1.
INDEX OIL AND GAS INC
2.
BRINER GROUP INC
3.
LYNDON WEST AND OTHERS
================================================================================
ACQUISITION AGREEMENT
relating to shares and warrants in Index Oil & Gas Limited
================================================================================
THIS DOCUMENT IS FOR
DISTRIBUTION IN THE UNITED KINGDOM ONLY TO PERSONS HOLDING
SHARES IN INDEX OIL & GAS LIMITED. THIS DOCUMENT IS NOT A
PROSPECTUS PURSUANT TO
SECTION 85
OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000. FOR THE PURPOSES OF
SECTION 21
OF THE FINANCIAL SERVICES AND MARKETS
ACT 2000, THIS DOCUMENT IS A
COMMUNICATION WHICH
FALLS WITHIN THE SCOPE OF THE SALE OF BODY CORPORATE
EXEMPTION PURSUANT
TO REGULATION 62 OF THE FINANCIAL
SERVICES AND MARKETS ACT
(FINANCIAL PROMOTION)
ORDER 2005
<PAGE>
THIS AGREEMENT is made on 2 January 2006
BETWEEN
1. BRINER
GROUP INC. a corporation with an address for notice and
delivery at
Suite 510 - 999 West Hastings Street,
Vancouver, BC V6C 2W
("BG") and;
2. INDEX
OIL AND GAS INC. a corporation incorporated and registered in
accordance with
the laws of the State of Nevada, USA and having its
principal office
at 711 South Carson Street, Nevada 89701, USA ("the
"Purchaser") and;
3. THE
PERSONS WHOSE NAMES AND ADDRESSES are set out in the first
column
of
Schedule 1 ("the A Group Shareholders").
WHEREAS:-
A.
The Purchaser and the A Group Shareholders have agreed terms
for
the transfer
by the A Group Shareholders to the
Purchaser of their
respective holdings
of the Shares and the
Warrants for Consideration
Shares and
Consideration Warrants
(as defined below) on the terms of
this Agreement.
B.
BG has agreed to enter into this Agreement for the purposes,
inter alia, of giving certain warranties and undertakings in favour
of
the Shareholders (as defined below).
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
THE AGREEMENT
1. Definitions and Interpretations
-----------------------------------
1.1 In this Agreement:
"AGREEMENT" means this
agreement;
" A Group Shareholders"
means the
persons whose names and addresses
are set out in the
first column of Schedule 1 who
have agreed
to provide certain warranties in
favour of the Purchaser in relation to the
business, assets and liabilities of the Company;
"Purchaser Warranties"
means the warranties on the part of BG and
the Purchaser
set out in Clause 10.3
and Part II
of Schedule 2;
"BG Disclosure Letter"
means the
letter from BG to the A Group
Shareholders with the
same date as this Agreement
and described as the BG disclosure letter;
"Claim"
means a claim under the A Group Warranties
and/or the
Purchaser Warranties, as the context
may admit;
"Company"
means Index
Oil & Gas Limited a company
incorporated and
registered
in England under
registered number
4674411 and having its
registered office at Lawrence House, Lower Bristol
Road, Bath, BA2 9ET England;
"Completion"
means the completion of the sale and purchase
of the Shares and the
Warrants pursuant to Clause
9;
<PAGE>
"Completion Date"
means the date of this agreement;
"the Consideration Shares" means the 8,796,997 shares of common stock in
the capital
of the Purchaser to be issued and
allotted to
the A Group
Shareholders pursuant to
Clause 3;
"the Consideration Warrants" means the 503,164 warrants to subscribe for
shares of common stock in the capital of the
Purchaser to be issued and allotted to the A Group
Shareholders pursuant
to Clause 3, such
warrants
to be constituted pursuant to a deed
poll of the
Purchaser in the agreed form;
"Disclosed"
means fairly
disclosed in or under the A
Group Disclosure
Letter or the BG Disclosure
Letter as the case may be;
"A Group Disclosure Letter" means the letter from the A
Group Shareholders
to
the Purchaser with the same date as this Agreement
and described as the A
Group disclosure letter;
"Encumbrance"
any interest or equity
of any person (including
any right to acquire, option or right of pre-
emption) or
any mortgage, charge, pledge,
lien,
assignment,
hypothecation,
security,
interest,
title retention or any other security agreement or
arrangement;
"Market Orderliness"
means the
principle
that
a private or a
public institution
will
ensure
the proper
regulation of
net flows into and out of the
market;
"NASDAQ OTC Bulletin
Board" and "NASDAQ"
means the National Association of Securities
Dealers Automated
Quotation
system and all
references to this
market shall include all other
such markets
that the Stock Units are traded on
from time to time;
"Party" and " Parties"
means all or any of the parties to this Agreement
as the context requires;
"Restriction Provisions" means
in the case of the A Group Shareholders,
the
restriction
provisions
on the sale and
transfer of
the Consideration Shares set out
in
Clause 4 and in the case of the Shareholders
(excluding
the A
Group Shareholders) the
restriction provisions on the sale and transfer of
Stock Units
set out in the relevant
Shareholder
Agreement;
"Private Placing"
means the private placing of 8,533,333 Stock
Units in the Purchaser at US$0.60 per share to
placees pursuant
to a subscription agreement in
the agreed form and as referred to in Clause 7;
"Shareholder Agreements" means
agreements
executed separately from this
Agreement between the Purchaser and shareholders
of the Company excluding the A Group
Shareholders for the
transfer of their individual
holdings of shares and
warrants in the Company to
the Purchaser in exchange for Stock Units;
<PAGE>
"the Shares"
means the 3,079,225 ordinary shares of 10p
each in the capital of the Company
beneficially
owned by and registered in the names of the A
Group Shareholders
in the proportions set
out in
Schedule 1;
"Shareholders"
means all the registered holders of ordinary
shares of 10p each in the capital of the
Company
on the date of this Agreement, including the
A
Group Shareholders;
"Stock Units"
means the units of capital or shares of
common stock of US$0.001 each of the Purchaser;
"Subsidiaries"
mean the wholly owned subsidiary undertakings
of the Company,
details of which are contained in
Schedule 3;
"the Warrants"
means the 176,117 warrants to subscribe for
ordinary shares of 10p
each in the capital of the
Company beneficially
owned by and registered in
the names of the A Group Shareholders as set
out
in Schedule
1, such warrants being constituted
pursuant to
a deed poll of the Company dated 9
September 2005;
"Warranties"
means the warranties extended by the Parties
to each other set out in Clause 10 of and Schedule
2 to this Agreement.
1.2
Any reference,
express or implied, to an enactment includes
references to:
(a)
that enactment as amended, extended or applied by or under any
other enactment before or after this Agreement; and;
(b)
any enactment which that enactment re-enacts (with or without
modification; and;
(c)
any subordinate legislation made (before or after this Agreement)
under any enactment, including one within (a) or (b) above;
except to the extent that any legislation or subordinate legislation
made
or enacted after the date of this Agreement would create or
increase a
liability of the Shareholders under this agreement.
1.3
Words denoting
persons shall include bodies corporate and
unincorporated associations of persons.
1.4
The headings
in this Agreement do not affect its
interpretation
1.5
A reference
to a document being in the agreed form is to a
document initialled
by or on behalf of the
Parties for the purposes of
identification.
1.6
Save where
specifically
provided otherwise all obligations
undertaken by
more than one Party to this Agreement are
undertaken
severally.
2. The Exchange of Shares in the Company for Stock Units of the
Purchaser
-------------------------------------------------------------------------
2.1
On the terms of this agreement, each of the A Group Shareholders
shall sell,
and the Purchaser
shall buy, the numbers of the Shares and
the Warrants
set out opposite the respective names of the A Group
Shareholders in Schedule 1 with full title guarantee,
<PAGE>
free from all Encumbrances and together with all rights that
attach (or
may in the future
attach) to them including, in the case of
the Shares,
the right to receive all dividends and distributions
declared, made or paid on them on or after the date of this
Agreement
2.2
Each of the A Group Shareholders waives any right of pre-emption
or other restriction on transfer in respect of the Shares and the
Warrants or
any of them conferred on him under the articles of
association of the Company or otherwise .
2.3
The Purchaser
shall not be obliged to complete the purchase of
any of the Shares and the Warrants unless the purchase of all the
Shares
and the Warrants is completed simultaneously.
3. The
Consideration
------------------
3.1
The aggregate
consideration
for the Shares and the Warrants
shall be the issue and allotment to the A Group Shareholders on
Completion of
the numbers of Consideration Shares and
Consideration
Warrants set out opposite their respective names in Schedule 1.
3.2
The Consideration
Shares shall be issued by the Purchaser
credited as fully paid and non-. assessable and shall rank pari
passu in
all respects
with the existing issued shares of common stock in
the
capital of the Purchaser in issue at Completion.
4. Restriction Provisions on Transfer/Sale of the Stock Units
-----------------------------------------------------------
4.1
Each A Group Shareholder agrees not to dispose of any of the
Consideration Shares
before 20 January
2007, save pursuant to an offer
made to all the holders of Stock Units in
the Purchaser and thereafter
only to dispose of Consideration Shares in accordance with the
provisions of this Clause 4.
4.2
Between 20
July 2007 and 20 January 2008 each A Group
Shareholder will
(subject to such
restrictions as shall apply under US
Securities Laws)
be permitted to sell a
proportion of their holding of
Consideration Shares.
The proportion of
Consideration SharP3 permitted
to be sold by each A Group Shareholder will
be based upon the average
price of a Stock Unit on the NASDAQ OTC Bulletin Board
for the five
dealing days preceding 20 July 2007 as follows:
4.2.1 If
the average price of a Stock Unit is US$0.79 or less,
each A Group
Shareholder shall be entitled to sell their entire
holding of Consideration Shares; or;
4.2.2 If
the average price of a Stock Unit is between US$0.80
and US$0.99, each A
Group Shareholder shall be entitled to sell
up to 25% of their holding of Consideration Shares .
4.2.3 If
the average price of a Stock Unit is between US$1.00
and US$1.49, each A
Group Shareholder shall be entitled to sell
up 20% of their holding of Consideration Shares.
4.2.4 If
the average price of a Stock Unit is greater than
US$1.50, each Shareholder shall be entitled to sell up to 15%
of
their holding of Consideration Shares
4.3
After 20 January 2008, each A Group Shareholder will be able to
dispose of
their Consideration
Shares free of any restrictions imposed
by this Agreement, but subject to such restrictions as shall apply
under
US Securities Laws.
<PAGE>
4.4
Each A Group Shareholder undertakes not to dispose of any
Consideration Shares
in the period from 20 July 2007 to 20 January 2008
without the
prior approval by a
majority of the board of the Purchaser
and subject to such
conditions as may be determined by the board of the
Purchaser to
ensure such disposal is made in accordance with the
principle of Market Orderliness.
4.5
Each of the A Group Shareholders undertakes so far as he is able
by the exercise of his rights as a director of the
Purchaser and the
holder of Stock Units to ensure that the Purchaser does not agree
to the
release of
any Shareholder from their obligations to comply
with the
Restriction Provisions
and to procure that the Purchaser
enforces the
Restriction Provisions by which each Shareholder is bound
5. The Escrow
-----------
During the
12 month period from
the Completion Date, BG agrees that the voting
rights attached to
5,047,130 of its holding of Stock Units shall be exclusively
exercised in
accordance
with the directions of a majority of the A Group
Shareholders given
in writing.
6. The Stock
Option Plan
------------------------
6.1
The Company
shall adopt the share option plan in the agreed form
prior to Completion. The Parties shall procure the adoption of
such
share option plan by the Purchaser on Completion .
6.2
Pursuant to
the share option plan, the Purchaser shall set aside
options to
purchase up to
5,225,000 Stock Units in the Purchaser at an
option price of 0.20 per share for 7 years from the date of
grant.
6.3
Following Completion,
the Purchaser will file the share option
plan with the Securities and Exchange Commission pursuant to
registration
requirements set out in S8 of the United States Securities
Act 1933.
7. The Private
Planing and Investor Relations
------------------------------------------------
7.1
BG warrants
that it has completed the provisional sale of
8,533,333 Stock
Units in the Purchaser by way of the
Private Placing,
which Stock Units have been fully subscribed subject only to
Completion.
Immediately following
Completion, BG will hold on trust for the benefit
of and shall, when
requested, transfer to the Purchaser the proceeds of
the Private Placing amounting to US$5,120,000.
7.2
BG warrants
to the Shareholders that the Purchaser has not, and
is not subject to, any liabilities with regard to its business
whatsoever whether
known, actual, or contingent and BG shall pay to the
Purchaser an amount equal to any liability of the Purchaser to any
other
person.
7.3
The A Group Shareholders and BG agree that following Completion,
the Purchaser
shall spend US$240,000 of the monies
raised pursuant to
Clause 71 on Investor Relations provided
that the A Group Shareholders
shall not be in breach of this Clause 7.3 to
the extent that the board
of directors of the
Purchaser determine that such expenditure would not
be in the best interests of the Purchaser.
8. Directors
---------
8.1
Upon Completion,
BG will procure the resignation of John Briner
as the sole director of the Purchaser and the appointment of each
of the
A Group Shareholders as directors of the Purchaser.
<PAGE>
8.2
BG will have the right to nominate a director of the Purchaser
for a 12 month period from the Completion Date. During
the 12 month
period, each
of the A Group Shareholders agrees to
exercise all votes
exercisable by him as
a director and/or shareholder of the Purchaser in
favor of the appointment as a director of
the Purchaser of such person
as
shall be nominated by BG in writing
9. Completion
----------
9.1
Completion shall
take place immediately following the signing of
this Agreement at the
offices of Faegre & Benson LLP, 7 Pilgrim Street,
London EC4V 6LB.
9.2
On the Completion each of the A Group Shareholders shall deliver
or cause to be delivered to the Purchaser the following:
9.2.1 signed
stock transfer forms into the name of the
Purchaser representing
the Shares and the Warrants set out
opposite his name in Schedule 1; and
9.2.2 the
share and warrant certificates for the Shares and
the Warrants set out opposite his name in Schedule 1.
9.3
On Completion,
the Purchaser shall deliver to each of the A
Group Shareholders:
9.3.1 Stock
certificates
in respect of the Consideration
Shares to which such A Group Shareholder is entitled; and
9.3.2 Warrants
certificates
in respect of the Consideration
Warrants to which such A Group Shareholder is entitled;
9.3.3 a
certified copy of the resolution of the Purchaser
authorising the
allotment and issue of the Consideration Shares
and the creation and issue of the Consideration Warrants
pursuant to
the deed poll of the
Purchaser in the agreed form;
and
9.4
The A Group Shareholders shall procure that a meeting of the
directors of
the Company is held on the Completion
Date or as soon as
reasonably practicable
following Completion and in any event within
7
days of the Completion Date at which the directors shall
approve for
registration the
transfers of the Shares and the Warrants to the
Purchaser made in exchange for the shares and warrants in the
Purchaser.
9.5
On and from Completion each of the Parties shall comply with its
obligations under Clauses 5, 6, 7 and 8 of this Agreement.
10. Warranties
----------
10.1 The
A Group Shareholders warrant to the Purchaser that save as
Disclosed each of the statements set out in Part 1 of Schedule 2 is
true
and accurate in all material respects.
10.2
Liability for
the A Group Warranties on the part of the A Group
Shareholders shall
be joint and several
subject to the limitations set
out in Clause 11 below,
10.3 Each
of BG and the Purchaser warrants to the Shareholders that
save as disclosed in the BG Disclosure Letter each of the
statements set
out in Part 2 of Schedule 2 is true and accurate in all
material
respects.
<PAGE>
11. Limitations on Warranty Claims
-------------------------------
11.1 The
Purchaser acknowledges and agrees with the A Group
Shareholders that;
11.1.1 the
A Group Warranties are the only warranties of any
kind given by the A Group Shareholders upon which the
Purchaser'
may rely pursuant to this Agreement; and;
11.1.3 at the time of entering in this agreement neither the
Purchaser nor
BG is aware of any matte
