|
Subject to the passing of the Resolution by Shareholders at the EGM,
it is proposed that the first stage in implementing the Company's new
business plan will be the investment of up to US$1,275,000 in Newco
LLC (through Newco Inc) in return for a 51 per cent. equity
participation by Newco Inc in Newco LLC (the 'Proposed Investment').
Newco LLC will be the vehicle into which the work in progress and net
assets of Bella Films LLC which relate to the Springfield Project
will be transferred and which will then undertake the Springfield Project.
It is proposed that a 34 per cent. interest in Newco LLC be issued to
Fred Weinert and Stephen Crisman and the other founder and management
of Bella Films in consideration for the development of the
Springfield Project to date and the work in progress and net assets
of Bella Films, all of which relate to the Springfield. It is
intended that the remaining 15 per cent. interest in Newco LLC will
be subscribed for by third party investors for a minimum of
US$600,000 to raise the further equity funds needed in relation to
the Springfield Project.
The investment by the Company in Newco LLC (through Newco Inc) will
be limited to US$1,275,000. The Company will seek to protect the
manner in which this investment can be used by providing for phased
drawdown of the investment from Newco Inc to Newco LLC against the
achievement of project milestones. The detail of these arrangements
has still to be agreed between MobileFuture, Newco Inc and Newco LLC.
Further, successful completion of the Springfield Project is
dependent upon Newco LLC obtaining a construction loan of
approximately US$3,500,000 from a US bank and raising a minimum of
US$600,000 of equity from third party US investors.
The project currently being undertaken by Bella Films is its proposed
acquisition of a site on which to construct and then operate a new
350-seat 3D IMAX theatre in Springfield, Missouri. The specific
location of this proposed 'flagship' theatre is on the campus of Bass
Pro, adjacent to its 300,000 sq.ft. flagship store, which receives
approximately 4,000,000 visitors per year and is also next to the new
American National Fish and Wildlife Museum - Wonders of Wildlife.
Bass Pro is a chain of hunting, fishing and outdoor retail outlets
featuring live fish tanks, cascading waterfalls and in-house
restaurants. The group currently operates 16 sites in the USA with
another 7 in development, including one in Toronto, Canada. The
Springfield site is also the group's corporate headquarters. The
Springfield Project is expected to become operational in the summer
of 2004.
The Wonders of Wildlife Museum was established by John L. Morris, who
is also the founder of Bass Pro. The museum aims to educate visitors
about conservation and the heritage of hunting and fishing. The
Directors believe that the IMAX theatre, Bass Pro and the museum will
be complementary to each other in terms of attracting visitors in
common and that the IMAX theatre will benefit from its association
with these and other leisure destinations and its proximity to a
significant local metropolitan population.
Bella Films has reached an agreement in principle with IMAX in
respect of the equipment lease for the Springfield Project. In
relation to the proposed site itself, the terms of a 30-year ground
lease plus an option over a 20 year extension have been agreed, in
principle, between Wonders of Wildlife and Bella Films and, subject
to the passing of the Resolution, contracts are expected to be signed
between Wonders of Wildlife and Newco LLC in August 2003.
The detail of the Proposed Investment remains subject to finalisation
and documentation. Accordingly, the Board must stress that whilst the
proposal above reflects the current agreement in principle, the
structure and detail may change as the proposal moves to the
execution stage. The Board has resolved however that if the Proposed
Investment does not proceed in substantially the manner envisaged in
this document then they would not proceed any further with it.
Incentivisation of Fred Weinert and Stephen Crisman and Related Party Transaction
In addition to their salary packages, Newco Inc intends, subject to
Shareholder approval, to issue, for a nominal consideration, up to 15
per cent. of the equity of Newco Inc to Fred Weinert and Stephen
Crisman. It is proposed that the US Directors will be given the right
to convert their new shares in Newco Inc, for such number of new
fully paid Ordinary Shares in the Company as would, if converted
today, give them 15 per cent. (7.5 per cent. each) of the current
fully diluted Ordinary Share capital of the Company (assuming that
any convertible instruments had been exercised and Ordinary Shares
issued). It is proposed, however, that such conversion right would
only be exercisable to the extent that it did not trigger a mandatory
bid under Rule 9 of the City Code on the part of these two Directors
and Pacific Media who are currently regarded by the Panel as acting
in concert.
The Board believes that these proposals provide a suitable
incentivisation arrangement for the US Directors who are to be
crucial to the successful implementation of the new strategy. The
proposed investment in Newco LLC by the Company (through Newco Inc),
the issue of a 15 per cent equity holding in Newco Inc and the
associated conversion rights ('Related Party Proposals') are a
related party transaction for the purposes of the AiM Rules. This
occurs by virtue of the fact that Fred Weinert and Stephen Crisman
are Directors.
With the exception of Fred Weinert and Stephen Crisman, who are
interested in the Proposed Investment, the Directors consider, having
consulted with Beaumont Cornish, the Company's Nominated Adviser for
the purposes of AiM, that the terms of the Related Party Proposals
are fair and reasonable insofar as Shareholders are concerned. |
