ACQUISITION
AGREEMENT
AMONG
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1.
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MALIBU
MINERALS, INC (Purchaser)
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2.
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FLEX
FUELS ENERGY LIMITED (Company)
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3.
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VARIOUS
SHAREHOLDERS (Shareholders)
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4.
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GORDON
ALAN EWART AND JON PENTON (GAE and JP)
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THIS DOCUMENT
IS FOR DISTRIBUTION IN THE UNITED KINGDOM ONLY TO PERSONS HOLDING
SHARES IN THE LIMITED COMPANY. 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.
AN
AGREEMENT dated the 29 December of 2006
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1.
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MALIBU
MINERALS, INC., a corporation incorporated and registered in
accordance with the laws of the State of Nevada, USA and having its
principal office located at Suite 510 - 999 West Hastings Street,
Vancouver, British Columbia, Canada, A1 V6C 2W2 (the
“Purchaser”);
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2.
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FLEX FUELS
ENERGY LIMITED, a company registered in England and Wales under
company number 6003328 with its registered office located at 30 St.
Mary Axe, London, EC3A 8EP (the “Company”);
and
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3.
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THE PERSONS
WHOSE NAMES AND ADDRESSES are set out in the first column of
Schedule 2 and whose address for the purpose of service of notices
shall be the address of the Company’s Solicitors unless
otherwise notified to the other parties (the
“Shareholders”).
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4.
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GORDON ALAN
EWART of 125 Springfield Avenue, London SW20 9JS and JON PENTON of
Lilac Cottage, Compton Dundon, Somerset TA11 6PS (hereinafter
referred to as “GAE and “JP”,
respectively).
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The Company
plans to construct, own and manage seed processing facilities,
refineries producing bio diesel products (and associated power
generation facilities if commercially desirable) and to engage in
the business of selling supplying and distributing bio diesel
products.
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The Purchaser,
a Nevada, United States, company primarily engaged in the
exploration of mineral properties, has access to the capital
markets and has agreed to collaborate with the Company in providing
finance in support of its activities with the intention on the part
of the Purchaser of diversifying its business through the
acquisition of the entire issued share capital of the
Company
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The
Company’s authorized share capital comprises 2,000 Shares of
£0.10 each of which 1700 Shares have been issued, 624 to the
Shareholders and 1,076 to the Remaining Shareholders.
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The Parties and
the Remaining Shareholders consider that their mutual interests
will be best served if the Purchaser acquires ownership of the
Company as contemplated under this Agreement and they have
accordingly agreed in the case of the Parties to enter into this
Agreement and in the case of the Remaining Shareholders and the
Purchaser, in order to induce the Purchaser to enter into this
Agreement, to enter into the Supplementary Agreement subject to the
terms and conditions hereinafter contained and in the case of the
Supplementary Agreement as set out in that document.
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NOW,
THEREFORE, IT IS AGREED AS FOLLOWS:
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1.
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Definitions and
Interpretations
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means the 624
Shares to be acquired by the Purchaser on Completion from the
Shareholders.
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means this
agreement, dated December 29, 2006.
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means the 300
Shares to be allotted and issued to the Purchaser and which shall
on allotment and issue constitute 15% of the entire authorised
share capital of the Company.
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means the
business activities which the Company plans to undertake and which
the Purchaser will acquire, including constructing, commissioning,
managing and operating refineries, seed crush facilities, and
producing biodiesel products and power and trading in such
products, and constituting the business activities described in the
Business Plan.
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means a day of
the week which is not a Saturday or Sunday when dealing in domestic
securities may take place on the markets operated by London Stock
Exchange plc.
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means the
business plan prepared on behalf of the Company as set out in
Schedule 8.
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“Business
Transfer Agreement”
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means the
agreement relating to the transfer of the Pre Completion Business
from the Purchaser to a subsidiary company established for the
purpose of receiving the Pre Completion Business.
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means a claim
or claims pursuant to the Warranties.
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“Company
Financial Statements”
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means the
consolidated financial statements of the Company for the period
from inception to December 31, 2006, audited by an independent
registered certified public accounting firm who is registered with,
and has audited the consolidated financial statements in accordance
with the standards of, the Public Company Accounting Oversight
Board (United States of America) (“PCAOB”) (the
“Financial Statements”); provided that if the
Completion Date is on or after May 1, 2007, the Company shall
provide collectively the Financial Statements together with the
consolidated financial statements of the Company for the three
month period ended March 31, 2007 that have been reviewed in
accordance with the PCAOB and in conformity with accounting
principles generally accepted in the US; true copies of which shall
be delivered by the Company to the Purchaser on or before
Completion.
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means Hunton
& Williams of 30 St Mary Axe, London EC3A 8EP.
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means the
agreements set out in Schedule 7.
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means date upon
which Completion is to take place as identified in Clause
8.2.
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means
completion of the sale and purchase of the Acquisition
Shares.
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the
consideration which is to pass from the Purchaser to the
Shareholders in exchange for the Shares.
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means the
9,123,795 Stock Units of the Purchaser to be issued and allotted to
the Shareholders pursuant to Clause 8.6 in the proportions and
numbers identified in Schedule 2.
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means any
disclosure letter to be delivered to the Purchaser by the Company,
the Shareholders, GAE and JP pursuant to this Agreement in
accordance with clause 11.
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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.
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means the
Escrow Agreement to be entered into between the Company's
Solicitors and SRFF prior to signature of this Agreement to enable
Initial Funding Completion to take place.
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means an amount
equal to US$1,500,000 which the Purchaser has raised for the
purposes of this Agreement through private placements of Stock
Units to be used for the purposes set out in this Agreement subject
as hereinafter contained.
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“Initial
Funding Agreements”
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means the
agreements set out in Schedule 6 of Part I.
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“Initial
Funding Completion”
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means transfer
of the Initial Funding to the Company’s Solicitors’
Client Account and issue of the Allotment Shares in accordance with
Clause 5 hereof.
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means a period
of time starting on the date of release of the Initial Funding to
the Company and ending on Completion Date.
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means the
subscription price per Allotment Share in pounds sterling, to be
paid by the Purchaser to the Company, calculated on Initial Funding
Completion by dividing the Initial Funding (as an amount converted
from dollars into pounds sterling by the Company’s Solicitors
pursuant to clause 5.4) by the total number of Allotment Shares
(being 300).
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means JTC
Company having its registered office at ______
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means the
accounts to be periodically supplied to the Purchaser during the
Interim Period, and to be used for the purposes of supplementary
due diligence, including at the end of the Interim Period a balance
sheet setting out the Company’s assets and
liabilities.
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means the
raising through a Private Placement of US$11,800,000 or such larger
amount as may be agreed to by the Parties.
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means the
director of the Company or his alternate appointed by the Purchaser
from time to time.
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means the
Purchaser, the Company, the Shareholders, GAE and JP being
collectively referred to as the “Parties”.
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“Pre-Completion Business”
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means the
business conducted by the Purchaser immediately prior to execution
of the Business Transfer Agreement.
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means the
Over-The-Counter Bulletin Board quotation service, or if the Stock
Units are then traded on another quotation service or on a national
securities exchange, such quotation service or national securities
exchange.
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means the
private placement of up to 15,061,729 Stock Units of the Purchaser
at US$0.90 per Stock Unit, or such other amounts as may be agreed
to between the Parties in order to achieve the Main Funding of not
less than US$11,800,000, to certain accredited investors under
Regulation S of the Securities Act of 1933, or as maybe agreed to
by the Parties.
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“Purchaser Completion Balance
Sheet”
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means the
balance sheet of the Purchaser as at the Completion Date to be
delivered to the Shareholders on Completion.
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"Purchaser
Majority Directors”
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means an
affirmative vote of a majority of the votes cast by the members of
the board of directors of the Purchaser on a particular matter at a
meeting of the directors at which a majority of the directors is
present in person or by proxy, with each director entitled to one
vote.
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means the
warranties extended by the Purchaser to the Shareholders as set out
in Schedule 5.
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means the 1,076
Shares to be transferred by the Remaining Shareholders to the
Purchaser pursuant to the Supplementary Agreement.
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means JTC
Trustee Ltd. and Gillian Penton the holders of 538 Shares each and
therefore together a total of 1,076 Shares.
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means in the
case of the Shareholders, the restriction provisions on the sale
and transfer of the Consideration Shares set out in Clause 9 and in
the case of the Purchaser the restriction provisions on the sale
and transfer of the Allotment Shares and the Acquisition Shares set
out in Clause 9.
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means ordinary
shares in the capital of the Company.
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means the
persons whose names and addresses are set out in the first column
of Schedule 2 and being the registered owners of the Shares of the
Company as set out opposite their names in Schedule 2.
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“Solicitor’s Bank
Account”
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means a US
dollar designated account held by the Company's Solicitors at
Barclays Bank PLC, 54 Lombard Street London EC3V 9EX, and being the
numbered account advised to SRFF pursuant to the Escrow
Agreement.
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means the
Purchaser’s attorneys Sichenzia Ross Friedman Ference LLP
with a business address of 1065 Avenue of the Americas, 21
st Floor, New York, NY 10018.
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means the
shares of common stock, $0.001 par value per share, of the
Purchaser.
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means the
wholly owned Flex Fuel subsidiary companies to be incorporated in
England and Wales as such companies are identified by name in the
Business Plan.
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“Supplementary agreement”
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means the
Agreement between the Remaining Shareholders and the Purchaser
providing for the transfer by the Remaining Shareholders of the
Remaining Shares to the Purchaser.
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means the
warranties extended by the Shareholders, GAE and JP to the
Purchaser and by the Purchaser to the Shareholders as the context
requires as such warranties are set out in Schedule 4 and Schedule
5 as applicable.
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1.2
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Any reference,
express or implied, to an enactment includes references
to:
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(a)
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that enactment
as amended, extended or applied by or under any other enactment
before or after this Agreement; and;
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(b)
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any enactment
which that enactment re-enacts (with or without modification;
and
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(c)
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any subordinate
legislation made (before or after this Agreement) under any
enactment, including one within (a) or (b) above.
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1.3
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Words denoting
persons shall include corporate bodies and unincorporated
associations of persons.
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1.4
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The headings
and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not
intended to interpret, define or limit the scope, extent or intent
of this Agreement or any provision thereof.
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1.5
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Reference to a
document being in the agreed form is to a document initialed by or
on behalf of the Parties for the purposes of
identification.
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1.6
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Save where
specifically provided otherwise all obligations undertaken by more
than one individual being a Party to this Agreement are undertaken
jointly and severally.
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1.7
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Upon
termination for any reason, the Parties shall be relieved of any
further obligations or commitments pursuant to this Agreement
including, but without limitation, the commitments on the part of
the Shareholders and GAE and JP contained in Clause 21, save and
except for the obligations of either of the Parties to compensate
the other pursuant to Clause 16.5 and 16.6 and to the continuation
of the confidentiality obligations contained in Clause
20.6.
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2.
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Allotment Shares and Acquisition
Shares
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2.1
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Subject to the
terms of this Agreement the Purchaser shall:
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2.1.1
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subscribe for
and be issued with and allotted the Allotment Shares credited as
fully paid at par value of £0.10 each.
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2.1.2
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acquire the
Acquisition Shares from the Shareholders on the Completion
Date.
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2.2
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On Completion
Date the Shareholders shall transfer to the Purchaser the number of
Acquisition Shares set out opposite their respective names in
Schedule 2, and the Remaining Shareholders shall transfer to the
Purchaser the Remaining Shares.
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2.3
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On Completion
Date the Purchaser shall not be obliged to accept the transfer of
any of the Acquisition Shares and release the Main Funding to the
Company unless the transfer of all of the Acquisition Shares and
all of the Remaining Shares takes place simultaneously.
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2.4
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Each of the
Shareholders hereby waives any right of pre-emption or other
restriction on transfer in respect of the Acquisition Shares or any
of them conferred on each of the Shareholders under the Articles of
Association of the Company or otherwise.
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2.5
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The
Shareholders hereby acknowledge that:
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2.5.1
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the authorised
share capital of the Company shall not be increased or altered in
any way between the date of Initial Funding Completion and the
earlier of (i) the Completion Date and (ii) the last day of the
Interim Period; and
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2.5.2
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none of the
Shareholders shall transfer or otherwise dispose of his or its
interest in the Acquisition Shares between the date of this
Agreement and the earlier of (i) the Completion Date and (ii) the
last day of the Interim Period.
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2.5.3
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the
Shareholders shall cause any and all actions necessary to secure
for the Purchaser to acquire the Remaining Shares from Remaining
Shareholders on the Completion Date as contemplated by this
Agreement.
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2.6
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It is
acknowledged that the agreement of the Shareholders to transfer the
Acquisition Shares and of the Purchaser to acquire them represent
irrevocable commitments subject only to the conditions precedent to
Completion set out in Clause 8.1 and to termination of this
Agreement before Completion pursuant to clauses 16.2, 16.3 or
16.4.
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2.7
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Each of GAE and
JP hereby acknowledge that:
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2.7.1
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the authorised
share capital of the Company shall not be increased or altered in
any way between the date of Initial Funding Completion and the
earlier of (i) the Completion Date and (ii) the last day of the
Interim Period; and
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2.7.2
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neither GAE nor
JP shall transfer or otherwise dispose of their interest, if any,
in the Acquisition Shares between the date of this Agreement and
the earlier of (i) the Completion Date and (ii) the last day of the
Interim Period.
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2.7.3
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each of GAE and
JP shall cause any and all actions necessary to secure for the
Purchaser to acquire the Remaining Shares from Remaining
Shareholders on the Completion Date as contemplated by this
Agreement.
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3.
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Consideration for the Acquisition
Shares
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3.1
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The
Consideration for the transfer of the Acquisition Shares shall be
the issue and allotment by the Purchaser to the Shareholders or
their nominees on Completion of the numbers of Consideration Shares
set out opposite their respective names in Schedule 2.
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3.2
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The
Consideration Shares shall be issued by the Purchaser credited as
fully paid and non assessable and shall rank pari passu in all
respects with the Stock Units in the capital of the Purchaser in
issue at Completion.
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3.3
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The
Consideration Shares shall, at the Completion Date represent 14.5%
percent of the entire issued share capital of the
Purchaser.
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4.1
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The Initial
Funding shall be used during the Interim Period to meet expenditure
connected with setting up and establishing the Business. The
Business Plan contains details of expenditure to be incurred during
the Interim Period and Schedule 6 Part II identifies a detailed
schedule of expenditure for which the Initial Funding may be
used.
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4.2
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It is intended
that the Initial Funding shall be transferred and made available to
the Company in exchange for the Allotment Shares. Of the total
Initial Funding the pound sterling equivalent of US$1,500,000 shall
be applied on Initial Funding Completion in payment of the Issue
Price for the Allotment Shares pursuant to Clause 5.
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4.3
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As and with
effect from Initial Funding Completion, the Purchaser shall be
represented by a single director on the board of directors of the
Company, Malibu Representative, and the Purchaser shall be entitled
to remove the same director and appoint a replacement at any time.
Any subsequent appointment to the initial appointment and any
removal shall be made by notice in writing served on the Company
and shall take effect upon service of the notice. The Company shall
take any and all actions necessary to approve such subsequent
appointment. The Malibu Representative, or his duly appointed
alternate, shall have the same right to attend Company board
meetings and to call upon the board of the Company to convene
meetings as the other directors and shall have the same rights of
access to the Company’s accounts, records and papers as other
directors. The board of directors shall meet regularly (as
necessary by telephone conference call) during the Interim Period,
and not less often than once a month. During the Interim Period the
Malibu Representative (or his alternate) shall be a necessary
attendee for a quorum and for the purposes of this Agreement the
Company’s Articles of Association shall be deemed to have
been amended accordingly.
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4.4
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The Purchaser
intends to raise the Main Funding during the Interim Period through
further private placements of Stock Units and undertakes with the
Company with respect to such arrangements as follows:
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4.4.1
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to use its best
endeavours to raise the Main Funding through private placements
provided that, as the Company, the Shareholders, GAE and JP hereby
acknowledge and accept, the outcome of such endeavours cannot be
guaranteed by the Purchaser and is not underwritten by third
parties;
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4.4.2
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that such
private placements shall be solicited based on draft subscription
agreements and shall be managed and administered in conformity with
US securities laws and rules and regulations applicable to the
issue and allotment of stock in corporations quoted on the
Principal Market;
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4.4.3
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that in
collaboration with its agents and representatives it will proceed
diligently with actions required to achieve the Main Funding within
the Interim Period;
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4.4.4
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that it will
advise the Company as to progress with the Main Funding initiatives
in response to requests for information;
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4.4.5
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that it will
provide the Company with a draft copy of the private placement
memorandum at least 2 Business Days before it is released to
potential investors;
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4.4.6
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that it will
incorporate reasonable amendments to the private placement
memorandum requested by the Company’s directors before
issuance to potential investors, unless such amendments would cause
or could lead to a violation of any law or regulation;
and
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4.4.7
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that as soon as
practicable after receiving binding commitments for the full amount
of the Main Funding it will advise the Company that such
commitments have been received.
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5.
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Initial
Funding Completion
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5.1
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Subject to a
mutual agreement of, and entry into the Escrow Agreement by and
between, SRFF and the Company’s Solicitors, Initial Funding
Completion shall take place on the date of this Agreement at the
offices of the Company’s Solicitors.
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5.2
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Prior to
Initial Funding Completion the Purchaser shall transfer the Initial
Funding by direct deposit to the Solicitor’s Bank Account
pursuant to the terms of the Escrow Agreement. Upon Initial Funding
Completion or as soon as practical thereafter, the Company shall
cause the US dollar amount held in the Solicitor’s Bank
Account to be converted to Pounds Sterling equivalent at such rate
as may be available to the Company’s Solicitors, pursuant to
their normal banking arrangements. Following such conversion, in
accordance with the form of the Escrow Agreement, the
Company’s Solicitors will arrange for the transfer of the
Pounds Sterling amount to be transferred to the Company’s
account by way of subscription for the Allotment Shares.
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5.3
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On Initial
Funding Completion in consideration for and subject to the payment
of the subscription price in accordance with Clause 5.2 above, the
Company shall:
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5.3.1
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allot and issue
to the Purchaser the Allotment Shares credited as fully
paid;
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5.3.2
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deliver to the
Purchaser a duly executed share certificate in respect of the
Allotment Shares; and
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5.3.3
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deliver to the
Purchaser a certified copy of the minutes of the meeting of its
board of directors as referred to in Clause 5.4 below.
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5.4
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On Initial
Funding Completion the directors of the Company shall hold a
meeting at the offices of the Company’s Solicitors or a
mutually agreed location to:
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5.4.1
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approve the
allotment and issue to the Purchaser of the Allotment
Shares;
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5.4.2
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instruct the
secretary of the Company to enter the Purchaser into the register
of members of the Company as the owner of the Allotment Shares and
make the necessary returns to the Registrar of
Companies.
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The Purchaser
shall, on Initial Funding Completion, subscribe in cash
US$1,500,000 as consideration for the Allotment Shares.
The
subscription price for each of the Allotment Shares shall be the
Issue Price.
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5.5
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On or before
Initial Funding Completion, the Purchaser shall appoint a Malibu
Representative onto the board of directors of the Company, and the
Company shall take any and all actions necessary to approve such
appointment of the Purchaser appointed director to its board of
directors.
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5.6
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The
Shareholders and GAE and JP undertake with the Purchaser to procure
that the Company complies with its obligations as set out in this
Clause 5.
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6.
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Interim
Period Management
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6.1
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The Parties
mutually recognise the importance to the success of the Business
of:
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6.1.1
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ensuring that
the provisions of the Interim Funding Agreements are implemented in
accordance with their terms and within the periods of time for the
implementation of such provisions as identified in the Business
Plan; and
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6.1.2
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signing the
Completion Agreements during the Interim Period and implementing
the provisions of such Completion Agreements to the extent such
provisions are capable of being implemented within the Interim
Period.
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6.2
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During the
Interim Period the Company and its Business shall be actively and
diligently managed with a view to achieving the objectives set out
in the Business Plan by relevant milestone dates. In particular the
Company:
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6.2.1
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shall
incorporate and register in the UK the Subsidiaries having the
legal capacity to construct, own and operate the contemplated
businesses (subject to receiving the necessary licences and
approvals);
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6.2.2
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shall use its
best endeavours to identify and secure rights of long term tenancy
by the Subsidiaries of sites for the construction and operation of
the facilities necessary to the businesses contemplated in this
Agreement and to submit all applications so as to enable
construction and operation of these facilities to be commenced by
the various dates for commencement set out in the Business
Plan;
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6.2.3
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shall use best
endeavours, so far as practicable, to identify and establish
business relationships either through the Subsidiaries, or by the
Company directly, with suitable suppliers of raw materials and
customers for oilseed crush plant and enter into discussions with
such suppliers and customers with a view to delivering the
financial results projected in the Business Plan provided
nevertheless that the Purchaser hereby acknowledges that such
results are only projections; and
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6.2.4
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shall not
establish any subsidiary companies other than the Subsidiaries and
shall not enter into any joint ventures or other forms of
partnership with any third parties unless approved by the
Purchaser’s board of directors.
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6.2.5
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the Company
shall only enter into any other arrangement or agreement with the
intention of meeting the objectives set out in the Business Plan
subject to the prior approval of the Company’s board of
directors;
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6.2.6
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notwithstanding
the requirements set forth in this clause 6.2.5, prior approval of
the Company’s board of directors during the Interim Period
shall not be required for the Company to enter into an arrangement
or agreement provided that said arrangement or agreement (i) is
entered into in the best interests of the Company with the
intention of meeting the objectives set out in the Business Plan,
(ii) individually is not valued in excess of £10,000 and shall
not cause the Company to incur liabilities or expenditures in
excess of £10,000, and (iii) in aggregate, any said
arrangements or agreements, are not valued in excess of
£30,000 and shall not cause the Company to incur liabilities
or expenditures in excess of £30,000.
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6.3
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The directors
and managers of the Company shall during the Interim Period
dedicate sufficient working time to the management of the Company
and its Business as may be required to deliver the objectives set
out in the Business Plan by relevant milestone dates in accordance
with the provisions of Clause 6.2 and during the Interim Period
shall use their best endeavours to achieve the objectives set for
the Business in the Business Plan..
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6.4
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Neither the
Company, nor the Shareholders, nor GAE and JP shall during the
Interim Period enter into any agreements or arrangements with third
parties which would be prejudicial or likely to be prejudicial to
the best interests of the Company and the future of the Business.
The Completion Agreements and any other material contracts and
undertakings between the Company, and/or its Subsidiaries shall be
signed on a basis which ensures that the commitments and
obligations of the Company and/or its Subsidiaries are made
conditional upon Completion pursuant to this Agreement.
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6.5
|
During the
Interim Period the Company shall not create any mortgages, charges
or liens, security interests over any Company assets without the
consent of the Purchaser.
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6.6
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During the
Interim Period the Company shall introduce and enforce proper and
effective generally accepted accounting systems and procedures. All
expenses, payments and outgoings made by the Company and the
Subsidiaries shall be consistent with the provisions of the
Business Plan and shall be restricted to payments of the type
identified in Schedule 6.
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6.7
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During the
Interim Period the Company shall introduce and implement policies
and procedures for the proper and effective management of the
Business by the Company's officers and employees, and by third
parties instructed on behalf of the Company. Such policies
and procedures shall provide for the management of the Business
following Completion and to the extent feasible during the Interim
Period for management, in compliance with all relevant laws and
regulations and in accordance with best practice corporate
governance and relevant social obligations, including US laws
governing the conduct of business by US registered companies and
their subsidiaries, and US Securities Exchange Commission’s
rules and regulations.
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6.8
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During the
Interim Period the Company shall cause monthly Management Accounts
to be prepared containing full details of income and expenditure
and shall submit the same to its board of directors. The Management
Accounts shall fairly and accurately represent the liabilities of
the Company and shall be prepared in substantial accordance with US
generally accepted accounting principles consistently applied. Not
less than 7 Business Days prior to Completion the Company shall
forward to the Purchaser a final set of Management
Accounts.
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6.9
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The
Shareholders and GAE and JP expressly undertake and covenant with
the Purchaser to procure that the Company and the directors and
managers complies with and performs its, and or their, obligations
as set out in this Clause 6. The Purchaser acknowledges that, with
respect to those of the Company’s obligations which are
expressed as best efforts obligations, the Shareholders and GAE and
JP shall be deemed to have fulfilled and/or discharged their
obligation to procure such compliance and/or performance by the
Company provided they can demonstrate that they themselves have
made best efforts to procure compliance and performance by the
Company. Any reasonable costs and expenses incurred by the
Shareholders and GAE and JP in discharging their obligations to the
Company pursuant to this Clause 6.9, not covered by separate
expense arrangements with the Company, shall be reimbursed by the
Company.
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6.10
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Prior to or
upon Completion, the Company shall deliver the Company Financial
Statements.
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6.11
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During the
Interim Period the Purchaser shall be actively and diligently
managed with a view to achieving the objectives set out in the
Purchaser’s Business Overview Section set forth in its
Registration Statement filed with the SEC on Form SB-2 on August 4,
2006; in particular, the Purchaser shall use the net proceeds from
sales of its Stock Units, net of the Initial Funding, for general
corporate purposes and working capital; notwithstanding the
foregoing, during the Interim Period the Purchaser shall not incur
liabilities or expenditures in excess of $150,000.
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7.
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Purchaser’s Termination
Right
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If during the third and fourth months of the
Interim Period the Purchaser, in its absolute discretion, decides
that the prospects for success of the Business do not justify
proceeding to Completion, the Purchaser shall so advise the
Company, the Shareholders and GAE and JP in writing, and following
such advice shall be entitled at any time during such third and
fourth months of the Interim Period, to terminate this Agreement in
accordance with Clause 16.2.
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8.1
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Completion
shall be conditional upon:
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8.1.1
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the Purchaser
being satisfied with the prospects for the Business in accordance
with Clause 7 and its not having served a notice terminating this
Agreement pursuant to Clause 16.2;
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8.1.2
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the Purchaser
raising the Main Funding through the private placement of Stock
Units equal to or more than the amount of the Main
Funding;
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8.1.3
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all documents
or copies of documents required to be executed and delivered to the
Purchaser hereunder having been so executed and
delivered;
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8.1.4
|
all of the
terms, covenants and conditions of this Agreement to be complied
with or performed by the Company, the Shareholders or GAE and JP at
or prior to the Completion having been complied with or performed;
and
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8.1.5
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there not
having occurred:
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(a)
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any material
adverse change in the financial position or condition of the
Company, its liabilities or the assets of the Company or any
damage, loss or other change in circumstances materially and
adversely affecting the Company, the Business or the assets of the
Company or the Company’s right to carry on the Business,
other than changes in the ordinary course of business, none of
which has been materially adverse; or
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(b)
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any damage,
destruction, loss or other event, including changes to any laws or
statutes applicable to the Company or the Business (whether or not
covered by insurance) materially and adversely affecting the
Company, the Business or the assets of the Company;
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8.1.6
|
the
transactions contemplated hereby having been approved by any
regulatory authorities having jurisdiction over the transactions
contemplated in this Agreement, if applicable;
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8.1.7
|
there being no
disclosures in any draft Disclosure Letter delivered to the
Purchaser on or before the Completion Date which will have, or may
be likely to have, a material adverse effect upon the value of the
Company and or the Business or which would be likely to adversely
effect the Company’s ability to deliver the Business Plan or
which have the effect of altering or amending any of the
Company’s, the Shareholders’ and or GAE and JP’s
obligations or commitments pursuant to this Agreement..
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8.1.8
|
the delivery of
the Company Financial Statements pursuant to Clause
6.11.
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8.1.9
|
the delivery of
the Voting Trust Agreements entered into by the shareholders of the
Purchaser holding in aggregate at least 10.5% of the issued and
outstanding Stock Units on the Completion Date (the “10.5%
Shareholders”), a form of which is annexed hereto as Exhibit
I; such that the Purchaser will arrange for the 10.5% Shareholders
to enter into a Voting Trust Agreement with SRFF giving the
Purchaser’s Majority Directors, the right to vote the shares
held by the 10.5% Shareholders during the 12 month period from the
Completion Date in favor of any resolution presented to all of the
shareholders of Malibu in accordance with the directions of the
Purchaser’s Majority Directors.
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8.1.10
|
the delivery by
the Purchaser of the Lock-up Agreements entered into by the 10.5%
Shareholders, a form of which is annexed hereto as Exhibit
II;
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8.1.11
|
the delivery by
the Purchaser to the Company in a reasonable manner of a
confirmation that the Stock Units have been approved for listing on
the Principal Market (effectiveness of Form 211 application);
and
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8.1.12
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simultaneous
transfer of the Remaining Shares pursuant to the Supplementary
Agreement.
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8.2
|
Completion
shall take place on a date to be agreed between the Parties being a
date which shall be not earlier than two Business Days and not
later than ten Business Days after the date when all of the above
conditions precedent have been fulfilled. If the Parties fail to
agree upon a date which is within the ten Business Day period,
Completion shall take place on a date which shall be fifteen
Business Days after fulfillment of all of the conditions precedent
to Completion.
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8.3
|
If Completion
has not occurred within a period of five months from the date
hereof due to non fulfillment of any one or more of the conditions
precedent to Completion set out in Clause 8.1 above and the
Purchaser has not served a notice pursuant to 16.2,
then:
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8.3.1
|
the Purchaser
shall be entitled to serve notice on the Company and the
Shareholders calling upon them to meet and discuss actions which
can be taken to fulfill the outstanding condition or conditions
precedent which is or are preventing Completion from taking place;
and
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8.3.2
|
the Company
shall be entitled to serve an equivalent notice to the notice
described in 8.3.1 on the Purchaser.
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8.4
|
Following
service of a notice pursuant to Clause 8.3 the Parties and or their
representatives shall meet to discuss, in good faith, actions which
can be taken to resolve the difficulties which are preventing
Completion from taking place. If the Parties either have not met or
have not resolved such difficulties within a period of twenty five
Business Days from the date of service of a Clause 8.3 notice they
shall be entitled to serve notice terminating this Agreement in
accordance with Clause16.3.
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8.5
|
On Completion,
which shall take place at the offices of the Company’s
Solicitors:
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8.5.1
|
each of the
Shareholders shall transfer his respective Acquisition Shares with
full title guarantee, free from all Encumbrances and together with
all rights that attach, or may in future attach, to them including
the right to receive all dividends and distributions declared, made
or paid on them on or after the date of this Agreement;
and
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8.5.2
|
each of the
Shareholders shall deliver or cause to be delivered to the
Purchaser the following:
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(a)
|
a duly signed
share transfer form into the name of the Purchaser representing the
Acquisition Shares set out opposite his name in Schedule 2;
and
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(b)
|
the share
certificates for the Acquisition Shares or an indemnity in respect
thereof.
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|
8.5.3
|
the Company
shall deliver the certificate of incorporation and the statutory
books (including the minute books of the Company);
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8.5.4
|
the Company,
the Shareholders and GAE and JP shall deliver the final Disclosure
Letter in the form of the draft accepted by the Purchaser to the
Purchaser; and
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8.5.5
|
the Company
shall deliver minutes of a meeting of the directors of the Company
approving the transfers of the Acquisition Shares for registration
in the name of the Purchaser.
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8.6
|
On Completion,
the Purchaser shall:
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|
8.6.1
|
deliver to each
of the Shareholders a stock certificate in respect of the
Consideration Shares to which each Shareholder is
entitled;
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8.6.2
|
produce to the
Shareholders a certified copy of the resolution of the board of the
Purchaser authorising the allotment and issue of the Consideration
Shares to the Shareholders and appointing Gordon Alan Ewart, Jon
Penton, Iestyn Morgan and Mark Ian Paulson as directors of the
Purchaser; and
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8.6.3
|
a copy of the
duly executed Business Transfer Agreement.
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9.
|
Restriction Provisions on Transfer/Sale of the
Stock Units
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