SHARE EXCHANGE AGREEMENT DATED: MARCH 12, 2009
(Purchaser)
AND
WHITE
ENERGY COMPANY LIMITED
ACN
071 527 083
(White
Energy)
AND
WHITE
ENERGY TECHNOLOGY COMPANY LIMITED
ABN
62 114 203 904
(WET)
THIS AGREEMENT is made
the 12th day of March 2009
BETWEEN
ASIA SPECIAL SITUATION ACQUISITION
CORP., a Cayman Islands corporation (the “Purchaser”), having an office
at XX Xxx 000XX, Xxxxxx Xxxxx, Xxxxx Church Street, Xxxxxx Town, Grand Cayman
Island, 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;
and
WHITE ENERGY TECHNOLOGY LTD.
(ABN 62 114 203 904) an Australian corporation (“WET”), having an office at
Xxxxx 00, 000 Xxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxx Xxxxx.
RECITALS
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X.
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Xxxxx
Energy is a company listed on the Australian Securities Exchange (ASX).
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B.
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WET
is a wholly-owned Subsidiary of White
Energy.
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C.
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Binderless
Coal Briquetting Company Pty Limited (ABN 11 111 821 044), an Australian
corporation (“BCBC”) and the other
Constituent Corporations (hereinafter defined) are each direct or indirect
Subsidiaries of WET.
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X.
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Xxxxx
Energy is hereinafter sometimes referred to as the “Vendor”.
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X.
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Xxxxx
Energy is the legal and beneficial owner of the Subject Shares; and,
except as otherwise provided in this Agreement, WET and the other
Constituent Corporations are the legal and beneficial owners of 100% of
the issued and outstanding Constituent Corporation
Shares.
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F.
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The
Subject Shares represent 100% of the issued and outstanding ordinary
shares of WET.
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G.
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BCBC
holds the exclusive worldwide licence to Commercialise the Technology
throughout the world.
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H.
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BCBC
has entered into various license agreements granting various sub-licenses
to certain parties as set forth in the Constituent Corporations Disclosure
Schedule.
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I.
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On
or before the Settlement Date, in addition to the exclusive rights to
Commercialise the Technology throughout the world, one or more of the
Constituent Corporations will hold certain legal rights under Material
Contracts in and to certain business initiatives to Commercialise the
Technology.
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J.
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The
Vendor and/or other Constituent Corporations, as applicable, are parties
to all of the Material Contracts.
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K.
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On
or before the Settlement Date of the Transactions outlined herein, the
Vendor will exchange all of the Subject Shares for the Consideration
Shares.
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2
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L.
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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.
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M.
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The
Vendor and the Purchaser wish to undertake the Transactions outlined
herein and this Agreement sets out all of the terms and conditions of the
Transactions among the Parties described
herein.
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N.
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The
Vendor has agreed to sell and the Purchaser has agreed to purchase the
Subject Shares, all upon the terms and subject to the conditions set forth
in this Agreement.
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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:
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1.
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DEFINITIONS
AND INTERPRETATION
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1.1
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Definitions
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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.
Adaro/Itochu Joint Venture Agreements
means the collective reference to:
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(a)
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the
Heads of Agreement, dated 2 March 2006 between BCBC and Itochu
Corporation;
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(b)
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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);
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(c)
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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;
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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 Plans in Indonesia utilising the Technology.
Additional Securities means
any ordinary shares, common shares, notes, debentures or other securities of the
Purchaser and/or any of the Constituent Corporations (including WET) that are or
may be issued and sold by any of such Persons between the Execution Date of this
Agreement and the Settlement Date to provide additional funds to the Purchaser
and the Constituent Corporations; in each case, upon such terms and conditions
as shall be acceptable to both White Energy and the Purchaser.
Additional White Energy Securities
means any ordinary shares, common shares, notes, debentures or other debt
securities of White Energy that are issued and sold by White Energy between the
Execution Date of this Agreement and the Settlement Date.
3
Adjusted Funds means, as at
the Settlement Date, the Purchaser’s Funds, less the
sum of:
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(d)
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amounts
payable upon consummation of the Transactions 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;
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(e)
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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; and
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(f)
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the
amount of any Assumed Liabilities that are payable following the
Settlement Date in respect of the issuance of Additional Securities by the
Purchaser and/or the Constituent Corporations between the Execution Date
and the Settlement Date.
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Affiliates shall have the
meaning as is defined in Rule 405 promulgated under the Securities
Act.
Affiliated Obligations means
any indebtedness or other liabilities owed by WET or any of the other
Constituent Corporations to White Energy or any of the Excluded Subsidiaries as
at the Execution Date or as at the Settlement Date, other than the Allowed
Affiliated Obligations.
Agreement means the agreement
constituted by this document and includes the Exhibits and Schedules hereto and
the Recitals hereof.
Allowed Affiliated Obligations
means any indebtedness or other liabilities owed by WET or any of the
other Constituent Corporations to White Energy or any of the Excluded
Subsidiaries as at the Execution Date or as at the Settlement Date, as a result
of:
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(a)
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the
aggregate of any liability or obligation that is required to be assigned
by WEC to WET or another Constituent Corporation but is unable to be
legally assigned; and
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(b)
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the
aggregate of any indebtedness or other liabilities owed by White Energy to
external Persons as a result of any White Energy Dedicated Securities that
are issued and sold by White Energy between the Execution Date and the
Settlement Date.
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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.
AUS GAAP means generally
accepted accounting and auditing principles in Australia in effect as at the
Execution Date of this Agreement.
ASX means ASX Limited and the
Australian Securities Exchange, as the context requires.
Assumed Liabilities means the
sum
of the aggregate amount of indebtedness and obligations represented by the
following items as at the Settlement Date:
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(a)
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the
White Energy notes and/or debentures in aggregate (AUS) $45.0 million
outstanding principal amount plus any accrued interest and interest
payable that are held by the noteholders pursuant to the convertible note
deed dated 10 October 2007 as at the Execution Date, as the same shall be
restated, amended or modified between the Execution Date and the
Settlement Date; provided,
however, that, the repayment terms and other material terms of any
such restatement, amendment or modification shall be approved by the
Purchaser, which approval shall not be unreasonably withheld or
delayed;
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4
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(b)
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those
specific accounts payable, accrued expenses and other liabilities that are
set forth on the Constituent Corporations Balance Sheet, as the same shall
be adjusted between 31 December 2008 and the Settlement Date in the
ordinary course of business;
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(c)
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the
Allowed Affiliated Obligations;
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(d)
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any
guarantees provided by White Energy in respect of any Constituent
Corporation; and
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(e)
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any
notes, debentures or other indebtedness of any of the Constituent
Corporations (including WET) representing any Additional Securities sold
or issued by such Constituent Corporation(s) between the Execution Date
and the Settlement Date; provided,
however, that, the term Assumed Liabilities
shall not include any Affiliated
Obligations.
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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 Approval.
Bayan Joint Venture
Companies means PT Kaltim Supa Coal, 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.
Bayan Joint Venture Agreements means the collective reference to the Coal Briquette Joint Venture Deed between BCBC and
PT Bayan Resources, dated 12 September 2006, and the various other agreements
relating to the joint venture between BCBC 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 Constituent Corporations Disclosure Schedule.
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
Constituent Corporations (“WECNA”), with Buckskin Mining
Company (an indirect wholly-owned Subsidiary of Xxxxxx
Corporation).
Business means, as the context
requires (a) as to the Vendor and the other Constituent Corporations, the
Commercialisation of the Technology throughout the world, and (b) as to the
Purchaser, the seeking of a business combination, as at the Execution Date and
the Settlement 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 or the Constituent
Corporations.
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.
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Coal Upgrading Facility means
a coal upgrading plant or facility owned, designed, operated, managed or in
which any of the Constituent Corporations 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.
Conditions means the
conditions precedent set out in Section 2.1 of this
Agreement.
Confidential Information means
any trade secrets, lists of information pertaining to clients of the Constituent
Corporations 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 the Constituent
Corporations or any of their respective subsidiaries.
Consideration means the
allotment and issue of the Consideration Shares to the Vendor.
Consideration Shares means an
aggregate number of authorized and previously unissued Purchaser Shares to be
issued to White Energy on the Settlement Date in accordance with Section 3.2 of this
Agreement.
Constituent Corporation
or Constituent
Corporations means, as applicable, the individual or collective reference
to: (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) any other direct or indirect Subsidiary of the
Constituent Corporations acquired or created following the Execution Date and
prior to the Settlement Date, other than the Excluded Subsidiaries, and (p) any
other direct or indirect Subsidiary of White Energy acquired or created
following the Execution Date and prior to the Settlement Date to engage in the
Business.
Constituent Corporation Balance Sheet
means the combined or consolidated balance sheet of the Constituent
Corporations annexed as Exhibit
3 to this Agreement.
Constituent Corporation Shares
means the authorized ordinary shares in the capital of each of the Constituent
Corporations.
Corporations Act means the
Australian Corporations Xxx 0000 (Cth).
Disclosure Schedule
means:
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(a)
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in
respect of the Purchaser – the written material disclosed on a Disclosure
Schedule (the Purchaser
Disclosure Schedule) to be delivered by the Purchaser to the
Constituent Corporations pertaining to the business, operations and
financial condition of the
Purchaser;
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(b)
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in
respect of the Constituent Corporations – the written material disclosed
on a Disclosure Schedule (the Constituent Corporations
Disclosure Schedule) to be delivered by the Vendor to the Purchaser
in respect of the business, operations and financial condition of the
Constituent Corporations, which shall be deemed to include all information
contained on the White Energy website and information disclosed in writing
to the ASX.
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6
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 Settlement Date means 5:00
p.m. (EST) on September 30, 2009.
Event of Insolvency
means:
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(a)
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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;
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(b)
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a
liquidator or provisional liquidator is appointed in respect of a
Party;
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(c)
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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:
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(i)
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appointing
a Person referred to in paragraphs (a) or
(b);
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(ii)
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winding
up a Party; or
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(iii)
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proposing
or implementing a creditors scheme of
arrangement.
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(d)
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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;
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(e)
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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;
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(f)
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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
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(g)
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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.
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Exchange Rate means the rate
of exchange between one AUS dollars and United States Dollars, which as at the
Execution Date is one AUS Dollar equals 0.66 United States Dollars.
Execution Date means the date
of execution of this Agreement by all of the Parties.
Excluded Subsidiaries means
(a) Amerod Resources Pty
Ltd., an Australian corporation, (b) Amerod Exploration Ltd., an
Australian corporation, (c) Amerod Holdings Pty Ltd., an
Australian corporation, (d) Spike Services Pty Ltd., an
Australian corporation, and (e) Spike Licenses, Inc., a
Delaware United States corporation.
Existing Purchaser
Shareholders means those Persons holding 100% of the issued and
outstanding Purchaser Shares immediately prior to the Settlement
Date.
7
Head Licences means the
licence agreements reflected or set forth on the Constituent Corporations
Disclosure Schedule, including the License Agreement, pursuant to which the
Vendor, 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 the Constituent Corporations to carry on
the Business.
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:
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(a)
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the
business names, copyrights or tradenames owned or used by the Constituent
Corporations or the Purchaser, as the context
requires;
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(b)
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the
Confidential Information owned or used at any time by the Constituent
Corporations or the Purchaser, as the context
requires;
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(g)
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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 the Constituent Corporations or the
Purchaser, as the context requires;
and
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(h)
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the
Head Licences.
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Insider Warrants shall mean
the warrants to purchase an aggregate of 5,725,000 Purchaser Shares issued to Ho
Capital Management LLC and which (a) are beneficially owned by Xxxxxx Xx and
Xxxxx Investment Fund Ltd., (b) have an exercise price of $7.50 per Purchase
Share, and (c) contain “cashless exercise” provisions.
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.
Material Adverse Effect shall
mean any event or condition which has or could reasonably be expected to have a
material adverse effect upon the business, assets, properties, financial
condition or business prospects, or ability to consummate the Transactions, of
the Constituent Corporations, either individually or when taken as a
consolidated group (as applicable), or the Purchaser, as applicable, other than
any exogenous events.
Material Contracts means all contracts and agreements which as at the
Execution Date and the Settlement Date are material to the Commercialisation of
the Technology throughout the world, 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 Constituent Corporations Disclosure
Schedule.
8
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 Settlement 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 Transactions contemplated by this
Agreement).
Minimum Amount has the meaning
given to that term in Section 2.1(d) of
this Agreement.
Name Change means the change
of the Purchaser’s name as described in paragraph (d) of the definition of
Purchaser Shareholder Approval.
Officer, in relation to a
corporation, has the same meaning given to that term in Section 9 of the
Corporations Act.
Other Warrants has the meaning
given to that term in Section 1(d) of Exhibit
2.
Party means the Vendor, WET
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”.
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.
Percentage Interest shall have
the meaning set forth in Section 3.2(a)(iii) of this Agreement.
Performance Shares shall have
the meaning set forth in Section 3.3(c) of this Agreement.
Person shall mean any
individual, corporation, partnership, limited liability company, institution or
other entity.
Prohibited Occurrence means
any of the following actions or events affecting the Constituent Corporations or
the Purchaser, as the context requires:
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(a)
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splitting
or converting all or any of its shares into a larger or smaller number of
shares;
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(b)
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resolving
to reduce its share capital in any way;
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(c)
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except
as otherwise permitted by Section 9.l(b) and Section 10.2(h) hereof,
entering into a buy back
agreement;
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(d)
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except
as otherwise permitted by Section 9.1(b)
and Section
10.2(h) hereof, resolving to approve the terms of a buy back
agreement;
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(i)
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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;
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9
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(j)
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except
as otherwise permitted by Section 9.1(b)
and Section
10.2(f) hereof, issuing, or agreeing to issue any security, share
or loan capital or any security convertible into any share or loan
capital;
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(k)
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disposing,
or agreeing to dispose, of the whole, or a substantial part, of its
Business or property;
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(l)
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breaching
in any material respect any of its obligations under, in the case of the
Constituent Corporations, 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;
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(m)
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encumbering,
or agreeing to encumber, the whole, or a substantial part, of its Business
or property;
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(n)
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resolving
that it be wound up;
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(o)
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appointing
an administrator or provisional
liquidator;
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(p)
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being
the subject of a winding up order by a
court;
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(q)
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executing
a deed of company arrangement; or
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(r)
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having
a receiver, or a receiver and manager appointed, in relation to the whole,
or a substantial part, of its
property.
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Public
Warrants means the 11,500,000 issued and outstanding warrants
of the Purchaser as at the date of this Agreement and the Settlement 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 10-K for the year ended
December 31, 2007 (the Balance
Sheet Date) filed on March 27, 2008.
Purchaser’s Funds
means the sum of the
aggregate amount of cash made available at the Settlement Date to the Purchaser
and the Constituent Corporations 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:
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(a)
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the
aggregate amount of cash in the Purchaser’s trust account on the
Settlement Date that is directly attributable to the Purchaser; plus
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(b)
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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
Securities between the Execution Date of this Agreement and the Settlement
Date; plus
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(c)
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the
aggregate amount of any additional cash made available to the Constituent
Corporations as a result of the sale of Additional Securities of WET or
any other Constituent Corporation(s) between the Execution Date of this
Agreement and the Settlement Date.
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Purchaser’s Investment Bankers
means the collective reference to Canaccord Xxxxx Capital LLC, Xxxx Capital
Partners, LLC or their Affiliates and associates.
10
Purchaser
Outstanding Shares means
(i) the aggregate number of Purchaser Shares that are issued and outstanding on
the Settlement Date and which are not subject to any unprocessed redemption
claims or the like, plus (ii) any additional Purchaser Shares that are
issuable following the Settlement Date as a direct result of the conversion or
exercise of any Additional Securities issued between the Execution Date and the
Settlement Date, plus (iii)
any additional Purchaser Shares that are issuable following the
Settlement Date but in respect of which the Purchaser has received the relevant
funds for such Purchaser Shares prior to the Settlement Date; provided,
that, for the sake of clarity, the term Purchaser Outstanding Shares
shall not be deemed to include any of the (i) Insider Warrants, (ii) Public
Warrants, or (iii) other Options and Warrants listed on Schedule A to Exhibit
2 hereof, that are not exercised on or before the Settlement
Date.
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 Approval.
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 any additional ordinary shares of
Purchaser that shall be authorized for issuance in connection with obtaining the
Purchaser Shareholder Approval.
Purchaser Shareholder Approval
means, collectively, (a) the affirmative vote of the holders of a majority of
the Purchaser Shares in favour of the Transactions 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
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 necessary under the
Purchaser’s Organizational Documents and applicable law to satisfy the
provisions of Section 5.2 of this Agreement (the directors to be appointed
pursuant to Section 5.2, the Post-Closing Purchaser
Directors), (c) the affirmative vote of Purchaser's shareholders
necessary to amend Purchaser's Organizational Documents to increase the number
of authorized Purchaser Shares to a number reasonably expected to be equal to or
greater than the sum of the number of (i) Purchaser Shares issued and
outstanding immediately prior to Settlement, (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 and (iv) Performance Shares, and (d) the affirmative
vote of Purchaser’s shareholders 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 the Vendor).
Purchaser Shareholders Meeting
means the meeting of the Record Purchaser Shareholders to be held prior to the
End Settlement Date for the purpose of approving this Agreement and all of the
Transactions contemplated hereby.
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.
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 Transactions and the other matters contemplated by
the Purchaser Shareholder Approval.
11
Revenue Authority means any
federal, state, territory or local government authority or instrumentality in
respect of Tax.
Sale of Control means a sale
of all or substantially all of the assets or securities of White Energy or any
of the Constituent 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 Constituent
Corporations.
SEC means the United States
Securities and Exchange Commission.
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.
Settlement means the
settlement on the Settlement Date of the sale and purchase of the Subject Shares
in accordance with the terms of this Agreement.
Settlement Date means that
date which is not more than ten (10) Business Days after the satisfaction of the
Conditions (or such other date as is agreed between the Parties).
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.
Subject Shares means the
collective reference to 100% of the issued and outstanding fully-paid ordinary
shares of WET which is legally and beneficially owned by White
Energy.
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.
Supacoal Trademark means the
“Supacoal”
trademark which is pending registration in Indonesia and Australia.
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 the Constituent Corporations, 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 3.2(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.
12
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 or Transactions
means the transactions described and contemplated by this
Agreement.
Transaction Value means the
sum of (a) the White Energy Market Value, and (b) the Adjusted Funds as at the
Settlement 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.
Vendor means White
Energy.
White Energy Dedicated
Securities means any Additional White Energy Securities issued between
the Execution Date and the Settlement Date; provided,
however, that:
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(a)
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the
net proceeds of such issuance(s) or sale(s) shall only be used to provide
additional funds to the Constituent
Corporations;
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(b)
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the
terms and conditions of any White Energy Dedicated Securities that shall
constitute or are included in Assumed Liabilities shall be subject to the
prior written approval of the Purchaser; such consent not to be
unreasonably withheld or delayed;
and
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(c)
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any
White Energy Dedicated Securities that (i) are limited to ordinary shares
or common shares, (ii) do not constitute and are not included in Assumed
Liabilities, and (iii) may be issued without the approval of the
shareholders of White Energy under ASX Rules or the Corporations Act may
be issued by White Energy on commercially reasonable terms, without the
prior written approval of the
Purchaser.
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White Energy Diluted Shares
means the number of:
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(a)
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the
aggregate of 153,856,997 White Energy Shares as at the Execution Date;
plus
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(b)
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any
additional White Energy Shares that are issued between the Execution Date
and the Settlement Date and represent White Energy Dedicated Securities;
plus
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(c)
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the
4,613,967 additional White Energy Shares that are deemed issuable as at
the Settlement Date under stock options or other rights to purchase White
Energy Shares outstanding as at the Execution Date that are exercisable at
prices equal to or below the White Energy
VWAP;
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provided,
however, that the term White Energy Diluted Shares shall specifically
exclude
any White Energy Shares that are or may be issuable upon (i) conversion into
White Energy Shares of any Assumed Liabilities, (ii) the conversion into White
Energy Shares or exercise of any warrants, options or rights to purchase White
Energy Shares that are issued in connection with any White Energy Dedicated
Securities and/or (iii) the exercise of any stock options or other rights to
purchase White Energy Shares outstanding as at the Settlement Date that are
exercisable at prices in excess of the White Energy VWAP.
13
White Energy Market Value
shall mean the product of the White Energy Diluted Shares multiplied by the
White Energy VWAP, as expressed in United States Dollars, represented by the
sum
of :
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(a)
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US
$156,965,490 (AUS $237,833,223) at the Exchange Rate;
plus
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(b)
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the
product of (i) that number of additional White Energy Shares, if any,
issued between the Execution Date and the Settlement Date that represent
White Energy Dedicated Securities, multiplied by (ii) the White Energy
VWAP.
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White Energy Majority Shareholder
Consents shall have the meaning set forth in Section 2.1(v) of this
Agreement.
White Energy Shares means, as
at any point in time, the issued and outstanding ordinary shares of White
Energy.
White Energy VWAP means, as
expressed in United States Dollars at the Exchange Rate, US $0.9905 (AUS
$1.5008), representing the volume weighted average of the closing prices of
White Energy ordinary shares, as traded on the ASX for the twenty (20) Trading
Days immediately prior to the Execution Date.
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1.2
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Interpretation
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In this
Agreement unless the context otherwise requires:
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(a)
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headings
are for convenience only and do not affect its
interpretation;
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(b)
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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;
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(c)
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a
reference to any party includes that party’s executors, administrators,
successors and permitted assigns, including any Person taking by way of
novation;
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(d)
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a
reference to any document (including this Agreement) is to that document
as varied, novated, ratified or replaced from time to
time;
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(e)
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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;
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(f)
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words
importing the singular include the plural (and vice versa) and words
indicating a gender include every other
gender;
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(g)
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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;
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(h)
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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
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14
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(i)
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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.
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2.
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CONDITIONS
PRECEDENT
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2.1
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Conditions
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Consummation
of the Transactions contemplated by this Agreement (Section 14 is
specifically excluded from this Section) is subject to and conditional upon the
satisfaction, before the Settlement Date, of all of the following conditions
precedent:
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(a)
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the
Purchaser shall have completed a business, financial and legal due
diligence on the Constituent Corporations, which due diligence shall be
satisfactory in the sole and absolute discretion of the
Purchaser;
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(b)
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White
Energy shall have completed a financial and legal due diligence on the
Purchaser, which due diligence shall be satisfactory in the sole and
absolute discretion of White
Energy;
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(c)
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Purchaser
Shareholder Approval shall have been duly obtained from the Record
Purchaser Shareholders by the requisite vote under applicable law and the
Purchaser’s Organizational Documents, the Post-Closing Purchaser Directors
shall have been duly elected in accordance with 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;
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(d)
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the
aggregate minimum amount of Purchaser’s Funds, after deduction of the
items referred to in clauses (a) and (b) of the definition of Adjusted
Funds, that are available to the Purchaser and the Constituent
Corporations as at the Settlement Date shall be not less than
$74.75 million (the Minimum
Amount);
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(e)
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except
as set forth on Schedule A to
Exhibit
2 to this Agreement, the Purchaser shall have no Material Purchaser
Liabilities;
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(f)
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each
Party shall have obtained all regulatory, shareholder or other
Authorizations necessary to implement the Transactions contemplated by
this Agreement either unconditionally or on conditions satisfactory to the
respective Party acting reasonably;
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(g)
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the
Vendor shall not have breached, in any material respect, any of the
representations and warranties contained in Exhibit
1 of this Agreement;
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(h)
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a
Prohibited Occurrence has not occurred in respect of any of the
Constituent Corporations;
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(i)
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the
Purchaser shall not have breached, in any material respect, any of the
representations and warranties contained in Exhibit
2 of this Agreement;
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(j)
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a
Prohibited Occurrence has not occurred in respect of the
Purchaser;
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(k)
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no
event shall have occurred which shall have a Material Adverse Effect upon
the Constituent Corporations, their Business or the value of the Subject
Shares or the Constituent Corporations
Shares;
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15
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(l)
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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;
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(m)
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the Vendor shall
have assigned to the Constituent
Corporations all of its right,
title and interest in and to all of the Material Contracts;
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(n)
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all Affiliated Obligations shall be capitalized and terminated and neither WET nor any of the other
Constituent Corporations shall have any obligation or liability to White
Energy or any of the other Excluded Subsidiaries in respect of such
Affiliated Obligations;
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(o)
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the
Purchaser shall have delivered an opinion of counsel to Purchaser
reasonably satisfactory to the
Vendor;
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(p)
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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 Transactions 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;
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(q)
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[Intentionally
omitted];
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(r)
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the
Purchaser shall have delivered to Vendor a fully executed copy of an
amendment to the registration rights agreement dated January [16], 2008 by
and among the Purchaser and the Initial Stockholders (as such term is
defined therein) party thereto in form and substance mutually satisfactory
to the Vendor and Purchaser;
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(s)
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[Intentionally
omitted];
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(t)
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the
sale and issuance of:
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(i)
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any
Additional Securities and White Energy Dedicated Securities that
constitute or may be included in Assumed Liabilities shall be issued only
on such terms and conditions that are mutually acceptable to both White
Energy and the Purchaser; and
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(ii)
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White
Energy Dedicated Securities that (A) are limited to ordinary shares or
common shares, (B) do not constitute and are not included in Assumed
Liabilities, and (C) may be issued without the approval of the
shareholders of White Energy under ASX Rules or the Corporations Act may
be issued by White Energy on commercially reasonable terms, without the
prior written approval of the
Purchaser.
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(u)
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White
Energy and the Purchaser shall have entered into an agreement with the
noteholders pursuant to the convertible note deed dated 10 October 2007 to
amend, restate or modify certain terms and conditions of the Assumed
Liability reflected in such convertible note deed, all in a manner that
shall be mutually satisfactory to the Purchaser and White
Energy;
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(v)
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On
or before the date of mailing of the Purchaser Proxy Statement to the
Purchaser Shareholders, White Energy shall use its reasonable endeavours
to procure (but without being legally bound to so procure) from the record
holders of not less than 50% (or such lesser percentage as shall be
reasonably acceptable to Purchaser) of the total number of issued and
outstanding White Energy Shares entitled to vote at any regular or
extraordinary meeting of White Energy shareholders called in whole or in
part to consider this Agreement and the transactions contemplated hereby
(the White Energy
Shareholders Meeting), an agreement from such Persons or their
authorized representative (collectively, the White Energy Majority
Shareholders), in form and content reasonably satisfactory to the
Purchaser, to vote all of the White Energy Shares which such White Energy
Majority Shareholders are authorized to vote, in
favour of this Agreement and consummation of all of the
transactions contemplated hereby (the White Energy Majority
Shareholders Consents);
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16
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(w)
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the
Purchaser shall execute such documentation as is reasonably required by
White Energy whereby the Purchaser shall expressly assume all obligations
in respect of the payment of, all Assumed Liabilities;
and
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(x)
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the
delivery of Disclosure Schedules by the disclosing Party to the recipient
Party within 14 days after the Execution
Date.
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2.2
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Benefit
of the Conditions
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(a)
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The
Conditions in Sections 2.1(a), 2.1(g), 2.1(h), 2.1(k), 2.1(m), 2.1(n) and
2(v) are inserted in this Agreement for the benefit of the Purchaser and
the Purchaser may, by notice in writing to the Vendor on or before the due
date for satisfaction of these Conditions waive any of these
Conditions.
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(b)
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The
Conditions in Sections 2.1(b), 2.1(c), 2.1(d), 2.1(e), 2.1(i), 2.1(j),
2.1(l), 2.1(o), 2.1(p) and 2.1(w) are inserted in this Agreement for the
benefit of the Vendor and the Vendor may, by notice in writing to the
Purchaser on or before the due date for satisfaction of these Conditions
waive any of there Conditions.
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(c)
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The
Condition in Sections 2.1(f), 2.1(r), 2.1(t), 2.1(u) and 2.1(x) 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.
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2.3
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Satisfaction
or waiver of Conditions
|
If the
Conditions are not satisfied, or waived by the relevant Party, in accordance
with the provisions of this Agreement on or before the End Settlement Date, this
Agreement shall be deemed to be at an end and of no force or effect with no
Party being subject to any of the obligations contained in this Agreement and
with no Party claiming any rights at law or in equity against any other Party
save for the obligations under Section 14 below and the performance of those
covenants and agreements (if any) which should have already been performed and
all damages for breach of the same.
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2.4
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Best
Endeavours
|
The
Parties must each use their best endeavours to satisfy the
Conditions.
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2.5
|
Notices;
Closing Certificates
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(a)
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The
Purchaser and the Vendor 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 Settlement Date and (ii) the Settlement
Date.
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(b)
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On
the Settlement 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 Settlement
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.
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17
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(c)
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On
the Settlement 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
Settlement 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.
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3.
|
THE
TRANSACTION
|
Subject
to the satisfaction or waiver of the Conditions set forth in Section 2.1 above, on
the Settlement Date, the Parties hereby agree as follows:
|
3.1
|
Purchase
and Sale of Subject Shares; Constituent Corporation
Shares
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(a)
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As
legal and beneficial owner of all and not less than all of the Subject
Shares, the Vendor shall sell the Subject Shares to the Purchaser, free
and clear of all Encumbrances, and the Purchaser shall purchase such
Subject Shares from the Vendor, and pay to the Vendor the Consideration
set forth in Section 3.2
hereof. The Subject Shares represent on the Execution
Date, and will represent on the Settlement Date, 100% of the issued and
outstanding shares of WET.
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(b)
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Except
as otherwise reflected in this Agreement or the Exhibits hereto, WET and
certain other Constituent Corporations are the record and beneficial
owners on the Execution Date and on the Settlement Date of 100% of the
issued and outstanding ordinary shares of each of the Constituent
Corporations. By its acquisition of the Subject Shares, the
Purchaser shall become the direct and indirect record and beneficial owner
of all of the issued and outstanding Constituent Corporation Shares owned
by WET or other Constituent
Corporations.
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3.2
|
Consideration
Shares
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(a)
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As
the sole consideration for the Subject Shares, on the Settlement Date, the
Purchaser shall (i) issue to White Energy the Consideration Shares, and
(ii) assume and otherwise guaranty all of the Vendor’s or any of the
Constituent Corporations’ obligations in respect of the Assumed
Liabilities. The aggregate number of Consideration Shares to be
issued by the Purchaser to White Energy on the Settlement Date shall be
calculated as follows:
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(i)
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the White Energy Market Value shall be determined;
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(ii)
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the
Adjusted Funds as at the Settlement Date shall be added to the White
Energy Market Value and the sum thereof shall represent the Transaction
Value;
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(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;
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(iv)
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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;
and
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(v)
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the
Total Adjusted Outstanding Shares less the Purchaser Outstanding Shares
shall represent the Consideration
Shares.
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18
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|
(b)
|
Notwithstanding
the foregoing, or anything to the contrary contained in this Agreement,
unless otherwise separately agreed by the Parties, in no event
shall:
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(i)
|
the
(A) Percentage Interest be less than Fifty-One Percent (51.00%), or (B)
the aggregate number of Consideration Shares issued to White Energy under
this Agreement represent less than Fifty-One Percent (51.00%) of the
aggregate number of the Total Adjusted Outstanding Shares of the
Purchaser, or
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(ii)
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the
(A) Percentage Interest be more than Seventy-Two and One-Half Percent
(72.50%) or (B) the aggregate number of Consideration Shares issued to
White Energy under this Agreement exceed Seventy-Two and One-Half Percent
(72.50%) of the aggregate number of the Total Adjusted Outstanding Shares
of the Purchaser.
|
For the
avoidance of doubt, the effect of this Section 3.2(b) is if,
as a result of the calculation in Section
3.2(a):
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(i)
|
the
(A) the Percentage Interest would be less than Fifty-One Percent (51.00%),
or (B) the aggregate number of Consideration Shares to be issued to White
Energy under this Agreement would represent less than Fifty-One Percent
(51.00%) of the aggregate number of the Total Adjusted Outstanding Shares
of the Purchaser, the Purchaser shall nevertheless issue to White Energy
on the Settlement Date that aggregate number of Consideration Shares so
that the aggregate number of Consideration Shares to be issued to White
Energy under this Agreement, shall be Fifty-One Percent (51.00%) of the
aggregate number of the Total Adjusted Outstanding Shares of the
Purchaser; and
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(ii)
|
the
(A) Percentage Interest would be more than Seventy-Two and One-Half
Percent (72.50%) or (B) the aggregate number of Consideration Shares to be
issued to White Energy under this Agreement would represent more than
Seventy-Two and One-Half Percent (72.50%) of the aggregate number of the
Total Adjusted Outstanding Shares of the Purchaser, the Purchaser shall
nevertheless issue to White Energy on the Settlement Date that aggregate
number of Consideration Shares so that the aggregate number of
Consideration Shares to be issued to White Energy under this Agreement
shall be limited to Seventy-Two and One-Half Percent (72.50%) of the
aggregate number of the Total Adjusted Outstanding Shares of the
Purchaser.
|
|
|
(c)
|
An
example of the method of calculating the aggregate number of Consideration
Shares in accordance with the above formula is set forth is Section 4
below.
|
|
3.3
|
Performance
Shares
|
|
|
(a)
|
On
or following the Settlement Date, the Purchaser shall authorize for
issuance 100,000 shares of convertible redeemable preferred shares,
$0.0001 par value per share, of the Purchaser (the Preference
Shares). The Preference Shares shall have a stated or
liquidation value of US $0.01 per share (the Stated
Value).
|
|
|
(b)
|
The
Preference Shares shall be issued to the key executive officers and other
management personnel of the Purchaser and the Constituent Corporations as
stock incentives under a stock incentive scheme (the Stock Incentive
Plan). Under such Stock Incentive Plan, in the event
that the annual rate of coal production from Coal Upgrading Facilities
that has been achieved or is achievable by the end of 31 December 2012
shall exceed certain minimum levels to be determined by the compensation
committee of the board of directors of the Purchaser after the Settlement
Date (the Minimum
Production Level) but up to a rate that is equal to or in excess of
20,000,000 tonnes per annum.
|
19
|
|
(c)
|
In
the event that the achieved or achievable rate of coal production at all
Coal Upgrading Facilities shall not exceed the Minimum Production Level by
31 December 2012, the Preference Shares shall automatically be redeemed at
their Stated Value and cancelled.
|
|
|
(d)
|
In
the event that the achieved or achievable rate of coal production at all
Coal Upgrading Facilities shall exceed the Minimum Production Level by 31
December 2012, the Preference Shares shall automatically convert into
additional ordinary shares of the Purchaser (the Performance Shares) to
be calculated on an incremental pro-rata basis based on coal tonne
production levels in excess of the Minimum Production Level and up to a
rate that is equal to 20,000,000 tonnes per
annum.
|
|
|
(d)
|
Notwithstanding
anything to the contrary set forth in this Section 3.3, the aggregate
amount of Performance Shares issuable under such Stock Incentive Plan
shall not exceed ten percent (10%) of the aggregate number of Total
Adjusted Outstanding Shares on the Settlement Date (as adjusted for any
share split, share consolidation and the like that may occur after the
Settlement Date).
|
|
4.
|
EXAMPLE
OF METHOD OF CALCULATING CONSIDERATION
SHARES
|
For the
avoidance of doubt, if, for example:
|
|
(a)
|
the
White Energy Diluted Shares at the Execution Date are 158,470,964 ordinary
shares;
|
|
|
(b)
|
the
White Energy VWAP at the Execution Date is (AUS) $1.5008 or (USD)
$0.9905;
|
|
|
(c)
|
the
White Energy Market Value at the Execution Date is (USD)
$156,965,490;
|
|
|
(d)
|
there
are $105.0 million of Adjusted Funds available on the Settlement Date, and
therefore the Transaction Value is US
$261,965,490;
|
|
|
(e)
|
the
Percentage Interest is 0.5992 (US $156,965,490 /US $261,965,490) and the
result of the equation in Section
3.2(a)(iv) is 0.4008;
|
|
|
(f)
|
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;
|
|
|
(g)
|
the
Total Adjusted Outstanding Shares are therefore 34,930,140 Purchaser
Shares; and
|
|
|
(h)
|
the
Consideration Shares to be issued to White Energy on the Settlement Date
are 20,930,140 Shares (34,930,140 –
14,000,000).
|
|
5.
|
MANAGEMENT
AND CONTROL OF THE PURCHASER
|
|
5.1
|
Management
and control
|
Following
the Settlement Date, the Parties agree that White Energy will appoint the
relevant management personnel who will control the business operations of the
Purchaser and the Constituent Corporations, as wholly-owned Subsidiaries of the
Purchaser.
|
5.2
|
Composition
of the Board of Directors
|
|
|
(a)
|
On
the Settlement Date, White Energy will appoint four (4) Persons to serve
as members of the Board of Directors of the Purchaser, and two (2) Persons
designated by the Purchaser’s Board of Directors prior to the Settlement
Date and approved by White Energy shall serve as the remaining two (2)
members of the Purchaser’s Board of Directors. The Chairman of
the Board of Directors of the Purchaser and the Constituent Corporations
shall be designated by White
Energy.
|
20
|
|
(b)
|
For
the purposes of Section 5.2(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.
|
|
|
(c)
|
For
the purposes of Section 5.2(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.
|
|
|
(d)
|
For
a period of five (5) years following the Settlement Date, White Energy
shall vote all of its Purchaser Shares, at each annual or extraordinary
meeting of shareholders of the Purchaser called in whole or in part for
the purpose of electing members of the Purchaser’s board of directors, to
elect two (2) Persons designated by the existing management and board of
directors of Purchaser as members of the board of directors of the
Purchaser.
|
|
6.
|
UTILISATION
OF ADJUSTED FUNDS
|
The
Parties agree that following Settlement, the Adjusted Funds will be used by the
Purchaser and the Constituent Corporations to provide expansion capital to fund
the Commercialisation of the Technology throughout the world and for general
working capital purposes.
|
7.
|
CHANGE
OF NAME; PREPARATION OF PURCHASER’S PROXY STATEMENT;
COSTS
|
|
7.1
|
Change
of Name
|
Immediately
following Settlement, the Parties will procure that the name of the Purchaser be
changed to “White Energy Coal
Technology Corporation” or such other name as shall be acceptable to
White Energy.
|
7.2
|
Preparation
of Purchaser Proxy Statement
|
Representatives
of each of White Energy and the Constituent Corporations 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,
including, without limitation:
|
|
(a)
|
providing
the Purchaser and its representatives with all business, legal and audited
and unaudited financial statements concerning the Vendor and the
Constituent 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 on or prior to the
Settlement Date.
|
21
|
7.3
|
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 of the Purchaser Proxy Statement
and in complying with the provisions of Section 2.1(c) of this
Agreement.
|
|
|
(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
Settlement 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.
|
|
8.
|
SETTLEMENT
|
|
8.1
|
Time
and Location of Settlement
|
Settlement
shall take place on the Settlement Date at the offices of Xxxxxxx Xxxx LLP,
legal counsel to the Purchaser at 0000 Xxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx
00000, Xxxxxx Xxxxxx of America or at such other offices as the Parties may
otherwise agree and at such time as shall be agreed by the Parties.
|
8.2
|
Vendor
obligations at Settlement
|
At
Settlement, the Vendor shall confer on the Purchaser title to the Subject Shares
and place the Purchaser in effective possession and control of the Constituent
Corporations. To this end, at or prior to Settlement, the Vendor covenants to,
if required by the Purchaser:
|
|
(a)
|
deliver
or cause to be delivered to the Purchaser in a form and substance
satisfactory to the Purchaser:
|
|
|
(i)
|
share
certificate(s) evidencing all of the Subject
Shares;
|
|
|
(ii)
|
the
minute book and share certificates and share record book of WET and each
of the other Constituent Corporations;
and
|
|
|
(iii)
|
a
separate instrument of transfer in registrable form for the Subject Shares
in favour of the Purchaser (as transferee) which have been duly executed
by White Energy (as transferor);
|
|
|
(b)
|
procure
that directors’ meetings of the Vendor and WET are held to attend to the
following matters (as applicable):
|
|
|
(i)
|
the
approval of the registration (subject to payment of stamp duty, if any) of
the transfers of the Subject Shares and the issue of a new share
certificate for the Subject Shares registered in the name of the
Purchaser; and
|
|
|
(ii)
|
if
required by the Purchaser, the appointment as additional directors of the
Constituent Corporations of not more than two (2) Persons nominated by the
Purchaser by written notice before the Settlement Date pursuant to Section
5.2(a);
|
22
|
|
(c)
|
provide
the Purchaser with evidence reasonably satisfactory to the Purchaser of
the valid assignments to the Constituent Corporations of all of the
Material Contracts, and, to the extent legally required, the consents of
all other Persons (other than the Vendor) to the assignment of such
Material Contracts to the Constituent Corporations;
and
|
|
|
(d)
|
provide
to the Constituent Corporations and the Purchaser legal and binding
agreements and other documents reconstituting all Assumed Liabilities in
form and content satisfactory to the
Purchaser.
|
|
8.3
|
Purchaser’s
obligations at Settlement
|
At
Settlement, the Purchaser shall:
|
|
(a)
|
allot
and issue the Consideration Shares to White
Energy;
|
|
|
(b)
|
deliver
or cause to be delivered to White Energy share certificate(s) in respect
of the Consideration Shares;
|
|
|
(c)
|
do
all things necessary to place White Energy in effective possession and
control of the Consideration
Shares;
|
|
|
(d)
|
procure
that directors’ meetings of the Purchaser are held to attend to the
following matters (as applicable):
|
|
|
(i)
|
the
approval of the issue of the Consideration Shares and the issue of a new
share certificate for the Consideration Shares in the name of White
Energy;
|
|
|
(ii)
|
the
appointment as additional directors and chairman of the Purchaser of those
Persons nominated by White Energy by written notice before the Settlement
Date in accordance with Section
5.2;
|
|
|
(iii)
|
if
required by Section 5.2,
the retirement, by written notice, of such number of the Purchaser
Shareholders’ representatives as officers and directors of the Constituent
Corporations with effect from the end of that meeting acknowledging that
each of them has no claim of any kind whatsoever against the Constituent
Corporations by way of compensation or entitlement for loss of office;
and
|
|
|
(iv)
|
any
other matters that White Energy or its legal counsel consider reasonably
necessary in order for the Transaction to proceed in accordance with this
Agreement.
|
|
|
(e)
|
deliver
or cause to be delivered to White Energy, unless such items are required
to be held and are actually held at the registered office of the
Purchaser:
|
|
|
(i)
|
the
common seal (and any duplicate common seal, share seal or official seal)
of the Purchaser;
|
|
|
(ii)
|
all
available copies of the constitution of the
Purchaser;
|
|
|
(iii)
|
the
minute books and other records of meetings or resolutions of members and
directors of the Purchaser;
|
|
|
(iv)
|
all
registers of the Purchaser (including the register of members, register of
options, register of directors, register of charges) in proper order and
condition and fully entered up to the Settlement
Date;
|
23
|
|
(v)
|
all
cheque books, financial and accounting books and records, copies of tax
returns and assessments, mortgages, leases, agreements, insurance
policies, title documents, licences, indicia of title, contracts,
certificates and all other records, papers, books and documents of the
Purchaser;
|
|
|
(vi)
|
a
duly completed authority for the alteration of the signatories of each
bank account of the Purchaser in the manner agreed to by the Purchaser and
the Vendor by written notice before the Settlement Date;
and
|
|
|
(vii)
|
all
current Authorisations and other documents issued to the Purchaser under
any legislation or ordinance relating to its Business
activities.
|
|
|
(f)
|
pay
or cause to be paid (i) all of the Material Purchaser Liabilities that are
required to be paid at the Settlement Date, as set forth on Schedule A to
Exhibit
2 hereto, and (ii) all other costs and expenses incurred and to be
incurred by the Purchaser prior to the Settlement Date in connection with
the consummation of the Transactions contemplated by this
Agreement.
|
|
|
(g)
|
assume
and guaranty the Assumed Liabilities, by instruments mutually satisfactory
to White Energy and the Purchaser.
|
|
9.
|
COVENANTS
BY WHITE ENERGY
|
|
9.1
|
Conduct
of Business by the Constituent
Corporations
|
|
|
(a)
|
During
the period from the Execution Date to the Settlement Date, each of the
Constituent Corporations shall and White Energy shall cause the
Constituent 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.
|
|
|
(b)
|
In
addition to and not in lieu of the provisions of Section 9.1(a),
the Parties hereto do hereby acknowledge and agree that during the period
between the Execution Date and the Settlement Date, without the consent or
approval of the Purchaser, White Energy may (i) issue any Additional White
Energy Securities, other than White Energy Dedicated Securities, and (ii)
issue White Energy Dedicated Securities that (A) are limited to ordinary
shares or common shares, (B) do not constitute and are not included in
Assumed Liabilities, and (C) may be issued without the approval of the
shareholders of White Energy under ASX Rules or the Corporations
Act.
|
|
9.2
|
Covenants
about the Constituent Corporations
|
White
Energy covenants with the Purchaser that during the period commencing on the
Execution Date and expiring on the Settlement Date, neither White Energy nor the
Constituent Corporations will, in connection
with the Business or on behalf of the Constituent Corporations, except in the
ordinary course of such 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, other than Assumed
Liabilities;
|
24
|
|
(c)
|
increase
any of the Assumed Liabilities, except for accounts payable and accrued
expenses incurred in the ordinary course of the businesses of the
Constituent Corporations and consistent with past
practices;
|
|
|
(d)
|
acquire
any material asset or authorise any material capital expenditure (except
in accordance with existing capital expenditure
programs);
|
|
|
(e)
|
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;
|
|
|
(f)
|
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;
|
|
|
(g)
|
issue
any additional Constituent Corporations Shares, or grant any option to
subscribe for any security in the Constituent 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 any of the
Constituent Corporations;
|
|
|
(h)
|
resolve
to reduce or increase the Constituent Corporations Shares or capital in
any way;
|
|
|
(i)
|
enter
into a buy-back agreement or resolve to approve the terms of a buy-back
agreement on behalf of the Constituent
Corporations;
|
|
|
(j)
|
declare
or pay any dividend or make any other distribution of the Constituent
Corporations’ assets or profits;
|
|
|
(k)
|
alter
or agree to alter any of the Constituent Corporations’
constitution;
|
|
|
(l)
|
pass
any resolution;
|
|
|
(m)
|
amend or modify any executed Material
Contract;
|
|
|
(n)
|
resolve
any programs or budgets in relation to the Constituent
Corporations;
|
|
|
(o)
|
issue
or sell any Additional Securities;
|
|
|
(p)
|
issue
or sell any White Energy Dedicated Securities, other than White Energy
Dedicated Securities that (i) are limited to ordinary shares or common
shares, (ii) do not constitute and are not included in Assumed
Liabilities, and (iii) may be issued without the approval of the
shareholders of White Energy under ASX Rules or the Corporations Act;
or
|
|
|
(q)
|
otherwise
take any action that would result in or reasonably be expected to result
in a Prohibited Occurrence in respect of the Constituent
Corporations.
|
|
9.3
|
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 Settlement Date it
will:
|
|
|
(i)
|
allow
the Purchaser to carry out a financial, commercial and legal due diligence
in relation to the Constituent Corporations and will provide the Purchaser
with all relevant information in respect of the Constituent Corporations,
in order for the Purchaser to complete this due
diligence;
|
25
|
|
(ii)
|
ensure
that the approval of any third parties is obtained to the transfer of the
Subject Shares pursuant to this Agreement (if
required);
|
|
|
(iii)
|
cooperate
with the Purchaser’s Investment Bankers in obtaining additional Purchaser
Funds for the Purchaser and the Constituent Corporations, and, in such
connection, use its reasonable endeavours to cause WET to raise additional
Purchaser Funds through the sale of Additional Securities;
and
|
|
|
(iv)
|
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 Constituent Corporations, or take any action which could reasonably be
expected to make the Transactions 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 Constituent Corporations supplied by White Energy, any of
the Constituent Corporations, 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 Settlement, a change in such
information which would make the preceding sentence incorrect should be
discovered by the Vendor or the Constituent Corporations, the Vendor or
the Constituent Corporations, as applicable, will promptly notify
Purchaser of such change. The Vendor and the Constituent 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.
|
|
|
(c)
|
White
Energy shall use its reasonable endeavours to cause the White Energy
Shareholders Meeting to be held not later than 15 May
2009.
|
|
|
(d)
|
Except
as otherwise permitted in this Section 9.3(d),
for a period of not less than one (1) year from the Settlement Date, White
Energy shall not sell, transfer or assign in any public distribution any
of the Consideration Shares. Notwithstanding the foregoing, White Energy
shall have the right, at any time following 180 days after the Settlement
Date to dividend or otherwise distribute any and all of such Consideration
Shares to the White Energy
shareholders.
|
|
9.4
|
Break
up Fee
|
|
|
(a)
|
In
the event that, for any reason, the White Energy shareholders shall not
approve this Agreement and the Transactions contemplated hereby at the
White Energy Shareholders Meeting, the Purchaser may be required to
liquidate. Accordingly, in the event that the White Energy
shareholders shall not approve this Agreement and the Transactions
contemplated hereby at the White Energy Shareholders Meeting, 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,
|
26
|
|
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, pay to the Purchaser, the sum
of Six Million Dollars ($6,000,000) as a break-up fee (the Breakup
Fee).
|
|
|
(b)
|
The
provisions of Section 9.4(a)
above shall be subject to the provisions of Section 9.4(d)
below, and shall terminate on the earlier to occur of either of the
following events:
|
|
|
(i)
|
the
White Energy shareholders shall have approved this Agreement and the
Transactions contemplated hereby at the White Energy Shareholders Meeting;
or
|
|
|
(ii)
|
White
Energy shall have been successful in procuring the White Energy Majority
Shareholders Consents.
|
|
|
(c)
|
The
Parties agree and acknowledge that the Breakup Fee is a reasonable
estimation of the loss and damage that may be suffered and incurred by the
Purchaser as a result of the Transactions contemplated by this Agreement
not being consummated.
|
|
|
(d)
|
If
it is found by any court of competent jurisdiction 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:
|
|
|
(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.
|
|
9.5
|
Event
affecting value of Subject Shares
|
If, on or
before Settlement, an event occurs which has or may have a Material Adverse
Effect on the profitability or value of the Subject Shares, or the value of the
Business shall have occurred, the Vendor must, immediately upon becoming aware
of that event, give written notice to the Purchaser fully describing the
event.
|
10.
|
COVENANTS
BY THE PURCHASER
|
|
10.1
|
Conduct
of Business by the Purchaser
|
During
the period from the Execution Date to the Settlement 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.
27
|
10.2
|
Covenants
about the Purchaser
|
The
Purchaser covenants with the Vendor that during the period commencing on the
Execution Date and expiring on the Settlement Date, the Purchaser will not,
except as contemplated by this Agreement, without the prior written consent of
the Vendor:
|
|
(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;
|
|
|
(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 on or before the Settlement Date, the Purchaser shall
have the right to issue and sell additional Purchaser Shares or issue
Additional Securities of the Purchaser (upon terms and conditions
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 shall (i) have advised the
Purchaser or its representatives that such Person will not vote in favour
of this Agreement and the Transactions 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;
|
|
|
(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 Settlement 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 Transactions 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 $74.75 million Minimum Amount
available on the Settlement 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;
|
28
|
|
(l)
|
sell
or issue any Additional Securities, other than as contemplated in Section 10.2(f)
and Section
10.2(h); or
|
|
|
(m)
|
otherwise
take any action that would result in or reasonably be expected to result
in a Prohibited Occurrence in respect of the
Purchaser.
|
|
10.3
|
Further
Covenants by the Purchaser
|
|
|
(a)
|
The
Purchaser covenants in favour of the Vendor that during the period
commencing on the Execution Date and expiring on the Settlement Date it
will:
|
|
|
(i)
|
allow
the Vendor to carry out a financial, commercial and legal due diligence in
relation to the Purchaser and will provide the Vendor with all relevant
information in respect of the Purchaser, in order for the Vendor 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 transfer of the issue of the Consideration Shares
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;
and
|
|
|
(iv)
|
use
its best endeavours to increase the amount of Purchaser Funds by the sale
and issuance of additional Purchaser Shares or other Additional
Securities, all upon such terms and conditions as shall be mutually
acceptable to White Energy and the
Purchaser.
|
|
|
(b)
|
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 Approval, 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
Approval. 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 Approval;
and
|
|
|
(iii)
|
will
otherwise comply with applicable legal requirements with respect to the
Purchaser Shareholder Meeting.
|
29
|
|
(c)
|
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 the
Vendor or the Constituent 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 Vendor. Purchaser shall give the Vendor 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 the Vendor' comments. Purchaser will provide to the
Vendor 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.
|
|
|
(d)
|
With
respect to any information change notice delivered by Vendor to Purchaser
pursuant to Section 9.3(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
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).
|
|
|
(e)
|
Until
the earlier of the Settlement 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;
or
|
|
|
(iii)
|
enter
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 Vendor of any such
inquiries or proposals or requests for information for such
purpose.
|
|
10.4
|
Event
affecting value of Purchaser Shares
|
If, on or
before Settlement, 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 the Vendor fully describing the
event.
|
11.
|
REPRESENTATIONS
AND WARRANTIES BY THE VENDOR
|
|
11.1
|
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, both at the Execution Date
and at the Settlement Date, except as otherwise disclosed in the Constituent
Corporations Disclosure Schedule.
30
|
11.2
|
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 any
of the Constituent 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.
|
|
11.3
|
Repetition
on Settlement Date
|
The
matters set out in Exhibit
1 will be taken to be repeated by White Energy on the Settlement Date
with reference to the facts and circumstances existing at that
date.
|
11.4
|
Limitation
on Warranties
|
|
(a)
|
Except
with respect to Claims arising in connection with the representations and
warranties set forth in Section 1 of
Exhibit
1, which representations and warranties shall survive the
Settlement indefinitely, White Energy shall not be liable to the Purchaser
for any Claim under or in connection with this Agreement, or the
transactions contemplated by it, unless the Purchaser has given written
notice to White Energy setting out reasonable details of the specific
matter in respect of which the Claim is
made:
|
|
(i)
|
within
two (2) years after the Settlement Date in respect of any such Claim
relating to any Tax; and
|
|
(ii)
|
within
twelve (12) months after the Settlement Date in respect of all other
Claims, and
|
|
(iii)
|
subject
to White Energy and the Purchaser otherwise agreeing in writing) court
proceedings have been issued and properly served by the Purchaser against
White Energy in respect of such Claim within the period of 6 months
immediately following notification of the
Claim.
|
|
(b)
|
White
Energy shall not be liable to the Purchaser for any Claim for breach of
warranty under this Agreement or any breach of any other provision of this
Agreement or under any indemnity in this Agreement, and the Purchaser is
not entitled to make a Claim, if and to the extent that the facts, matters
or circumstances giving rise to the Claim are fully and fairly disclosed
and set out in the Disclosure Schedule provided by White Energy to the
Purchaser under this
Agreement.
|
11.5 Reduction
of Consideration Shares
White
Energy hereby agrees that, as an additional and/or alternative remedy to the
indemnity provided by White Energy pursuant to Section 11.2, in the
event that Purchaser is subject to any Claim which arises from or is in
connection with any matter indemnified by White Energy pursuant to such Section 11.2, the
Purchaser may demand that White Energy return to the Purchaser’s treasury for
cancellation, such number of the Consideration Shares issued on the Settlement
Date as determined by dividing the value of the Claim by the volume weighted
average price of the Purchaser’s Shares as quoted on NYSE Alternext over the 20
trading days immediately following the date of the resolution of the
Claim.
31
|
12.
|
REPRESENTATIONS
AND WARRANTIES BY THE PURCHASER
|
|
12.1
|
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 the Vendor 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, both at the Execution Date
and at the Settlement Date, except as disclosed in the Constituent Corporations
Disclosure Schedule.
|
12.2
|
Indemnity
by Purchaser
|
The
Purchaser hereby agrees to indemnify and hold harmless White Energy and the
Vendor against any Claim against White Energy, the Vendor or the Constituent
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
|
|
(c)
|
any
Material Purchaser Liability which occurred or which was incurred or arose
prior to the Settlement Date, including specifically, any Material
Liability relating to the China Tel
Transaction.
|
|
12.3
|
Additional
Purchaser Shares
|
The
Purchaser hereby agrees that, as an additional and/or alternative remedy to the
indemnity provided by the Purchaser pursuant to Section 12.2, in the event that
White Energy or the Constituent Corporations are subject to any Claim which
arises from or is in connection with any matter to be indemnified by the
Purchaser pursuant to such Section 12.2, White Energy shall be entitled to be
issued such number of additional Purchaser Shares as determined by dividing the
value of the Claim by the volume weighted average price of the Purchaser’s
Shares as quoted on NYSE Alternext over the 20 trading days immediately
following the date of the resolution of the Claim.
|
12.4
|
Repetition
on Settlement Date
|
The
matters set out in Exhibit
2 will be taken to be repeated by the Purchaser on the Settlement Date
with reference to the facts and circumstances existing at that
date.
|
12.5
|
Limitation
on Warranties
|
|
(a)
|
Except
with respect to Claims arising in connection with the representations and
warranties set forth in Section 1 of
Exhibit
2, which representations and warranties shall survive the
Settlement indefinitely, the Purchaser shall not be liable to White Energy
or the Constituent Corporations for any Claim under or in connection with
this Agreement, or the transactions contemplated by it, unless the
Purchaser has received written notice setting out reasonable details of
the specific matter in respect of which the Claim is
made:
|
32
|
(i)
|
within
two (2) years after the Settlement Date in respect of any such Claim
relating to any Tax; and
|
|
(ii)
|
within
twelve (12) months after the Settlement Date in respect of all other
Claims, and
|
|
(iii)
|
subject
to White Energy and the Purchaser otherwise agreeing in writing) court
proceedings have been issued and properly served by White Energy against
the Purchaser in respect of such Claim within the period of 6 months
immediately following notification of the
Claim.
|
|
(b)
|
The
Purchaser shall not be liable to White Energy for any Claim for breach of
warranty under this Agreement or any breach of any other provision of this
Agreement or under any indemnity in this Agreement, and White Energy shall
not be entitled to make a Claim, if and to the extent that the facts,
matters or circumstances giving rise to the Claim are fully and fairly
disclosed and set out in the Disclosure Schedule furnished by the
Purchaser, in the Purchaser Prospectus or in the Form 20-F and Forms 6-K
filings made by the Purchaser under the Securities Exchange
Act.
|
|
13.
|
GENERAL
REPRESENTATIONS AND WARRANTIES AND ACKNOWLEDGEMENTS BY ALL
PARTIES
|
|
13.1
|
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.
|
|
13.2
|
Acknowledgement
|
Each
Party acknowledges and agrees that upon consummation of the Transactions
contemplated hereby, immediately following the Settlement Date substantially all
of White Energy’s assets will consist of:
|
(a)
|
$5,000,000
cash;
|
|
(b)
|
equity
in the Excluded Subsidiaries;
|
|
(c)
|
the
Consideration Shares; and
|
|
(d)
|
any
receivables in respect of any Allowed Affiliated
Obligations.
|
33
|
14.
|
CONFIDENTIALITY
|
|
14.1
|
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
|
|
(g)
|
to
a financier or prospective financier (or its advisers) of a
Party.
|
|
14.2
|
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.
|
14.3
|
Obligations
continuing
|
The
obligations under this Section 14 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.
|
14.4
|
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.
|
14.5
|
Agreed
announcement
|
A party
may not make any other public announcement relating to this agreement (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
|
34
|
(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.
|
|
15.
|
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.
|
|
16.
|
NOTICES
AND CERTIFICATES
|
|
16.1
|
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
16.2, 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 16.3.
|
16.2
|
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 Island
Cayman
Islands
With
copies to:
Xx. Xxxx Xxxxx
0000 Xxxxxxxxxxxxx Xxxxxxx,
Xxxxx 0000
Xxxx Xxxx, XX 00000
Facsimile: INT
x(000) 000-0000
-and-
35
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 and WET:
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
|
16.3
|
Change
of Address
|
Each
Party may from time to time change its address by giving notice pursuant to
Section 16.1 to the other Parties.
|
16.4
|
Receipt
of notice
|
Any
notice given pursuant to Section 16.1 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.
|
36
|
17.
|
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.
|
18.
|
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.
|
19.
|
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.
|
20.
|
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.
|
|
21.
|
COSTS
|
|
21.1
|
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.
|
21.2
|
Legal
Costs
|
In
addition to the provisions of Section 7.3 above, each Party shall bear their own
legal costs of and incidental to the preparation, negotiation and execution of
this Agreement.
|
22.
|
MISCELLANEOUS
|
|
22.1
|
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.
|
22.2
|
Sole
Understanding
|
This
Agreement shall constitute the sole understanding of the Parties with respect to
the subject matter and replaces all other agreements with respect
thereto.
37
|
22.3
|
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.
|
22.4
|
Time
|
Time
shall be of the essence in this Agreement in all respects.
[balance
of this page intentionally left blank – signature page follows]
38
EXECUTED by the Parties as an
Agreement.
|
EXECUTED
BY:
|
)
|
||
|
)
|
|||
|
)
|
|||
|
ASIA
SPECIAL SITUATION ACQUISITION
|
)
|
||
|
CORP.
|
|||
|
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/ Xxxx XxXxxxxx | |||
|
Director
|
|||
|
EXECUTED
BY:
|
) | ||
| ) | |||
|
WHITE ENERGY TECHNOLOGY
LTD.
|
) | ||
|
ABN
62 114 203 904
|
) | ||
|
in
accordance with Corporations Act:
|
|||
|
/s/ Xxxx Xxxxxxxx
|
|||
|
Director
|
|||
| /s/ Xxxx XxXxxxxx | |||
|
Director
|
39
EXHIBIT
1 – REPRESENTATIONS AND WARRANTIES OF WHITE ENERGY
|
1.
|
Share
capital
|
|
(a)
|
(Subject
Shares): The Subject Shares comprise 100% of the issued
and outstanding ordinary shares in
WET.
|
|
(b)
|
(Constituent Corporations
Shares): The aggregate number of the issued and
outstanding Constituent Corporations Shares of each of the Constituent
Corporations, and the record and beneficial owners of the Constituent
Corporations Shares of each of the Constituent Corporations is set forth
on Schedule
A to this Exhibit
1.
|
|
(c)
|
(Due Issuance and
Payment): The Subject Shares and the issued and
outstanding Constituent Corporations Shares are fully paid up and
non-assessable and have been duly issued and allotted. The
Subject Shares are owned of record and beneficially by the Vendor free and
clear of all Encumbrances, and the issued and outstanding Constituent
Corporations Shares are owned of record and beneficially by the applicable
Constituent Corporation set forth on Schedule A to
the Exhibit 1 free
and clear of all
Encumbrances.
|
|
(d)
|
(No right to subscribe):
No Person has any right or option to subscribe for or otherwise to acquire
any further Constituent Corporation
Shares.
|
|
(e)
|
(No preference shares or
convertible securities): The Constituent Corporations do
not have any preferred or preference shares authorized or
issued. No Person has any right to convert any notes or other
securities of the Constituent Corporations or the Vendor into any
Constituent Corporation
Shares.
|
|
(f)
|
(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 the Constituent
Corporations or any Constituent Corporation
Shares.
|
|
(g)
|
(No other
allotments): The Constituent Corporations are 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
Constituent Corporations are not under any obligation to give any option
over any part of their unissued share capital nor have the Constituent
Corporations offered to do any of the matters stated in this
sub-paragraph.
|
|
(h)
|
(Right and power to
sell): Subject to all necessary approvals (as
contemplated in this Agreement), the Vendor has complete and unrestricted
power and right to sell, assign and transfer the Subject Shares to the
Purchaser except for the consent of the directors of WET to the
registration of the transfers of the Subject
Shares.
|
|
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
Constituent Corporations 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
Constituent Corporations 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 the Constituent
Corporations 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 the Constituent
Corporations to any Person or entitle any Person to require the
performance of or compliance with any existing contractual or other
obligation of the Constituent Corporations;
and
|
|
(e)
|
will
not entitle any Person with whom the Constituent Corporations have a
contract or arrangement of any kind to terminate that contract or
arrangement or to impose less favourable terms on the Constituent
Corporations.
|
|
3.
|
The Constituent
Corporations
|
Each of
the Constituent Corporations:
|
(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 the Vendor
or the Constituent Corporations is a party and relating to the Transaction
have been fully disclosed to the Purchaser prior to the Execution Date and
listed on the Constituent Corporations Disclosure
Schedule.
|
|
(b)
|
(Executed Material
Contracts): Each and every Material Contract and other
instrument or other commitment relating to the Transaction to which the
Vendor or the Constituent Corporations is a party and which is executed,
delivered and assigned to the Constituent Corporations on the Settlement
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 Settlement 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
the Constituent Corporations to carry on the Business. As at
the Settlement Date, White Energy shall cause to be assigned to the
Constituent Corporations all of the Material Contracts that are, in White
Energy’s reasonable opinion, necessary for the Constituent Corporations to
carry on the Business.
|
|
(d)
|
(No Defaults): White
Energy not has 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): The Vendor and the Constituent
Corporations are not a party to any contract or commitment relating to the
Transaction 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 Subject
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): The Constituent Corporations have 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 the Constituent Corporations on the
Settlement Date are sufficient to conduct the Business of the Constituent
Corporations as currently conducted and as expected to be conducted as at
the Settlement Date.
|
|
5.
|
Corporate
matters
|
|
(a)
|
(Assets owned by the Constituent
Corporations): The Constituent Corporations are the
legal and beneficial owner of all of their assets, which are owned free
and clear of any Encumbrance, except as disclosed in the Constituent
Corporations Disclosure Schedule, and on the Settlement 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 Constituent Corporations Disclosure Schedule, there are
no Encumbrances over all or the Constituent Corporations’ present or
future assets or revenues of its
business.
|
|
(c)
|
(Compliance with
contracts): Each of the Vendor and the Constituent
Corporations, as applicable, 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 the
Constituent Corporations in favour of any Person which are or may come to
be in force in relation to the Business or the Constituent
Corporations.
|
|
(e)
|
(Officers duly
appointed): All of the directors and secretaries of the
Constituent Corporations have been duly appointed in accordance with the
Corporations Act.
|
|
(f)
|
(All duties and taxes
paid): All stamp duties and other taxes for which the
Constituent Corporations are primarily liable in respect of every deed,
agreement or other document to which the Constituent Corporations is or
has been a party have been duly paid or adequately provided
for.
|
|
(g)
|
(Filings): The
Constituent Corporations have 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 Constituent Corporations is not liable to be struck off
the register of companies.
|
|
6.
|
Intellectual
Property and
Confidential Information
|
(a)
The Constituent Corporations 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 Settlement Date owned or used by the Constituent Corporations
in connection with the Business.
(b)
(Right and
title): As at the Execution Date and the Settlement
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)
|
neither
White Energy nor the Constituent Corporations will 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 Settlement Date and pursuant to the Head Licenses be legally
vested in the Constituent Corporations (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. Each of White Energy
and the Constituent Corporations, as applicable, 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): Neither White Energy nor the Constituent
Corporations is aware of any use by any other Person of any business name
or trade xxxx owned or used by the Constituent
Corporations.
|
|
(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 or the Constituent Corporations, 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): The Constituent Corporations 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 the Constituent Corporations or any
Person for whom the Constituent Corporations 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
the Constituent Corporations to continue to operate the
Business.
|
|
(d)
|
(No outstanding
judgments): There are no unsatisfied or outstanding
judgments, orders, decrees, stipulations, or notices affecting the
Constituent Corporations or any Person for whom the Constituent
Corporations may be vicariously
liable.
|
|
8.
|
Taxation
|
|
(a)
|
(Compliance): The
Constituent Corporations have 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 Constituent Corporations have been
paid or remitted to the relevant Revenue Authority by the Constituent
Corporations.
|
|
(c)
|
(No penalty or fine paid or
payable): The Constituent Corporations have not in the
past five years paid or become liable to pay, nor are there any
circumstances by reason of which the Constituent Corporations 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 the Constituent Corporations which might
reasonably be regarded as material to a purchaser for value of the Subject
Shares has been disclosed in writing to the Purchaser and is set forth in
the Constituent Corporations Disclosure
Schedules.
|
|
(b)
|
(True, complete and
accurate): All information concerning the Constituent
Corporations or concerning the Subject Shares supplied to the Purchaser or
its agents, employees or advisers by the Vendor 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 Vendor 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 Subject Shares or the Constituent Corporations which might
materially adversely affect the interests of the Purchaser as an intending
purchaser of the Subject
Shares.
|
|
(i)
|
Permits;
Compliance. The Constituent Corporations are 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 or the Constituent Corporations, threatened regarding suspension or
cancellation of any of the Permits. The Constituent
Corporations are 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 the
Constituent Corporations 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.
|
|
(ii)
|
Environmental
Matters. There are, with respect to the Constituent
Corporations, 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 the Constituent Corporations have 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 the Constituent Corporations,
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 the Constituent Corporations, and no
Hazardous Materials were released on or about any real property previously
owned, leased or used by the Constituent Corporations 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 the
Constituent Corporations that are not in compliance with applicable
law.
|
|
(iii)
|
Title to
Property. The Constituent Corporations have 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 each of the Constituent Corporations 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 the Constituent Corporations are held by them under
valid, subsisting and enforceable leases with such exceptions as would not
have a Material Adverse
Effect.
|
|
(iv)
|
Insurance. The
Constituent Corporations are 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 Constituent
Corporations believes to be prudent and customary in the businesses in
which the Constituent Corporations are engaged. No executive
officer of White Energy or the Constituent Corporations have any reason to
believe that the Constituent Corporations 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. Each
of the Constituent Corporations (after giving effect to the Transactions
contemplated by this Agreement) is solvent. Each of the
Constituent Corporations (after giving effect to the Transactions
contemplated by this Agreement) 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 Constituent
Corporations Disclosure Schedule, neither White Energy nor the Constituent
Corporations have 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 Transactions
hereunder.
|
SCHEDULE
A TO EXHIBIT 1
|
Constituent
Corporation
|
Constituent
Corporation Shares
|
Legal holder of
Constituent
Corporation Shares
|
Beneficial holder of
Constituent
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
|
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
Settlement duly and validly authorized, and when issued and delivered in
accordance with the terms hereof for the consideration set forth in
Section 3.1 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 Approval) 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 as of the Execution
Date.
|
|
|
(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 by Ho Capital Management LLC and as at the
Settlement Date or immediately thereafter will be owned of record and
beneficially (A) as to 2,862,500 Insider Warrants by Noble Investment
Fund, and (B) as to 2,862,500 Insider Warrants by Ho Capital Management
LLC or Xxxxxx Xx, subject to the pledge of such Insider Warrants to Noble
Investment Company to secure a loan to Ho Capital Management LLC;
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 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 are exempt
from:
|
|
|
(i)
|
the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof; and
|
|
|
(ii)
|
the
registration or qualification requirements of any applicable U.S. state
securities laws.
|
|
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;
and
|
|
|
(c)
|
is
and has been operating in accordance with all statements contained in the
Purchaser’s Prospectus.
|
|
|
(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 China Tel Transaction 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
Settlement Date, the Purchaser will have not less than the Minimum 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 Constituent
Corporations 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 the Vendor 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 Settlement 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 Approval, the execution and delivery of
this Agreement and the consummation of the Transactions 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
Transactions.
|
|
|
(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 the Vendor 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 the Vendor 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 Vendor 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 Settlement 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 Constituent Corporations are
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 Transactions contemplated by this
Agreement) is solvent. The Purchaser (after giving effect to
the Transactions 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 Transactions, 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
$987,000 as at the Execution Date, and may borrow up to an additional
$263,000 prior to the Settlement 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 Settlement Date, certain
Affiliates of the Purchaser shall assign to TAG an aggregate of 100,000
ordinary shares of ASSAC owned by such Affiliates, all as set forth in the
Funding Agreement.
|
|
2.
|
The
Purchaser is indebted to Xxxxxx Xx 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 a monthly work fee of $25,000 per month to
Canaccord Capital Corp. and Xxxx Capital Partners LLC, and on the
Settlement Date, the Purchaser will be obligated to pay a success fee to
such Persons equal to up to 6% of the “Transaction Consideration” (as
defined) and (if applicable) a financing fee equal to up to 6% of the
amount of financing provided to the Purchaser by or through such Persons,
all as set forth in an investment banking agreement between Purchaser and
Canaccord Capital Corp. and Xxxx Capital Partners LLC, dated December 15,
2008, as amended and restated as of March 12, 2009. In
addition, in connection with the sale and issuance of Additional
Securities of the Purchaser or WET, the Purchaser is obligated to issue to
Canaccord Capital Corp. and Xxxx Capital Partners LLC warrants,
exercisable at 110% of the issue price, conversion price or exercise price
per share of any Additional Securities, entitling such Persons to purchase
10% of the amount of Purchaser Shares that are issued or issuable upon
conversion or exercise of such Additional
Securities.
|
|
4.
|
On
the Settlement 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.
|
|
5.
|
On
the Settlement 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 Transaction by TAG to the
Purchaser.
|
|
6.
|
On
the Settlement Date, the Purchaser shall be obligated to pay a cash
payment of up to $225,000 to AFH Holdings LLC, in connection with the
settlement of a claim for a finders
fee.
|
EXHIBIT
3 – COMBINED CONSOLIDATED BALANCE SHEET OF THE CONSTITUENT CORPORATIONS BASED ON
AUDITED ACCOUNTS AS OF 31 DECEMBER 2008
Balances in Australian
Dollars (AU$)
|
AU$
|
||||
|
Current
Assets
|
||||
|
Cash
and cash equivalents
|
5,946,784 | |||
|
Trade
and other receivables
|
11,620,856 | |||
|
Total
current assets
|
17,567,640 | |||
|
Non-current
assets
|
||||
|
Property,
plant and equipment
|
113,682,067 | |||
|
Intangible
assets
|
53,162,129 | |||
|
Total
non-current assets
|
166,844,196 | |||
|
Total
Assets
|
184,411,836 | |||
|
Current
Liabilities
|
||||
|
Accounts
payable and accrued expenses
|
16,801,430 | |||
|
Other
liabilities
|
14,339,223 | |||
|
Total
current liabilities
|
31,140,653 | |||
|
Non-current
liabilities
|
||||
|
Other
liabilities
|
35,917,619 | |||
|
Borrowings
|
44,447,570 | |||
|
Total
non-current liabilities
|
80,365,189 | |||
|
Total
liabilities
|
111,505,842 | |||
|
Net
assets
|
72,905,994 | |||
