the Dilutive Issuance, plus (iii) the quotient of
the aggregate consideration received or to be received by White Energy from such
Dilutive Issuance on the exercise of any White Energy Options included in the
Dilutive Issuance divided by the White Energy Per Share Value in effect
immediately prior to such Dilutive Issuance; and
(b) the
denominator of which is the sum of (i) the total number of White Energy Shares
issued and outstanding immediately after the Dilutive Issuance, plus (ii) any
additional White Energy Shares that may be subsequently be issuable upon
conversion or exercise of any Additional White Energy Securities that were
issued in connection with such Dilutive Issuance;
provided
that only one adjustment will be made for each Dilutive Issuance, and no
adjustment in the White Energy Per Share Value shall have the effect of
increasing the White Energy Per Share Value above US$2.50 per
share.
15
White Energy Shareholder
Approval means a resolution in favour of the White Energy Shares Scheme
passed by the holders of White Energy Shares pursuant to sub-section
411(4)(a)(ii) of the Corporations Act.
White Energy Shares Scheme
means the scheme of arrangement proposed to be entered into between White
Energy and White Energy Shares Scheme Participants, as
described in Section 4.1 of this Agreement, under Part 5.1 of the Corporations
Act, pursuant to which the Purchaser (and/or its Nominee) seeks to acquire all
of the White Energy Shares in exchange for the White Energy Shares Scheme
Consideration as contemplated by this Agreement.
White Energy Shares Scheme
Consideration means the consideration the Purchaser is required to
provide to White Energy Shares Scheme Participants under Section 4.2(a) of this Agreement.
White Energy Shares Scheme Deed Poll
means the deed poll described in Section 9.2(b)(i).
White Energy Shares Scheme
Participant(s) means, as applicable, a holder or all holders of White
Energy Shares registered in the Register on the Record Date.
White Energy Shares means, as
the context requires, either:
|
|
(a)
|
the
total issued and outstanding fully paid ordinary shares in the capital of
White Energy, as at any point in time;
or
|
|
|
(b)
|
fully
paid ordinary shares in the capital of White
Energy.
|
White Energy Takeover Proposal
means any proposal (whether or not confidential, incomplete or subject to
conditions) for a takeover bid, share purchase, scheme, capital reconstruction,
purchase of assets, merger, amalgamation, consolidation or other business
combination involving White Energy or any of its subsidiaries, any issue by
White Energy of a material amount of its equity securities as consideration for
the assets or securities of another person or any proposal or offer to acquire
in any manner, directly or indirectly, a material equity interest in, any voting
securities of, or a substantial portion of the assets of White Energy or any of
its subsidiaries, other than the transactions involving the Purchaser
contemplated by this Agreement.
|
1.2
|
Interpretation
|
In this
Agreement unless the context otherwise requires:
|
|
(a)
|
a
reference to White Energy shall be deemed to include a reference to a
Subsidiary Corporation;
|
|
|
(b)
|
headings
are for convenience only and do not affect its
interpretation;
|
|
|
(c)
|
an
obligation or liability assumed by, or a right conferred on, two (2) or
more Parties binds or benefits all of them jointly and each of them
severally;
|
|
|
(d)
|
a
reference to any party includes that party’s executors, administrators,
successors and permitted assigns, including any Person taking by way of
novation;
|
|
|
(e)
|
a
reference to any document (including this Agreement) is to that document
as varied, novated, ratified or replaced from time to
time;
|
|
|
(f)
|
a
reference to any statute or to any statutory provision includes any
statutory modification or re-enactment of it or any statutory provision
substituted for it, and all ordinances, by-laws, regulations, rules and
statutory instruments (however described) issued under
it;
|
16
|
|
(g)
|
words
importing the singular include the plural (and vice versa) and words
indicating a gender include every other
gender;
|
|
|
(h)
|
reference
to parties, sections, schedules, exhibits or annexures are references to
parties, sections, schedules, exhibits and annexures to or of this
Agreement and a reference to this Agreement includes any schedule, exhibit
or annexure to this Agreement;
|
|
|
(i)
|
where
a word or phrase is given a defined meaning, any other part of speech or
grammatical form of that word or phrase has a corresponding meaning;
and
|
|
|
(j)
|
a
reference to a payment is to a payment by wire transfer of immediately
available funds to a bank account designated by the recipient of such
payment, or a bank cheque unless the recipient otherwise
allows.
|
|
|
|
2.
|
AGREEMENT
TO PROCEED WITH SCHEMES AND CONVERTIBLE NOTES
OFFERS
|
The
parties agree to propose and use their collective best endeavours to (a)
implement and consummate the Schemes, and (b) to the extent applicable, to
implement and consummate (i) the Convertible Notes Offers, in accordance with,
and subject to, the terms and conditions of this Agreement.
|
|
|
3.
|
CONDITIONS
PRECEDENT
|
|
3.1
|
Conditions
|
Consummation
of the Acquisition, each of the Schemes and the other transactions contemplated
by this Agreement (Section 15 is
specifically excluded from this Section 3) is subject to and conditional upon
the satisfaction of all of the following conditions precedent:
|
|
(a)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date, the
Purchaser shall have completed a business, financial and legal due
diligence on White Energy, which due diligence shall be satisfactory in
the sole and absolute discretion of the
Purchaser;
|
|
|
(b)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date,
White Energy shall have completed a business, financial and legal due
diligence on the Purchaser, which due diligence shall be satisfactory in
the sole and absolute discretion of White
Energy;
|
|
|
(c)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application
Date:
|
|
|
(i)
|
the
Purchaser Shareholder Approvals shall have been duly obtained from the
Record Purchaser Shareholders by the requisite vote under applicable law
and the Purchaser’s Organizational Documents, the Authorized Share
Increase and the Name Change shall have been effected in accordance with
applicable law and the Purchaser’s Organizational Documents, and the
Purchaser shall have otherwise complied with all of the covenants and
conditions regarding business combinations that are contained in the
Purchaser’s Prospectus and in its Organizational Documents;
and
|
|
|
(ii)
|
the
Purchaser shall have procured the current directors of the Purchaser to
have delivered signed resignations to White Energy which shall be
effective as and from the Merger Implementation
Date;
|
|
|
(d)
|
the
aggregate minimum amount of Adjusted Funds, that are available to the
Purchaser and White Energy as at each of the Second Court Date Application
Date, the Second Court Date and the Merger Implementation Date shall be
not less than (US)$100 million (the Minimum Amount); provided,
however, notwithstanding anything else contained in this Agreement,
the board of directors of White Energy shall, have the right in the
exercise of its sole and absolute discretion, to reduce the Minimum Amount
to as low as (US)$75.0 million;
|
17
|
|
(e)
|
the
aggregate maximum amount of Adjusted Funds, that are available to the
Purchaser and White Energy as at each of the Second Court Date Application
Date, the Second Court Date and the Merger Implementation Date shall be
not more than (US)$140 million (the Maximum
Amount);
|
|
|
(f)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date, the
Purchaser must have re-negotiated with all relevant third parties and
reached agreement that all cash fees payable by the Purchaser to third
parties in relation to the Schemes and the transactions contemplated by
this Agreement shall not exceed $15,000,000. In addition, the
Purchaser agrees that:
|
|
|
(i)
|
any
fees to be paid to the Maxim Group shall be
reduced;
|
|
|
(ii)
|
the
cash fees and Purchaser securities payable to Canaccord Capital Corp. and
Xxxx Capital Partners LLC shall be limited, in aggregate, to the
following:
|
|
|
(A)
|
a
6% financing fee on new funds raised in the Purchaser (i.e. $6,000,000
assuming $100,000,000 in new funds are
raised;
|
|
|
(B)
|
any
success fee on the successful completion of the Schemes and all the
transactions contemplated by this Agreement shall be fixed at $3,000,000;
and
|
|
|
(iii)
|
a
maximum of 1,150,000 warrants shall be issuable upon successful completion
of the Schemes and all the transactions contemplated by this Agreement
which shall be exercisable by the payment of cash equal to an exercise
price of (US)$11.00 per Purchaser
Share.
|
|
|
(g)
|
as
at 5:00 p.m. on the day before the Second Court Date Application Date, the
Second Court Date and on the Merger Implementation Date, except as set
forth on Schedule A to
Exhibit
2 to this Agreement, the Purchaser shall have no Material Purchaser
Liabilities;
|
|
|
(h)
|
between
the date of this Agreement and 5.00 pm on the Merger Implementation Date,
White Energy shall not have breached, in any material
respect:
|
|
|
(i)
|
any
of the representations and warranties contained in Exhibit
1 of this Agreement; or
|
|
|
(ii)
|
any
of White Energy’s covenants or obligations contained in this
Agreement;
|
|
|
(i)
|
between
the date of this Agreement and 5.00 pm on the Merger Implementation Date,
a Prohibited Occurrence has not occurred in respect of White
Energy;
|
|
|
(j)
|
between
the date of this Agreement and 5.00 pm on the Merger Implementation Date,
the Purchaser shall not have breached, in any material
respect:
|
|
|
(i)
|
any
of the representations and warranties contained in Exhibit
2 of this Agreement; or
|
|
|
(ii)
|
any
of Purchaser’s covenants or obligations contained in this
Agreement;
|
18
|
|
(k)
|
between
the date of this Agreement and 5.00 pm on the Merger Implementation Date,
a Prohibited Occurrence has not occurred in respect of the
Purchaser;
|
|
|
(l)
|
between
the date of this Agreement and 5.00 pm on the Merger Implementation Date,
no event shall have occurred which shall have a Material Adverse Effect
upon White Energy and the Subsidiary
Corporations;
|
|
|
(m)
|
between
the date of this Agreement and 5.00 pm on the Merger Implementation Date,
no event shall have occurred which shall have a Material Adverse Effect
upon the Purchaser, its financial condition or the value of the Purchaser
Shares;
|
|
|
(n)
|
prior
to 5:00 p.m. on the day two days before the Second Court Date Application
Date, White Energy shall have delivered an Opinion of Counsel for White
Energy to the Purchaser in form and content reasonably satisfactory to the
Purchaser which opinion shall, inter
alia, provide, subject to the conditions set forth in such Opinion
of Counsel:
|
(i) that
all requisite consents and approvals of the White Energy Shareholders required
under the Corporations Act or other applicable law to approve the Schemes have
been obtained,
(ii) that
upon the White Energy Shares Scheme being duly and validly approved by the Court
and all other Regulatory Authorities in Australia, it will be Effective as at
the Effective Date;
(iii) that
upon the Options Scheme being duly and validly approved by the Court and all
other Regulatory Authorities in Australia, it will be Effective as at the
Effective Date; and
(iv) in
detail, the procedures to be adopted by the Court and each of the Schemes so
that Counsel for the Purchaser can determine whether the conditions required to
be satisfied under the Securities Act for a valid exemption under Section
3(a)(10) of the Securities Act have been satisfied;
|
|
(o)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date,
subject to receipt of the Opinion of Counsel for White Energy referred to
in Section 3.1(n) of this Agreement, the Purchaser shall have
delivered an Opinion of Counsel for the Purchaser to White Energy in form
and content reasonably satisfactory to White Energy; which opinion shall,
inter
alia, provide that, subject to the conditions set forth in such
Opinion of Counsel and in reliance upon the Opinion for Counsel of White
Energy:
|
(i) all
requisite consents and approvals of the Purchaser Shareholders required under
the Organizational Documents of the Purchaser and applicable law to consummate
the Acquisition and the other transactions contemplated by this Agreement have
been obtained,
(ii) all
Consideration Shares issuable pursuant to the White Energy Shares Scheme are
exempt from the registration requirements under the Securities Act, by reason of
Section 3(a)(10) of the Securities Act;
(iii) the
Purchaser Options issuable pursuant to the Options Scheme will be exempt from
the registration requirements under the Securities Act, by reason of Section
3(a)(10) of the Securities Act;
(iv) the
Purchasers Convertible Notes issuable pursuant to the Convertible Notes Offer,
when issued, will be exempt from the registration requirements under the
Securities Act by reason of the application of Regulation S or another exemption
from the registration requirements of the Securities Act, as applicable;
and
19
(v) such
Consideration Shares, Purchaser Options, Convertible Notes and Purchaser Shares
issuable upon exercise of such Purchaser Options and Purchaser Convertible Notes
will be saleable and tradable on the stock exchange on which Purchaser’s Shares
then trade);
|
|
(p)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date,
holders of less than 35% of the 11,500,000 Purchaser Shares issued in the
Purchaser’s initial public offering and held by Record Purchaser
Shareholders shall have voted against the Schemes and other transactions
contemplated by this Agreement and exercised their rights to redeem their
shares in accordance with the procedures set forth in the Purchaser’s
Prospectus and the Purchaser’s Organizational
Documents;
|
|
|
(q)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date,
there shall have been fully executed and delivered to White Energy an
amended and restated registration rights agreement by and among the
Purchaser, the holders of Insiders Shares, and certain Affiliates of White
Energy, all in form and substance mutually satisfactory to White Energy
and Purchaser;
|
|
|
(r)
|
the
delivery of Disclosure Schedules by the disclosing Party to the recipient
Party within 14 days after the Execution Date, which Disclosure Schedules
shall not include anything which has not been disclosed by the disclosing
party to the recipient party prior to the Execution
Date;
|
|
|
(s)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date,
White Energy shall have completed a review of the terms and exercise
rights attached to the Insider Warrants, which review shall be
satisfactory to White Energy in its sole and absolute
discretion;
|
|
|
(t)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date, all
Regulatory Approvals (other than the making of an order by the Court on
the Second Court Date approving each of the Schemes pursuant to
sub-section 411(4)(b) of the Corporations Act) required by any Regulatory
Authority or judicial entity or authority to implement the Schemes and
other transactions contemplated by this Agreement are
obtained;
|
|
|
(u)
|
prior
to 5:00 p.m. on the day before the Second Court Date, no Regulatory
Authority or judicial entity or authority taking any action or making any
order or decree which action, order or decree restrains or prohibits the
Schemes or other transactions contemplated by this
Agreement;
|
|
|
(v)
|
prior
to 5:00 p.m. on the day before the Second Court Date, no Purchaser
Takeover Proposal is made or announced as a result of which the Expert is
no longer able to conclude that the Schemes are in the best interests of
the Scheme Participants;
|
|
|
(w)
|
prior
to 5:00 p.m. on the day before the Second Court Date, no White Energy
Takeover Proposal is made or announced as a result of which the Expert is
no longer able to conclude that the Schemes are in the best interests of
the Scheme Participants;
|
|
|
(x)
|
an
Independent Expert’s Report is obtained by White Energy and included in
the Scheme Booklet which concludes that each of the Schemes are in the
best interests of the Scheme Participants and as at 5:00 p.m. on the day
before the Second Court Date, the Independent Expert has not changed its
opinion as was included in the Scheme
Booklet;
|
|
|
(y)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date, all
of the Purchaser Outstanding Shares, plus the Consideration Shares and
Purchaser Shares issuable upon conversion of Purchaser Convertible Notes
and exercise of Purchaser Options to be issued to Scheme Participants
pursuant to the terms of the Schemes and any other Purchaser Shares issued
pursuant to the terms of this Agreement, are approved for official
quotation and listing on either (a) the NYSE (conditional only on the
issue of those securities and on compliance with such other rules and
regulations of the NYSE as the Parties agree may be complied with), or (b)
the NYSE Alternext Exchange or such other stock exchange as agreed by the
Parties. To the extent that the relevant equivalent of the securities
referred to in this clause are to be quoted on ASX in accordance with
clause 3.1(z),
then this clause does not apply to those
securities;
|
20
|
|
(z)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date, the
relevant equivalent of the securities referred to in clause 3.1(y) which are to
not to be quoted on the any of the stock exchanges referred to in that
clause are approved for official quotation by ASX (conditional only on the
issue of those securities and on compliance with such other rules and
regulations of the ASX as the Parties agree may be complied
with);
|
|
|
(aa)
|
intentionally
omitted;
|
|
|
(bb)
|
not
later than 15 November 2009, the White Energy Shareholder Approval shall
be obtained;
|
|
|
(cc)
|
not
later than thirty (30) days after White Energy Shareholder Approval is
obtained, the Purchaser shall hold the Purchaser Shareholders Meeting and
all Purchaser Shareholder Approvals shall be
obtained;
|
|
|
(dd)
|
the
making of an order by the Court on the Second Court Date approving each of
the Schemes pursuant to sub-section 411(4)(b) of the Corporations
Act;
|
|
|
(ee)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date,
subject to Section 3.1(t), the Parties obtaining any third party
approvals under joint venture documentation or other significant contracts
to which the Purchaser and White Energy acting reasonably agree are
necessary or desirable to implement the Schemes or any transaction
contemplated by the Schemes or this
Agreement;
|
|
|
(ff)
|
prior
to the date of the Purchaser Shareholders Meeting and prior to 5:00 p.m.
on the day before the Second Court Date Application Date, the Options
Scheme Participants will at the Options Scheme meetings vote to approve
the Options Scheme; and
|
|
|
(gg)
|
prior
to 5:00 p.m. on the day before the Second Court Date Application Date,
White Energy and the Purchaser shall have entered into an agreement with
the holders of the White Energy Convertible Notes on such terms and
conditions as shall be mutually satisfactory to both White Energy and the
Purchaser.
|
|
3.2
|
Benefit
of the Conditions
|
|
|
(a)
|
The
Conditions in Sections 3.1(a), (h), (i), (l) and (n). are inserted in this
Agreement for the benefit of the Purchaser and the Purchaser may, by
notice in writing to White Energy on or before the due date for
satisfaction of these Conditions waive any of these
Conditions.
|
|
|
(b)
|
The
Conditions in Sections 3.1(b), (c), (d), (e), (f), (g), (j), (k), (m),
(o), (p), (q), (s) and (x) are inserted in this Agreement for
the benefit of White Energy and White Energy may, by notice in writing to
the Purchaser on or before the due date for satisfaction of these
Conditions waive any of there
Conditions.
|
|
|
(c)
|
The
Condition in Xxxxxxxx 0.0(x), (x), (x), (x), (x), (x), (x), (xx), (xx),
(dd), (ee), (ff) and (gg) are inserted in this Agreement for the benefit
of all Parties and all Parties must, by mutual written agreement on or
before the due date for satisfaction of this Condition, waive the
Condition or grant an extension of time for satisfaction of the
Condition.
|
21
|
3.3
|
Best
Endeavours
|
Each of
the Purchaser and White Energy agree to use its best endeavours to procure that
each of the conditions precedent in Section 3.1 are satisfied as soon as
practicable after the date of this Agreement or that there is no occurrence that
would prevent the conditions in Section 3.1 being satisfied (as the
context requires).
Without
limiting the generality of the foregoing:
|
|
(a)
|
the
Purchaser will promptly apply for all Regulatory Approvals and provide
White Energy with a copy of such applications and White Energy shall
provide the Purchaser with such information regarding White Energy as the
Purchaser shall reasonably request for the purpose of making such
applications;
|
|
|
(b)
|
the
Purchaser will prepare and provide to White Energy the Purchaser
Information for inclusion in the Scheme
Booklet;
|
|
|
(c)
|
White
Energy will prepare the Scheme Booklet in accordance with all applicable
laws, and in particular with the Corporations Act, RG 60 and RG
142:
|
|
|
(i)
|
ensuring
that the terms of each of the Schemes is fully and fairly portrayed;
and
|
|
|
(ii)
|
in
consultation with the Purchaser and subject to the Purchaser’s agreement
(such agreement not to be unreasonably withheld), as to the content and
presentation of the Scheme Booklet, which consultation and approval shall
include obtaining the consent of the Purchaser to the inclusion of
information provided by the Purchaser under Section 3.3(b) (not to be unreasonably
withheld);
|
|
|
(d)
|
White
Energy shall ensure that, without the prior written consent of the
Purchaser, between the date of this Agreement and the Merger
Implementation Date no Prohibited Occurrence occurs in relation to it;
and
|
|
|
(e)
|
The
Purchaser shall ensure that, without the prior written consent of White
Energy, between the date of this Agreement and the Merger Implementation
Date, no Prohibited Occurrence occurs in relation to
it.
|
|
3.4
|
Approval
of Scheme Booklet
|
|
|
(a)
|
White Energy to provide Scheme
Booklet: As soon as practicable after White Energy has
completed the preparation of the final form of the Scheme Booklet in
accordance with Section 3.3(c), White Energy
will forward copies to the
Purchaser.
|
|
|
(b)
|
Meeting of directors of White
Energy: As soon as practicable after preparation of the
final form of the Scheme Booklet as referred to in Section 3.4(a), a meeting of the White Energy Board will be
convened for the purpose of approving the Scheme
Booklet.
|
|
|
(c)
|
|
3.5
|
Consultation
|
|
|
(a)
|
Consultation: If
a condition precedent in Section 3.1 is not
satisfied or waived in accordance with Section 3.2 or there is an occurrence that will prevent
a condition precedent being satisfied as at the date specified in this
Agreement for its satisfaction (other than, in either case, as the result
of a deliberate action of the Purchaser or White Energy) or the Effective
Date has not occurred by the End Date, White Energy and the Purchaser will
consult in good faith:
|
22
|
|
(i)
|
as
to whether the relevant condition precedent is to be waived in accordance
with Section 3.2;
|
|
|
(ii)
|
as
to whether to extend the date by which the relevant condition precedent
must be satisfied including as to whether to extend the End Date;
and
|
|
|
(iii)
|
with
a view to determining whether the transactions contemplated by this
Agreement may proceed by way of alternative means or
methods.
|
|
|
(b)
|
Failure to
agree: If the parties are unable to reach agreement
under Section 3.5(a) within ten (10) Business
Days, either party may terminate this Agreement without any liability to
the other party by reason of that
termination.
|
|
3.6
|
Notices
|
|
|
(a)
|
Notice of a White Energy
Prohibited Occurrence or a White Energy Material Adverse
Effect: If any event which constitutes a White Energy
Prohibited Occurrence or a White Energy Material Adverse Effect occurs,
White Energy will immediately give written notice to the Purchaser of that
event. Thereafter, the Purchaser will give written notice to
White Energy as soon as possible as to whether or not it waives the breach
or non-fulfilment of the relevant condition precedent of this Agreement
resulting from the occurrence of that event, specifying the condition in
question. A waiver of breach or non-fulfilment in respect of a
condition precedent of this Agreement shall not
constitute:
|
|
|
(i)
|
a
waiver of breach or non-fulfilment of any other condition precedent of
this Agreement resulting from the same or substantially similar event;
or
|
|
|
(ii)
|
a
waiver of breach or non-fulfilment of that condition precedent resulting
from any other event.
|
|
|
(b)
|
White Energy Notice of
Changes: White Energy shall promptly notify the
Purchaser in writing of any change or event causing, or which, insofar as
can reasonably be foreseen, would cause a representation or warranty
provided in this Agreement to be false if given at that date, a Material
Adverse Effect or a Prohibited Occurrence in relation to White
Energy.
|
|
|
(c)
|
Notice of a Purchaser
Prohibited Occurrence or a Purchaser Material Adverse
Effect: If any event which constitutes
a Prohibited Occurrence or a Material Adverse Effect in respect
of the Purchaser occurs, the Purchaser will immediately give written
notice to White Energy of that event. Thereafter, White Energy
will give written notice to the Purchaser as soon as possible as to
whether or not it waives the breach or non-fulfilment of the relevant
condition precedent of this Agreement resulting from the occurrence of
that event, specifying the condition in question. A waiver of
breach or non-fulfilment in respect of a condition precedent of this
Agreement shall not constitute:
|
|
|
(i)
|
a
waiver of breach or non-fulfilment of any other condition precedent of
this Agreement resulting from the same or substantially similar event;
or
|
|
|
(ii)
|
a
waiver of breach or non-fulfilment of that condition precedent resulting
from any other event.
|
23
|
|
(d)
|
Purchaser Notice of
Changes: The Purchaser shall promptly notify White
Energy in writing of any change or event causing, or which, insofar as can
reasonably been foreseen, would cause a representation or warranty
provided in this Agreement to be false if given at that date, a Purchaser
Material Adverse Effect or a Purchaser Prohibited
Occurrence.
|
|
3.7
|
Notices;
Closing Certificates
|
|
|
(a)
|
The
Purchaser and White Energy must promptly notify the other in writing if
any of the Conditions are not satisfied, or cannot be satisfied, before
the earlier of (i) the End Date and (ii) prior to 5.00 pm on the day
before the Second Court Date.
|
|
(b)
|
At
5:00 pm (AEST) on the day immediately prior to the Second Court Date
Application Date, White Energy shall deliver to the Purchaser a
certificate, duly executed by an executive officer of White Energy
confirming that (i) all of the representations and warranties of White
Energy as at the Execution Date are true and correct as at the Second
Court Date Application Date in all material respects, and (ii) that all of
the Conditions required to be performed or satisfied by White Energy by
the Second Court Date Application Date, have been duly performed and
satisfied.
|
|
|
(c)
|
At
5:00 pm (AEST) on the day immediately prior to the Second Court Date and
the Merger Implementation Date, White Energy shall deliver to the
Purchaser a certificate, duly executed by an executive officer of White
Energy confirming that (i) all of the representations and warranties of
White Energy as at the Execution Date are true and correct as at the
Second Court Date and the Merger Implementation Date in all material
respects, and (ii) that all of the Conditions required to be performed or
satisfied by White Energy have been duly performed and
satisfied.
|
|
(d)
|
At
5:00 pm (AEST) on the day immediately prior to the Second Court Date
Application Date, the Purchaser shall deliver to White Energy a
certificate, duly executed by an executive officer of the Purchaser
confirming that (i) all of the representations and warranties of the
Purchaser as at the Execution Date are true and correct as at the Second
Court Date Application Date in all material respects, and (ii) that all of
the Conditions required to be performed or satisfied by the Purchaser by
the Second Court Date Application Date, have been duly performed and
satisfied.
|
|
|
(e)
|
At
5:00 pm (AEST) on the day immediately prior to the Second Court Date and
the Merger Implementation Date, the Purchaser shall deliver to White
Energy a certificate, duly executed by an executive officer of the
Purchaser confirming that (i) all of the representations and warranties of
the Purchaser as at the Execution Date are true and correct as at the
Second Court Date and the Merger Implementation Date in all material
respects, and (ii) that all of the Conditions required to be performed or
satisfied by the Purchaser under this Agreement have been duly performed
and satisfied.
|
|
|
|
4.
|
THE
SCHEMES
|
|
4.1
|
Schemes
to be proposed
|
White
Energy agrees to propose:
(a) the
White Energy Shares Scheme under which all of the White Energy Shares will be
transferred to the Purchaser (and/or its Nominee) in consideration for the
Purchaser providing the White Energy Shares Scheme Consideration to the White
Energy Shares Scheme Participants; and
(b) the
Options Scheme under which all of the White Energy Options shall be cancelled in
consideration of the Purchaser providing the Options Scheme Consideration to the
Options Scheme Participants.
24
|
4.2
|
Consideration
for the Schemes
|
The
Purchaser covenants in favour of White Energy:
(a) in
its own right and on behalf of the White Energy Shares Scheme Participants, that
(i) in consideration for each White Energy Share transferred to the Purchaser
(and/or its Nominee) by a White Energy Shares Scheme Participant, it will allot
and issue to such White Energy Shares Scheme Participant, on the Merger
Implementation Date, such number of Consideration Shares calculated in
accordance with Section 4.3, and (ii) if the aggregate number of Consideration
Shares issuable to a White Energy Shares Scheme Participant in accordance with
Section 4.3 results in a fraction of a number, the fraction will be rounded down
to the nearest whole number of Consideration Shares; and
(b) in
its own right and on behalf of the Options Scheme Participants, that (i) in
consideration for each White Energy Option an Options Scheme Participant agrees
to cancel, it will allot and issue to such Options Scheme Participant, on the
Merger Implementation Date, such number of Purchaser Options determined in
accordance with Section 4.3, and (ii) if the aggregate number of Purchaser
Options issuable to an Options Scheme Participant in accordance with Section 4.3
results in a fraction of a number, the fraction will be rounded down to the
nearest whole number of Purchaser Options.
|
4.3
|
Scheme
Consideration
|
|
|
(a)
|
The
aggregate number of Consideration Shares to be issued by the Purchaser to
each White Energy Shares Scheme Participant on the Merger Implementation
Date shall be calculated as
follows:
|
|
|
(i)
|
the
White Energy Market Value shall be determined;
|
|
|
(ii)
|
the
Adjusted Funds as at the Effective Date shall be added to the White Energy
Market Value and the sum thereof shall represent the Transaction
Value;
|
|
|
(iii)
|
the
amount by which the White Energy Market Value bears to the Transaction
Value (by dividing the White Energy Market Value by the Transaction Value)
shall be expressed as a percentage and shall be deemed to be the
Percentage Interest;
|
|
|
(iv)
|
the
Purchaser Outstanding Shares shall be divided by the result of the
equation, 1.00 minus the Percentage Interest, and the result thereof shall
be the Total Adjusted Outstanding Shares;
|
|
|
(v)
|
the
Total Adjusted Outstanding Shares less the Purchaser Outstanding Shares
shall represent the Consideration
Shares;
|
|
|
(vi)
|
the
Consideration Shares shall then be divided by the White Energy Diluted
Shares and the result shall be called the Share Issue Ratio;
and
|
|
|
(vii)
|
the
number of White Energy Shares held by each White Energy Shares Scheme
Participant shall be multiplied by the Share Issue Ratio and the result
shall be the number of Consideration Shares each White Energy Shares
Scheme Participant shall receive (after rounding
downwards).
|
|
|
(b)
|
Examples
of the method of calculating the aggregate number of Consideration Shares
and the Consideration Shares each White Energy Shares Scheme Participant
is entitled to in accordance with the above formula is set forth is
Section 5
below.
|
25
|
|
(c)
|
The
aggregate number of Purchaser Options to be issued by the Purchaser to
each Options Scheme Participant in respect of each class of White Energy
Options held by each Options Scheme Participant on the Merger
Implementation Date shall be calculated as
follows:
|
|
|
(i)
|
the
number of White Energy Options held by each Options Scheme Participant
shall be multiplied by the Share Issue Ratio and the result shall be the
number of Purchaser Options each Options Scheme Participant shall receive
(after rounding the result
downwards);
|
|
|
(ii)
|
the
alternative exercise prices of the Purchaser Options shall be calculated
as follows:
|
|
|
(A)
|
the
current exercise price of the White Energy Options shall be divided by the
Share Issue Ratio and the result shall be the exercise price of the
Purchaser Options (in Australian dollars);
and
|
|
|
(B)
|
the
current exercise price of the White Energy Options shall be divided by the
Share Issue Ratio and the result shall be multiplied by the Exchange Rate
and the result shall be the exercise price of the Purchaser Options (in US
dollars).
|
|
|
(d)
|
Examples
of the method of calculating the aggregate number of Purchaser Options
each Options Scheme Participant is entitled to in accordance with the
above formula is set forth is Section 5
below.
|
|
4.4
|
Other
Schemes and Offers are Conditional on the Prior Effectiveness of the White
Energy Shares Scheme and Effectiveness of All Schemes and
Offers
|
(a) Each
of the Options Scheme and the Convertible Notes Offers are conditional upon the
White Energy Shares Scheme becoming Effective.
(b) Unless
such conditions shall be waived in writing by White Energy and the Purchaser,
the consummation of the White Energy Shares Scheme and the other transactions
contemplated by this Agreement are conditional upon the Options Scheme becoming
Effective and the Convertible Notes Offers being accepted.
(c) The
Court Convened Meeting on the White Energy Shares Scheme shall be held first, to
be followed as soon thereafter as is practicable by a Court Convened Meeting/s
on the Options Scheme.
|
4.5
|
Convertible
Notes Offers
|
|
|
(a)
|
The
Purchaser shall make the Convertible Notes Offers within thirty (30)
Business Days of the Execution
Date.
|
|
|
(b)
|
Under
the terms of the Convertible Notes Offers and in consideration of the
holders of White Energy Convertible Notes agreeing to cancel, redeem,
replace or otherwise deal with their White Energy Convertible Notes, the
Purchaser must issue Purchaser Convertible Notes to the holders of the
White Energy Convertible Notes on terms to be agreed by the Purchaser,
White Energy and the White Energy Convertible Note
Holders.
|
|
|
(c)
|
The
Convertible Notes Offers (which may be waived by mutual agreement between
White Energy and the Purchaser) shall be conditional upon the White Energy
Shares Scheme and the Options Scheme becoming
Effective.
|
|
|
(d)
|
The
offer period of the Convertible Notes Offers shall expire on the Second
Court Application Date.
|
26
|
|
(e)
|
The
Purchaser Convertible Notes shall be issued to the White Energy
Convertible Note Holders under the Convertible Notes Offers on or about
the date that the Scheme Consideration is payable to the Schemes
Participants.
|
|
|
(f)
|
The
purpose of this Section 4.5 is to ensure that
the White Energy Convertible Note Holders shall have the right to convert
their Purchaser Convertible Notes into Purchaser Shares on an economically
equivalent basis.
|
|
4.6
|
Conditional
Subscription Agreement
|
The
Purchaser agrees and covenants in favour of White Energy (in its own right and
on behalf of Peabody) to roll up the Conditional Subscription Agreement into the
Purchaser on terms that preserve the rights of the parties to the Conditional
Subscription Agreement.
|
|
|
5.
|
EXAMPLE
OF METHOD OF CALCULATING CONSIDERATION SHARES AND PURCHASER
OPTIONS
|
|
5.1
|
Consideration
Shares – Example based on $100.00 million of Adjusted
Funds
|
|
|
For
the avoidance of doubt, if, for
example:
|
|
|
(a)
|
the
White Energy Diluted Shares at the Effective Date are 192,277,902 ordinary
shares;
|
|
|
(b)
|
the
White Energy Market Value at the Effective Date is
$480,694,755;
|
|
|
(c)
|
there
are $100.0 million of Adjusted Funds available on the Effective Date, and
therefore the Transaction Value is
$580,694,755;
|
|
|
(d)
|
the
Percentage Interest is 0.827792486 ($480,694,755/$580,694,755) and the
result of the equation in Section 4.3(a)(iv)
is 0.172207514;
|
|
|
(e)
|
solely
for the purpose of this example, the Purchaser Outstanding Shares shall be
taken to be 14,000,000 (being the number of Purchaser Shares as at the
Execution Date);
|
|
|
(f)
|
the
Total Adjusted Outstanding Shares are therefore 81,297,266 Purchaser
Shares;
|
|
|
(g)
|
the
Consideration Shares to be issued to the Scheme Participants on the Merger
Implementation Date is 67,297,266 Shares (81,297,266 –
14,000,000);
|
|
|
(h)
|
the
Share Issue Ratio is the result of 67,297,266 divided by 192,277,902 and
is 0.35000;
|
|
|
(i)
|
assuming
a White Energy Shares Scheme Participant holds 1,000 White Energy Shares
on the Record Date, such White Energy Shares Scheme Participant shall
receive 350 Purchaser Shares (1,000 multiplied by
0.35000).
|
It is
noted that the above numbers and figures are provided solely for the purpose of
this example and are not representations or warranties in any
respect.
|
5.2
|
Purchaser
Options – Example based on $100.00 million of Adjusted
Funds
|
For the
avoidance of doubt, if, for example and using the above example, the Share Issue
Ratio is 0.35000, and assuming a Options Scheme Participant holds, on the Record
Date, 1,000 White Energy Options exercisable at AUD$1.00 on or before 30 August
2010, such Options Scheme Participant shall receive:
27
|
|
(a)
|
350
Purchaser Options (1,000 multiplied by
0.35000);
|
|
|
(b)
|
exercisable,
at the Options Scheme Participant’s election, on or before 30 August 2010
at:
|
|
|
(i)
|
AUD$2.85;
or
|
|
|
(ii)
|
US$2.35.
|
It is
noted that the above numbers and figures are provided solely for the purpose of
this example and are not representations or warranties in any
respect.
|
5.3
|
Consideration
Shares – Example based on $140.00 million of Adjusted
Funds
|
|
|
For
the avoidance of doubt, if, for
example:
|
|
|
(a)
|
the
White Energy Diluted Shares at the Effective Date are 192,277,902 ordinary
shares;
|
|
|
(b)
|
the
White Energy Market Value at the Effective Date is
$480,694,755;
|
|
|
(c)
|
there
are $140.0 million of Adjusted Funds available on the Effective Date, and
therefore the Transaction Value is
$620,694,755;
|
|
|
(d)
|
the
Percentage Interest is 0.774446298 ($480,694,755/$620,694,755) and the
result of the equation in Section 4.3(a)(iv)
is 0.22553702;
|
|
|
(e)
|
solely
for the purpose of this example, the Purchaser Outstanding Shares shall be
taken to be 14,000,000 (being the number of Purchaser Shares as at the
Execution Date);
|
|
|
(f)
|
the
Total Adjusted Outstanding Shares are therefore 62,069,476 Purchaser
Shares;
|
|
|
(g)
|
the
Consideration Shares to be issued to the Scheme Participants on the Merger
Implementation Date is 48,069,476 Shares (62,069,476 –
14,000,000);
|
|
|
(h)
|
the
Share Issue Ratio is the result of 48,069,476 divided by 192,277,902 and
is 0.25000;
|
|
|
(i)
|
assuming
a White Energy Shares Scheme Participant holds 1,000 White Energy Shares
on the Record Date, such White Energy Shares Scheme Participant shall
receive 250 Purchaser Shares (1,000 multiplied by
0.25000).
|
It is
noted that the above numbers and figures are provided solely for the purpose of
this example and are not representations or warranties in any
respect.
|
5.4
|
Purchaser
Options – Example based on $140.00 million of Adjusted
Funds
|
For the
avoidance of doubt, if, for example and using the above example, the Share Issue
Ratio is 0.25000, and assuming a Options Scheme Participant holds, on the Record
Date, 1,000 White Energy Options exercisable at AUD$1.00 on or before 30 August
2010, such Options Scheme Participant shall receive:
|
|
(a)
|
250
Purchaser Options (1,000 multiplied by
0.25000);
|
|
|
(b)
|
exercisable,
at the Options Scheme Participant’s election, on or before 30 August 2010
at:
|
|
|
(i)
|
AUD$4.00;
or
|
|
|
(ii)
|
US$3.29.
|
28
It is
noted that the above numbers and figures are provided solely for the purpose of
this example and are not representations or warranties in any
respect.
|
|
|
6.
|
MANAGEMENT
AND CONTROL OF THE PURCHASER
|
|
6.1
|
Composition
of the Board of Directors
|
|
|
(a)
|
On
the Merger Implementation Date, White Energy will appoint four (4) Persons
to serve as members of the Board of Directors of the Purchaser, and one
(1) Independent (as defined in clause 6.1(e)) Person designated by the Purchaser’s Board
of Directors prior to the Second Court Date and approved by White Energy
shall serve as the remaining member of the Purchaser’s Board of
Directors. The Chairman of the Board of Directors of the
Purchaser shall be designated by White
Energy.
|
|
|
(b)
|
For
the purposes of Section 6.1(a), White Energy shall be entitled to increase
the number of members on the Board of Directors of the Purchaser to such
number as it considers reasonably appropriate, in its sole discretion, but
subject to maintaining the same ratio of members appointed by White Energy
to members appointed by the
Purchaser.
|
|
|
(c)
|
For
the purposes of Section 6.1(a),
White Energy shall nominate those Persons it wishes to appoint to the
Board of Directors of the Purchaser not later than ten (10) Business Days
following the Execution Date, at which time the documents needed to
perform background checks on such persons shall be provided to the
President and Secretary of the Purchaser. The names, ages and
business backgrounds of such Persons shall be included in the Purchaser
Proxy Statement. Each such Person appointed to the Board of
Directors of the Purchaser shall furnish to Purchaser all relevant
background information as may be required to be disclosed under U.S.
securities laws in connection with their
appointment.
|
|
|
(d)
|
For
the purposes of Section 6.1(a), the
Purchaser shall nominate those Persons that will serve on the Board of
Directors of the Purchaser not later than ten (10) Business Days following
the Execution Date, at which time the documents needed to perform
background checks on such persons shall be provided to the Company
Secretary of White Energy.
|
|
|
(e)
|
For
the purpose of this clause 6, Independent
means independent for the purposes of the NYSE
Rules.
|
|
|
|
7.
|
MISCELLANEOUS
|
|
7.1
|
Change
of Name
|
As soon
as practicable following the Merger Implementation Date, the Parties will
procure that the name of the Purchaser be changed to “White Energy Technology Inc”
or such other name as shall be acceptable to White Energy.
|
7.2
|
Delisting
|
As soon
as practicable after the Merger Implementation Date, White Energy will
apply:
|
|
(a)
|
for
termination of official quotation of White Energy Shares on ASX;
and
|
|
|
(b)
|
arrange
for it to be removed from the official list of
ASX.
|
|
7.3
|
Preparation
of Purchaser Proxy Statement
|
29
Representatives
of White Energy will use all reasonable endeavours to cooperate with the legal
and financial representatives of the Purchaser in connection with the
preparation of the Purchaser Proxy Statement and such other documentation as may
be required for the purposes of the implementation of the Scheme and any
transactions contemplated by this Agreement or the Scheme, including, without
limitation:
|
|
(a)
|
providing
the Purchaser and its representatives with all business, legal and audited
and unaudited financial statements concerning White Energy and the
Subsidiary Corporations and their respective businesses and management as
is required under the Securities Exchange Act for inclusion in the
Purchaser Proxy Statement;
|
|
|
(b)
|
reviewing
and commenting on one or more drafts of the Purchaser Proxy Statement
furnished by the legal and financial representatives of the Purchaser;
and
|
|
|
(c)
|
meeting
with and answering questions of, or providing information to, Purchaser’s
investment bankers, Existing Purchaser Shareholders and other Persons who
may be purchasing Purchaser Shares from Existing Purchaser Shareholders in
connection with one or more buy-back transactions or in connection with
the sale and issuance of additional Purchaser Shares prior to the Second
Court Date.
|
|
7.4
|
Mailing
of Purchaser Proxy Statement and Purchaser Shareholders
Meeting
|
Unless
otherwise agreed by the Purchaser and White Energy:
|
|
(a)
|
the
Purchaser Proxy Statement shall be mailed to the Purchaser Shareholders
not later than five (5) Business Days after White Energy shall have
obtained the White Energy Shareholders Approval;
and
|
|
|
(b)
|
the
Purchaser Shareholders Meeting shall be held after the Court Convened
Meetings and not more than twenty (20) Business Days following the mailing
of the Purchaser Proxy Statement to the Purchaser
Shareholders.
|
|
7.5
|
Costs
and Certain Purchaser Obligations
|
|
|
(a)
|
The
Purchaser shall be responsible to pay all legal, banking and other costs
and expenses related to the preparation and distribution of the Purchaser
Proxy Statement and such other documentation as may be required for the
purposes of the implementation of the Schemes and any transactions
contemplated by this Agreement or the Schemes and in complying with the
provisions of Section 3.1(c) of this
Agreement. To this end, the Purchaser shall procure that all
third parties submit their invoices or accounts (including estimates of
fees payable for all future work to be completed) to the Purchaser on or
before the Second Court Date.
|
|
|
(b)
|
White
Energy shall bear its own professional and other costs and expenses
incurred by White Energy in complying with its obligations under Section 7.2 above.
|
|
|
(c)
|
As
set forth on Schedule A to Exhibit 2 hereto, on the
Merger Implementation Date, the Purchaser shall (i) repay its indebtedness
to TAG Virgin Islands, Inc. (ii) pay a finders’ fee to TAG Virgin Islands,
Inc., and (iii) certain Affiliates of Purchaser shall issue to TAG Virgin
Islands, Inc. 100,000 ordinary shares of the
Purchaser.
|
|
7.6
|
Dates
|
The
Parties agree and acknowledge that all proposed dates and times relevant to the
Schemes may be varied by mutual agreement of the Parties.
30
|
|
|
8.
|
TERMINATION
|
|
8.1
|
Termination
|
This
Agreement may be terminated at any time prior to the Second Court
Date:
|
|
(a)
|
by
either the Purchaser or White Energy if any judicial entity or authority
(including the Court) or Regulatory Authority has issued an order, decree
of ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the Schemes and other transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have
become final and non appealable;
|
|
|
(b)
|
by
either the Purchaser or White Energy if the other Party is in material
breach of any provision of this Agreement before the Second Court Date;
provided that the non-breaching Party (either the Purchaser or White
Energy, as the case may be) has given notice to the other Party setting
out the relevant circumstances and stating an intention to terminate this
Agreement and, unless such breach shall be cured to the reasonable
satisfaction of the non-breaching Party within seven (7) Business Days (or
any shorter period ending at 5.00 pm on the day before the Second Court
Date) from the time such notice is given, the non-breaching Party may, in
its sole discretion, terminate this Agreement by a further notice in
writing to the other Party; or
|
|
|
(c)
|
by
either the Purchaser or White Energy if the Schemes (as described in
Section 4) are not approved by the majority of
Scheme Participants required under the Corporations
Act.
|
|
8.2
|
Effect
of Termination
|
In the
event of termination of this Agreement by either the Purchaser or White Energy
pursuant to Section 8.1, except to the extent that
such termination results from a breach by any party of its obligations under
this Agreement, this Agreement shall become void and have no effect, without any
liability or obligation on the part of the Purchaser or White Energy, other than
the provisions of Section 15.
|
|
|
9.
|
IMPLEMENTATION
|
|
9.1
|
White
Energy’s Obligations
|
White
Energy shall do everything reasonable within its power to implement the Schemes
prior to the End Date, including, without limitation:
|
|
(a)
|
Scheme
Booklet: The preparation and the dispatch of a Scheme
Booklet in respect of each of the Schemes to be dispatched to Scheme
Participants which shall comply with all applicable laws, the Corporations
Act, RG 142 and the Listing
Rules.
|
|
|
(b)
|
Directors’
recommendation: White Energy will state (on the basis of
statements made to it by each of its directors) that each of the directors
of White Energy recommends to each of the Scheme Participants that, in the
absence of a higher offer, the Schemes be approved, which statements shall
be made following the execution of this
Agreement.
|
|
|
(c)
|
Sub-section 411(17)(b)
statement: Apply to the ASIC for the production of a
statement pursuant to sub-section 411(17)(b) of the Corporations Act
stating that the ASIC has no objection to the
Schemes.
|
|
|
(d)
|
Court Convened
Meetings: Apply to the Court for an order convening the
Court Convened Meetings.
|
31
|
|
(e)
|
Court
Approval: Apply to the Court for an order approving all
of the Schemes pursuant to sub-section 411(4)(b) of the Corporations Act,
if the Schemes are approved by the relevant Scheme Participants at the
Court Convened Meetings.
|
|
|
(f)
|
Lodge copy of Court
order: Lodge with the ASIC an office copy of the Court
order approving the Schemes if approved by the relevant Scheme
Participants at the Court Convened Meetings and the
Court.
|
|
|
(g)
|
Conduct of Business by
White
Energy: During the period from the date of this
Agreement to the Effective Date, White Energy shall, and shall cause the
Subsidiary Corporations to, carry on their respective businesses in the
usual, regular and ordinary course in substantially the same manner as
conducted until now and in compliance in all material respects with all
applicable laws and regulations and agreements to which it is a party and
use reasonable efforts to preserve their relationships with customers,
suppliers, licensors, licensees, joint venturers and others having
business dealings with them.
|
|
9.2
|
The
Purchaser’s Obligations
|
The
Purchaser shall do everything reasonable within its power to implement the
Schemes prior to the End Date, including, without limitation:
|
|
(a)
|
Representation: Procuring
that the Purchaser is represented by counsel at the Court hearings
convened for the purposes of sub-section 411(4)(b) of the Corporations
Act, at which, through its counsel, the Purchaser will undertake (if
requested by the Court) to do all such things and take all such steps
within its power as may be necessary in order to ensure the fulfilment of
its obligations under this Agreement and the
Schemes.
|
|
|
(b)
|
Deed
Poll: Prior to dispatch of the Scheme Booklet,
execute:
|
|
|
(i)
|
a
deed poll under which the Purchaser offers to acquire the White Energy
Shares at the Record Date and covenants in favour of White Energy Shares
Scheme Participants generally to perform its obligations under this
Agreement, the deed poll and the White Energy Shares Scheme (White Energy Shares
Scheme Deed
Poll); and
|
|
|
(ii)
|
a
deed poll under which the Purchaser offers to provide the Options Scheme
Consideration to the Options Scheme Participants at the Record Date and
covenants in favour of Options Scheme Participants generally to perform
its obligations under this Agreement, the deed poll and the Options
Scheme (Options Scheme Deed
Poll).
|
|
|
(c)
|
Independent Expert
Report: the Purchaser shall provide such information and
otherwise assist any expert appointed by White Energy in any way
reasonably requested by the expert to assist in the preparation of its
report to accompany the Scheme
Booklet.
|
|
|
(d)
|
Conduct of Business by the
Purchaser: During the period from the date of this
Agreement to the Effective Date, the Purchaser shall carry on its business
in the usual, regular and ordinary course in substantially the same manner
as conducted until now and in compliance in all material respects with all
applicable laws and regulations and agreements to which it is a party and
use reasonable efforts to preserve its relationships with customers,
suppliers, licensors, licensees, joint venturers and others having
business dealings with it.
|
32
|
|
|
10.
|
COVENANTS
BY WHITE ENERGY
|
|
10.1
|
Conduct
of Business by White Energy
|
|
|
(a)
|
During
the period from the Execution Date to the Merger Implementation Date, each
of White Energy and the Subsidiary Corporations shall carry on their
respective businesses in the usual, regular and ordinary course in
substantially the same manner as conducted until now and in compliance in
all material respects with all applicable laws and regulations and
agreements to which they are a party and use reasonable efforts to
preserve their relationships with customers, suppliers, licensors,
licensees, joint venturers and others having business dealings with
them.
|
|
|
(b)
|
In
addition to and not in lieu of the provisions of Section 10.1, the Parties hereto do hereby acknowledge
and agree that during the period between the Execution Date and the Second
Court Date, without the consent or approval of the Purchaser, White Energy
may issue any White Energy Shares on commercially reasonable
terms.
|
|
10.2
|
Covenants
about White Energy
|
White
Energy covenants with the Purchaser that during the period commencing on the
Execution Date and expiring on the Merger Implementation Date, neither White
Energy nor the Subsidiary Corporations will, in connection
with the Business or on behalf of White Energy or the Subsidiary Corporations,
except in the ordinary course of business or as contemplated by this Agreement,
without the prior written consent of the Purchaser:
|
|
(a)
|
enter
into, terminate or alter any term of any Material Contract or other
material commitment;
|
|
|
(b)
|
incur
any material liability;
|
|
|
(c)
|
acquire
any material asset or authorise any material capital expenditure (except
in accordance with existing capital expenditure
programs);
|
|
|
(d)
|
dispose
of, agree to dispose of, assign, agree to assign, encumber or grant any
option over any of its assets or any interest in any of
them;
|
|
|
(e)
|
hire
or terminate the employment of or pay or agree to pay any bonus or
allowance to any employee or alter the terms of employment (including the
terms of superannuation or any other benefit) of any
employee;
|
|
|
(f)
|
issue
any additional Subsidiary Corporations Shares, or grant any option to
subscribe for any security in White Energy or the Subsidiary Corporations
or allot or issue or agree to allot or issue any security, share or loan
capital or any security convertible into any share or loan capital in
White Energy or any of the Subsidiary
Corporations;
|
|
|
(g)
|
resolve
to reduce or increase the Subsidiary Corporations Shares or capital in any
way;
|
|
|
(h)
|
enter
into a buy-back agreement or resolve to approve the terms of a buy-back
agreement on behalf of White Energy or the Subsidiary
Corporations;
|
|
|
(i)
|
declare
or pay any dividend or make any other distribution of White Energy’s or
the Subsidiary Corporations’ assets or
profits;
|
|
|
(j)
|
alter
or agree to alter White Energy’s or any of the Subsidiary Corporations’
constitutions;
|
33
|
|
(k)
|
pass
any resolution;
|
|
|
(l)
|
amend or modify any executed Material
Contract;
|
|
|
(m)
|
resolve
any material programs or budgets;
|
|
|
(n)
|
issue
or sell any Additional White Energy Securities between the Execution Date
and the Second Court Date that consist
of:
|
|
(i)
|
White Energy Shares, or | |
|
|
(ii)
|
other
Additional White Energy Securities that are convertible into or
exercisable for additional White Energy
Shares,
|
which, if issued or sold, would result in a Dilutive Issuance, unless
such issuance or sale is either
|
|
(A) | approved and consented to in writing by the Purchaser, or |
|
|
(B)
|
if
the prior written consent of the Purchaser is not obtained and White
Energy nonetheless elects to consummate such issuance or sale of Dilutive
Issuance Additional White Energy Securities between the Execution Date and
the Second Court Date, such issuance or sale shall reduce the White Energy
Per Share Value, as provided herein;
or
|
|
|
(o)
|
otherwise
take any action that would result in or reasonably be expected to result
in a Prohibited Occurrence in respect of White Energy or the Subsidiary
Corporations.
|
|
10.3
|
Further
Covenants by White Energy
|
|
|
(a)
|
White
Energy hereby covenants in favour of the Purchaser that during the period
commencing on the Execution Date and expiring on the Second Court Date it
will:
|
|
|
(i)
|
allow
the Purchaser to carry out a financial, commercial and legal due diligence
in relation to White Energy and the Subsidiary Corporations and will
provide the Purchaser with all relevant information in respect of White
Energy and the Subsidiary Corporations, in order for the Purchaser to
complete this due diligence;
|
|
|
(ii)
|
cooperate
with the Purchaser’s Investment Bankers in obtaining additional Purchaser
Funds for the Purchaser; and
|
|
|
(iii)
|
not
solicit or negotiate with any third party in respect of any proposed
tender offer, merger or takeover proposal involving White Energy or any of
the Subsidiary Corporations, or take any action which could reasonably be
expected to make the Schemes contemplated by this Agreement impossible or
impracticable to consummate.
|
|
|
(b)
|
White
Energy will use all reasonable endeavours to ensure that, to the best of
its knowledge, information and belief (after due investigation and inquiry
by its senior executive officers), none of the information regarding
itself or the Subsidiary Corporations supplied by White Energy, or any of
their representatives expressly for inclusion in the Purchaser Proxy
Statement (including any information included in the financial statements
or other financial information required to be included in the Purchaser
Proxy Statement) will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein in light of the circumstances
under which they were made, not misleading. If at any time prior to Second
Court Date, a change in such information which would make the preceding
sentence incorrect should be discovered by White Energy or the Subsidiary
Corporations, as applicable, will promptly notify Purchaser of such
change. White Energy and the Subsidiary Corporations agree, and agree to
cause their respective representatives to, reasonably cooperate with
Purchaser in its preparation of the Purchaser Proxy Statement and the
filing of the Purchaser Proxy Statement with the
SEC.
|
34
|
|
(c)
|
White
Energy hereby covenants in favour of the Purchaser that during the period
commencing on the Second Court Date and expiring on the Merger
Implementation Date it will not issue or agree to issue any White Energy
Shares or any other securities
whatsoever.
|
|
10.4
|
Break
up Fee
|
|
|
(a)
|
The
Parties hereto acknowledge that in the event that, for any reason, the
Schemes Participants shall not approve the Schemes contemplated hereby at
the Schemes Meetings, the Purchaser may be required to liquidate and
return the trust fund to its public shareholders on or after 31 January
2010. Accordingly, in the event that the Schemes Participants
shall not approve the Schemes contemplated hereby at the Schemes Meetings,
if the Purchaser shall thereafter be forced to liquidate or otherwise
return the trust fund to its public shareholders, and if at any time
thereafter, up to and including 31 January 2010, White Energy shall
either:
|
|
|
(i)
|
consummate
or be subject to a Sale of Control;
or
|
|
|
(ii)
|
obtain
financing for the Business in excess of the Minimum Amount (whether
through direct investment, a joint venture or otherwise) from any Person
who is not an Affiliate or associate of White
Energy,
|
then, and
upon the occurrence of either of such events, White Energy shall, simultaneous
with consummation of any such Sale of Control or such financing referred to in
section (ii) above, be responsible to pay or cause to be paid to the Purchaser,
the sum of Six Million Dollars ($6,000,000) as a break-up fee (the Breakup Fee)
|
|
(b)
|
|
|
(i)
|
the
Schemes Participants shall have approved the Schemes contemplated hereby
at the Scheme Meetings;
|
|
|
(ii)
|
White
Energy shall have been successful in procuring the White Energy Majority
Shareholders Consents.
|
|
|
(c)
|
The
Parties and their respective boards of directors do hereby agree and
acknowledge that the Breakup Fee (representing only approximately 1.25% of
the estimated White Energy Market Value) is reasonable under the
circumstances and represents a reasonable estimation of the loss and
damage that may be suffered and incurred by the Purchaser as a result of
the Schemes contemplated by this Agreement not being consummated by reason
of the Schemes Participants Shareholders not approving the
Schemes.
|
|
|
(d)
|
Notwithstanding
the provisions of Section 10.4(c) above, if it is found by any court of
competent jurisdiction in Australia from which no appeal can or shall be
taken that the Breakup Fee or any part of the Breakup Fee (the Impugned Amount) (i)
is or was or would be unlawful; (ii)
constitutes a breach of the fiduciary duties of the directors of White
Energy; or (iii) constitutes an Unacceptable Circumstances, then, and in such
event:
|
35
|
|
(i)
|
the
undertaking shall not apply to the extent of the Impugned
Amount;
|
|
|
(ii)
|
the
Person making payment of such Breakup Fee shall have a good defence to any
claim for the Impugned Amount; and
|
|
|
(iii)
|
if
the other Party has been paid the Impugned Amount, that Party must
immediately refund the Impugned Amount to the
Payer.
|
|
|
(e)
|
Provided
that the Purchaser shall have complied with all of its representations and
warranties contained in this Agreement and shall have performed all of the
covenants and agreements on its part to be performed hereunder (unless
such performance by the Purchaser shall have been rendered irrelevant
because the Schemes Participants shall not approve the Schemes
contemplated hereby at the Schemes Meetings), neither White Energy nor any
officer or director of White Energy shall commence any action or
proceeding of the nature contemplated by Section 10.4(d) to dispute all or
any portion of the Breakup Fee.
|
|
10.5
|
Event
affecting value of White Energy
Shares
|
If, on or
before Merger Implementation Date, an event occurs which has or may have a
Material Adverse Effect on the profitability or value of White Energy, or the
value of the Business shall have occurred, White Energy must, immediately upon
becoming aware of that event, give written notice to the Purchaser fully
describing the event.
|
|
|
11.
|
COVENANTS
BY THE PURCHASER
|
|
11.1
|
Conduct
of Business by the Purchaser
|
During
the period from the Execution Date to the Merger Implementation Date, the
Purchaser shall carry on its Business in the usual, regular and ordinary course
in substantially the same manner as conducted until now and in compliance in all
material respects with all applicable laws and regulations and agreements to
which it is a party and use reasonable efforts to preserve their relationships
with customers, suppliers, licensors, licensees, joint venturers and others
having business dealings with them.
|
11.2
|
Covenants
about the Purchaser
|
The
Purchaser covenants with White Energy that during the period commencing on the
Execution Date and expiring on the Merger Implementation Date, the Purchaser
will not, except as contemplated by this Agreement, without the prior written
consent of White Energy:
|
|
(a)
|
enter
into, terminate or alter any term of any material contract or
commitment;
|
|
|
(b)
|
incur
any additional Material Purchaser
Liability;
|
|
|
(c)
|
acquire
any material asset or authorise any material capital
expenditure;
|
|
|
(d)
|
dispose
of, agree to dispose of, assign, agree to assign, encumber or grant any
option over any of its current or future assets or any interest in any of
them;
|
36
|
|
(e)
|
hire
or terminate the employment of or pay or agree to pay any bonus or
allowance to any employee or alter the terms of employment (including the
terms of superannuation or any other benefit) of any
employee;
|
|
|
(f)
|
except for Warrants or Other Warrants listed on
Sections
1(c) and (d) of Exhibit
2 hereto, grant any option to
subscribe for any security in the Purchaser or allot or issue or agree to
allot or issue any security, share or loan capital or any security
convertible into any share or loan capital in the Purchaser or enter into
any agreement with respect to the ownership or control of any securities
of the Purchaser; provided,
however, that from and after the Execution Date and on any one or
more occasions on or before the Second Court Date, the Purchaser shall
have the right to issue and sell
|
(i)
additional Purchaser Shares or
(ii) other
Additional Purchaser Securities of the Purchaser
(in each
case, upon terms and conditions that shall be reasonably satisfactory to White
Energy) for the sole purpose of purchasing or otherwise acquiring Purchaser
Shares that are then currently owned by any one or more Record Purchaser
Shareholder(s) who (i) shall have advised the Purchaser or its representatives
that such Person will not vote in favour of this Agreement and the Schemes
contemplated hereby, or (ii) wishes to exercise such Person’s right to redeem
such Purchaser Shares and receive payment of the purchase price therefore; and
provided,
further, that the issuance of additional Purchaser Shares for the
foregoing purposes that are issued a per share price of not less than (US)$7.50
and not more than (US)$10.00, will be deemed to have issued on terms
satisfactory to White Energy;
|
|
(g)
|
resolve
to reduce or alter its share capital in any
way;
|
|
|
(h)
|
buy-back
Purchaser Shares or enter into a buy-back agreement or resolve to approve
the terms of a buy-back agreement; provided,
however, that on or before the Second Court Date, the Purchaser
shall have the right to buy-back Purchaser Shares from, or enter into one
or more buy-back agreements with, any one or more Record Purchaser
Shareholder(s) who shall (i) have advised the Purchaser or its
representatives that such Person will not vote in favour of this Agreement
and the Schemes contemplated hereby, or (ii) who wishes to exercise such
Person’s right to redeem such Purchaser Shares and receive payment of the
purchase price therefore; provided,
further, that, after giving effect to all such buy-backs and
buy-back agreements and the payments made by the Purchaser in connection
therewith, there shall be not less than the Minimum Amount available on
the Second Court Date;
|
|
|
(i)
|
declare
or pay any dividend or make any other distribution of its assets or
profits;
|
|
|
(j)
|
alter
or agree to alter the Purchaser Organizational Documents (except as
otherwise contemplated by this
Agreement);
|
|
|
(k)
|
pass
any resolution that would have a Material Adverse
Effect;
|
|
|
(l)
|
|
|
(m)
|
otherwise
take any action that would result in or reasonably be expected to result
in a Prohibited Occurrence in respect of the
Purchaser.
|
37
|
11.3
|
Further
Covenants by the Purchaser
|
|
|
(a)
|
The
Purchaser covenants in favour of White Energy that during the period
commencing on the Execution Date and expiring on the Second Court Date or
such later date as set out in the specific sub-clause below, it
will:
|
|
|
(i)
|
allow
White Energy to carry out a financial, commercial and legal due diligence
in relation to the Purchaser and will provide White Energy with all
relevant information in respect of the Purchaser, in order for White
Energy to complete this due
diligence;
|
|
|
(ii)
|
use
its best endeavours to ensure that the approval of any third parties (if
any) is obtained to the issue of the Consideration Shares, the Purchaser
Options, the Purchaser Convertible Notes and any other Purchaser Shares to
be issued pursuant to this Agreement (if
required);
|
|
|
(iii)
|
use
its best endeavours to obtain and provide confirmation from all third
party financiers to the Purchaser that they consent to the change of
control of the Purchaser or that the change of control is not an event of
default pursuant to any financing
arrangements;
|
|
|
(iv)
|
use
its best endeavours to increase the amount of Purchaser Funds by the sale
and issuance of additional Purchaser Shares or other Additional Purchaser
Securities. All upon such terms and conditions as shall be mutually
acceptable to White Energy and the
Purchaser;
|
|
|
(v)
|
|
|
(vi)
|
ensure
that the aggregate amount of the Adjusted Funds that are available to the
Purchaser and White Energy as at the Merger Implementation Date shall be
not less than the Minimum Amount.
|
|
|
(b)
|
Other
than as contemplated by this Agreement, the Purchaser hereby covenants in
favour of White Energy that during the period commencing on the Second
Court Date and expiring on the Merger Implementation Date it will not
issue or agree to issue any Purchaser Shares or any other securities
whatsoever.
|
|
|
(c)
|
The
Purchaser shall cause the Purchaser Shareholders Meeting to be duly called
and held as soon as reasonably practicable for the purpose of seeking the
Purchaser Shareholder Approvals, pursuant to the requirements of
Purchaser’s Organizational Documents, applicable law and applicable stock
exchange requirements. The Purchaser shall use its best efforts
to cause its board of directors to recommend that its shareholders vote in
favour of the matters required for Purchaser Shareholder
Approvals. In connection with the Purchaser Shareholders
Meeting, Purchaser shall:
|
|
|
(i)
|
prepare
and mail to its shareholders the Purchaser Proxy Statement meeting the
requirements of the Securities Exchange Act (determined as if compliance
with Regulation 14A thereunder were required) and all other proxy
materials for the Purchaser Shareholders
Meeting;
|
|
|
(ii)
|
use
its best efforts to obtain the Purchaser Shareholder Approvals;
and
|
|
|
(iii)
|
will
otherwise comply with applicable legal requirements with respect to the
Purchaser Shareholder Meeting.
|
38
|
|
(d)
|
Purchaser
agrees that the Purchaser Proxy Statement will comply in all material
respects with all of the requirements of the Securities Exchange Act
(determined as if compliance with Regulation 14A thereunder were required)
and Purchaser will ensure that the Purchaser Proxy Statement will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty is
made by Purchaser with respect to information supplied in writing by White
Energy or the Subsidiary Corporations expressly for inclusion in the
Purchaser Proxy Statement. Purchaser shall promptly correct any
information provided by it for use in the Purchaser Proxy Statement if and
to the extent that such information becomes false or misleading and shall
take all steps necessary to cause the Purchaser Proxy Statement as so
corrected to be filed with the SEC and disseminated to its shareholders as
and to the extent required by the Securities Act or the Securities
Exchange Act (determined as if compliance with Regulation 14A thereunder
were required) and to White Energy. Purchaser shall give White Energy and
its counsel a reasonable opportunity to review and comment on the
Purchaser Proxy Statement, and any amendments or supplements thereto,
prior to the filing of any such documents with the SEC and Purchaser will
give due consideration to White Energy's comments. Purchaser will provide
to White Energy and its counsel any comments that Purchaser or its counsel
may receive from the SEC or its staff, whether written or oral, with
respect to the Purchaser Proxy Statement promptly after receipt of any
such comments. Purchaser will use its reasonable best efforts to respond
promptly to any comments received from the SEC or its
staff.
|
|
|
(e)
|
With
respect to any information change notice delivered by White Energy to
Purchaser pursuant to Section 10.3(b) hereof,
Purchaser shall promptly correct any such information in the Purchaser
Proxy Statement and shall take all steps necessary to cause the Purchaser
Proxy Statement as so corrected to be disseminated to its shareholders as
and to the extent required by the Securities Exchange Act (determined as
if compliance with Regulation 14A thereunder were
required).
|
|
|
(f)
|
Until
the earlier of the Merger Implementation Date or the termination of this
Agreement, Purchaser shall not:
|
|
|
(i)
|
solicit,
encourage, directly or indirectly, any inquiries, discussions or proposals
for;
|
|
|
(ii)
|
continue,
propose or enter into any negotiations or discussions looking
toward;
|
entering
into any agreement or understanding providing for any acquisition of any capital
shares of Purchaser or any part of its assets or Business (in whole or in part),
nor shall Purchaser provide any information to any Person for the purpose of
evaluating or determining whether to make or pursue any such inquiries or
proposals with respect to any such acquisition. Purchaser shall immediately
notify White Energy of any such inquiries or proposals or requests for
information for such purpose.
|
11.4
|
Event
affecting value of Purchaser Shares
|
If, on or
before the Merger Implementation Date, a Material Adverse Effect on the
profitability or value of the Purchaser Shares or the Consideration Shares, or
the available Purchaser Funds shall have occurred, the Purchaser must,
immediately upon becoming aware of that event, give written notice to White
Energy fully describing the event.
39
|
|
|
|
|
12.
|
REPRESENTATIONS
AND WARRANTIES BY WHITE ENERGY
|
|
12.1
|
Representations
and Warranties
|
The
representations and warranties of White Energy set forth on Exhibit
1 annexed hereto are hereby incorporated by reference in this Agreement,
as though more fully set forth herein at length. White Energy
represents and warrants to the Purchaser, as an inducement to the Purchaser to
enter into this Agreement and it is a condition of this Agreement that the
statements set out in Exhibit
1 are and will be true, complete and accurate at the Execution Date, the
Second Court Date and at the Merger Implementation Date, except as otherwise
disclosed in the White Energy Disclosure Schedule.
|
12.2
|
Indemnity
|
White
Energy hereby agrees to indemnify and hold harmless the Purchaser against any
Claim against the Purchaser to the extent that the Claim arises from or is in
connection with:
|
|
(a)
|
any
breach of any representation or warranty set out in Exhibit
1, other than any representation or warranty, the breach of which
could not be reasonably expected to have a Material Adverse Effect on
White Energy or any of the Subsidiary Corporations, either individually or
as a consolidated whole, or
|
|
|
(b)
|
the
failure by White Energy to perform any of their respective covenants and
agreements to be performed under this
Agreement.
|
|
12.3
|
Repetition
on Second Court Date and Merger Implementation
Date
|
The
matters set out in Exhibit
1 will be taken to be repeated by White Energy on the Second Court Date
and the Merger Implementation Date with reference to the facts and circumstances
existing at that date.
|
|
|
13.
|
REPRESENTATIONS
AND WARRANTIES BY THE PURCHASER
|
|
13.1
|
Representations
and Warranties
|
The
representations and warranties of the Purchaser set forth in Exhibit
2 annexed hereto are hereby incorporated by reference in this Agreement,
as though more fully set forth herein at length. The Purchaser
represents and warrants to White Energy, as an inducement to White Energy and
White Energy to enter into this Agreement and it is a condition of this
Agreement that the statements set out in Exhibit
2 are and will be true, complete and accurate, at the Execution Date, at
the Second Court Date and the Merger Implementation Date, except as disclosed in
the Purchaser Disclosure Schedule.
|
13.2
|
Indemnity
by Purchaser
|
The
Purchaser hereby agrees to indemnify and hold harmless White Energy against any
Claim against White Energy, or the Subsidiary Corporations to the extent that
the Claim arises from or is in connection with:
|
|
(a)
|
any
breach of any representation or warranty set out in Exhibit
2, other than any representation or warranty, the breach of which
could not be reasonably expected to have a Material Adverse Effect on the
Purchaser;
|
|
|
(b)
|
the
failure by the Purchaser to perform any of its covenants and agreements to
be performed under this Agreement;
or
|
40
|
|
(c)
|
any
Material Purchaser Liability which occurred or which was incurred or arose
prior to the Second Court Date, including specifically, any Material
Liability relating to the China Tel
Transaction.
|
|
13.3
|
Repetition
on Second Court Date and Merger Implementation
Date
|
The
matters set out in Exhibit
2 will be taken to be repeated by the Purchaser on the Second Court Date
and the Merger Implementation Date with reference to the facts and circumstances
existing at that date.
|
|
|
14.
|
GENERAL
REPRESENTATIONS AND WARRANTIES AND ACKNOWLEDGEMENTS BY ALL
PARTIES
|
|
14.1
|
Representations
and warranties
|
Each
Party represents and warrants to the other Parties that:
|
|
(a)
|
if
a Party is a corporation, it is duly registered under the relevant and
appropriate legislation;
|
|
|
(b)
|
the
entry into and performance of this Agreement by the Party does not
constitute a breach of any obligation (including any statutory,
contractual or fiduciary obligation), or default under any agreement or
undertaking, by which the Party is
bound;
|
|
|
(c)
|
the
Party has taken all necessary action to authorise the execution, delivery
and performance of this Agreement in accordance with its terms;
and
|
|
|
(d)
|
no
Event of Insolvency has occurred in relation to the Party nor is there any
act which has occurred or any omission made which may result in an Event
of Insolvency occurring in relation to the
Party.
|
|
|
|
15.
|
CONFIDENTIALITY
|
|
15.1
|
Terms
to remain confidential
|
Each
Party is to keep confidential the terms of this Agreement, and any
other Confidential Information obtained in the course of furthering
this Agreement, or during the negotiations preceding this Agreement, and is not
to disclose it to any Person except:
|
|
(a)
|
to
employees, legal advisers, auditors and other consultants requiring the
information for the purposes of this
Agreement;
|
|
|
(b)
|
with
the consent of the other Parties;
|
|
|
(c)
|
if
the information is, at the date of this Agreement, lawfully in the
possession of the recipient of the information through sources other than
any of the other Parties;
|
|
|
(d)
|
if
required by law or a stock
exchange;
|
|
|
(e)
|
if
strictly and necessarily required in connection with legal proceedings
relating to this Agreement;
|
|
|
(f)
|
if
the information is generally and publicly available other than as a result
of a breach of confidence; or
|
41
|
|
(g)
|
to
a financier or prospective financier (or its advisers) of a
Party.
|
|
15.2
|
Disclosure
of Information
|
A Party
disclosing Confidential Information must use all reasonable endeavours to ensure
that Persons receiving Confidential Information from it do not disclose the
information except in the circumstances permitted by this
Agreement.
|
15.3
|
Obligations
continuing
|
The
obligations under this Section 15 contain
obligations, separate and independent from the other obligations of the Parties
and remain in existence for a period of five (5) years from the Execution Date,
regardless of any termination of this Agreement.
|
15.4
|
Stock
Exchange Listing
|
The
Parties acknowledge that White Energy is a company listed on ASX and accordingly
is required to make certain disclosures in the circumstances set out in the ASX
Listing Rules. The Parties acknowledge that Purchaser is a company
listed on NYSE Alternext and accordingly is required to make certain disclosures
in the circumstances set out in the NYSE Alternext Listing Rules and
as required by U.S. securities laws.
|
15.5
|
Agreed
announcement
|
A party
may not make any other public announcement release any information to the public
relating to the Schemes and any transactions contemplated by this Agreement or
the Schemes (including the fact that the parties have executed this Agreement)
unless:
|
|
(a)
|
the
other party has consented, such consent not to be unreasonably withheld or
delayed, to the announcement, including the form and content of that
disclosure; or
|
|
|
(b)
|
the
announcement must be made in order to comply with any law, regulation or
rule of the SEC or a stock exchange, and the party making the announcement
has provided the other party with at least one Business Day notice of the
requirement to make the announcement and a copy of the proposed draft
announcement.
|
|
|
|
16.
|
DEFAULT
|
If any of
the Parties (Defaulting
Party) shall default in the due observance or performance of any of its
obligations under this Agreement the observance or performance of which is or
becomes essential and such default shall continue for five (5) Business Days
after the receipt of a notice in writing from:
|
|
(a)
|
where
the Defaulting Party is White Energy – the Purchaser;
or
|
|
|
(b)
|
where
the Defaulting Party is the Purchaser – White
Energy,
|
to remedy
the default, then the Party or Parties not in default (the Non Defaulting Party) may,
without further notice to the Defaulting Party:
|
|
(a)
|
rescind
this Agreement and be entitled to such damages as to which the Non
Defaulting Party would be entitled at common law or in equity;
or
|
|
|
(b)
|
xxx
the Defaulting Party for specific performance of this
Agreement.
|
42
|
|
|
|
|
17.
|
DIRECTORS’
DUTIES
|
Nothing
in this Agreement imposes obligations on either party to the extent that
compliance with the relevant section would involve a breach of fiduciary duties
by directors of that party or be otherwise unlawful, provided that the party
must give prior written notice to the other party before taking any action in
respect of which it relies on this section and must, to the extent permitted by
law and as expeditiously as practicable, provide full particulars to the other
party, and consult with the other party in good faith, with respect to the
relevant action.
|
|
|
18.
|
RELEASE
|
Subject
to section 199A of the Corporations Act, no party, and no officer or director of
a party, shall be liable for anything done or purported to be done in connection
with the Schemes in good faith, but nothing in this section shall exclude any
liability which may arise from a grossly negligent act or omission on the part
of such a person. Each party receives and holds the benefit of this
release, to the extent that it relates to its officers or directors, as agent
for them.
|
|
|
19.
|
BUSINESS
DAY
|
Except
where otherwise expressly provided, where under this Agreement the day on which
any act, matter or thing that is required to be done is not a Business Day, that
act, matter or thing shall be done on the immediately succeeding Business
Day.
|
|
|
20.
|
NOTICES
AND CERTIFICATES
|
|
20.1
|
Notices
and Certificates in writing
|
Each
notice or certificate authorised or required to be given to a Party shall be in
writing and may be delivered Personally or sent by next day courier service or
facsimile in each case addressed to the Party at its address set out in Section
20.2, or as the case may be to such other address
as it may from time to time notify to the other Parties pursuant to Section 20.3.
|
20.2
|
Initial
address of Parties
|
The
initial address of the Parties shall be as follows:
In the
case of the Purchaser:
Xxxxxx
House
South
Church Street
Xxxxxx
Town, Grand Cayman
Cayman
Islands
With
copies to:
Xx. Xxxx Xxxxx
0000 Xxxxxxxxxxxxx Xxxxxxx,
Xxxxx 0000
Xxxx Xxxx, XX 00000
Facsimile: INT x(000) 000-0000
-and-
43
Xxxxxxx
Xxxx LLP
0000
Xxxxxxxx, Xxxxx 0000
Xxx Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxx
X. Xxxxx, Esq.
Facsimile: INT
+ (000) 000-0000
Email: xxxxxx@xxxxxxxxxxx.xxx
In the
case of White Energy:
Xxxxx
00
000
Xxxxxx Xxxxxx,
Xxxxx
Xxxxxx, XXX 0000
Facsimile: INT
+ (00-0) 0000 0000
Attention: Chief
Financial Officer
With
copies to:
Steinepreis
Paganin
Xxxxx 0,
The Read Buildings
00
Xxxxxxxx Xxxxxx
XXXXX XX
0000
Attn:
Xxxxx Xxxxxxxxxxx
Facsimile:
INT x(00-0) 0000 0000
Email:
xxxxx@xxxxxxxx.xxx.xx
-xxx-
XXX Piper
LLP (US)
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxxx Xxxxx Xxxxx, Esq.
Facsimile:
INT + (000) 000-0000
Email: Xxxxxxxx.xxxxx@xxxxxxxx.xxx
|
20.3
|
Change
of Address
|
Each
Party may from time to time change its address by giving notice pursuant to
Section 20.1 to the other Parties.
|
20.4
|
Receipt
of notice
|
Any
notice given pursuant to Section 20.1 will be
conclusively deemed to have been received:
|
|
(a)
|
in
the case of Personal delivery, on the actual day of delivery if delivered
prior to 5.00 pm (local time) on a Business Day or on the next following
Business Day if delivered after 5.00pm (local time) on a Business Day or
on a day other than a Business Day;
|
|
|
(b)
|
if
sent by mail, on the tenth clear Business Day after the day of posting;
or
|
|
|
(c)
|
if
sent by facsimile or electronic mail, on the day after the facsimile or
electronic was sent by clear transmission and confirmed as
received.
|
44
|
|
|
21.
|
NON-ASSIGNMENT
|
No Party
may assign any or all of its rights and obligations under this Agreement to any
Person except with the prior written consent of the other Parties which consent
shall not be unreasonably withheld or delayed.
|
22.
|
FURTHER
ASSURANCE
|
Each
Party shall sign, execute and do all deeds, acts, documents and things as may
reasonably be required by the other Parties to effectively carry out and give
effect to the terms and intentions of this Agreement.
|
|
|
23.
|
GOVERNING
LAW
|
This
Agreement shall be governed by and construed in accordance with the law from
time to time in the State of New South Wales and the Parties agree to submit to
the non-exclusive jurisdiction of the courts of New South Wales and the courts
which hear appeals therefrom.
|
|
|
24.
|
VARIATION
|
|
|
(a)
|
No
modification or alteration of the terms of this Agreement shall be binding
unless made in writing dated subsequent to the date of this Agreement and
duly executed by the Parties.
|
|
|
(b)
|
If
a Party proposes an amendment or alteration that will optimise the
benefits flowing to a Party and not detriment the position or benefits
flowing to another Party, the Parties agree that they will use their best
endeavours to implement such amendment or alteration and shall not
unreasonably withhold their consent to such amendment or
alteration.
|
|
|
|
25.
|
COSTS
|
|
25.1
|
Stamp
Duty
|
All stamp
duty assessed on or in respect of this Agreement or any document or transaction
contemplated by this Agreement shall be paid 50% by the Purchaser and 50% by
White Energy.
|
25.2
|
Legal
Costs
|
In
addition to the provisions of Section 7.4 above,
each Party shall bear their own legal costs of and incidental to the
preparation, negotiation and execution of this Agreement.
|
|
|
26.
|
WAIVER,
REMEDIES CUMULATIVE
|
|
26.1
|
Waiver
|
The
waiver by either party of a breach or default by the other party of this
Agreement or a failure to satisfy a condition shall not be construed as a waiver
of any other breach or default or non-fulfilment of this Agreement or of any
other provisions of this Agreement and shall not impair the exercise of any
rights accruing to it under this Agreement thereafter. All waivers
must be in writing. Any delay or omission on the part of either party
to exercise or avail itself of any rights accruing to it under this Agreement
shall not operate as a waiver by such party of any breach or default by the
other party of any of the said provisions.
45
|
26.2
|
Remedies
Cumulative
|
All
rights and remedies provided in this Agreement are cumulative and are not
exclusive of any rights or remedies provided by law.
|
|
|
27.
|
MISCELLANEOUS
|
|
27.1
|
Enforcement
of Provisions
|
If any
provision of this Agreement is invalid and not enforceable in accordance with
its terms, all other provisions which are self-sustaining and capable of
separate enforcement without regard to the invalid provision, shall be and
continue to be valid and forceful in accordance with their terms.
|
27.2
|
Sole
Understanding
|
|
|
(a)
|
This
Agreement shall constitute the sole understanding of the Parties with
respect to the subject matter and replaces all other agreements with
respect thereto.
|
|
|
(b)
|
For
the avoidance of any doubt, the parties agree that the Share Exchange
Agreement is hereby terminated and of no further force or effect and the
parties release each other from and in respect of all claims in relation
to the Share Exchange Agreement.
|
|
27.3
|
Counterparts
|
This
Agreement may be executed in any number of counterparts (including by way of
facsimile) each of which shall be deemed for all purposes to be an original and
all such counterparts taken together shall be deemed to constitute one and the
same instrument.
|
27.4
|
Time
|
Time
shall be of the essence in this Agreement in all respects.
[balance
of this page intentionally left blank – signature page follows]
46
EXECUTED by the Parties as an
Agreement.
|
EXECUTED
BY:
in
accordance with its constituent documents and Cayman Islands
law:
|
)
)
)
)
|
|
|
/s/
Xxxx X. Xxxxx
|
||
|
President
/s/
Xxxxxxx Xxxxxx
|
||
|
Secretary
|
|
EXECUTED
BY:
WHITE
ENERGY COMPANY LIMITED
ACN
071 527 083
in
accordance with the Corporations Act:
|
)
)
)
)
|
|
|
/s/
Xxxx
Xxxxxxxx
|
||
|
Director
/s/
Xxxxxxx Xxxxxx
|
||
|
Director/Secretary
|
47
|
EXHIBIT
1 – REPRESENTATIONS AND WARRANTIES OF WHITE
ENERGY
|
|
1.
|
Share
capital
|
|
|
(a)
|
(Due Issuance and
Payment): The White Energy Shares and the issued and
outstanding Subsidiary Corporations Shares are fully paid up and
non-assessable and have been duly issued and
allotted.
|
|
|
(b)
|
(Shares): The
aggregate number of the issued and outstanding White Energy Shares and
Subsidiary Corporations, and the record and beneficial owners of the White
Energy Shares or Subsidiary Corporations is set forth on Schedule A to
this Exhibit
1.
|
|
|
(c)
|
(No right to subscribe):
Other than as set out in this Agreement and disclosed to the Purchaser, No
Person has any right or option to subscribe for or otherwise to acquire
any further White Energy Shares.
|
|
|
(d)
|
(No preference shares or
convertible securities): White Energy does not have any
preferred or preference shares authorized or issued. No Person
has any right to convert any notes or other securities of White Energy
into White Energy Shares other than as set out in this Agreement or
disclosed to the Purchaser.
|
|
|
(e)
|
(No warrants or
options): There are no outstanding warrants, options,
contracts, calls, first refusals, commitments, rights or demands of any
kind relating to the issued or unissued capital of White Energy other than
as set out in this Agreement or disclosed to the
Purchaser.
|
|
|
(f)
|
(No other
allotments): Other than as set out in this Agreement or
disclosed to the Purchaser, White Energy is not under any obligation to
allot any shares to any Person or Persons, or otherwise to alter the
structure of any part of its unissued share capital, and White Energy is
not under any obligation to give any option over any part of its unissued
share capital nor has White Energy offered to do any of the matters stated
in this sub-paragraph other than as set out in this Agreement or disclosed
to the Purchaser.
|
|
2.
|
Effect of this
Agreement
|
The entry
into and performance of this Agreement and all Exhibits hereto and other
documents executed pursuant to this Agreement:
|
|
(a)
|
will
not relieve any Person of any contractual or other obligation to White
Energy or entitle any Person to re-negotiate the terms or conditions of
any such obligation;
|
|
|
(b)
|
do
not and will not conflict with, violate or result in a breach by White
Energy or the occurrence of an event of default under any agreement or any
law, undertaking to or judgment or Court
order;
|
|
|
(c)
|
will
not result in any indebtedness, present or future, of White Energy
becoming due or capable or being declared due and payable before the
stated maturity date;
|
|
|
(d)
|
will
not give rise to any contractual or other obligation of White Energy to
any Person or entitle any Person to require the performance of or
compliance with any existing contractual or other obligation of White
Energy; and
|
|
|
(e)
|
will
not entitle any Person with whom White Energy has a contract or
arrangement of any kind to terminate that contract or arrangement or to
impose less favourable terms on White
Energy.
|
|
3.
|
White
Energy
|
White
Energy:
|
|
(a)
|
is
duly registered, has full corporate power to own its assets and Business
and to carry on its Business as now conducted;
and
|
|
|
(b)
|
has
done everything reasonably necessary to do business lawfully in all
jurisdictions in which its Business is carried
on.
|
|
4.
|
Contracts and
Commitments
|
|
|
(a)
|
(Material
Contracts): All Material Contracts to which White Energy
is a party and relating to the Acquisition have been fully disclosed to
the Purchaser prior to the Execution Date and listed on White Energy’s
Disclosure Schedule.
|
|
|
(b)
|
(Executed Material
Contracts): Each and every Material Contract and other
instrument or other commitment relating to the Acquisition to which White
Energy is a party and which is executed, delivered and assigned to White
Energy on the Second Court Date, represents and will represent a valid and
binding obligation of all of the parties thereto in accordance with their
respective terms.
|
|
|
(c)
|
(Unexecuted Material
Contracts): Having regard to commercial circumstances,
White Energy shall use its best efforts to cause to be duly executed and
delivered on or before the Second Court Date, such Material Contracts
submitted in draft form and which are not duly executed as at the
Execution Date as it, in its reasonable opinion, considers necessary for
White Energy to carry on the
Business.
|
|
|
(d)
|
(No Defaults): White
Energy has not committed any default or event of default under any
Material Contract and no event has occurred, which, with the passage of
time, the giving of notice, or both, would constitute a default or event
of default under any such Material Contract and such event having not been rectified after
appropriate notice of the event has been provided to the relevant party
under the relevant contract or the event is not capable of
rectification. To the knowledge of White Energy no other
party to any Material Contract has committed any default or event of
default under any such Material Contracts
and such event having not been rectified after appropriate notice of the
event has been provided to the relevant party under the relevant contract
or the event is not capable of
rectification
|
|
|
(e)
|
(No contracts outside ordinary
course of business): White Energy is not a party to any
contract or commitment relating to the Acquisition which has been entered
into and which is in existence
that:
|
(i) is
outside the ordinary course of its Business;
|
|
(ii)
|
even
if entered into in the ordinary course of its Business, involves or is
likely to involve obligations or liabilities which by reason of their
magnitude or nature ought reasonably to be made known to an intending
purchaser of the White Energy
Shares;
|
(iii) is
not at arm’s length or not on normal commercial terms; or
(iv) is
long term, substantial or onerous.
|
|
(f)
|
(No guarantees
given): Other than as disclosed to the Purchaser and
other than guarantees provided in the ordinary course of its business,
White Energy has not guaranteed or indemnified and is not directly or
indirectly obliged in any way to guarantee, assume or provide funds to
satisfy any obligation of any Person, and has not given a letter of
comfort to any Person.
|
|
|
(g)
|
(Material Contracts
sufficient): The Material Contracts that are duly
executed, delivered and assigned to White Energy on the Second Court Date
are sufficient to conduct the Business of White Energy as currently
conducted and as expected to be conducted as at the Second Court
Date.
|
|
5.
|
Corporate
matters
|
|
|
(a)
|
(Assets owned by White
Energy): White Energy is the legal and beneficial owner
of all of their assets, which are owned free and clear of any Encumbrance,
except as disclosed in the White Energy Disclosure Schedule, and on the
Second Court Date BCBC will hold the exclusive license to the Technology
throughout the world pursuant to the Licence Agreement and 51% of the
Adaro Joint Venture and BCBC Singapore will hold 51% of the equity of the
Bayan Joint Venture.
|
|
|
(b)
|
(Encumbrances): Except as
disclosed in the White Energy Disclosure Schedule, there are no
Encumbrances over all or White Energy’ present or future assets or
revenues of its business.
|
|
|
(c)
|
(Compliance with
contracts): White Energy has complied in all material
respects with:
|
|
|
(i)
|
its
constitution;
|
|
|
(ii)
|
all
Material Contracts;
|
| (iii) | any instrument to which it is a party or by which it is bound; and | |
|
|
(iv)
|
all
Statutes and other legal requirements and all judgments, orders,
injunctions and requirements of any Court or Government
Authority,
|
|
|
(v)
|
and
there has not occurred any event which, with the passing of time or giving
of notice, would constitute a material breach or default of any of the
above.
|
|
|
(d)
|
(No powers of
attorney): There are no powers of attorney given by
White Energy in favour of any Person which are or may come to be in force
in relation to the Business or White
Energy.
|
|
|
(e)
|
(Officers duly
appointed): All of the directors and secretaries of
White Energy have been duly appointed in accordance with the Corporations
Act.
|
|
|
(f)
|
(All duties and taxes
paid): All stamp duties and other taxes for which White
Energy is primarily liable in respect of every deed, agreement or other
document to which White Energy is or has been a party have been duly paid
or adequately provided for.
|
|
|
(g)
|
(Filings): White
Energy has filed all annual returns, resolutions, particulars, other
forms, returns and documents as and where required to be filed or
registered, such documents were accurate in all material respects, and
White Energy is not liable to be struck off the register of
companies.
|
|
6.
|
Intellectual
Property and
Confidential Information
|
(a) The
White Energy Disclosure Schedule accurately describes:
|
|
(i)
|
all
registered and unregistered business names and
Trademarks;
|
|
|
(ii)
|
all
registered Patents; and
|
|
|
(iii)
|
all
applications for registration of Trademarks,
Patents;
|
which
will be as at the Second Court Date owned or used by White Energy in connection
with the Business.
|
|
(b)
|
(Right and
title): Other than as disclosed to the Purchaser by
White Energy, as at the Execution Date and the Second Court
Date:
|
|
|
(i)
|
BCBC
has been legally and validly granted the exclusive right and licence (as a
licensee) to the Technology throughout the world pursuant to the Licence
Agreement;
|
|
|
(ii)
|
BCBC
has not granted any sub- licence to Commercialise the Technology to any
Person (other than to the Bayan Joint Venture Company and River Energy JV
Limited); and
|
|
|
(iii)
|
White
Energy will not have assigned or disposed of any right, title or interest
in the Intellectual Property
Rights.
|
(c)
(Legally and beneficially
owned): The Intellectual Property Rights:
|
|
(i)
|
will
as at the Second Court Date and pursuant to the Head Licenses be legally
vested in White Energy (as a sub-licensee), if
required;
|
|
|
(ii)
|
to
the best of White Energy’s knowledge, information and belief, are not
being presently infringed, nor are they the subject of any dispute,
litigation or expungement application (whether threatened or otherwise);
and
|
|
|
(iii)
|
are
not subject to any licence or authority in favour of any third Person, and
the exercise of them does not infringe the rights of any other
Person.
|
|
|
(d)
|
(Confidential
Information): There has not been any misuse or
unauthorised disclosure of any Confidential
Information.
|
|
|
(e)
|
(Head
Licence): The Head Licences are valid, binding and
enforceable in accordance with its terms. White Energy has
complied at all times with the terms of the Head Licences, and no act or
omission has occurred which would entitle the licensor under the Head
Licences to terminate that Head
Licences.
|
|
|
(f)
|
(No use by other
Persons): White Energy is not aware of any use by any
other Person of any business name or trade xxxx owned or used by White
Energy.
|
|
|
(g)
|
(No infringement of other
right): To the best of White Energy’s knowledge,
information and belief, none of the Intellectual Property Rights or other
processes now or at any time employed, or the products now or at any time
produced by White Energy, constitutes or may constitute an unauthorised
infringement of any intellectual property rights of any other
Person.
|
|
7.
|
Absence of
Litigation
|
|
|
(a)
|
(No current or pending
litigation): White Energy and any Person for whom it may
be vicariously liable is not engaged in any capacity in any prosecution,
litigation, arbitration proceedings or administrative or governmental
challenge or investigation (Litigation). In addition, no
Litigation exists involving the Intellectual Property Rights, the
Technology or the right to Commercialise the
Technology.
|
|
|
(b)
|
(No pending
Litigation): There is no Litigation pending, threatened,
anticipated or contemplated against White Energy or any Person for whom
White Energy may be vicariously liable. In addition, no
Litigation involving the Intellectual Property Rights, the Technology or
the right to Commercialise the Technology is currently
pending.
|
|
|
(c)
|
(No facts giving rise to
Litigation): No fact or circumstance exists which may
give rise to any Litigation which could materially affect the ability of
White Energy to continue to operate the
Business.
|
|
|
(d)
|
(No outstanding
judgments): There are no unsatisfied or outstanding
judgments, orders, decrees, stipulations, or notices affecting White
Energy or any Person for whom White Energy may be vicariously
liable.
|
|
8.
|
Taxation
|
|
|
(a)
|
(Compliance): White
Energy has duly complied with all of its taxation
obligations.
|
|
|
(b)
|
(All other taxes assessed and
paid): All Taxes which have been assessed or imposed or
which are deemed to have been assessed or imposed or which are lawfully
assessable or payable by or upon White Energy has been paid or remitted to
the relevant Revenue Authority by White
Energy.
|
|
|
(c)
|
(No penalty or fine paid or
payable): White Energy has not in the past five years
paid or become liable to pay, nor are there any circumstances by reason of
which White Energy is likely to become liable to pay, any penalty, fine or
interest with respect to any Tax.
|
|
9.
|
Material
disclosure
|
|
|
(a)
|
(All material
information): Any information known or which should be
known to White Energy concerning White Energy which might reasonably be
regarded as material to a purchaser for value of the White Energy Shares
has been disclosed in writing to the Purchaser and is set forth in White
Energy Disclosure Schedules.
|
|
|
(b)
|
(True, complete and
accurate): All information concerning White Energy or
concerning the White Energy Shares supplied to the Purchaser or its
agents, employees or advisers by White Energy or its agents, employees or
advisers is true, complete and accurate in all respects, and is not
misleading or deceptive.
|
|
|
(c)
|
(No material error or
misstatement): No representation, warranty or document
made or furnished by White Energy in connection with this Agreement
contains any material error or misstatement nor does it omit to state any
material fact.
|
|
|
(d)
|
(No adverse
acts): Nothing has been done or omitted to be done in
relation to the White Energy Shares or White Energy which might materially
adversely affect the interests of the Purchaser as an intending purchaser
of the White Energy Shares.
|
|
|
(i)
|
Permits;
Compliance. White Energy is in possession of all
franchises, grants, authorizations, licenses, permits, easements,
variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its
business as it is now being conducted (collectively, the Permits), and there is
no action pending or, to the knowledge of any executive officer of White
Energy, threatened regarding suspension or cancellation of any of the
Permits. White Energy is not in conflict with, or in default or
violation of, any of the Permits, except for any such conflicts, defaults
or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse
Effect. Neither White Energy nor White Energy has received any
notification with respect to possible conflicts, defaults or violations of
applicable laws, except for notices relating to possible conflicts,
defaults or violations, which conflicts, defaults or violations would not
have a Material Adverse Effect.
|
|
|
(ii)
|
Environmental
Matters. There are, with respect to White Energy, no
past or present violations of Environmental Laws (as defined below),
releases of any material into the environment, actions, activities,
circumstances, conditions, events, incidents, or contractual obligations
which may give rise to any common law environmental liability or any
liability under any environmental laws of any country throughout the
world, and White Energy has not received any notice with respect to any of
the foregoing, nor is any action pending or, to the knowledge of any
executive officer of White Energy, threatened in connection with any of
the foregoing. The term Environmental Laws means
all laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants contaminants, or toxic or hazardous
substances or wastes (collectively, Hazardous Materials)
into the environment, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials, as well as all authorizations, codes,
decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder. Other than those
that are or were stored, used or disposed of in compliance with applicable
law, no Hazardous Materials are contained on or about any real property
currently owned, leased or used by White Energy, and no Hazardous
Materials were released on or about any real property previously owned,
leased or used by White Energy during the period the property was owned,
leased or used by such Company, except in the normal course of their
businesses. There are no underground storage tanks on or under
any real property owned, leased or used by White Energy that are not in
compliance with applicable law.
|
|
|
(iii)
|
Title to
Property. White Energy has good and marketable title to
all real property or holds under valid leases or other rights to use all
real property, plants, machinery and equipment necessary for the conduct
of the business of White Energy as presently conducted and good and
marketable title to all personal property owned by them which is material
to the business of such Company, in each case free and clear of all Liens
and defects except such as would not have a Material Adverse
Effect. Any real property and facilities held under lease by
White Energy is held by it under valid, subsisting and enforceable leases
with such exceptions as would not have a Material Adverse
Effect.
|
|
|
(iv)
|
Insurance. White
Energy is insured by insurers of recognized financial responsibility
against such losses and risks, including casualty and liability insurance,
and in such amounts as management of White Energy believes to be prudent
and customary in the businesses in which White Energy is
engaged. No executive officer of White Energy or White Energy
has any reason to believe that White Energy will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
such businesses at a cost that would not have a Material Adverse
Effect.
|
|
|
(v)
|
Solvency. White
Energy is solvent. White Energy has the ability to pay its
debts from time to time incurred in connection therewith as such debts
mature.
|
|
|
(vi)
|
No
Brokers. Except as set forth in the White Energy
Disclosure Schedule, White Energy has not taken any action which would
give rise to any claim by any Person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or the
Schemes hereunder.
|
|
10.
|
Interpretation
|
For the
purposes of this Exhibit 1, a document, matter or thing shall be deemed to be
“disclosed to the Purchaser” if it has been released publicly to ASX (i.e. as an
ASX announcement) or is contained in the White Energy Dataroom as at the
Execution Date.
|
SCHEDULE
A TO EXHIBIT 1
|
|
Corporation
|
Shares
|
Legal
holder of Shares
|
Beneficial
holder of Shares
|
|
White
Energy Company Limited
|
192,277,
|
Various
– refer to share register
|
Various
|
|
Subsidiary
Corporation
|
Subsidiary
Corporation Shares
|
Legal
holder of Subsidiary Corporation Shares
|
Beneficial
holder of Subsidiary Corporation Shares
|
|
WET
|
100,000
|
White
Energy
|
White
Energy
|
|
BCBC
|
1
|
WET
|
WET
|
|
Coking
BCB Pty Ltd
|
000
|
XXX
|
XXX
|
|
Xxxxx
Xxxxxx Xxxx Xxxxx Xxxxxxx Inc.
|
1000
|
BCBC
|
BCBC
|
|
BCBC-Singapore
Pte Ltd
|
1
|
BCBC
|
BCBC
|
|
PT
Kaltim Supacoal Singapore Pte. Ltd.
|
51
|
BCBC
Singapore
|
BCBC
Singapore
|
|
PT
Kaltim Supacoal
|
6,375
|
BCBC
Singapore
|
BCBC
Singapore
|
|
White
Manufacturing Pty Ltd
|
100,000
|
WET
|
WET
|
|
White
Investments North America Pty Ltd
|
100,000
|
WET
|
WET
|
|
White
Energy Coal Project Company, LLC
|
1,000
|
White
Energy Coal North America, Inc
|
White
Energy Coal Project Company, LLC
|
|
White
Energy Coal Wyoming, LLC
|
1,000
|
White
Energy Coal North America, Inc
|
White
Energy Coal North America, Inc
|
|
River
Energy JV Limited
|
51
|
BCBC
|
BCBC
|
|
White
Energy China Limited
|
100
|
BCBC
|
BCBC
|
|
Amerod
Resources Pty Ltd
|
1
|
White
Energy Company Limited
|
White
Energy Company Limited
|
|
Amerod
Exploration Ltd
|
5,150,002
|
White
Energy Company Limited
|
White
Energy Company Limited
|
|
Amerod
Holdings Pty Ltd
|
2
|
Amerod
Exploration Ltd
|
Amerod
Exploration Ltd
|
|
Spike
Services Pty Ltd
|
2
|
White
Energy Company Limited
|
White
Energy Company Limited
|
|
Spike
Licenses, Inc.
|
100
|
White
Energy Company Limited
|
White
Energy Company Limited
|
|
EXHIBIT
2– PURCHASER WARRANTIES
|
|
1.
|
Capitalization of
Purchaser
|
|
|
(a)
|
(Shares fully
paid): The issued and outstanding Purchaser Shares are
duly and validly authorized, fully paid up and have been duly and validly
issued and allotted. The Consideration Shares will be at the
Second Court Date and the Merger Implementation Date duly and validly
authorized, and when issued and delivered in accordance with the terms
hereof for the consideration set forth in Section 4.3 of the Agreement, will be duly and validly
issued and allotted. All outstanding Purchaser Shares have
been, and upon issuance the Consideration Shares will be, issued in
compliance with all applicable U.S. state and federal securities
laws.
|
|
|
(b)
|
(Capital Shares): The
authorized capital shares of Purchaser consists of 50,000,000 ordinary
shares of a par value of $0.0001 per share (provided, that the number of
authorized ordinary shares may be increased as approved by the Purchaser
Shareholder Approvals) and 1,000,000 preferred shares of a par value of
$0.0001 per share, of which 14,000,000 ordinary shares are issued and
outstanding as of the Execution Date and no preferred shares are issued
and outstanding.
|
|
|
(c)
|
(Purchaser Warrants): An
aggregate of 17,225,000 Insider Warrants and Public Warrants
(collectively, Purchaser
Warrants) of the Purchaser are owned of record, as
follows:
|
|
|
(i)
|
as
to 5,725,000 Insider Warrants as at the Second Court Date or immediately
thereafter, such Insider Warrants will be re-purchased by the Purchaser on
terms satisfactory to White Energy;
and
|
|
|
(ii)
|
as
to 11,500,000 Public Warrants, by purchasers of the units of securities of
the Purchaser sold to the public in its initial public offering or
transferees thereof.
|
|
|
(d)
|
(Other
Warrants): There
are:
|
|
|
(i)
|
warrants
to be issued to Maxim Group LLC and CRT Capital Group LLC to purchase
450,000 units of the Purchaser, comprised of 450,000 Purchaser Shares and
450,000 additional Public Warrants, with each such warrant being
exercisable for one Purchaser Share and one Public Warrant at an exercise
price of $12.50;
|
|
|
(ii)
|
warrants
outstanding and held by Lodestar Services SA to purchase 200,000 ordinary
shares of the Purchaser at an exercise price of $7.50 per share;
and
|
|
|
(iii)
|
warrants
that may be issued to Canaccord Capital Corp. and Xxxx Capital Partners
LLC in connection with the sale of Additional Purchaser Securities, as
contemplated pursuant to Schedule A of this Exhibit 2 (collectively,
the Other
Warrants).
|
|
|
(e)
|
(No right to subscribe):
No Person has any right or option to subscribe for or otherwise to acquire
any further Purchaser Shares, except for the Purchaser Warrants and the
Other Warrants.
|
|
|
(f)
|
(No
options): Except for the Purchaser Warrants and the
Other Warrants, there are no outstanding options, warrants, calls, first
refusals, commitments, rights, demands, convertible securities,
exchangeable securities, subscription rights, conversion rights, exchange
rights, or other contracts of any kind relating to the issued or unissued
capital of the Purchaser. There are no statutory pre-emptive
rights or pre-emptive rights granted under Purchaser’s Organizational
Documents or stock appreciation rights, phantom stock, profit
participation, or other similar rights with respect to
Purchaser.
|
|
|
(g)
|
(No other
allotments): The Purchaser is not under any obligation
to allot any shares to any Person or Persons, or otherwise to alter the
structure of any part of its unissued share capital, and the Purchaser is
not under any obligation to give any option over any part of its unissued
share capital nor has the Purchaser offered to do any of the matters
stated in this sub-paragraph.
|
|
|
(h)
|
(Exemption): The offer,
sale and issuance of the Consideration Shares and Purchaser Options are
exempt from the registration requirements of the Securities Act pursuant
to Section 3(a)(10) thereof.
|
|
2.
|
Effect of this
Agreement
|
The entry
into and performance of this Agreement and all Exhibits hereto and other
documents executed pursuant to this Agreement:
|
|
(a)
|
will
not relieve any Person of any contractual or other obligation to the
Purchaser or entitle any Person to re-negotiate the terms or conditions of
any such obligation;
|
|
|
(b)
|
do
not and will not conflict with, violate or result in a breach by the
Purchaser or the occurrence of an event of default under any document
(including any statement contained in the Purchaser’s Prospectus,
agreement or any law, undertaking to or judgment or Court
order;
|
|
|
(c)
|
will
not result in any indebtedness, present or future, of the Purchaser
becoming due or capable of being declared due and payable before the
stated maturity date;
|
|
|
(d)
|
will
not give rise to any contractual or other obligation of the Purchaser to
any Person or entitle any Person to require the performance of or
compliance with any existing contractual or other obligation of the
Purchaser; and
|
|
|
(e)
|
will
not entitle any Person with whom the Purchaser has a contract or
arrangement of any kind to terminate that contract or arrangement or to
impose less favourable terms on the
Purchaser.
|
|
3.
|
The
Purchaser
|
The
Purchaser:
|
|
(a)
|
is
a company limited by shares duly organized, validly existing and in good
standing under the laws of the Cayman Islands, has full corporate power to
own its assets and Business and to carry on its Business as now
conducted;
|
|
|
(b)
|
has
done everything necessary to do business lawfully in all jurisdictions in
which its Business is carried on;
|
|
|
(c)
|
is
and has been operating in accordance with all statements contained in the
Purchaser’s Prospectus; and
|
|
|
(d)
|
does
not have any ongoing obligations from or in respect of any previous
transactions or agreements entered into by it, including, specifically,
the China Tel Transaction.
|
|
4.
|
Material Purchaser
Liabilities
|
|
|
(a)
|
Except
as set forth on Schedule A to
this Exhibit
2, the Purchaser does not have any Material Purchaser Liabilities
as at the Execution Date of the
Agreement.
|
|
|
(b)
|
The
Purchaser has received a full and complete general release from all
adverse parties to the agreements previously entered into in 2008 with
China Tel Group, Inc., a Nevada corporation (“China Tel”) relating to
a proposed merger or consolidation with China Tel and its Affiliates (the
“China Tel
Transaction”). The Purchaser has received a full general
release from China Tel and does not have any ongoing obligations,
contingent or otherwise, from or in respect of the China Tel
Transaction.
|
|
5.
|
Funds
|
As at the
Execution Date, the Purchaser has Purchaser Funds of $115.0 million, and on the
Second Court Date, the Purchaser will have not less than the Minimum Amount and
(unless otherwise agreed by White Energy) not more than the Maximum Amount in
the trust account and such Purchaser Funds are held by a bank of recognised
financial responsibility which has not had a Insolvency Event. No executive
officer of the Purchaser has any reason to believe that the Purchaser will not
be able to have full access to the Purchaser Funds as and when
required.
|
6.
|
Contracts and
Commitments
|
|
|
(a)
|
(Purchaser
Contracts): All material contracts to which the
Purchaser is a party have been fully disclosed to White Energy prior to
the Execution Date and are set forth on the Purchaser Disclosure
Schedule.
|
|
|
(b)
|
(Contracts
binding): Every contract, instrument or other commitment
to which the Purchaser is a party is valid and binding according to its
terms and, without prejudice to any other warranty, no party to any such
commitment is in material default under the terms of that
commitment.
|
|
|
(c)
|
(No contracts outside ordinary
course of business): The Purchaser is not party to any
contract or commitment entered into which is in existence
and:
|
|
|
(i)
|
is
outside the ordinary course of its
Business;
|
|
|
(ii)
|
even
if entered into in the ordinary course of its Business, involves or is
likely to involve obligations or liabilities which by reason of their
magnitude or nature ought reasonably to be made known to an intending
purchaser of the Consideration Shares;
|
| (iii) | is not at arm’s length or not on normal commercial terms; or | |
| (iv) | is long term, substantial or onerous. |
|
|
(d)
|
(No sums
owing): Except as set forth on the Purchaser Disclosure
Schedule, no sums are now owing or will at the Second Court Date and the
Merger Implementation Date be owing by the Purchaser to any shareholders
of the Purchaser or to any other
Person.
|
|
|
(e)
|
(No guarantees
given): The Purchaser has not guaranteed or indemnified
and is not directly or indirectly obliged in any way to guarantee, assume
or provide funds to satisfy any obligation of any Person, and has not
given a letter of comfort to any
Person.
|
|
|
(f)
|
(Liabilities): Except
(i) as set forth on Schedule A to
this Exhibit
2, (ii) as and to the extent reflected or reserved against on the
Purchaser’s Balance Sheet, (iii) those liabilities, debts or contingencies
incurred since the Balance Sheet Date in the ordinary course of business
and consistent with past practice which are in the aggregate not material
and (iv) for liabilities and debts permitted to be incurred by Purchaser
pursuant to the terms of this Agreement, the Purchaser does not have any
liabilities, debts or cash contingencies, pledges in any form,
obligations, undertakings or arrangements, whether known or unknown,
absolute, accrued, contingent or
otherwise.
|
|
7.
|
Corporate
matters
|
|
|
(a)
|
(Assets owned by the
Purchaser): The Purchaser is the legal and beneficial
owner of all of its assets, which are owned free and clear of any
Encumbrance, except as disclosed in the Purchaser Disclosure
Schedule.
|
|
|
(b)
|
(Encumbrances): Except as
disclosed in the Purchaser Disclosure Schedule, there are no Encumbrances
over all or any of the Purchaser’s present or future assets or revenues of
its business.
|
|
|
(c)
|
(Compliance with
contracts): The Purchaser has complied in all respects
with:
|
|
|
(i)
|
the
Purchaser’s Organizational
Documents;
|
|
|
(ii)
|
any
instrument to which it is a party or by which it is bound;
and
|
|
|
(iii)
|
all
Statutes and other legal requirements and all judgments, orders,
injunctions and requirements of any Court or Government
Authority,
|
and there
has not occurred any event which, with the passing of time or giving of notice,
would constitute a material breach or default of any of the above.
|
|
(d)
|
(No powers of
attorney): There are no powers of attorney given by the
Purchaser in favour of any Person which are or may come to be in force in
relation to the Business or the
Purchaser.
|
|
|
(e)
|
(Officers duly
appointed): All of the directors and officers of the
Purchaser have been duly appointed.
|
|
|
(f)
|
(All duties and taxes
paid): All stamp duties and other taxes for which the
Purchaser is primarily liable in respect of every deed, agreement or other
document to which the Purchaser is or has been a party have been duly paid
or adequately provided for.
|
|
|
(g)
|
(Filings): The
Purchaser has filed all annual returns, resolutions, particulars, other
forms, returns and documents as and where required to be filed or
registered, such documents were accurate in all material respects, and the
Purchaser is not liable to be struck off the register of
companies.
|
|
|
(h)
|
(Authorizations): Other
than the Purchaser Shareholder Approvals, the execution and delivery of
this Agreement and the consummation of the Schemes will not require any
Authorizations.
|
|
8.
|
Absence of
Litigation
|
|
|
(a)
|
(No current
litigation): The Purchaser and any Person for whom it
may be vicariously liable is not engaged in any capacity in any
prosecution, litigation, arbitration proceedings or administrative or
governmental challenge or investigation or other similar action or
proceeding (Litigation).
|
|
|
(b)
|
(No pending
Litigation): Except as set forth in the Purchaser
Disclosure Schedule, there is no Litigation pending, threatened,
anticipated or contemplated against the Purchaser or any Person for whom
the Purchaser may be vicariously
liable.
|
|
|
(c)
|
(No facts giving rise to
Litigation): No fact or circumstance exists which may
give rise to any Litigation which could materially affect the ability of
the Purchaser to continue to operate its Business or to consummate the
Schemes.
|
|
|
(d)
|
(No outstanding
judgments): There are no unsatisfied or outstanding
judgments, orders, decrees, stipulations, or notices affecting the
Purchaser or any Person for whom the Purchaser may be vicariously
liable.
|
|
9.
|
Taxation
|
|
|
(a)
|
(Compliance): The
Purchaser has duly complied with all of its taxation
obligations.
|
|
|
(b)
|
(All other taxes assessed and
paid): All Taxes which have been assessed or imposed or
which are deemed to have been assessed or imposed or which are lawfully
assessable or payable by or upon the Purchaser have been paid or remitted
to the relevant Revenue Authority by the
Purchaser.
|
|
|
(c)
|
(No penalty of fine paid or
payable): The Purchaser has not in the past five years
paid or become liable to pay, nor are there any circumstances by reason of
which the Purchaser are likely to become liable to pay, any penalty, fine
or interest with respect to any
Tax.
|
|
10.
|
Material
disclosure
|
|
|
(a)
|
(All material
information): Any information known or which should be
known to the Purchaser concerning the Purchaser which might reasonably be
regarded as material to a purchaser for value of the Consideration Shares
has been disclosed in writing to White Energy on the Purchaser Disclosure
Schedule or is contained in the Purchaser Prospectus or in the Form 20-F
and Forms 6-K filings made by the Purchaser with the SEC under the
Securities Exchange Act.
|
|
|
(b)
|
(True, complete and
accurate): All information concerning the Purchaser or
concerning the Consideration Shares supplied to White Energy or its
agents, employees or advisers by the Purchaser or its agents, employees or
advisers is true, complete and accurate in all respects, and is not
misleading or deceptive.
|
|
|
(c)
|
(No material error or
misstatement): No representation, warranty or document
made or furnished by the Purchaser Shareholders in connection with this
Agreement contains any material error or misstatement nor does it omit to
state any material fact.
|
|
|
(d)
|
(No adverse
acts): Nothing has been done or omitted to be done in
relation to the Consideration Shares or the Purchaser which might
materially adversely affect the interests of the Purchaser as an intending
purchaser of the Consideration
Shares.
|
|
|
(e)
|
(SEC Reports): The
Purchaser has delivered or made available to White Energy a correct and
complete copy of each report, registration statement, definitive proxy
statement or other disclosure document filed by the Purchaser with the SEC
(the Purchaser SEC Reports), The Purchaser has filed all reports under the
Securities Exchange Act required to have been filed through the Execution
Date and will have filed all such reports required to have been filed
through the Second Court Date and has otherwise materially complied with
the Securities Act, the Securities Exchange Act and applicable U.S. state
securities laws. As of their respective dates, the Purchaser SEC Reports
(including the financial statements included
therein):
|
|
|
(i)
|
were
prepared in accordance with, and complied in all material respects with,
the requirements of all laws applicable to Purchaser with respect thereto,
including the Securities Act or the Securities Exchange Act, as the case
may be, and the rules and regulations of the SEC promulgated thereunder;
and
|
|
|
(ii)
|
did
not at the time they were filed (and if amended or superseded by a filing
then on the date of such filing and as so amended or superseded) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each set of financial statements (including, in
each case, any related notes thereto) contained in the Purchaser SEC
Reports complies as to form in all material respects with the applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto, was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and each fairly presents in all material
respects the financial position of Purchaser at the respective dates
thereof and the results of Purchaser’s operations and cash flows for the
periods indicated, except that unaudited interim financial statements were
subject to normal year-end adjustments, which adjustments are not
reasonably expected to have a Material Adverse Effect on
Purchaser.
|
|
11.
|
Permits;
Compliance. The Purchaser is in possession of all
franchises, grants, authorizations, licenses, permits, easements,
variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its
business as it is now being conducted (collectively, the Permits), and there is
no action pending or, to the knowledge of any executive officer of the
Purchaser, threatened regarding suspension or cancellation of any of the
Permits. The Purchaser is not in conflict with, or in default
or violation of, any of the Permits, except for any such conflicts,
defaults or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The
Purchaser has not have received any notification with respect to possible
conflicts, defaults or violations of applicable laws, except for notices
relating to possible conflicts, defaults or violations, which conflicts,
defaults or violations would not have a Material Adverse
Effect.
|
|
12.
|
Property. The
Purchaser owns no real property, machinery or
equipment.
|
|
13.
|
Insurance. The
Purchaser is insured by insurers of recognized financial responsibility
against such losses and risks, including casualty and liability insurance,
and in such amounts as management of the Purchaser believes to be prudent
and customary in the businesses in which the Purchaser is
engaged. No executive officer of the Purchaser has any reason
to believe that the Purchaser will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue such
business at a cost that would not have a Material Adverse
Effect.
|
|
14.
|
Solvency. The
Purchaser (after giving effect to the Schemes contemplated by this
Agreement) is solvent. The Purchaser (after giving effect to
the Schemes contemplated by this Agreement) has the ability to pay its
debts from time to time incurred in connection therewith as such debts
mature.
|
|
15.
|
No
Brokers. Except as set forth on Schedule A to
this Exhibit
2, the Purchaser has not taken any action which would give rise to
any claim by any Person for brokerage commissions, transaction fees or
similar payments whether relating to this Agreement, the Schemes, the
China Tel Transaction or otherwise.
|
|
16.
|
Investment
Company. Purchaser is not an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as
amended.
|
|
SCHEDULE
A TO EXHIBIT 2
|
|
|
Material
Purchaser Liabilities of Purchaser
|
|
1.
|
The
Purchaser is indebted to TAG Virgin Islands, Inc. (TAG) in the amount of
$1,250,000 as at the Execution Date under a maximum $1,250,000 line of
credit granted by TAG to the Purchaser pursuant to a funding agreement,
dated December 16, 2008 (the Funding
Agreement). On the Merger Implementation Date,
certain Affiliates of the Purchaser shall assign to TAG an aggregate of
100,000 ordinary shares of the Purchaser owned by such Affiliates, all as
set forth in the Funding Agreement.
|
|
2.
|
The
Purchaser is indebted to a shareholder in the amount of $250,000, plus
accrued interest at the rate of 5% per annum, in connection with a loan
made by such Affiliate to the Purchaser to pay premiums on directors’ and
officers’ liability insurance.
|
|
3.
|
The
Purchaser is obligated to pay to Canaccord Capital Corp. and Xxxx Capital
Partners LLC certain fees. These fees shall be limited to the
following:
|
|
|
(a)
|
a
6% financing fee on new funds raised on behalf of the Purchaser (for
example, $6,000,000 assuming $100,000,000 in new funds are
raised);
|
|
|
(b)
|
any
success fee on the successful completion of the Schemes shall be fixed at
$3,000,000; and
|
|
|
(c)
|
a
maximum of 1,150,000 warrants upon successful completion of the Schemes
which shall be exercisable by the payment of cash equal to a strike price
of $11 per Purchaser Share.
|
|
4.
|
On
the Execution Date, the Purchaser is obligated to pay Maxim Group LLC and
CRT Capital Group LLC, up to $3,450,000 in deferred underwriting
compensation pursuant to the terms of an underwriting agreement among the
Purchaser and such Persons, dated January 16, 2008; which obligation the
Purchaser will negotiate to reduce prior to the Merger Implementation
Date.
|
|
5.
|
On
the Merger Implementation Date, the Purchaser shall be obligated to pay a
cash finders’ fee to TAG Virgin Islands, Inc. or its Affiliates (“TAG”) in the aggregate
amount of one-half of one percent (0.5%) of the Transaction Value in
connection with the introduction of the Acquisition by TAG to the
Purchaser.
|
|
6.
|
On
the Merger Implementation Date, the Purchaser shall be obligated to pay a
cash payment of up to $225,000 and warrants to purchase 100,000 Purchaser
Shares to AFH Holdings LLC, in connection with the settlement of a claim
for a finders fee.
|
