AMALGAMATION
AGREEMENT
among
NAVA
RESOURCES, INC.
and
OURCO CAPITAL LTD.
and
INTERNATIONAL ECO ENDEAVORS CORP.
and
KENDERESH ENDEAVORS CORP.
and
KENDERES BIOGAZ TERMELO KORLATOLT FELE
LOSSEGU TARSASAG
Dated as of June 19, 2013
AMALGAMATION
AGREEMENT
THIS AGREEMENT made the 19th day of
June, 2013.
AMONG:
NAVA RESOURCES, INC., a corporation incorporated under the
laws of the State of Nevada
(“Nava”)
AND:
OURCO CAPITAL LTD., a corporation existing under the British
Columbia Business Corporations Act
(“Newco”)
AND:
INTERNATIONAL ECO
ENDEAVORS CORP.,a
corporation existing under the British Columbia Business Corporations Act
(“Eco Endeavors”)
AND:
KENDERESH ENDEAVORS
CORP., a corporation
existing under the British Columbia Business Corporations Act
(“Kenderesh”)
AND:
KENDERES BIOGAZ TERMELO
KORLATOLT FELE LOSSEGU TARSASAG, a Hungarian company
(“Kenderes Biogaz”)
WHEREAS:
A. |
Nava
and Eco Endeavors propose to complete a business combination by way of an
amalgamation under the provisions of the BCBCA (as hereinafter defined) of Eco
Endeavors and Newco, a wholly-owned subsidiary of Nava; |
B. |
Kenderes
Biogaz is a wholly-owned subsidiary of Kenderesh which, in turn, is a
wholly-owned subsidiary of Eco Endeavors; |
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C. |
Kenderes Biogaz owns and operates a biogas plant
located in Budapest, Hungary (the “Kenderes Biogas Plant”); and |
D. |
Kenderes
Biogaz and Kenderesh have each agreed to be a party to this Agreement in order
to make certain representations and warranties with respect to their respective
business to Nava; |
NOW
THEREFORE in
consideration of the mutual covenants and agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by each of the parties hereto, the parties hereto hereby
covenant and agree as follows:
ARTICLE 1
DEFINITIONS, INTERPRETATION AND SCHEDULES
1.1 Definitions
In this
Agreement, unless the context otherwise requires, the following words and terms
with the initial letter or letters thereof capitalized shall have the meanings
ascribed to them below:
|
(a) |
“1933 Act” means the United States Securities Act of 1933, as
amended; |
|
(b) |
“1940 Act” means the United States Investment Company Act of 1940,
as amended; |
|
(c) |
“affiliate” shall have the meaning ascribed to such term under the
BCBCA; |
|
(d) |
“Agreement” means this amalgamation agreement, together with the
schedules attached hereto, as amended, amended and restated or supplemented
from time to time; |
|
(e) |
“Amalco” means the company resulting from the amalgamation of Eco
Endeavors and Newco pursuant to the Amalgamation; |
|
(f) |
“Amalco Shares” means the common shares in the capital of Amalco; |
|
(g) |
“Amalgamating Corporations” means Eco Endeavors and Newco; |
|
(h) |
“Amalgamation” means the amalgamation of Eco Endeavors and Newco
pursuant to section 269 of the BCBCA on the terms and conditions set forth in
this Agreement, subject to any amendment thereto in accordance herewith; |
|
(i) |
“Amalgamation Application” means the amalgamation application that will
be filed with the Registrar under subsection 275(1)(a) of the BCBCA in order to
give effect to the Amalgamation, substantially in the form attached hereto as
Schedule C; |
|
(j) |
“Articles of Amalco” means the articles of Amalco in the form to be
mutually agreed to by the Parties, substantially in the form attached hereto as
Schedule D; |
|
(k) |
“Applicable Securities Laws” means all applicable securities legislation
in all jurisdictions relevant to the issuance of the Nava Common Shares; |
|
(l) |
“BCBCA” means the British Columbia Business Corporations Act;
|
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|
(m) |
“Business Day” means a day, other than a Saturday or Sunday, on which
the principal commercial banks located in the City of Vancouver, British
Columbia are open for business; |
|
(n) |
“Canadian Eco Endeavors Shareholders” means an Eco Endeavors Shareholder
that is a Canadian Resident and is not a U.S. Person; |
|
(o) |
“Canadian Resident” means a person that is resident of Canada for the
purposes of the Income Tax Act (Canada); |
|
(p) |
“Completion Deadline” means the latest date by which the transactions
contemplated by this Agreement are to be completed, which date shall be September
30, 2013 or such later date as the Parties may mutually agree; |
|
(q) |
“Contract” means any note, mortgage, indenture, non-governmental permit
or license, franchise, lease or other contract, agreement, commitment or
arrangement binding upon Nava (or any Subsidiary of Nava) or Eco Endeavors (or
any Subsidiary of Eco Endeavors), as the case may be; |
|
(r) |
“Deed of Undertaking” means the Deed of Undertaking dated June 1, 2012
between Eco Endeavors and Waratah Capital Ltd., who subsequently assigned all
rights thereto to Waratah, whereby Eco Endeavors agreed to repay amounts
advanced by Waratah Capital Ltd. to Eco Endeavors; |
|
(s) |
“Directed Selling Efforts” means directed selling efforts as that term
is defined in Regulation S and without limiting the foregoing, but for greater
clarity in this Agreement, it means, subject to the exclusions from the
definition of directed selling efforts contained in Regulation S, any activity
undertaken for the purpose of, or that could reasonably be expected to have the
effect of, conditioning the market in the United States for any of the Nava
Common Shares and includes the placement of any advertisement in a publication
with a general circulation in the United States that refers to the Nava Common
Shares; |
|
(t) |
“Dissent Rights” means the rights of dissent of Eco Endeavors
Shareholders in respect of the Eco Endeavors Resolution under section 272 of
the BCBCA; |
|
(u) |
“Eco Endeavors” shall have the meaning ascribed thereto on the first
page of this Agreement; |
|
(v) |
“Eco Endeavors Assets” has the meaning ascribed in Section 3.1(m) of
this Agreement; |
|
(w) |
“Eco Endeavors Board” means the board of directors of Eco Endeavors; |
|
(x) |
“Eco Endeavors Common Shares” means the authorized common shares in the
capital of Eco Endeavors, as presently constituted; |
|
(y) |
“Eco Endeavors Financial Statements” has the meaning ascribed in Section
3.1(k); |
|
(z) |
“Eco Endeavors Assets”
has the meaning ascribed thereto in Section 3.1(m) of this Agreement; |
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|
(aa) |
“Eco Endeavors Preferred Shares” means the
authorized preferred shares in the capital of Eco Endeavors, as presently
constituted; |
|
(bb) |
“Eco
Endeavors Resolution” means the Special Resolution of the Eco Endeavors
Shareholders approving the Amalgamation and this Agreement substantially in the
form attached hereto as Schedule A; |
|
(cc) |
“Eco
Endeavors Shareholder Approval” means the approval of the Eco Endeavors
Shareholders in respect of the Eco Endeavors Resolution; and |
|
(dd) |
“Eco
Endeavors Shareholders” means, at any time, the holders of outstanding Eco
Endeavors Common Shares. |
|
(ee) |
“EDGAR”
means the Electronic Data-Gathering, Analysis, and Retrieval system; |
|
(ff) |
“Effective
Date” means the date shown on the certificate of amalgamation issued by the
Registrar in respect of the Amalgamation in accordance with section 281 of the
BCBCA; |
|
(gg) |
“Effective
Time” means the earliest moment on the Effective Date or such other time on
the Effective Date as the Parties hereto may agree in writing; |
|
(hh) |
“Encumbrance”
means any mortgage, pledge, assignment, charge, lien, claim, security interest,
adverse interest, other third person interest or encumbrance of any kind,
whether contingent or absolute, and any agreement, option, right or privilege
(whether by law, contract or otherwise) capable of becoming any of the
foregoing; |
|
(ii) |
“Environmental
Approvals” means all permits, certificates, licences, authorizations,
consents, instructions, registrations, directions or approvals issued or
required by any Governmental Entity pursuant to any Environmental Laws; |
|
(jj) |
“Environmental
Laws” means all applicable Laws, including applicable common law, relating
to the protection of the environment and employee and public health and safety,
and includes Environmental Approvals; |
|
(kk) |
“Former
Eco Endeavors Shareholders” means the holders of Eco Endeavors Common
Shares immediately prior to the Effective Time; |
|
(ll) |
“GAAP”
means United States generally accepted accounting principles; |
|
(mm) |
“Governmental
Entity” means any applicable: |
|
|
(i) |
multinational, federal, provincial, state, regional, municipal, local or other
government, governmental or public department, central bank, court, tribunal,
arbitral body, commission, board, bureau or agency, domestic or foreign; |
|
(ii) |
subdivision, agent,
commission, board or authority of any of the foregoing; |
|
(iii) |
quasi-governmental or private body, including any tribunal, commission,
regulatory agency or self-regulatory organization, exercising any regulatory,
expropriation or taxing authority under or for the account of any of the
foregoing; or |
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|
(iv) |
stock exchange, including the OTC Bulletin Board; |
|
(nn) |
“Intellectual
Property” means the following intellectual property rights, both statutory
and common law rights, if applicable: (i) copyrights, registrations and
applications for registration thereof, (ii) trademarks, service marks, trade
names, industrial designs, inventions, manuals, technology, software, slogans,
domain names, logos, trade dress, and registrations and applications for
registrations thereof, (iii) patents, as well as any reissued and re-examined
patents and extensions corresponding to the patents, and any patent
applications, as well as any related continuation, continuation in part and
divisional applications and patents issuing, (iv) trade secrets, proprietary
confidential information and proprietary know-how or (v) any other intellectual
property; |
|
(oo) |
“Kenderes
Biogas Plant” has the meaning set out in Recital C of this Agreement; |
|
(pp) |
“Kenderes
Biogaz Royalty” means the royalty payable by Kenderes Biogaz to Palladio
Projects Kft calculated as 10% of profits of the operating biogas plant
operated by Kenderes Biogaz; |
|
(qq) |
“Laws”
means all laws, statutes, codes, ordinances, decrees, rules, regulations,
by-laws, statutory rules, principles of law, published policies and guidelines,
judicial or arbitral or administrative or ministerial or departmental or
regulatory judgments, orders, decisions, rulings or awards, including general
principles of common and civil law, and terms and conditions of any grant of
approval, permission, authority or license of any Governmental Entity,
statutory body or self-regulatory authority, and the term “applicable” with
respect to such Laws and in the context that refers to one or more Persons,
means that such Laws apply to such Person or Persons or its or their business,
undertaking, property or securities and emanate from a Governmental Entity (or
any other Person) having jurisdiction over the aforesaid Person or Persons or
its or their business, undertaking, property or securities; |
|
(rr) |
“Material
Adverse Change” means any one or more changes, effects, events, occurrences
or states of facts that, either individually or in the aggregate, have, or
would reasonably be expected to have, a Material Adverse Effect on the
applicable Party and its Subsidiaries on a consolidated basis; |
|
(ss) |
“Material
Adverse Effect” means any change, effect, event, occurrence or state of
facts that, individually or in the aggregate, with other such changes, effects,
events, occurrences or states of facts, is or would reasonably be expected to
be material and adverse to the business, properties, operations, results of
operations or financial condition of the applicable Party and its Subsidiaries
on a consolidated basis, except any change, effect, event, occurrence or state
of facts resulting from or relating to: |
|
(i) |
the announcement of the execution of this Agreement or the transactions
contemplated hereby or the performance of any obligation hereunder or
communication by the applicable Party of its plans or intentions with respect
to the other Party and/or any of its Subsidiaries; |
|
(ii) |
changes in the United
States and Canadian economies in general or the United States and Canadian
capital or currency markets in general; |
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|
(iii) |
the threat, commencement, occurrence or continuation
of any war, armed hostilities, acts of environmental groups, civil strife, or
acts of terrorism; |
|
(iv) |
any change in applicable Laws or in the interpretation thereof by any
Governmental Entity; |
|
(vi) |
any natural disaster; |
|
(vii) |
any change in the price of uranium or gold; |
|
(viii) |
any change relating to foreign currency exchange rates; or |
|
(ix) |
changes affecting the mining industry generally, |
|
provided that, in the case
of any changes referred to in clauses (ii) to (ix) above, inclusive such
changes do not have a materially disproportionate effect on the applicable
Party relative to comparable mineral exploration companies; |
|
(tt) |
“Material
Contracts” means all Contracts or other obligations or rights (and all
amendments, modifications and supplements thereto and all side letters to which
Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco
Endeavors), as the case may be, is a party affecting the obligations of any
party thereunder) to which Nava (or any Subsidiary of Nava) or Eco Endeavors
(or any Subsidiary of Eco Endeavors), as the case may be, is a party or by
which any of their respective properties or assets are bound that are material
to the business, properties or assets of Nava (or any Subsidiary of Nava) or
Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, taken
as a whole, including to the extent any of the following are material to the
business, properties or assets of Nava (or any Subsidiary of Nava) or Eco
Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, taken as a
whole, all: |
|
(i) |
employment, severance, personal services, consulting, non-competition or
indemnification contracts (including any Contract to which Nava (or any
Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as
the case may be, is a party involving employees); |
|
(ii) |
Contracts granting a right
of first refusal or first negotiation; |
|
(iii) |
partnership or joint venture agreements; |
|
(iv) |
Contracts for the acquisition, sale or lease of material properties or assets
of Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco
Endeavors), as the case may be, (by purchase or sale of assets or stock or
otherwise); |
|
(v) |
Contracts with any Governmental Entity; |
|
(vi) |
loan or credit agreements
mortgages, indentures or other Contracts or instruments evidencing indebtedness
for borrowed money by Nava (or any Subsidiary of Nava) or Eco Endeavors (or any
Subsidiary of Eco Endeavors), as the case may |
- 7 -
|
be,
or any such agreement pursuant to which indebtedness for borrowed money may be
incurred; |
|
(vii) |
Contracts that purport to limit, curtail or restrict the ability of Nava (or
any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors),
as the case may be, to compete in any geographic area or line of business; |
|
(viii) |
commitments and agreements to enter into any of the foregoing; and |
|
(ix) |
all Contracts that provide for annual payments to or from Nava (or any
Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as
the case may be, in excess of $25,000 per annum; |
|
(uu) |
“MI
51-105” means Multilateral Instrument 51-105 – Issuers Quoted in the
U.S. Overthe-Counter Markets as adopted by the British Columbia Securities
Commission. |
|
(vv) |
“Nava”
shall have the meaning ascribed thereto on the first page of this Agreement; |
|
(ww) |
“Nava
Board” means the board of directors of Nava; |
|
(xx) |
“Nava
Common Shares” means the authorized common shares in the capital of Nava as
presently constituted; |
|
(yy) |
“Nava
Financial Statements” shall have the meaning ascribed thereto in Section
3.2(j); |
|
(zz) |
“Nava
Options” means the outstanding options of Nava which entitle the holders to
purchase an aggregate of up to 275,000 Nava Common Shares; |
|
(aaa) |
“Nava
Placement Units” means the units to be offered by Nava in the Private
Placement, each unit consisting of one Nava Common Share and one Nava Placement
Warrant; |
|
(bbb) |
“Nava
Placement Warrant” means a share purchase warrant issued by Nava in the
Private Placement, each share purchase warrant of which is exercisable into one
Nava Common Share at the exercise price of $0.05 for a period of five years
from the closing of the Private Placement; |
|
(ccc) |
“Nava
Properties and Assets” has the meaning ascribed thereto in Section 3.2(m)
of this Agreement; |
|
(ddd) |
“Nava
Public Documents” means the public documents filed by Nava since January 1,
2013 and available on SEDAR under Nava’s SEDAR profile and filed with the SEC
and available on EDGAR; |
|
(eee) |
“Nava
Units” means the units to be issued by Nava to the Eco Endeavors
Shareholders at the Effective Time in accordance with Section 2.1(b)(i), each
unit consisting of one Nava Common Share and one Nava Warrant; |
|
(fff) |
“Nava
Warrant” means a share purchase warrant of Nava issued as part of the Nava
Units, each of which entitles the holder to acquire one Nava Common Share at
the exercise price of $0.05 for a period of five years from the Effective Date;
|
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|
(ggg) |
“Newco” shall have the meaning ascribed thereto on the first page of
this Agreement; |
|
(hhh) |
“Newco Shares”
means common shares in the capital of Newco; |
|
(iii) |
“Non-Canadian
Eco Endeavors Shareholders” means an Eco Endeavors Shareholder that is not
a Canadian Resident and is not a U.S. Person; |
|
(jjj) |
“Party”
shall mean, as the context requires, either Nava, Newco, Eco Endeavors,
Kenderesh or Kenderes Biogaz as applicable and “Parties” shall mean all
of them; |
|
(kkk) |
“Person”
means any individual, firm, partnership, joint venture, association, trust,
trustee, executor, administrator, legal personal representative, estate, group,
body corporate, corporation, unincorporated association or organization,
Governmental Entity, syndicate or other entity, whether or not having legal
status; |
|
(lll) |
“Private
Placement” means the non-brokered private placement of Nava Placement Units
to be offered by Nava at a price of $0.05 per Nava Placement Unit for gross
proceeds of at least $1,000,000; |
|
(mmm) |
“Registrar”
means the registrar appointed under section 400 of the BCBCA; |
|
(nnn) |
“Regulation
D” means Regulation D adopted by the SEC under the 1933 Act; |
|
(ooo) |
“Regulation
S” means Regulation S adopted by the SEC under the 1933 Act; |
|
(ppp) |
“SEC”
means the United States Securities and Exchange Commission; |
|
(qqq) |
“Securities
Authorities” means the securities commissions and/or other securities
regulatory authorities in the provinces and territories of Canada; |
|
(rrr) |
“SEDAR”
means the System for Electronic Document Analysis and Retrieval; |
|
(sss) |
“Subsidiary”
has that meaning as set out in section 2(2) of the BCBCA; |
|
(ttt) |
“Substantial
U.S. Market Interest” means substantial U.S. market interest as that term
is defined in Regulation S; |
|
(uuu) |
“Tax”
and “Taxes” means all taxes, assessments, charges, dues, duties, rates,
fees, imposts, levies and similar charges of any kind lawfully levied, assessed
or imposed by any Governmental Entity, including all income taxes (including
any tax on or based upon net income, gross income, income as specially defined,
earnings, profits or selected items of income, earnings or profits) and all
capital taxes, gross receipts taxes, environmental taxes, sales taxes, use
taxes, ad valorem taxes, value added taxes, transfer taxes (including, without
limitation, taxes relating to the transfer of interests in real property or
entities holding interests therein), franchise taxes, license taxes,
withholding taxes, payroll taxes, employment taxes, Canada Pension Plan
contributions, excise, severance, social security, workers’ compensation,
employment insurance or compensation taxes or premium, stamp taxes, occupation
taxes, premium taxes, property taxes, windfall profits taxes, alternative or
add-on minimum taxes, goods and services tax, customs duties or other taxes,
fees, imports, assessments or charges of any kind whatsoever, together with any
interest and any penalties or additional amounts imposed by any taxing
authority |
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|
(domestic or foreign) on such entity, and
any interest, penalties, additional taxes andadditions to tax imposed
with respect to the foregoing; |
|
(vvv) |
“Tax
Act” means the Income Tax Act (Canada), as amended and the
regulations thereunder, as amended; |
|
(www) |
“Tax
Returns” means all returns, schedules, elections, declarations, reports,
information returns, notices, forms, statements and other documents made,
prepared or filed with any taxing authority or required to be made, prepared or
filed with any taxing authority relating to Taxes; |
|
(xxx) |
“United
States” or “U.S.” means the United States of America, its
territories and possessions, any state of the United States and the District of
Columbia; |
|
(yyy) |
“U.S.
Person” has the meaning ascribed to such term in Rule 902 of Regulation S; |
|
(zzz) |
“Waratah”
means Waratah Investments Limited; |
|
(aaaa) |
“Waratah Loan” means the amounts advanced by Waratah to Eco Endeavors
pursuant to the terms of the Deed of Undertaking; and |
|
(bbbb) |
“Waratah Royalty” means the royalty granted by Eco Endeavors as
described in Schedule F attached hereto. |
In addition,
words and phrases used herein and defined in the BCBCA shall have the same
meaning herein as in the BCBCA unless the context otherwise requires.
1.2
Interpretation Not Affected by Headings
The division of
this Agreement into articles, sections, subsections, paragraphs and
subparagraphs and the insertion of headings herein are for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement. The terms “this Agreement”, “hereof”, “herein”, “hereto”,
“hereunder” and similar expressions refer to this Agreement and the schedules
attached hereto and not to any particular article, section or other portion
hereof and include any agreement, schedule or instrument supplementary or
ancillary hereto or thereto.
1.3
Number and Gender
In this
Agreement, unless the context otherwise requires, words importing the singular
only shall include the plural and vice versa and words importing the use of
either gender shall include both genders and neuter.
1.4
Date for any Action
If the date on
which any action is required to be taken hereunder by any party hereto is not a
Business Day, such action shall be required to be taken on the next succeeding
day that is a Business Day.
1.5
Statutory References
Any reference in this Agreement to a
statute includes all regulations and rules made thereunder, all amendments to
such statute or regulation in force from time to time and any statute or
regulation that supplements or supersedes such statute or regulation.
- 10 -
1.6 Currency
Unless otherwise expressly stated, all
references in this Agreement to dollar amounts are expressed in United States
dollars.
1.7 Invalidity of Provisions
Each of the provisions contained in this
Agreement is distinct and severable and a declaration of invalidity or
unenforceability of any such provision or part thereof by a court of competent
jurisdiction shall not affect the validity or enforceability of any other
provision hereof. To the extent permitted by applicable Laws, the parties
hereto waive any provision of Law that renders any provision of this Agreement
or any part thereof invalid or unenforceable in any respect. The parties hereto
will engage in good faith negotiations to replace any provision hereof or any
part thereof that is declared invalid or unenforceable with a valid and
enforceable provision or part thereof, the economic effect of which
approximates as much as possible the invalid or unenforceable provision or part
thereof that it replaces.
1.8 Accounting Matters
Unless otherwise stated, all accounting
terms used in this Agreement shall have the meanings attributable thereto
under, and all determinations of an accounting nature required to be made
hereunder shall be made in a manner consistent with GAAP.
1.9 Knowledge
Where the phrases “to the knowledge of
Nava” or “to the knowledge of Eco Endeavors” are used in respect of Nava or Eco
Endeavors, such phrase shall mean, in respect of each representation and
warranty or other statement which is qualified by such phrase, that such
representation and warranty or other statement is being made based upon:
|
(a) |
in the case of Nava, the actual knowledge of management of Nava after
appropriate inquiries and investigations; and |
|
(b) |
in the case of Eco
Endeavors, the actual knowledge of management of Eco Endeavors after
appropriate inquiries and investigations. |
1.10 Meaning of Certain Phrase
In this Agreement the phrase “in the
ordinary and regular course of business” shall mean and refer to those
activities that are normally conducted by corporations engaged in the business
of the generation of electricity from biogas.
1.11 Schedules
The following schedules are attached to,
and are deemed to be incorporated into and form part of, this Agreement:
|
Schedule A -Form of Eco Endeavors Resolution Schedule
B -Form of Newco Resolution Schedule C – Form of Amalgamation Application
Schedule D – Form of Articles of Amalco Schedule E – List of Intellectual
Property Schedule F – Waratah Royalties Schedule G – Eco Endeavors Disclosure
Statement |
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ARTICLE 2
THE AMALGAMATION
2.1
Terms of Amalgamation
Eco Endeavors,
Newco and Nava hereby covenant and agree to implement the Amalgamation in
accordance with the terms and subject to the conditions of this Agreement, as
follows:
|
(a) |
at the Effective Time,
Newco and Eco Endeavors shall amalgamate and continue as one company, being
Amalco, pursuant to the provisions of Section 269 of the BCBCA; |
|
(b) |
at the Effective Time: |
|
(i) |
all of the Eco Endeavors Common Shares outstanding immediately prior to the
Effective Time shall be cancelled, and holders of Eco Endeavors Common Shares
outstanding immediately prior to the Effective Time, other than Nava and Newco,
shall receive in exchange for their Eco Endeavors Common Shares so cancelled,
60,000,000 Nava Units on a pro-rata basis at a deemed value of $0.05 per Nava
Unit and neither Nava nor Newco shall receive any repayment of capital in
respect of any Eco Endeavors Common Shares held by them that are cancelled
pursuant to this subsection 2.1(b)(i); |
|
(ii) |
all of the common shares
of Newco outstanding immediately prior to the Effective Time shall be cancelled
and replaced with an equal number of common shares of Amalco issued by Amalco;
and |
|
(iii) |
as consideration for the
issuance of Nava Units pursuant to the Amalgamation, Amalco shall issue to Nava
one common share of Amalco for each Nava Unit issued; |
|
(c) |
as a result of the
foregoing: |
|
(i) |
in accordance with section 282 of the BCBCA, among other things, the property,
rights and interests of each of Eco Endeavors and Newco will continue to be the
property, rights and interests of Amalco, and Amalco will continue to be liable
for the obligations of each of Eco Endeavors and Newco; and |
|
(ii) |
Amalco will be a
wholly-owned subsidiary of Nava. |
2.2
Effective Date
The
Amalgamation shall be completed on the Effective Date and shall be effective at
the Effective Time.
2.3
Closing
Unless this Agreement is terminated
pursuant to the provisions hereof, Nava, Newco and Eco Endeavors shall meet at
the offices of Clark Wilson LLP, Suite 900 – 885 West Georgia Street,
Vancouver, British Columbia at 10:00 a.m., Vancouver time, on the Business Day
prior to the Effective Date, or at such other time, date or place as they may
mutually agree upon, and each of them shall deliver to the other Parties and
Newco, as the case may be:
- 12 -
|
(a) |
the documents required or contemplated to be delivered by it hereunder in order
to complete, or necessary or reasonably requested to be delivered by it by the
other Parties in order to effect the Amalgamation, provided that each such
document required to be dated the Effective Date shall be dated as of, or
become effective on, the Effective Date and shall be held in escrow to be
released upon the Amalgamation becoming effective; and |
|
(b) |
written confirmation as to
the satisfaction or waiver of all of the conditions in its favour contained in
Article 5 hereof. |
2.4
Amalgamation Application
Subject to the
rights of termination contained in Article 6 hereof, upon obtaining the Eco
Endeavors Shareholder Approval and the other conditions contained in Article 5 hereof
being satisfied or waived, Eco Endeavors and Newco shall jointly file the
Amalgamation Application, which shall be substantially in the form attached
hereto as Schedule D, together with such other documents as may be required
under the BCBCA, with the Registrar in accordance with the BCBCA in order to
effect the Amalgamation. To the extent appropriate, the Amalgamation
Application may be filed with the Registrar on a date agreed upon by the
Parties in advance of the Effective Date, subject to the right of any Party to
withdraw the Amalgamation Application by filing with the registrar a notice of
withdrawal pursuant to section 280 of BCBCA.
Unless
otherwise agreed to by Nava and Eco Endeavors, the name of Amalco shall be
“Nava Holdings Inc.”.
2.5
Registered Office of Amalco
The address of
the registered and records office of Amalco shall be Suite 900 – 885 West
Georgia Street, Vancouver, British Columbia V6C 3H1.
2.6
Authorized Capital of Amalco
Amalco shall be
authorized to issue an unlimited number of common shares (being the Amalco
Shares) and an unlimited number of preferred shares. At the Effective Time, the
capital account in the records of Amalco for the Amalco Shares shall be equal
to the capital attributed to the Eco Endeavors Common Shares (other than any
Eco Endeavors Common Shares held by Nava or Newco) and the Newco Shares.
2.7
Initial Directors of Amalco
The first directors of
Amalco shall be the persons whose names and business addresses appear below:
- 13 -
2.8 Articles of Amalco
The Articles of Amalco,
which shall be substantially in the form attached as Schedule D shall be signed
by one or more of the directors of Amalco referred to in section 2.7 hereof.
2.9 Securities
Laws
|
(a) |
The issuance and sale of the Nava Units to the Canadian
Eco Endeavors Shareholders will be made in reliance on an exemption from the
prospectus filing requirements contained in section 2.16 of NI 45-106 and the
exemption from the registration requirements contained in Regulation S promulgated
under the 1933 Act. Nava reserves the right to request from the Canadian Eco
Endeavors Shareholders any additional certificates or representations required
to establish an exemption from Applicable Securities Legislation prior to the
issuance of any Nava Units. |
|
(b) |
For
Canadian Eco Endeavors Shareholders, the certificates representing Nava Common
Shares and the Nava Warrants to be issued to such shareholders on the Effective
Date will be affixed with the following legends describing such restrictions: |
|
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER
THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT
TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT. |
|
THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY IN OR FROM A JURISDICTION OF CANADA UNLESS THE CONDITIONS OF
SECTION 13 OF MULTILATERAL INSTRUMENT 51-105 ISSUERS QUOTED IN THE U.S.
OVER-THECOUNTER MARKETS ARE MET. |
|
(c) |
The issuance and sale of
the Nava Units to Non-Canadian Eco Endeavors Shareholders will be made in
reliance on an exemption from the prospectus filing requirements contained in
Regulation S. The Non-Canadian Eco Endeavors Shareholders acknowledge and
understand that any Nava Units that they receive pursuant to this Agreement
will be subject to resale restrictions in accordance with Applicable Securities
Legislation and that as a result the certificates representing such Nava Common
Shares and Nava Warrants will be affixed with the following legend in
accordance with Regulation S of the 1933 Act: |
- 14 -
|
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION
S PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR
RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
ACT. |
|
(d) |
Pursuant to MI 51-105, a subsequent trade in the Nava
Common Shares in or from any province in Canada will be a distribution subject
to the prospectus requirements of applicable Canadian securities legislation
(including theSecurities Act (British Columbia)) unless certain
conditions are met, which conditions include, among others, a requirement that
any certificate representing the Nava Common Shares (or ownership statement
issued under a direct registration system or other book entry system) bear the
restrictive legend (the “51-105 Legend”) specified in MI 51-105. |
|
(e) |
The
Parties acknowledge that on or prior to the Effective Date, the Non-Canadian
Eco Endeavors Shareholders and Canadian Eco Endeavors Shareholders who are not
subject to MI 51-105 (together the “Non-51-105 Vendors”) may be required
to provide Nava with a certificate dated as of the Effective Date, whereby each
such person represents and warrants that they are not residents of the
provinces subject to MI 51-105 and further undertakes not to trade or resell
any of the Nava Common Shares received by them pursuant to this Agreement in or
from any provinces subject to MI 51-105 and further still that the Non-51-105
Vendors understand and agree that Nava and others will rely upon the truth and
accuracy of these representations and warranties and agree that if such
representations and warranties are no longer accurate or have been breached,
the Non-51105 Vendor will immediately notify Nava. Such certificate may
further require that by executing and delivering this Agreement and as a
consequence of the representations and warranties made by the Non-51-105
Vendors in this section, the Non-51-105 Vendors will have directed Nava not to
include the 51-105 Legend on any certificates representing the Nava Common
Shares or Nava Warrants to be issued to the Non-51-105 Vendors. As a
consequence, the Non-51-105 Vendors will not be able to rely on the resale
provisions of MI 51-105, and any subsequent trade in any of the Nava Common
Shares in or from the provinces subject to MI 51-105 will be a distribution
subject to the prospectus and registration requirements of the MI 51-105. As
set out in such certificate, if the Non-51105 Vendor wishes to trade or resell
any of the Nava Common Shares in or from a province subject to MI 51-105, the
Non-51-105 Vendor will agree and undertake to return, prior to any such trade
or resale, any certificate representing the Nava Common Shares or Nava
Warrants, as applicable, to Nava’s transfer agent to have the 51-105 Legend
imprinted on such certificate or to instruct Nava’s transfer agent to include
the 51-105 Legend on any ownership statement issued under a direct registration
system or other book entry system. |
- 15 -
2.10 Consultation
Nava and Eco Endeavors will
consult with each other in issuing any press release or otherwise making any
public statement with respect to this Agreement or the Amalgamation and in
making any filing with any Governmental Entity, Securities Authority or stock
exchange with respect thereto. Each of Nava and Eco Endeavors shall use its
commercially reasonable efforts to enable the other of them to review and
comment on all such press releases and filings prior to the release or filing,
respectively, thereof, provided, however, that the obligations herein will not
prevent a Party from making, after consultation with the other Party, such
disclosure as is required by applicable Laws or the rules and policies of any
applicable stock exchange.
2.11 Effecting
the Amalgamation
Subject to the rights of
termination contained in Article 6, upon the Eco Endeavors Shareholder Approval
being obtained and the other conditions contained in Article 5 being complied
with or waived, Eco Endeavors and Newco shall file with the Registrar the
Amalgamation Application and such other documents as may be required in order
to effect the Amalgamation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of Eco Endeavors, Kenderesh and Kenderes Biogaz
Each of Eco Endeavors,
Kenderesh and Kenderes Biogaz hereby jointly and severally represents and
warrants to Nava and hereby acknowledges that Nava is relying upon such
representations and warranties in connection with entering into this Agreement
and agreeing to complete the Amalgamation, as follows:
|
(a) |
Organization.
Each of Eco Endeavors and its Subsidiaries has been incorporated and, validly
exists under the laws of the jurisdiction of its incorporation and is in good
standing under applicable corporate laws and has full corporate and legal power
and authority to own its property and assets and to conduct its business as
currently owned and conducted. Each of Eco Endeavors and its Subsidiaries is
registered, licensed or otherwise qualified as a foreign corporation in each
jurisdiction where the nature of the business or the location or character of
the property and assets owned or leased by it requires it to be so registered,
licensed or otherwise qualified, other than those jurisdictions where the
failure to be so registered, licensed or otherwise qualified would not have a
Material Adverse Effect on Eco Endeavors. All of the outstanding shares of each
Subsidiary of Eco Endeavors are validly issued, and are fully paid and
non-assessable to the extent such a concept exists under applicable Laws. All
of the outstanding shares of each Subsidiary of Eco Endeavors are owned
directly or indirectly by Eco Endeavors. Except for the proposed conversion of
the Waratah Loan, there are no outstanding options, rights, entitlements,
understandings or commitments (contingent or otherwise) regarding the right to
acquire any issued or unissued securities of, or interest in, any Subsidiary of
Eco Endeavors. |
|
(b) |
Capitalization.
Eco Endeavors is authorized to issue an unlimited number of Eco Endeavors
Common Shares and an unlimited number of preferred shares. As of the date of
this Agreement, there were outstanding: |
|
(i) |
15,892,062 Eco Endeavors Common Shares; and |
|
(ii) |
no Eco
Endeavors Preferred Shares. |
- 16 -
|
Except for the
proposed conversion of the Waratah Loan and except pursuant to this Agreement
and the transactions contemplated hereby, as of the date hereof, there are no
options, warrants, conversion privileges or other rights, agreements,
arrangements or commitments (pre-emptive, contingent or otherwise) obligating
Eco Endeavors to issue or sell any shares of Eco Endeavors or any securities or
obligations of any kind convertible into or exchangeable for any shares of Eco
Endeavors. All outstanding Eco Endeavors Common Shares have been authorized and
are validly issued and outstanding as fully paid and non-assessable shares,
free of pre-emptive rights. As of the date hereof, and except as set out in
Schedule G, there are no outstanding bonds, debentures or other evidences of
indebtedness of Eco Endeavors. Except for any Eco Endeavors Common Shares that
are subject to dissent rights at the Effective Time in accordance with the
provisions of the BCBCA, there are no outstanding contractual obligations of
Eco Endeavors to repurchase, redeem or otherwise acquire any outstanding Eco
Endeavors Common Shares or with respect to the voting or disposition of any
outstanding Eco Endeavors Common Shares. |
|
(c) |
Authority.
Eco Endeavors has all necessary corporate power, authority and capacity to
enter into this Agreement and all other agreements and instruments to be
executed by Eco Endeavors as contemplated by this Agreement, and to perform its
obligations hereunder and under such other agreements and instruments. The execution
and delivery of this Agreement by Eco Endeavors and the completion by Eco
Endeavors of the transactions contemplated by this Agreement have been
authorized by the Eco Endeavors Board and, subject to obtaining the Eco
Endeavors Shareholder Approval in the manner contemplated herein, no other
corporate proceedings on the part of Eco Endeavors are necessary to authorize
this Agreement or the completion by Eco Endeavors of the transactions
contemplated hereby other than the filing of the Amalgamation Application with
the Registrar. This Agreement has been executed and delivered by Eco Endeavors
and constitutes a legal, valid and binding obligation of Eco Endeavors,
enforceable against Eco Endeavors in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
other applicable Laws relating to or affecting creditors’ rights generally, and
to general principles of equity. The execution and delivery by Eco Endeavors of
this Agreement and the performance by Eco Endeavors of its obligations
hereunder and the completion of the transactions contemplated hereby, do not
and will not: |
|
(i) |
result in a
violation, contravention or breach or constitute a default under, or entitle
any party to terminate, accelerate, modify or call any obligations or rights
under, require any consent to be obtained under or give rise to any termination
rights under any provision of: |
|
(A) |
the articles or notice of articles of Eco Endeavors or
any Subsidiary of Eco Endeavors; |
|
(B) |
any applicable Law, or |
|
(C) |
any credit
arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise,
concession, easement, contract, agreement, licence, permit or other instrument
to which Eco Endeavors or any Subsidiary of Eco Endeavors is bound or is
subject to or of which Eco Endeavors or any Subsidiary of Eco Endeavors is the
beneficiary, |
- 17 -
|
in each case, which would, individually or in the
aggregate, have a Material Adverse Effect on Eco Endeavors; |
|
(ii) |
cause any
indebtedness owing by Eco Endeavors or any Subsidiary of Eco Endeavors to come
due before its stated maturity or cause any available credit to cease to be
available which would, individually or in the aggregate, have a Material
Adverse Effect on Eco Endeavors; |
|
(iii) |
result in the
imposition of any Encumbrance upon any of the property or assets of Eco
Endeavors or any Subsidiary of Eco Endeavors or give any Person the right to
acquire any of Eco Endeavors’ assets, or restrict, hinder, impair or limit the
ability of Eco Endeavors or any Subsidiary of Eco Endeavors to conduct the
business of Eco Endeavors or any Subsidiary of Eco Endeavors as and where it is
now being conducted which would, individually or in the aggregate, have a
Material Adverse Effect on Eco Endeavors; |
|
(iv) |
result in
or accelerate the time for payment or vesting of, or increase the amount of any
severance, unemployment compensation, “golden parachute”, change of control
provision, bonus, termination payments, retention bonus or otherwise, becoming
due to any director or officer of Eco Endeavors or any Subsidiary of Eco
Endeavors or increase any benefits otherwise payable under any pension or
benefits plan of Eco Endeavors or any Subsidiary of Eco Endeavors or result in
the acceleration of the time of payment or vesting of any such benefits; or |
|
(v) |
result in the revocation, suspension, cancellation,
variation or non-renewal of any permits, licenses, leases or other instruments,
conferring rights in respect of the property interests in which Eco Endeavors
or any Subsidiary of Eco Endeavors has an interest. |
|
No consent, approval, order
or authorization of, or declaration or filing with, any Governmental Entity or
other Person is required to be obtained by Eco Endeavors or any Subsidiary of
Eco Endeavors in connection with the execution and delivery of this Agreement
or the consummation by Eco Endeavors of the transactions contemplated hereby
other than: |
|
(i) |
filings required under the BCBCA; |
|
(ii) |
filings
with and approvals by the Securities Authorities; and |
|
(iii) |
any other
consents, approvals, orders, authorizations, declarations or filings which, if
not obtained, would not, individually or in the aggregate, have a Material
Adverse Effect on Eco Endeavors. |
|
(d) |
Directors’
Approvals. The Eco Endeavors Board has unanimously: |
|
(i) |
determined that the Amalgamation is in the best
interests of Eco Endeavors; |
|
(ii) |
determined to recommend that the Eco Endeavors Shareholders vote in favour of
the Eco Endeavors Resolution; and |
- 18 -
|
(iii) |
authorized the entering into of this Agreement,
and the performance of Eco Endeavors’ obligations hereunder. |
|
(e) |
Contracts. Except for the Deed of Undertaking,
each of the Material Contracts to which Eco Endeavors or any Subsidiary of Eco
Endeavors is a party constitutes a valid and legally binding obligation of Eco
Endeavors, enforceable in accordance with its terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general applicability
relating to or affecting creditors’ rights or by general equity principles). |
|
(f) |
Waivers, Consents. There are no waivers, consents,
notices or approvals required to complete the transactions contemplated under
this Agreement from other parties to the Material Contracts of Eco Endeavors. |
|
(g) |
No
Defaults. Except as set out in Schedule G, none of Eco Endeavors or any
Subsidiary of Eco Endeavors is in default under, and, there exists no event,
condition or occurrence which, after notice or lapse of time or both, would
constitute a default by Eco Endeavors or any Subsidiary of Eco Endeavors under
any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease,
franchise, concession, easement, Contract of Eco Endeavors or any Subsidiary of
Eco Endeavors, agreement, licence, permit or other instrument that is material
to the conduct of the business of Eco Endeavors or any Subsidiary of Eco
Endeavors to which any of them is a party or by which any of them is bound or
subject to that would, individually or in the aggregate, have a Material
Adverse Effect on Eco Endeavors. No party to any Contract of Eco Endeavors or
any Subsidiary of Eco Endeavors has given written notice to Eco Endeavors or
any Subsidiary of Eco Endeavors of or made a claim against Eco Endeavors or any
Subsidiary of Eco Endeavors with respect to any breach or default thereunder,
in any such case in which such breach or default constitutes a Material Adverse
Effect on Eco Endeavors. |
|
(h) |
Absence
of Changes. Except as disclosed to Nava in writing prior to the date
hereof, since January 1, 2013: |
|
(i) |
Eco Endeavors and each Subsidiary of Eco Endeavors has
conducted its business only in the ordinary and regular course of business
consistent with past practice; |
|
(ii) |
none of
Eco Endeavors or any Subsidiary of Eco Endeavors has incurred or suffered a
Material Adverse Change; |
|
(iii) |
there has not
been any acquisition or sale by Eco Endeavors or any Subsidiary of Eco
Endeavors of any material property or assets thereof; |
|
(iv) |
other than in the
ordinary and regular course of business consistent with past practice, there
has not been any incurrence, assumption or guarantee by Eco Endeavors or any
Subsidiary of Eco Endeavors of any debt for borrowed money, any creation or assumption
by Eco Endeavors or any Subsidiary of Eco Endeavors of any Encumbrance, any
making by Eco Endeavors or any Subsidiary of Eco Endeavors of any loan, advance
or capital contribution to or investment in any other Person or any entering
into, amendment of, relinquishment, termination or non-renewal by Eco Endeavors
or any Subsidiary of Eco Endeavors of any contract, agreement, licence, lease
transaction, |
- 19 -
|
commitment or other right or obligation that would,
individually or in theaggregate, have a Material
Adverse Effect on Eco Endeavors; |
|
(v) |
Eco Endeavors has not declared or paid any dividends or
made any other distribution in respect of any of the Eco Endeavors Common
Shares; |
|
(vi) |
Eco
Endeavors has not effected or passed any resolution to approve a split,
consolidation or reclassification of any of the outstanding Eco Endeavors
Common Shares; |
|
(vii) |
other than in
the ordinary and regular course of business consistent with past practice,
there has not been any material increase in or modification of the compensation
payable by Eco Endeavors or any Subsidiary of Eco Endeavors to any of their
respective directors, officers, employees or consultants or any grant to any
such director, officer, employee or consultant of any increase in severance or
termination pay or any increase or modification of any bonus, pension,
insurance or benefit arrangement made to, for or with any of such directors,
officers, employees or consultants; |
|
(viii) |
Eco
Endeavors has not effected any material change in its accounting methods,
principles or practices, other than as disclosed to Nava; and |
|
(ix) |
Eco Endeavors
has not adopted any, or amended any, collective bargaining agreement, bonus,
pension, profit sharing, stock purchase, stock option or other benefit plan or
shareholder rights plan. |
|
(i) |
Employment
Agreements. Neither Eco Endeavors nor any Subsidiary of Eco Endeavors: |
|
(i) |
is a party to any written or oral policy, agreement,
obligation or understanding providing for retention bonuses, severance or
termination payments to, or any employment or consulting agreement with, any
director or officer of Eco Endeavors or any Subsidiary of Eco Endeavors that
would be triggered by Eco Endeavors’ entering into this Agreement or the
completion of the Amalgamation; |
|
(ii) |
has any
employee or consultant whose employment or contract with Eco Endeavors or any
Subsidiary of Eco Endeavors cannot be terminated by Eco Endeavors or any
Subsidiary of Eco Endeavors in accordance with the provisions of such
employment or consultant contract following the completion of the Amalgamation;
and |
|
(iii) |
(A) is a
party to any collective bargaining agreement; |
|
(B) |
is, to the knowledge of Eco Endeavors, subject to any
application for certification or threatened or apparent union-organizing
campaigns for employees not covered under a collective bargaining agreement; or |
|
(C) |
is subject
to any current, or, to the knowledge of Eco Endeavors, pending or threatened strike
or lockout. |
|
(j) |
Books
and Records. The corporate records and minute books of Eco Endeavors and
each Subsidiary of Eco Endeavors have been maintained in accordance with all
applicable |
- 20 -
|
Laws and are
complete and accurate in all material respects, except where such
incompleteness or inaccuracy would not have a Material Adverse Effect on Eco
Endeavors, financial books and records and accounts of Eco Endeavors and each
Subsidiary of Eco Endeavors in all material respects: |
|
(i) |
have been maintained in accordance with good business
practices on a basis consistent with prior years and past practice; and |
|
(ii) |
are
stated in reasonable detail and accurately and fairly reflect the transactions
and acquisitions and dispositions of assets of Eco Endeavors and each
Subsidiary of Eco Endeavors. |
|
(k) |
Financial Information. When prepared and
delivered, the audited annual consolidated financial statements of Eco
Endeavors for the fiscal years ended March 31, 2013 and 2012 and the notes
thereto (the “Eco Endeavors Financial Statements”) will be prepared in
accordance with GAAP consistently applied, and will fairly present in all
material respects the financial condition of Eco Endeavors at the respective
dates indicated and the results of operations of Eco Endeavors for the periods
covered. Except as disclosed in the Eco Endeavors Financial Statements, as of
the Closing Date Eco Endeavors will not have any liability or obligation
(including, without limitation, liabilities or obligations to fund any
operations or work or exploration program, to give any guarantees or for
Taxes), whether accrued, absolute, contingent or otherwise, or any related
party transactions or off-balance sheet transactions not reflected in the Eco
Endeavors Financial Statements, except liabilities and obligations incurred in
the normal course of business (including the business of operating and
developing Eco Endeavors assets) since March 31, 2013, which liabilities or
obligations would not reasonably be expected to have a Material Adverse Effect
on Eco Endeavors. |
|
(l) |
Litigation.
There is no claim, action, proceeding or investigation pending or in progress
or, to the knowledge of Eco Endeavors, threatened against or relating to Eco
Endeavors, any Subsidiary of Eco Endeavors or affecting any of their respective
properties or assets before any Governmental Entity which individually or in
the aggregate has, or could reasonably be expected to have, a Material Adverse
Effect on Eco Endeavors and Eco Endeavors is not aware of any existing ground
on which any such claim, action, proceeding or investigation might be commenced
with any reasonable likelihood of success. There is no bankruptcy, liquidation,
winding-up or other similar proceeding pending or in progress, or, to the
knowledge of Eco Endeavors, threatened against or relating to Eco Endeavors or
any Subsidiary of Eco Endeavors before any Governmental Entity. Neither Eco
Endeavors or any Subsidiary of Eco Endeavors nor any of their respective
properties or assets are subject to any outstanding judgment, order, writ,
injunction or decree that involves or may involve, or restricts or may restrict
the right or ability of Eco Endeavors or each Subsidiary of Eco Endeavors, as
the case may be, to conduct their respective business in all material respects
as it has been carried on prior to the date hereof, or that would materially
impede the consummation of the transactions contemplated by this Agreement,
except to the extent any such matter would not, individually or in the
aggregate, have a Material Adverse Effect on Eco Endeavors. |
|
(m) |
Title
to Assets and Operational Matters. Eco Endeavors and each Subsidiary of Eco
Endeavors is the legal and beneficial owner of and has good title to the
respective assets thereof in which Eco Endeavors or any such Subsidiary has an
interest (collectively, for the purposes of this Section 3.1(m), the “Eco
Endeavors Assets”). All agreements |
- 21 -
|
by which Eco Endeavors or any Subsidiary
of Eco Endeavors holds an interest in the Eco Endeavors Assets are in good
standing according to their respective terms. Eco Endeavors has conducted and
is conducting its business in material compliance with all applicable Laws,
including all applicable Laws and all Governmental Entity authorizations and
instructions, whether in writing or oral, relating to the Eco Endeavors Assets.
Eco Endeavors has not received any notice of the revocation or cancellation of,
or any intention to revoke or cancel, any of the permits, licenses, leases or
other instruments conferring rights in respect of the Eco Endeavors Assets that
would, individually or in the aggregate, result in a Material Adverse Effect on
Eco Endeavors. Without limiting the generality of the foregoing, Eco Endeavors
has obtained all material licences and permits necessary for the operation of
the business of Eco Endeavors and any Subsidiary of Eco Endeavors as presently
conducted, and has not taken any action which would impair the ability of Eco
Endeavors or any Subsidiary of Eco Endeavors to obtain necessary licences or
permits in the future for the continued operation of such business, in
accordance with applicable Laws and requirements of all Governmental Entities. |
|
(n) |
Royalty. Except as set out in Schedule G or as
contemplated herein, there are no landowner’s royalties, overriding royalties,
net profit interests or similar interests or any other rights or interests
whatsoever of third parties by which Eco Endeavors or a Subsidiary thereof is
bound or in relation to the Eco Endeavor Assets. |
|
(o) |
Assets. Except as set out in Schedule G, Eco
Endeavors and each Subsidiary of Eco Endeavors has good and marketable title to
its assets free and clear of any security interests, liens, charges, mortgages,
pledges, Encumbrances, adverse claims and demands of any nature or kind
whatsoever recorded or unrecorded, except as disclosed to Nava in writing prior
to the date hereof. |
|
(p) |
Condition and Sufficiency of Assets. All of the
Eco Endeavor Assets are: (i) in reasonable operating condition and repair,
ordinary wear and tear excepted; (ii) not in need of material maintenance or
repairs (ordinary or routine maintenance or repairs excepted); and (iii)
adequate and sufficient for the continuing of the business as now conducted. |
|
(q) |
Intellectual Property. Schedule E sets forth a
true and complete list of all Intellectual Property held, owned or licensed by
Eco Endeavors or a Subsidiary of Eco Endeavors, whether registered or
unregistered, and all applications therefor. Except as set forth in Schedule E:
(i) Eco Endeavors or a Subsidiary of Eco Endeavors owns, possesses or has the
right to use all Intellectual Property rights; (ii) no royalties, honorariums
or fees are payable by Eco Endeavors or a Subsidiary of Eco Endeavors to other
Persons by reason of ownership, sale, or use of the Intellectual Property,
other than with respect to Intellectual Property identified in Schedule E as
licensed to Eco Endeavors or a Subsidiary of Eco Endeavors; and (iii) no
product or service manufactured, marketed or sold by Eco Endeavors or a
Subsidiary of Eco Endeavors violates any licenses or infringes any intellectual
property rights of another. |
|
(r) |
Insurance.
Eco Endeavors maintains policies of insurance in amounts and in respect of such
risks as are normal and usual for companies of a similar size and business and
such policies are in full force and effect as of the date hereof. |
|
(s) |
Environmental.
To the knowledge of Eco Endeavors: |
- 22 -
|
(i) |
Eco
Endeavors and each Subsidiary of Eco Endeavors are in compliance in all
material respects with Environmental Laws; |
|
(ii) |
Eco
Endeavors and each Subsidiary of Eco Endeavors have operated their respective
businesses at all times and have received, handled, used, stored, treated,
shipped and disposed of all contaminants without violation of Environmental
Laws; |
|
(iii) |
there is
no material claim or judicial or administrative proceeding which may affect
either Eco Endeavors or any Subsidiary of Eco Endeavors or any of the
properties or assets of Eco Endeavors or any Subsidiary of Eco Endeavors
relating to or alleging any violation of Environmental Laws; and |
|
(iv) |
Eco
Endeavors and each Subsidiary of Eco Endeavors hold all licences, permits and
approvals required under any Environmental Laws in connection with the
operation of their respective businesses as presently conducted and the
ownership and use of their respective assets, other than those which the
failure to hold would not reasonably be expected to have a Material Adverse
Effect on Eco Endeavors, and neither Eco Endeavors nor any Subsidiary of Eco
Endeavors nor any of their respective assets is the subject of any
investigation, evaluation, audit or review not in the ordinary and regular
course of business by any Governmental Entity to determine whether any
violation of Environmental Laws has occurred or is occurring, and neither Eco
Endeavors nor any Subsidiary of Eco Endeavors is subject to any known
environmental liabilities. |
|
(t) |
Tax
Matters. Except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Eco Endeavors and except as
set out in Schedule G: |
|
(i) |
Eco
Endeavors and each Subsidiary of Eco Endeavors has duly and timely made or
prepared all Tax Returns required to be made or prepared by it, has duly and
timely filed all Tax Returns required to be filed by it with the appropriate
Governmental Entity and has, in all material respects, completely and correctly
reported all income and all other amounts or information required to be
reported thereon; |
|
(ii) |
Eco
Endeavors and each Subsidiary of Eco Endeavors has: |
|
(A) |
duly and timely paid all Taxes due and payable by it; |
|
(B) |
duly and timely withheld all Taxes and other amounts
required by applicable Laws to be withheld by it and has duly and timely
remitted to the appropriate Governmental Entity such Taxes and other amounts
required by applicable Laws to be remitted by it; and |
|
(C) |
duly and
timely collected all amounts on account of sales or transfer taxes, including
goods and services, harmonized sales and provincial or territorial sales taxes,
required by applicable Laws to be collected by it and has duly and timely
remitted to the appropriate Governmental Entity any such amounts required by
applicable Laws to be remitted by it; |
- 23 -
|
(iii) |
the
charges, accruals and reserves for Taxes reflected in the financial records of
Eco Endeavors (whether or not due and whether or not shown on any Tax Return
but excluding any provision for deferred income taxes) are, in the opinion of
Eco Endeavors, adequate under GAAP to cover Taxes with respect to Eco Endeavors
and any Subsidiary of Eco Endeavors accruing through the date hereof; |
|
(iv) |
there are no proceedings, investigations, audits,
assessments, reassessments or claims now pending or, to the knowledge of Eco
Endeavors, threatened against Eco Endeavors or any Subsidiary of Eco Endeavors
that propose to assess Taxes in addition to those reported in the Tax Returns;
and |
|
(v) |
no waiver
of any statutory limitation period with respect to Taxes has been given or
requested with respect to Eco Endeavors or any Subsidiary of Eco Endeavors. |
|
(u) |
Pension and Employee Benefits. Eco Endeavors and
each Subsidiary of Eco Endeavors has complied, in all material respects, with
all of the terms of the pension and other employee compensation and benefit
obligations of Eco Endeavors and each Subsidiary of Eco Endeavors, as the case
may be, including the provisions of any collective agreements, funding and
investment contracts or obligations applicable thereto, arising under or
relating to each of the pension or retirement income plans or other employee
compensation or benefit plans, agreements, policies, programs, arrangements or
practices, whether written or oral, which are maintained by or binding upon Eco
Endeavors or any Subsidiary of Eco Endeavors, as the case may be, other than
such non-compliance that would not reasonably be expected to have a Material
Adverse Effect on Eco Endeavors. |
|
(v) |
Compliance with Laws. Except with respect to
matters relating to the environment or Environmental Laws (which are addressed
in Section 3.1(s)), Eco Endeavors and each Subsidiary of Eco Endeavors has
complied with and are not in violation of any applicable Laws other than such
non-compliance or violations that would not, individually or in the aggregate,
have a Material Adverse Effect on Eco Endeavors. |
|
(w) |
No
Option on Assets. Except as disclosed to Nava in writing prior to the date
hereof or as disclosed in Schedule G, no Person has any agreement or option or
any right or privilege capable of becoming an agreement or option for the
purchase from Eco Endeavors or any Subsidiary of Eco Endeavors any of the
material assets of Eco Endeavors or any Subsidiary of Eco Endeavors. |
|
(x) |
Certain
Contracts. Neither Eco Endeavors nor any Subsidiary of Eco Endeavors is a
party to or bound by any non-competition agreement or, except as disclosed to
Nava in writing prior to the date hereof, any other agreement, obligation,
judgment, injunction, order or decree that purports to: |
|
(i) |
limit the manner or the localities in which all or any
material portion of the business of Eco Endeavors or any Subsidiary of Eco
Endeavors are conducted; |
|
(ii) |
limit any
business practice of Eco Endeavors or any Subsidiary of Eco Endeavors in any
material respect; or |
|
(iii) |
restrict
any acquisition or disposition of any property by Eco Endeavors or any Subsidiary
of Eco Endeavors in any material respect. |
- 24 -
|
(y) |
No Broker’s Commission. Neither Eco Endeavors, nor
any Subsidiary of Eco Endeavors has entered into any agreement that would
entitle any Person to any valid claim against them for a broker’s commission,
finder’s fee or any like payment in respect of the Amalgamation or any other
matter contemplated by this Agreement. |
|
(z) |
Vote
Required. The only votes of the holders of any class or series of
securities of Eco Endeavors necessary to approve this Agreement, the
Amalgamation and the transactions contemplated hereby or thereby is the Eco
Endeavors Shareholders Approval. |
|
(aa) |
U.S. Securities Law Matters. None of Eco Endeavors, any of
its affiliates or any person acting on its or their behalf has made or will make
any Directed Selling Efforts in the United States with respect to the Nava
Common Shares or has engaged or will engage in any form of general solicitation
or general advertising (as those terms are used in Regulation D), including
advertisements, articles, notices or other communications published in any
newspaper, magazine, or similar media or broadcast over radio or television, or
any seminar or meeting whose attendees had been invited by general solicitation
or general advertising in connection with the offer or exchange of the Nava
Common Shares in the United States. |
|
(bb) |
Restrictions
on Business Activities. There is no agreement, judgment, injunction, order
or decree binding upon Eco Endeavors or to its knowledge any Subsidiary of Eco
Endeavors that has or could be reasonably expected to have the effect of
prohibiting, restricting or materially impairing: (i) any business practice of
Eco Endeavors or any Subsidiary of Eco Endeavors, (ii) except as disclosed to
Nava in writing prior to the date hereof, any acquisition of property by Eco
Endeavors or any Subsidiary of Eco Endeavors, or (iii) the conduct of business
by Eco Endeavors or any Subsidiary of Eco Endeavors as currently conducted. |
|
(cc) |
Creditors
of Eco Endeavors. Eco Endeavors has reasonable grounds for believing that
no creditor of Eco Endeavors will be materially prejudiced by the Amalgamation.
|
|
(dd) |
Expropriation.
No property or asset of Eco Endeavors has been taken or expropriated by any
Governmental Entity and no notice or proceeding in respect of any such
expropriation has been given or commenced or, to the knowledge of Eco
Endeavors, is there any intent or proposal to give any such notice or commence
any such proceeding. |
|
(ee) |
Right to
Use Personal Information. All personal information in the possession of Eco
Endeavors has been collected, used and disclosed in compliance with all
applicable privacy Laws in those jurisdictions in which Eco Endeavors, or Eco
Endeavors is deemed by operation of law in those jurisdictions, to conduct its
business. Eco Endeavors has disclosed to Nava all contracts and facts
concerning the collection, use, retention, destruction and disclosure of
personal information, and there are no other contracts, or facts which, on
completion of the transactions contemplated by this Agreement, would restrict
or interfere with the use of any personal information by Nava in the operation
of its business as conducted by Eco Endeavors before the Closing. There are no
claims pending or, to the knowledge of Eco Endeavors, threatened, with respect
to Eco Endeavors’ collection, use or disclosure of personal information. |
|
(ff) |
No Material
Misstatments or Omissions. To the knowledge of Eco Endeavors, no
representations, warranties or certifications by Eco Endeavors and each
Subsidiary of Eco Endeavors in this Agreement or in any agreement or document
executed by Eco Endeavors or a Subsidiary of Eco Endeavors pursuant hereto or
in connection herewith, or in any schedule hereto or thereto, contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact necessary to make the statements or facts contained therein not
misleading. Except as otherwise disclosed in Schedule G, Eco Endeavors has
furnished or caused to be furnished to Nava, or its representative for review
copies that are complete and correct, in all material respects, of all material
agreements and documents executed by Eco Endeavors or a Subsidiary of Eco
Endeavors. |
- 25 -
3.2 Representations and Warranties of Nava and Newco
Nava and Newco each hereby
represents and warrants to Eco Endeavors, and hereby acknowledges that Eco
Endeavors is relying upon such representations and warranties in connection
with entering into this Agreement and agreeing to complete the Amalgamation, as
follows:
|
(a) |
Organization.
Each of Nava and Newco has been incorporated and validly exists under the laws
of the jurisdiction of its incorporation and is in good standing under
applicable corporate laws and has full corporate and legal power and authority
to own its property and assets and to conduct its business as currently owned
and conducted. Each of Nava and Newco is registered, licensed or otherwise
qualified in each jurisdiction where the nature of the business or the location
or character of the property and assets owned or leased by it requires it to be
so registered, licensed or otherwise qualified, other than those jurisdictions
where the failure to be so registered, licensed or otherwise qualified would
not have a Material Adverse Effect on Nava or Newco, as applicable. All of the
outstanding shares of Newco are validly issued, and are fully paid and
non-assessable to the extent such a concept exists under applicable Laws. All
of the outstanding shares of Newco are owned directly by Nava. There are no
outstanding options, rights, entitlements, understandings or commitments
(contingent or otherwise) regarding the right to acquire any issued or unissued
securities of, or interest in, Newco. |
|
(b) |
Capitalization.
Nava is authorized to issue 400,000,000 Nava Common Shares and Newco is
authorized to issue an unlimited number of Newco Shares. As of the date of this
Agreement, there were outstanding: |
|
(i) |
12,338,604 Nava Common Shares; |
|
(ii) |
Nava
Options to acquire an aggregate of up to 275,000 Nava Common Shares; and |
|
Except for the Nava Options, and except
pursuant to this Agreement and the transactions contemplated hereby, as of the
date hereof, there are no options, warrants, conversion privileges or other
rights, agreements, arrangements or commitments (pre-emptive, contingent or
otherwise) obligating Nava or Newco to issue or sell any shares of Nava or
Newco or any securities or obligations of any kind convertible into or exchangeable
for any shares of Nava or Newco. All outstanding Nava Common Shares and Newco
Shares have been authorized and are validly issued and outstanding as fully
paid and non-assessable shares, free of pre-emptive rights. As of the date
hereof, there are no outstanding bonds, debentures or other evidences of
indebtedness of Nava or Newco. There are no outstanding contractual obligations
of Nava or Newco to repurchase, redeem or otherwise acquire any outstanding
Nava Common Shares or Newco Shares or with respect to the voting or disposition
of any outstanding Nava Common Shares or Newco Shares. |
- 26 -
|
(c) |
Authority. Nava and Newco has all necessary corporate power,
authority and capacity to enter into this Agreement and all other agreements
and instruments to be executed by Nava as contemplated by this Agreement, and
to perform its obligations hereunder and under such other agreements and
instruments. The execution and delivery of this Agreement by Nava and the
completion by Nava of the transactions contemplated by this Agreement have been
authorized by the Nava Board, and subject to obtaining the Nava Shareholder
Approval in the manner contemplated herein, no other corporate proceedings on
the part of Nava are necessary to authorize this Agreement or the completion by
Nava of the transactions contemplated hereby other than the filing of the
Amalgamation Application with the Registrar. This Agreement has been executed
and delivered by Nava and constitutes a legal, valid and binding obligation of
Nava, enforceable against Nava in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
other applicable Laws relating to or affecting creditors’ rights generally, and
to general principles of equity. The execution and delivery by Nava of this
Agreement and the performance by it of its obligations hereunder and the
completion of the transactions contemplated hereby, do not and will not: |
|
(i) |
result in a
violation, contravention or breach or constitute a default under, or entitle
any party to terminate, accelerate, modify or call any obligations or rights
under, require any consent to be obtained under or give rise to any termination
rights under any provision of: |
|
(A) |
the articles or bylaws of Nava; |
|
(B) |
any applicable Law; or |
|
(C) |
any credit
arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise,
concession, easement, contract, agreement, licence, permit or other instrument
to which Nava is bound or is subject to or of which Nava is the beneficiary; |
|
in each case, which would, individually
or in the aggregate, have a Material Adverse Effect on Nava; |
|
(ii) |
cause any
indebtedness owing by Nava or Newco to come due before its stated maturity or
cause any available credit to cease to be available which would, individually
or in the aggregate, have a Material Adverse Effect on Nava; |
|
(iii) |
result in the
imposition of any Encumbrance upon any of the property or assets of Nava or
Newco or give any Person the right to acquire any of Nava’s assets, or
restrict, hinder, impair or limit the ability of Nava or Newco to conduct the
business of Nava or Newco as and where it is now being conducted which would,
individually or in the aggregate, have a Material Adverse Effect on Nava; |
|
(iv) |
result in
or accelerate the time for payment or vesting of, or increase the amount of any
severance, unemployment compensation, “golden parachute”, change of control
provision, bonus, termination payments, retention bonus or otherwise, becoming
due to any director or officer of Nava or Newco or increase any benefits
otherwise payable under any pension or benefits plan of Nava or Newco or result
in the acceleration of the time of payment or vesting of any such benefits; or |
- 27 -
|
(v) |
result in the revocation, suspension, cancellation,
variation or non-renewal of any mining claims, concessions, licenses, leases or
other instruments, conferring mineral rights in respect of the material
properties in which Nava or Newco has an interest. |
|
No consent, approval, order
or authorization of, or declaration or filing with, any Governmental Entity or
other Person is required to be obtained by Nava or Newco in connection with the
execution and delivery of this Agreement or the consummation by Nava of the
transactions contemplated hereby other than: |
|
(i) |
filings required under the BCBCA with respect to
Newco; |
|
(ii) |
filings
with and approvals required by the Securities Authorities and stock exchanges;
and |
|
(iii) |
any other consents, approvals, orders, authorizations,
declarations or filings which, if not obtained, would not, individually or in
the aggregate, have a Material Adverse Effect on Nava. |
|
(d) |
Directors’
Approvals. The Nava Board has unanimously: |
|
(i) |
determined that the Amalgamation is in the best
interests of Nava; and |
|
(ii) |
authorized the entering into of this Agreement, and the performance of Nava’
obligations hereunder. |
|
(e) |
Contracts. Each of the Material Contracts to which
Nava or Newco is a party constitutes a valid and legally binding obligation of
Nava, enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors’ rights or by general equity principles). |
|
(f) |
Waivers,
Consents. There are no waivers, consents, notices or approvals required to
complete the transactions contemplated under this Agreement from other parties
to the Material Contracts of Nava. |
|
(g) |
No
Defaults. Neither Nava nor Newco is in default under, and, there exists no
event, condition or occurrence which, after notice or lapse of time or both,
would constitute a default by Nava or Newco, under any credit arrangement,
note, bond, mortgage, indenture, deed of trust, lease, franchise, concession,
easement, Contract of Nava or Newco, agreement, licence, permit or other
instrument that is material to the conduct of the business of Nava or Newco to
which it is a party or by which it is bound or subject to that would,
individually or in the aggregate, have a Material Adverse Effect on Nava. No
party to any Contract of Nava or Newco has given written notice to Nava or
Newco of or made a claim against Nava or Newco with respect to any breach or
default thereunder, in any such case in which such breach or default
constitutes a Material Adverse Effect on Nava. |
- 28 -
|
(h) |
Absence
of Changes. Except as disclosed in the Nava Public Documents, since
December 31, 2012: |
|
(i) |
Nava has conducted its business only in the ordinary and
regular course of business consistent with past practice; |
|
(ii) |
neither
Nava nor Newco has incurred or suffered a Material Adverse Change; |
|
(iii) |
there
has not been any acquisition or sale by Nava and Newco of any material property
or assets thereof; |
|
(iv) |
other than in the ordinary and regular course of
business consistent with past practice, there has not been any incurrence,
assumption or guarantee by Nava or Newco of any debt for borrowed money, any
creation or assumption by Nava or Newco of any Encumbrance, any making by Nava
or Newco of any loan, advance or capital contribution to or investment in any
other Person or any entering into, amendment of, relinquishment, termination or
non-renewal by Nava or Newco, of any contract, agreement, licence, lease
transaction, commitment or other right or obligation that would, individually
or in the aggregate, have a Material Adverse Effect on Nava; |
|
(v) |
Nava has not declared or paid any dividends or made any
other distribution in respect of any of the Nava Common Shares; |
|
(vi) |
Nava has
not effected or passed any resolution to approve a split, consolidation or
reclassification of any of the outstanding Nava Common Shares; |
|
(vii) |
other
than in the ordinary and regular course of business consistent with past
practice, there has not been any material increase in or modification of the
compensation payable by Nava or Newco to any of its directors, officers,
employees or consultants or any grant to any such director, officer, employee
or consultant of any increase in severance or termination pay or any increase
or modification of any bonus, pension, insurance or benefit arrangement
(including, without limitation, the granting of Nava Options) made to, for or
with any of such directors, officers, employees or consultants; |
|
(viii) |
Nava
has not effected any material change in its accounting methods, principles or
practices, other than as disclosed in the Nava Financial Statements; and |
|
(ix) |
Nava has
not adopted any, or amended any, collective bargaining agreement, bonus, pension,
profit-sharing, stock purchase, stock option or other benefit plan or
shareholder rights plan. |
|
(i) |
Employment
Agreements. Neither Nava nor Newco: |
|
(i) |
is a party to any written or oral policy, agreement, obligation or
understanding providing for retention bonuses, severance or termination
payments to, or any employment or consulting agreement with any director or
officer of Nava or |
- 29 -
|
Newco that would be triggered by Nava’ entering into
this Agreement or thecompletion of the Amalgamation; |
|
(ii) |
has any
employee or consultant whose employment or contract with Nava or Newco cannot
be terminated by Nava or Newco in accordance with the provisions of such
employment or consultant contract following the completion of the Amalgamation;
and |
|
(iii) |
(A) is a
party to any collective bargaining agreement; |
|
(B) |
is, to the knowledge of Nava, subject to any application
for certification or threatened or apparent union-organizing campaigns for
employees not covered under a collective bargaining agreement; or |
|
(C) |
is subject
to any current, or to the knowledge of Nava, pending or threatened strike or
lockout. |
|
(j) |
Financial
Matters. Each of the audited financial statements of Nava for the year
ended June 30, 2012, the unaudited financial statements of Nava for the three
and nine month periods ended March 31, 2013 and the respective notes thereto
(collectively, the “Nava Financial Statements”) were prepared in
accordance with GAAP consistently applied, and fairly present in all material
respects the financial condition of Nava at the respective dates indicated and
the results of operations of Nava for the periods covered. Except as disclosed
in the Nava Financial Statements, as of the date hereof Nava does not have any
liability or obligation (including, without limitation, liabilities or
obligations to fund any operations or work or exploration program, to give any
guarantees or for Taxes), whether accrued, absolute, contingent or otherwise,
or any related party transactions or off-balance sheet transactions not
reflected in the Nava Financial Statements, except liabilities and obligations
incurred in the ordinary and regular course of business (including the business
of operating, developing, constructing and exploring Nava’ projects) since
March 31, 2013, which liabilities or obligations would not reasonably be
expected to have a Material Adverse Effect on Nava. |
|
(k) |
Books
and Records. The corporate records and minute books of Nava and Newco have
been maintained in accordance with all applicable Laws and are complete and
accurate in all material respects, except where such incompleteness or
inaccuracy would not have a Material Adverse Effect on Nava. Financial books
and records and accounts of Nava, in all material respects: |
|
(i) |
have been maintained in accordance with good business
practices on a basis consistent with prior years and past practice; |
|
(ii) |
are
stated in reasonable detail and accurately and fairly reflect the transactions
and acquisitions and dispositions of assets of Nava and Newco; and |
|
(iii) |
accurately and fairly reflect the basis for the Nava Financial Statements. |
|
(l) |
Litigation.
There is no claim, action, proceeding or investigation pending or in progress
or, to the knowledge of Nava threatened against or relating to Nava or Newco or
affecting any of their respective properties or assets before any Governmental
Entity which individually or in the aggregate has, or could reasonably be
expected to have, a Material Adverse Effect on Nava, and Nava is not aware of
any existing ground on which any such claim, action, proceeding or
investigation might be commenced with any reasonable likelihood of success.
There is no bankruptcy, liquidation, winding-up or other similar proceeding
pending or in progress, or, to the knowledge of Nava, threatened against or
relating to Nava or Newco before any Governmental Entity. Neither Nava nor
Newco nor any of their respective properties or assets are subject to any
outstanding judgment, order, writ, injunction or decree that involves or may
involve, or restricts or may restrict the right or ability of Nava or Newco, as
the case may be, to conduct their respective business in all material respects
as it has been carried on prior to the date hereof, or that would materially
impede the consummation of the transactions contemplated by this Agreement,
except to the extent any such matter would not, individually or in the
aggregate, have a Material Adverse Effect on Nava. |
- 30 -
|
(m) |
Title to Properties and Operational Matters. Nava
or Newco, as applicable, is the legal and beneficial owner of and has good
title to the exploitation permits, mining claims, concessions, licenses,
leases, options or other instruments conferring mineral rights to Nava or Newco
in respect of the properties in which Nava or Newco has an interest
(collectively, for the purposes of this Section 3.2(m), the “Nava Properties
and Assets”). All agreements by which Nava or Newco holds an interest in
the Nava Properties and Assets are in good standing according to their
respective terms and, to the knowledge of Nava, the Nava Properties and Assets
are in good standing under applicable Laws and all filings and work commitments
required by Nava to maintain the Nava Properties and Assets in good standing
have been properly recorded and filed in a timely manner with the appropriate
Governmental Entity and there are no material Encumbrances or any other
material interests in or on such Nava Properties and Assets except as disclosed
by Nava in the Nava Public Documents. To Nava’ knowledge, there are no material
adverse claims against or challenges to the title or ownership of any of the
Nava Properties and Assets. Nava has conducted and is conducting its business
in material compliance with all applicable Laws, including all applicable Laws
and all Governmental Entity authorizations and instructions, whether in writing
or oral, relating to the Nava Properties and Assets. Nava has not received any
notice of the revocation or cancellation of, or any intention to revoke or
cancel, any of the exploitation permits, mining claims, concessions, licenses,
leases or other instruments conferring mineral rights in respect of the Nava
Properties and Assets that would, individually or in the aggregate, result in a
Material Adverse Effect on Nava. Without limiting the generality of the
foregoing, Nava has obtained all material licences and permits necessary for
the operation of the business of Nava or Newco as presently conducted, and has
not taken any action which would impair the ability of Nava or Newco to obtain
necessary licences or permits in the future for the continued operation of such
business, in accordance with applicable Laws and requirements of all Governmental
Entities. |
|
(n) |
Royalty Payments. Except as disclosed in the Nava
Public Documents, there are no landowner’s royalties, overriding royalties, net
profits interests or similar interests or any other rights or interests
whatsoever of third parties by which Nava or Newco is bound on or in relation
to the Nava Properties and Assets. |
|
(o) |
Assets. Nava has good and marketable title to its
assets free and clear of any security interests, liens, charges, mortgages,
pledges, Encumbrances, adverse claims and demands of any nature or kind
whatsoever recorded or unrecorded, except as disclosed in the Nava Public
Documents. |
- 31 -
|
(p) |
Insurance.
Nava maintains policies of insurance in amounts and in respect of such risks as
are normal and usual for companies of a similar size and business and such
policies are in full force and effect as of the date hereof. |
|
(q) |
Environmental.
To the knowledge of Nava: |
|
(i) |
Nava and Newco are in compliance in all material respects
with Environmental Laws; |
|
(ii) |
Nava and
Newco have operated their respective businesses at all times and have received,
handled, used, stored, treated, shipped and disposed of all contaminants
without violation of Environmental Laws; |
|
(iii) |
there is
no material claim or judicial or administrative proceeding which may affect
either Nava or Newco or any of the properties or assets of Nava or Newco
relating to or alleging any violation of Environmental Laws; and |
|
(iv) |
Nava and
Newco hold all licences, permits and approvals required under any Environmental
Laws in connection with the operation of their respective businesses as
presently conducted and the ownership and use of their respective assets, other
than those which the failure to hold would not reasonably be expected to have a
Material Adverse Effect on Nava, and neither Nava or Newco nor any of their
respective assets is the subject of any investigation, evaluation, audit or
review not in the ordinary and regular course of business by any Governmental
Entity to determine whether any violation of Environmental Laws has occurred or
is occurring, and neither Nava nor Newco is subject to any known environmental
liabilities. |
|
(r) |
Tax
Matters. Except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Nava: |
|
(i) |
Nava and
Newco has duly and timely made or prepared all Tax Returns required to be made
or prepared by it, has duly and timely filed all Tax Returns required to be
filed by it with the appropriate Governmental Entity and has, in all material
respects, completely and correctly reported all income and all other amounts or
information required to be reported thereon; |
|
(A) |
duly and timely paid all Taxes due and payable by it; |
|
(B) |
duly and timely withheld all Taxes and other amounts
required by applicable Laws to be withheld by it and has duly and timely
remitted to the appropriate Governmental Entity such Taxes and other amounts
required by applicable Laws to be remitted by it; and |
|
(C) |
duly and
timely collected all amounts on account of sales or transfer taxes, including
goods and services, harmonized sales and provincial or territorial sales taxes,
required by applicable Laws to be collected by it and has duly and timely
remitted to the appropriate Governmental Entity any such amounts required by
applicable Laws to be remitted by it; |
- 32 -
|
(iii) |
the
charges, accruals and reserves for Taxes reflected on the Nava Financial
Statements (whether or not due and whether or not shown on any Tax Return but
excluding any provision for deferred income taxes) are, in the opinion of Nava,
adequate under GAAP, as applicable, to cover Taxes with respect to Nava
accruing through the date hereof; |
|
(iv) |
there are no proceedings, investigations, audits,
assessments, reassessments or claims now pending or to the knowledge of Nava,
threatened against Nava that propose to assess Taxes in addition to those
reported in the Tax Returns; and |
|
(v) |
no waiver
of any statutory limitation period with respect to Taxes has been given or
requested with respect to Nava. |
|
(s) |
Pension and Employee Benefits. Each of Nava and
Newco has complied, in all material respects with all of the terms of the
pension and other employee compensation and benefit obligations of Nava and
Newco, as the case may be, including the provisions of any collective
agreements, funding and investment contracts or obligations applicable thereto,
arising under or relating to each of the pension or retirement income plans or
other employee compensation or benefit plans, agreements, policies, programs, arrangements
or practices, whether written or oral, which are maintained by or binding upon
Nava or Newco, as the case may be, other than such non-compliance that would
not reasonably be expected to have a Material Adverse Effect on Nava. |
|
(t) |
Reporting
Status. Nava is a reporting issuer in good standing in the province of
British Columbia. The Nava Common Shares are quoted on the OTC Bulletin Board
and Nava is in material compliance with the rules and regulations of the OTC
Bulletin Board and FINRA and has not received any “strikes” issued against it
by the OTC Bulletin Board or FINRA during the past two year period. |
|
(u) |
Reports.
To the knowledge of Nava, since January 1, 2013, Nava has filed with the
Securities Authorities, all applicable self-regulatory authorities and the OTC
Bulletin Board, a true and complete copy of all forms, reports, schedules,
statements, certifications, material change reports and other documents
required to be filed by it, including the Nava Public Documents. The Nava
Public Documents, at the time filed or, if amended, as of the date of such
amendment: |
|
(i) |
did not contain any misrepresentation (as defined in theSecurities
Act (British Columbia)) and did not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; and |
|
(ii) |
complied
in all material respects with the requirements of applicable securities Laws
and the rules, policies and instruments of all Securities Authorities or stock
exchange or other self-regulatory authority having jurisdiction over Nava
except where such non-compliance has not had or would not reasonably be
expected to have a Material Adverse Effect on Nava. |
|
Nava has not filed any
confidential material change or other report or other document with any
Securities Authorities or stock exchange or other self-regulatory authority
which at the date hereof remains confidential. |
- 33 -
|
(v) |
Compliance with Laws. Except with respect to
matters relating to the environment or Environmental Laws, which are addressed
in Section 3.2(q)(iv), each of Nava and Newco has complied with and is not in
violation of any applicable Laws other than such noncompliance or violations
that would not, individually or in the aggregate, have a Material Adverse
Effect on Nava. |
|
(w) |
No Cease Trade. Nava is not subject to any cease
trade or other order of any applicable stock exchange or Securities Authority
and, to the knowledge of Nava, no investigation or other proceedings involving
Nava that may operate to prevent or restrict trading of any securities of Nava
are currently in progress or pending before any applicable stock exchange or
Securities Authority. |
|
(x) |
No
Option on Assets. No Person has any agreement or option or any right or
privilege capable of becoming an agreement or option for the purchase from Nava
or Newco of any of the material assets of Nava or Newco. |
|
(y) |
Certain
Contracts. Neither Nava nor Newco is a party to or bound by any non-competition
agreement or any other agreement, obligation, judgment, injunction, order or
decree that purports to: |
|
(i) |
limit the manner or the localities in which all or any
material portion of the business of Nava or Newco is conducted; |
|
(ii) |
limit any
business practice of Nava or Newco in any material respect; or |
|
(iii) |
restrict
any acquisition or disposition of any property by Nava or Newco in any material
respect. |
|
(z) |
No
Broker’s Commission. Nava has not entered into any agreement that would
entitle any Person to any valid claim against Nava for a broker’s commission,
finder’s fee or any like payment in respect of the Amalgamation or any other
matter contemplated by this Agreement. |
|
(aa) |
Shares.
The Nava Common Shares to be issued pursuant to the Amalgamation will, upon
issue, be issued as fully paid and non-assessable shares and quoted for trading
on the OTC Bulletin Board. |
|
(bb) |
U.S.
Securities Law Matters. |
|
(i) |
Nava is
not now, and is not registered, or required to be registered, as an “investment
company” as defined in the 1940 Act. |
|
(ii) |
Neither
Nava nor any of its affiliates, nor any person acting on its or their behalf,
has made or will make: |
|
(A) |
any offer to sell, or any solicitation of an offer to
buy, any Nava Common Shares to any person in the United States; or |
|
(B) |
any sale
of Nava Common Shares unless, at the time the buy order was or will have been
originated, the purchaser is (i) outside the United States |
- 34 -
|
or (ii) Nava,
its affiliates, and any person acting on their behalf reasonably believe that
the purchaser is outside the United States. |
|
(iii) |
None of Nava,
any of its affiliates or any person acting on its or their behalf has made or
will make any Directed Selling Efforts in the United States with respect to the
Nava Common Shares or has engaged or will engage in any form of general
solicitation or general advertising (as those terms are used in Regulation D),
including advertisements, articles, notices or other communications published
in any newspaper, magazine, or similar media or broadcast over radio or
television, or any seminar or meeting whose attendees had been invited by
general solicitation or general advertising in connection with the offer or
exchange of the Nava Common Shares in the United States. |
|
(iv) |
Except with
respect to the offer of the Nava Common Shares contemplated herein, Nava has
not, for a period of six months prior to the date hereof, sold, offered for
sale or solicited any offer to buy any of its securities in the United States. |
|
(cc) |
Restrictions
on Business Activities. There is no agreement, judgment, injunction, order
or decree binding upon Nava or Newco or that has or could be reasonably
expected to have the effect of prohibiting, restricting or materially impairing
any business practice of Nava or Newco, any acquisition of property by Nava or
Newco, or the conduct of business by Nava or Newco as currently conducted. |
|
(dd) |
Expropriation.
No property or asset of Nava has been taken or expropriated by any Governmental
Entity and no notice or proceeding in respect of any such expropriation has
been given or commenced or, to the knowledge of Nava, is there any intent or
proposal to give any such notice or commence any such proceeding. |
|
(ee) |
Right to
Use Personal Information. All personal information in the possession of
Nava has been collected, used and disclosed in compliance with all applicable
privacy Laws in those jurisdictions in which Nava, or Nava is deemed by
operation of law in those jurisdictions, to conduct its business. Nava has disclosed
to Eco Endeavors all contracts and facts concerning the collection, use,
retention, destruction and disclosure of personal information, and there are no
other contracts, or facts which, on completion of the transactions contemplated
by this Agreement, would restrict or interfere with the use of any personal
information by Nava in the operation of its business as conducted by Nava
before the Closing. There are no claims pending or, to the knowledge of Nava,
threatened, with respect to Nava’ collection, use or disclosure of personal
information. |
|
(ff) |
No Material
Misstatments or Omissions. To the knowledge of Nava, no representations,
warranties or certifications by Nava in this Agreement or in any agreement or
document executed by Nava pursuant hereto or in connection herewith, or in any
schedule hereto or thereto, contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact necessary to
make the statements or facts contained therein not misleading. Nava has
furnished or caused to be furnished to Eco Endeavors, or its representative for
review copies that are complete and correct, in all material respects, of all
material agreements and documents executed by Nava. |
- 35 -
|
(gg) |
Newco Business. Except for the capitalization of Newco, the
approval and adoption of standard post-incorporation matters in accordance with
the BCBCA and the matters contemplated herein, Newco has not carried on any
business from incorporation to date. |
3.3 Survival of
Representations and Warranties
The representations and
warranties contained in this Agreement shall survive the execution and delivery
of this Agreement and shall expire and be terminated and extinguished upon
completion of the Amalgamation.
ARTICLE 4
COVENANTS
4.1 Covenants of
Eco Endeavors
Eco Endeavors hereby
covenants and agrees with Nava as follows:
|
(a) |
Eco Endeavors Shareholder Approval. Eco Endeavors
shall use its commercially reasonable efforts to obtain, in a timely manner
prior to the Closing Date, all necessary shareholder approvals required to
complete the transactions contemplated hereunder. |
|
(b) |
Copy of
Documents. Eco Endeavors shall furnish promptly to Nava a copy of any
dealings or communications with any Governmental Entity or Securities Authority
in connection with, or in any way affecting, the transactions contemplated by
this Agreement. |
|
(c) |
Certain
Actions Prohibited. Other than in contemplation of or as required to give
effect to the transactions contemplated by this Agreement or as otherwise
permitted pursuant to this Agreement, Eco Endeavors shall not, without the
prior written consent of Nava, which consent shall not be unreasonably withheld
or delayed, directly or indirectly do or permit to occur any of the following
prior to the Effective Date: |
|
(i) |
issue, sell, grant, pledge, lease, dispose of, encumber
or create any Encumbrance on or agree to issue, sell, grant, pledge, lease,
dispose of, or encumber or create any Encumbrance on any shares of, or any
options, warrants, calls, conversion privileges or rights of any kind to
acquire any shares of Eco Endeavors; |
|
(ii) |
incur or
commit to incur in any debt, except in the ordinary and regular course of
business, or to finance its working capital requirements, or as otherwise
contemplated in connection with the transactions contemplated in this
Agreement; |
|
(iii) |
declare
or pay any dividends or distribute any of its property or assets to
shareholders with respect to the Eco Endeavors Common Shares; |
|
(iv) |
enter into any material contracts, other than in the
ordinary and regular course of business, in connection with the Amalgamation or
as otherwise contemplated herein; |
- 36 -
|
(v) |
alter or amend its notice of articles or articles, other
than as may be required in connection with the transactions contemplated
herein; |
|
(vi) |
engage in
any business enterprise or other activity different from that carried on or
contemplated as of the date hereof; |
|
(vii) |
sell,
pledge, lease, dispose of, grant any interest in, encumber or agree to sell,
pledge, lease, dispose of, grant any interest in or encumber any of its assets,
except where to do so would not have a Material Adverse Effect on Eco
Endeavors; |
|
(viii) |
redeem,
purchase or offer to purchase any of Eco Endeavors Common Shares or other
securities; or |
|
(ix) |
acquire,
directly or indirectly, any assets, including but not limited to securities of
other companies, other than in the ordinary and regular course of business. |
|
(d) |
Certain
Actions. Eco Endeavors shall |
|
(i) |
not take
any action, or refrain from taking any action or permit any action to be taken
or not taken (subject to a commercially reasonable efforts qualification),
inconsistent with the provisions of this Agreement or that would reasonably be
expected to materially impede the completion of the transactions contemplated
hereby or would render, or that could reasonably be expected to render, any
representation or warranty made by Eco Endeavors in this Agreement untrue or
inaccurate in any material respect at any time on or before the Effective Date
if then made or that would or could have a Material Adverse Effect on Eco
Endeavors; and |
|
(ii) |
promptly
notify Nava of: |
|
(A) |
any Material Adverse Change or Material Adverse Effect,
or any change, event, occurrence or state of facts that could reasonably be
expected to become a Material Adverse Change or to have a Material Adverse
Effect, in respect of the business or in the conduct of the business of Eco
Endeavors; |
|
(B) |
any material Governmental Entity or third person
complaints, investigations or hearings (or communications indicating that the
same may be contemplated); |
|
(C) |
any breach by Eco Endeavors of any covenant or agreement
contained in this Agreement; and |
|
(D) |
any event
occurring subsequent to the date hereof that would render any representation or
warranty of Eco Endeavors contained in this Agreement, if made on or as of the
date of such event or the Effective Date, to be untrue or inaccurate in any
material respect. |
|
(e) |
Satisfaction
of Conditions. Eco Endeavors shall use all commercially reasonable efforts
to satisfy, or cause to be satisfied, all conditions precedent to its
obligations to the extent that the same is within its control and to take, or
cause to be taken, all other action and to do, or cause to be done, all other
things necessary, proper or advisable under all |
- 37 -
|
applicable Laws to complete the transactions
contemplated by this Agreement, includingusing its commercially reasonable
efforts to: |
|
(i) |
obtain the Eco Endeavors Shareholder Approval in
accordance with the provisions of the BCBCA and the requirements of any
applicable regulatory authority; |
|
(ii) |
obtain
all other consents, approvals and authorizations as are required to be obtained
by Eco Endeavors or any Subsidiary of Eco Endeavors under any applicable Laws
or from any Governmental Entity that would, if not obtained, materially impede
the completion of the transactions contemplated by this Agreement or have a
Material Adverse Effect on Eco Endeavors; |
|
(iii) |
effect all
necessary registrations, filings and submissions of information requested by
Governmental Entities required to be effected by it in connection with the
transactions contemplated by this Agreement and participate and appear in any
proceedings of any Party hereto before any Governmental Entity; |
|
(iv) |
oppose, lift or rescind any injunction or restraining
order or other order or action challenging or affecting this Agreement, the
transactions contemplated hereby or seeking to enjoin or delay, or otherwise
adversely affecting the ability of the parties hereto to consummate, the
transactions contemplated hereby, subject to the Eco Endeavors Board
determining in good faith after receiving advice from outside legal counsel
(which may include written opinions or advice) that taking such action would be
inconsistent with the fiduciary duties of such directors under applicable Laws,
and provided that, immediately upon receipt of such advice, Eco Endeavors
advises Nava in writing that it has received such advice and provides written
details thereof to Nava; |
|
(v) |
fulfill all conditions and satisfy all provisions of this
Agreement and the Amalgamation required to be fulfilled or satisfied by Eco
Endeavors; and |
|
(vi) |
co-operate with Nava in connection with the performance by it of its
obligations hereunder, provided however that the foregoing shall not be
construed to obligate Eco Endeavors to pay or cause to be paid any monies to
cause such performance to occur, other than as contemplated in this Agreement. |
|
(f) |
Keep Fully Informed. Subject to applicable Laws,
Eco Endeavors shall use commercially reasonable efforts to conduct itself so as
to keep Nava fully informed as to the material decisions or actions required or
required to be made with respect to the operation of its business. |
|
(g) |
Co-operation. Eco Endeavors shall make, or
cooperate as necessary in the making of, all necessary filings and applications
under all applicable Laws required in connection with the transactions
contemplated hereby and take all reasonable action necessary to be in
compliance with such Laws. |
|
(h) |
Representations. Eco Endeavors shall use its
commercially reasonable efforts to conduct its affairs so that all of the
representations and warranties of Eco Endeavors contained herein shall be true
and correct on and as of the Effective Date as if made on and as of such date. |
- 38 -
|
(i) |
Closing Documents. Eco Endeavors shall execute and
deliver, or cause to be executed and delivered, at the closing of the
transactions contemplated hereby such customary agreements, certificates,
resolutions, opinions and other closing documents as may be required by Nava,
all in form satisfactory to Nava, acting reasonably. |
|
(j) |
Due Diligence. Eco Endeavors shall provide in a
timely manner all information reasonably required by Nava in connection with
its due diligence investigation of Eco Endeavors, Kenderesh and Kenderes
Biogaz, including access to documents, personnel, staff, consultants and
advisors. |
|
(k) |
Legal
Opinion. Kenderes Biogaz shall provide an opinion of qualified counsel to
Nava opining as to the validity and enforceability of this Agreement, that the
transactions contemplated herein do not violate any laws of Hungry or any
material contract to which Kenderes Biogaz is a party to, that Kenderes Biogaz
is duly incorporated and in good standing under the laws of Hungary, that the
assets held by Kenderes Biogaz are lawfully so held and any registrable
interests are in good standing with applicable government authorities in
Hungary and that such counsel is not aware of any actual pending or threatened
litigation, and other matters reasonably requested by counsel to Nava. |
4.2 Covenants of Nava
Nava hereby covenants and
agrees with Eco Endeavors as follows:
|
(a) |
Newco Shareholder Approval. Nava shall use its
commercially reasonable efforts to obtain, in a timely manner prior to the
Closing Date, Newco shareholder approval required to complete the transactions
contemplated hereunder. |
|
(b) |
Super 8-K. Nava shall, in a timely and expeditious
manner, but in no event later than four Business Days following September 30,
2013, prepare, with the assistance of Eco Endeavors, and file with the SEC a
Super 8-K (which shall be in a form satisfactory to each of the Parties, acting
reasonably), together with any other documents required by applicable Laws in
accordance with all applicable Laws on the date of filing thereof, in the form
and containing the information required by all applicable Laws and not
containing any misrepresentation (as defined under applicable securities Laws
and requirements) with respect thereto, other than with respect to any
information relating to and provided by Eco Endeavors. Nava shall, with the
assistance of Eco Endeavors, promptly prepare and file with the SEC such amendments
or supplements to the Super 8K, if any, as may be required by the SEC or under
applicable Laws. |
|
(c) |
Copy of
Documents. Nava shall furnish promptly to Eco Endeavors a copy of any
filing under any applicable Laws and any dealings or communications with any
Governmental Entity, Securities Authority or stock exchange in connection with,
or in any way affecting, the transactions contemplated by this Agreement. |
|
(d) |
Certain
Actions Prohibited. Other than in contemplation of or as required to give
effect to the transactions contemplated by this Agreement or as otherwise
permitted pursuant to this Agreement, Nava shall not, without the prior written
consent of Eco Endeavors, which consent shall not be unreasonably withheld or
delayed, directly or indirectly do or permit to occur any of the following
prior to the Effective Date: |
- 39 -
|
(i) |
issue, sell, grant, pledge, lease, dispose of, encumber
or create any Encumbrance on or agree to issue, sell, grant, pledge, lease,
dispose of, or encumber or create any Encumbrance on any shares of, or any
options, warrants, calls, conversion privileges or rights of any kind to
acquire any shares of Nava, other than the issue of Nava Common Shares upon the
exercise of Nava Options; |
|
(ii) |
incur or
commit to incur any debt, except in the ordinary and regular course of
business, or to finance its working capital requirements, or as otherwise
contemplated herein in connection with the transactions contemplated by this
Agreement; |
|
(iii) |
declare
or pay any dividends or distribute any of its properties or assets to
shareholders with respect to the Nava Common Shares; |
|
(iv) |
enter into material contracts, other than in the
ordinary and regular course of business, in connection with the Amalgamation or
as otherwise contemplated herein; |
|
(v) |
alter or amend its bylaws or articles; |
|
(vi) |
engage in
any business enterprise or other activity different from that carried on or
contemplated as of the date hereof; |
|
(vii) |
sell,
pledge, lease, dispose of, grant any interest in, encumber or agree to sell,
pledge, lease, dispose of, grant any interest in or encumber any of its assets
except where to do so would not have a Material Adverse Effect on Nava; |
|
(viii) |
redeem,
purchase or offer to purchase any of the Nava Common Shares, Nava Options, or
other securities; |
|
(ix) |
acquire,
directly or indirectly, any assets, including but not limited to securities of
other companies, other than in the ordinary and regular course of business. |
|
(e) |
Certain
Actions. Nava shall: |
|
(i) |
not take
any action, or refrain from taking any action or permit any action to be taken
or not taken (subject to a commercially reasonable efforts qualification),
inconsistent with the provisions of this Agreement or that would reasonably be
expected to materially impede the completion of the transactions contemplated
hereby or would render, or that could reasonably be expected to render, any
representation or warranty made by Nava in this Agreement untrue or inaccurate
in any material respect at any time on or before the Effective Date if then
made or that would or could have a Material Adverse Effect on Nava; and |
|
(ii) |
promptly
notify Eco Endeavors of: |
|
(A) |
any
Material Adverse Change or Material Adverse Effect, or any change, event,
occurrence or state of facts that could reasonably be expected to become a
Material Adverse Change or to have a Material Adverse Effect, in respect of the
business or in the conduct of the business of Nava; |
- 40 -
|
(B) |
any
material Governmental Entity or third person complaints, investigations or
hearings (or communications indicating that the same may be contemplated); |
|
(C) |
any breach
by Nava of any covenant or agreement contained in this Agreement; and |
|
(D) |
any event
occurring subsequent to the date hereof that would render any representation or
warranty of Nava contained in this Agreement, if made on or as of the date of
such event or the Effective Date, to be untrue or inaccurate in any material
respect. |
|
(f) |
Satisfaction
of Conditions. Nava shall use all commercially reasonable efforts to
satisfy, or cause to be satisfied, all of the conditions precedent to its
obligations to the extent the same is within its control and to take, or cause
to be taken, all other actions and to do, or cause to be done, all other things
necessary, proper or advisable under all applicable Laws to complete the
transactions contemplated by this Agreement, including using its commercially
reasonable efforts to: |
|
(i) |
obtain shareholder approval from Newco in accordance with
the policies of the BCBCA; |
|
(ii) |
obtain
all other consents, approvals and authorizations as are required to be obtained
by Nava or Newco under any applicable Laws or from any Governmental Entity that
would, if not obtained, materially impede the completion of the transactions
contemplated by this Agreement or have a Material Adverse Effect on Nava; |
|
(iii) |
effect
all necessary registrations, filings and submissions of information requested
by Governmental Entities required to be effected by it in connection with the
transactions contemplated by this Agreement and participate, and appear in any
proceedings of, any Party hereto before any Governmental Entity; |
|
(iv) |
oppose, lift or rescind any injunction or restraining
order or other order or action challenging or affecting this Agreement, the transactions
contemplated hereby or seeking to enjoin or delay, or otherwise adversely
affecting the ability of the parties hereto to consummate, the transactions
contemplated hereby, subject to the Nava Board determining in good faith after
receiving advice from outside legal counsel (which may include written opinions
or advice) that taking such action would be inconsistent with the fiduciary
duties of such directors under applicable Laws, and provided that, immediately
upon receipt of such advice, Nava advises Eco Endeavors in writing that it has
received such advice and provides written details thereof to Eco Endeavors; |
|
(v) |
fulfill all conditions and satisfy all provisions of this
Agreement and the Amalgamation required to be fulfilled or satisfied by Nava;
and |
|
(vi) |
co-operate with Eco Endeavors in connection with the performance by Eco
Endeavors of its obligations hereunder, provided however that the foregoing
shall not be construed to obligate Nava to pay or cause to be paid any monies
to cause such performance to occur, other than as contemplated in this
Agreement. |
- 41 -
|
(g) |
Keep Fully Informed. Subject to applicable Laws,
Nava shall use commercially reasonable efforts to conduct itself so as to keep
Eco Endeavors fully informed as to the material decisions or actions required
or required to be made with respect to the operation of its business. |
|
(h) |
Co-operation. Nava shall make, or cooperate as
necessary in the making of, all necessary filings and applications under all
applicable Laws required in connection with the transactions contemplated
hereby and take all reasonable action necessary to be in compliance with such
Laws. |
|
(i) |
Representations. Nava shall use its commercially
reasonable efforts to conduct its affairs so that all of the representations
and warranties of Nava contained herein shall be true and correct on and as of
the Effective Date as if made on and as of such date. |
|
(j) |
Closing
Documents. Nava shall execute and deliver, or cause to be executed and
delivered, at the closing of the transactions contemplated hereby such
customary agreements, certificates, opinions, resolutions and other closing
documents as may be required by Eco Endeavors, all in form satisfactory to Eco
Endeavors, acting reasonably. |
|
(k) |
Newco.
In its capacity as the sole shareholder of Newco, Nava shall: |
|
(i) |
take all such action as is necessary or desirable to
cause Newco to satisfy its obligations hereunder, including without limitation,
passing a resolution in the form attached hereto as Schedule B, on or prior to
the Effective Date, or such other date as may be agreed to by Eco Endeavors and
Nava, acting reasonably; |
|
(ii) |
prior to
the Effective Date, not cause or permit Newco to issue any securities or enter
into any agreements to issue or grant options, warrants or rights to purchase
any of its securities except for the issuance of a nominal number of Newco
Shares to Nava, or carry on any business, enter into any transaction or effect
any corporate act whatsoever, other than as contemplated herein or as
reasonably necessary to carry out the Amalgamation, unless previously consented
to in writing by Eco Endeavors; and |
|
(iii) |
after
the Effective Date, cause Amalco to satisfy any obligations which Amalco may
have to a Eco Endeavors Shareholder who exercises Dissent Rights. |
|
(l) |
Shares.
Nava will issue, at the Effective Time, Nava Units, in accordance with the
terms hereof, to those Eco Endeavors Shareholders who are entitled to receive
Nava Units pursuant to the Amalgamation. |
|
(m) |
Listing
of Shares. Until the earlier of: |
|
(i) |
the Effective Time; and |
|
(ii) |
the
termination of this Agreement in accordance with Section 6.2, |
|
Nava shall use its
commercially reasonable efforts to ensure that the Nava Common Shares, are continuously
quoted on the OTC Bulletin Board. |
- 42 -
|
(n) |
Nava
Board. Upon entry into this Agreement, the Nava Board shall procure a duly
executed resignation and release in favour of Nava from Don Blackadar in the
form and substance reasonably satisfactory to Eco Endeavors. Upon the Effective
Date, the Nava Board and officers will have been re-organized to consist of: |
4.3 Mutual
Covenants of Nava and Eco Endeavors
|
(a) |
Completion
of Amalgamation. Each of the Parties agrees that, it shall complete the
Amalgamation on such date as the parties may mutually agree to and prior to the
Completion Deadline. |
|
At the Effective Time, the Nava Board
shall approve resolutions to: |
|
(i) |
accept the resignations from the directors and officers
of Nava that will no longer be serving in such capacity following the
completion of the Amalgamation; |
|
(ii) |
change
the composition of the Nava Board such that it will be comprised of the
individuals listed in Section 4.2(n); and |
|
(iii) |
appoint the
officers listed in Section 4.2(n). |
|
(b) |
Confidential Information. Each of the Parties
agrees that any information as to the other Party’s financial condition,
business, properties, title, assets and affairs (including any material
contracts) received from the other Party as part of its due diligence
investigations in connection with the transactions contemplated in this
Agreement, including information which, at the time of receipt had not become
generally available to the public, was not available to a Party or its
representatives on a non-confidential basis before the date of the Letter
Agreement or does not become available to a Party or its representatives on a
non-confidential basis from a person who is not, to the knowledge of the Party
or its representatives, otherwise bound by confidentiality obligations to the
provider of such information or otherwise prohibited from transmitting the
information to the Party or its representatives (“confidential information”)
will be kept confidential by such Party for a period of two (2) years from the
date hereof. Prior to releasing any confidential information, Nava or Eco
Endeavors, as applicable, may require the recipient of the confidential
information to enter into a mutually acceptable confidentiality agreement. No
confidential information may be released to third parties without the consent
of the provider thereof, except that the parties hereto agree that they will
not unreasonably withhold such consent to the extent that such confidential
information is compelled to be released by legal process or must be released to
regulatory bodies and/or included in public documents. The provisions of this
Section 4.3(b) shall survive the termination of this Agreement. |
|
(c) |
Public
Statements. Each of the Parties will advise the other Party, in advance of
any public statement which they propose to make in respect of the Amalgamation,
provided that no Party shall be prevented from making any disclosure statement
which is required |
- 43 -
|
to be made by law or any rule of a stock exchange or a
similar organization to which it is bound. |
|
(d) |
Information for Super 8-K. In a timely and
expeditious manner, Eco Endeavors shall provide to Nava all information as may
be reasonably requested by Nava or as required by applicable Laws with respect
to Eco Endeavors and its businesses and properties for inclusion in the Super
8-K and in any amendment or supplement thereto that complies in all material
respects with all applicable Laws and containing all material facts relating to
it required to be disclosed in the Super 8-K, and not containing any
misrepresentation (as defined under applicable securities Laws) with respect
thereto. Eco Endeavors shall fully cooperate with Nava in the preparation of
the Super 8-K and shall provide such assistance as Nava may reasonably request
in connection therewith. |
|
(e) |
Amendments.
In a timely and expeditious manner, Eco Endeavors shall provide Nava with
information as requested by Nava, acting reasonably, in order to prepare any
amendments or supplements to the Super 8-K (which amendments or supplements
shall be in a form satisfactory to each of the Parties, acting reasonably). |
|
(f) |
Exclusive
Dealing. Each Party covenants and agrees with the other Party that, until
the termination of this Agreement in accordance with Section 6.2, it will not,
without prior written consent of the other Party, directly or indirectly: |
|
(i) |
initiate, solicit, cause, facilitate or participate in
any (confidential or otherwise) offer or expression of interest to sell any of
its securities or assets to a third party; |
|
(ii) |
except
with regard to the Amalgamation, pursue any other material amalgamation,
merger, arrangement, business combination or sale of assets or make any other
material change to its business, capital or affairs; or |
|
(iii) |
conduct any
activity otherwise materially detrimental to the Amalgamation. |
|
Notwithstanding the foregoing, nothing
herein will restrict the Parties from taking such actions as may be required in
order to discharge their obligations pursuant to applicable corporate laws. |
ARTICLE 5
CONDITIONS
5.1 Mutual
Conditions in Favour of Nava and Eco Endeavors
The respective obligations
of Eco Endeavors and Nava to complete the transactions contemplated herein are
subject to the fulfillment of the following conditions at or before the
Effective Time or such other time as is specified below:
|
(a) |
the Eco Endeavors Shareholder Approval shall have been
obtained in accordance with the provisions of the BCBCA and the requirements of
any applicable regulatory authority; |
|
(b) |
each of the Eco Endeavors Board and the Nava Board shall
have adopted all necessary resolutions and all other necessary corporate action
shall have been taken by Eco Endeavors and Nava to permit the consummation of
the Amalgamation and all other matters contemplated in this Agreement; |
- 44 -
|
(c) |
Newco shall not have engaged in any business enterprise
or other activity or had any assets or liabilities; |
|
(d) |
the Nava Units to be issued to the Eco Endeavors
Shareholders pursuant to the Amalgamation shall be exempt from registration
requirements under the 1933 Act pursuant to Regulation S under the 1933 Act; |
|
(e) |
the distribution of the Nava Units pursuant to the
Amalgamation shall be exempt from prospectus requirements under applicable
securities Laws of Canada; |
|
(f) |
the Waratah Royalty will have been terminated on or prior
to the Effective Date and on or prior to the Effective Time, Kenderes Biogaz
will have granted a royalty to Waratah calculated at 3% of all revenues
generated from the Kenderes Biogas Plant and an additional royalty to Waratah
calculated at 1.5% of all revenues generated from all other assets of Kenderes
Biogaz other than the Kenderes Biogas Plant; |
|
(g) |
the Deed of Undertaking will have been terminated on or
prior to the Effective Date and all amounts advanced by Waratah to Eco
Endeavors shall have been converted into Eco Endeavors Common Shares at a price
of $0.02 per Eco Endeavor Common Share; and |
|
(h) |
Nava shall
have closed the Private Placement. For greater certainty, Nava’s obligation to
complete the Private Placement is in addition to any financing obligation
contemplated in any agreement entered into or that may be entered into between
the Nava and Quivira Gold Ltd. regarding the acquisition of Quivira Gold Ltd. |
The
foregoing conditions are for the mutual benefit of the Parties and may be
waived by mutual consent of Nava and Eco Endeavors in writing at any time. No
such waiver shall be of any effect unless it is in writing signed by both
Parties. If any of such conditions shall not be complied with or waived as
aforesaid on or before the Completion Deadline or, if earlier, the date
required for the performance thereof, then, subject to Section 5.4, any Party
may terminate this Agreement by written notice to the other Party in
circumstances where the failure to satisfy any such condition is not the
result, directly or indirectly, of a breach of this Agreement by such
terminating Party.
5.2 Eco
Endeavors Conditions
The obligation of Eco
Endeavors to complete the transactions contemplated herein is subject to the
fulfillment of the following additional conditions at or before the Effective
Time or such other time as is specified below:
|
(a) |
the Nava
Board shall have procured duly executed resignations and releases in favour of
Nava effective at the Effective Time from each director and executive officer
of Nava who will no longer be serving in such capacity or capacities following
completion of the Amalgamation; |
|
(b) |
the
representations and warranties made by Nava in this Agreement that are
qualified by the expression “Material Adverse Change” or “Material
Adverse Effect” shall be true and correct as of the Effective Date as if
made on and as of such date (except to the extent that such representations and
warranties speak as of an earlier date, in which event such representations and
warranties shall be true and correct as of such earlier date), and all other
representations and warranties made by Nava in this Agreement shall be true and
correct in all material respects as of the Effective Date as if made on and as
of such date (except to the extent that such representations and warranties
speak as of an earlier date, in which event such representations and warranties
shall be true and correct as of such earlier date), in either case, except
where any failures or breaches of representations and warranties would not
either individually or in the aggregate, in the reasonable judgment of Eco
Endeavors, have a Material Adverse Effect on Nava, and Nava shall have provided
to Eco Endeavors a certificate of two officers thereof certifying such accuracy
or lack of Material Adverse Effect on the Effective Date. No representation or
warranty made by Nava hereunder shall be deemed not to be true and correct if
the facts or circumstances which make such representation or warranty untrue or
incorrect are disclosed or referred to, or provided for, or stated to be exceptions
under this Agreement; |
- 45 -
|
(c) |
from the date of this Agreement to the Effective Date,
there shall not have occurred a Material Adverse Change in respect of Nava; |
|
(d) |
Nava shall have complied in all material respects with
its covenants herein and Nava shall have provided to Eco Endeavors a
certificate of two officers thereof, certifying that, as of the Effective Date,
it has so complied with their covenants herein; |
|
(e) |
Nava shall obtain and provide reasonable evidence to Eco
Endeavors on or prior to the Effective Time that it has obtained director and
officer insurance with a policy of up to $1,000,000; and |
|
(f) |
the Nava
Board shall have adopted all necessary resolutions and all other necessary
corporate action shall have been taken by Nava and Eco Endeavors to permit the
consummation of the Amalgamation and the transactions to be completed by Nava
pursuant to the terms of this Agreement. |
The
foregoing conditions are for the benefit of Eco Endeavors and may be waived, in
whole or in part, by Eco Endeavors in writing at any time. No such waiver shall
be of any effect unless it is in writing signed by Eco Endeavors. If any of
such conditions shall not be complied with or waived by Eco Endeavors on or
before the Completion Deadline or, if earlier, the date required for the
performance thereof, then, subject to Section 5.4, Eco Endeavors may terminate
this Agreement by written notice to Nava in circumstances where the failure to
satisfy any such condition is not the result, directly or indirectly, of a
breach of this Agreement by Eco Endeavors.
5.3 Nava
Conditions
The obligation of Nava to
complete the transactions contemplated herein is subject to the fulfillment of
the following additional conditions at or before the Effective Time or such
other time as is specified below:
|
(a) |
the
representations and warranties made by Eco Endeavors in this Agreement that are
qualified by the expression “Material Adverse Change” or “Material
Adverse Effect” shall be true and correct as of the Effective Date as if
made on and as of such date (except to the extent that such representations and
warranties speak as of an earlier date, in which event such representations and
warranties shall be true and correct as of such earlier date), and all other
representations and warranties made by Eco Endeavors in this Agreement that are
not so qualified shall be true and correct in all material respects as of the
Effective Date as if made on and as of such date (except to the extent that
such representations and warranties speak as of an earlier date, in which event
such representations and warranties shall be true and correct as of such
earlier date), in either case, except where any failures or breaches of
representations and warranties would not either, individually or in the
aggregate, in the reasonable judgment of Nava, have a Material Adverse Effect
on Eco Endeavors, and Eco Endeavors shall have provided to Nava a certificate
of two officers thereof certifying such accuracy or lack of Material Adverse
Effect on the Effective Date. No representation or warranty made by Eco
Endeavors hereunder shall be deemed not to be true and correct if the facts or
circumstances that make such representation or warranty untrue or incorrect are
disclosed or referred to, or provided for, or stated to be exceptions under
this Agreement; |
- 46 -
|
(b) |
from the date of this Agreement to the Effective Date,
there shall not have occurred a Material Adverse Change in respect of Eco
Endeavors; |
|
(c) |
Eco Endeavors shall have provided the Eco Endeavors
Financial Statements; |
|
(d) |
Eco Endeavors shall have complied in all material
respects with its covenants herein and Eco Endeavors shall have provided to
Nava a certificate of two officers thereof certifying that, as of the Effective
Date, Eco Endeavors has so complied with its covenants herein; |
|
(e) |
the Eco Endeavors Board shall have adopted all necessary
resolutions and all other necessary corporate action shall have been taken by
Eco Endeavors to permit the consummation of the Amalgamation and the
transactions to be completed by Eco Endeavors pursuant to the terms of this
Agreement; |
|
(f) |
Nava shall have completed its due diligence investigation
of Eco Endeavors and all matters arising therefrom shall have been addressed to
the satisfaction of Nava, acting reasonably; and |
|
(g) |
Eco
Endeavors shall have provided a response to a due diligence questionnaire from
Nava and an officer of Eco Endeavors shall have certified such questionnaire to
be true, accurate and complete in all material respects as of the date given
therein. |
The
foregoing conditions are for the benefit of Nava and may be waived, in whole or
in part, by Nava in writing at any time. No such waiver shall be of any effect
unless it is in writing signed by Nava. If any of such conditions shall not be
complied with or waived by Nava on or before the Completion Deadline or, if
earlier, the date required for the performance thereof, then, subject to
Section 5.4, Nava may terminate this Agreement by written notice to Eco
Endeavors in circumstances where the failure to satisfy any such condition is
not the result, directly or indirectly, of a breach of this Agreement by Nava.
5.4 Notice and
Cure Provisions
Each Party hereto shall
give prompt notice to the other Party of the occurrence, or failure to occur,
at any time from the date hereof until the Effective Date, of any event or
state of facts which occurrence or failure would, would be likely to or could:
|
(a) |
cause any of the representations or warranties of such
Party contained herein to be untrue or inaccurate in any respect on the date
hereof or on the Effective Date; |
|
(b) |
result in the failure to comply with or satisfy any
covenant or agreement to be complied with or satisfied by such Party on or before
the Effective Date; or |
|
(c) |
result in
the failure to satisfy any of the conditions precedent in favour of the other
Party contained in Section 5.1, 5.2 or 5.3, as the case may be. |
- 47 -
Subject as herein provided, a Party may:
|
(a) |
elect not
to complete the transactions contemplated hereby by virtue of any of the
conditions for its benefit contained in Section 5.1, 5.2 or 5.3 not being
satisfied or waived; or |
|
(b) |
exercise
any termination right arising therefrom; provided, however, that: |
|
(i) |
promptly and in any event prior to the Effective Date,
the Party hereto intending to rely thereon has delivered a written notice to
the other Party specifying in reasonable detail the breaches of covenants or
untruthfulness or inaccuracy of representations and warranties or other matters
that the Party delivering such notice is asserting as the basis for the
exercise of the termination right, as the case may be; and |
|
(ii) |
if any
such notice is delivered, and a Party proceeds diligently, at its own expense,
to cure such matter, if such matter is susceptible to being cured, the Party
that has delivered such notice may not terminate this Agreement until the
lesser of ten (10) days from the date of delivery of such notice and the number
of days remaining before the earlier of the Effective Date and the Completion
Deadline. |
5.5 Merger of
Conditions
If no notice has been sent
by either Party pursuant to Section 5.4 prior to the Effective Date, the
conditions set out in Section 5.1, 5.2 or 5.3 shall be conclusively deemed to
have been satisfied, fulfilled or waived as of the Effective Time.
ARTICLE 6
AMENDMENT AND
TERMINATION
6.1 Amendment
This Agreement may, at any
time and from time to time before or after the receipt of the Eco Endeavors
Shareholder Approval be amended by mutual written agreement of the Parties
without, subject to applicable Laws, further notice to or authorization on the
part of the Eco Endeavors Shareholders and any such amendment may, without
limitation:
|
(a) |
change the time for the performance of any of the
obligations or acts of any of the parties hereto; |
|
(b) |
waive any inaccuracies in or modify any representation or
warranty contained herein or in any document delivered pursuant hereto; |
|
(c) |
waive compliance with or modify any of the covenants
herein contained and waive or modify the performance of any of the obligations
of any of the parties hereto; and |
|
(d) |
waive
compliance with or modify any condition herein contained; |
provided, however, that
notwithstanding the foregoing, following the receipt of the Eco Endeavors
Shareholder Approval, the number of Nava Units issuable at the Effective Time
shall not be amended without the approval of the Eco Endeavors Shareholders
given in the same manner as required for the approval of the Amalgamation.
- 48 -
6.2 Termination
This Agreement may be
terminated at any time prior to the Effective Time:
|
(a) |
by mutual
written agreement by Eco Endeavors, Nava and Newco; |
|
(b) |
subject to
Section 5.4: |
|
(i) |
by Eco Endeavors, if any condition in Section 5.2 is not
satisfied or waived in accordance with such section; |
|
(ii) |
by Nava,
if any condition in Section 5.3 is not satisfied or waived in accordance with
such section; |
|
(iii) |
by Eco
Endeavors or by Nava, if any of the conditions in Section 5.1 for the benefit
of the terminating party is not satisfied or waived in accordance with such
Section 5.1; or |
|
(iv) |
by Nava
if, as a result of its due diligence inquiry of Eco Endeavors, Kenderesh or
Kenderes Biogaz, any material deficiency arises therefrom and Nava notifies Eco
Endeavors of such material deficiency in writing and Eco Endeavors has not
remedied or caused to be remedied such material deficiency within 20 calendar
days of such notification, other than a material deficiency that by its nature
cannot be cured, to the satisfaction of Nava, acting reasonably. |
|
(c) |
by Nava if there is an intentional breach of the
covenants of Eco Endeavors contained herein by Eco Endeavors or any of its
directors, officers, employees, agents, consultants or other representatives,
in each case, on or before the Effective Date; |
|
(d) |
by Eco Endeavors if there is an intentional breach of the
covenants of Nava contained herein by Nava or any of its directors, officers,
employees, agents, consultants or other representatives, in each case, on or
before the Effective Date; or |
|
(e) |
by Nava or
by Eco Endeavors if the Amalgamation shall not have been completed by the
Completion Deadline, |
provided that any
termination by a Party in accordance with the paragraphs above shall be made by
such Party delivering written notice thereof to the other Party or parties
hereto prior to the earlier of the Effective Date and the Completion Deadline
and specifying therein in reasonable detail the matter or matters giving rise
to such termination right.
ARTICLE 7
GENERAL
7.1 Notices
Any notice, consent, waiver, direction or other
communication required or permitted to be given under this Agreement by a party
hereto shall be in writing and shall be delivered by hand to the party hereto
to which the notice is to be given at the following address or sent by
facsimile to the following numbers or to such other address or facsimile number
as shall be specified by a party hereto by like notice. Any notice, consent,
waiver, direction or other communication aforesaid shall, if delivered, be deemed
to have been given and received on the date on which it was delivered to the
address provided herein (if a Business Day or, if not, then the next succeeding
Business Day) and if sent by facsimile be deemed to have been given and
received at the time of receipt (if a Business Day or, if not, then the next
succeeding Business Day) unless actually received after 5:00 p.m. (local time)
at the point of delivery in which case it shall be deemed to have been given
and received on the next Business Day.
- 49 -
The address for service of each of the
parties hereto shall be as follows:
|
International
Eco Endeavors Corp. 101 – 161 West Georgia Street Vancouver, British Columbia Canada V6B 0K9 |
|
Attention:
Robert Abenante, CEO Fax: (604) 687-6314 |
|
Nava
Resources Inc. Suite 206 – 595 Howe Street Vancouver, British Columbia |
|
Attention:
Jag Sandhu, CEO Fax: |
7.2 Remedies
The parties hereto acknowledge and agree that an award
of money damages may be inadequate for any breach of this Agreement by any
party hereto or its representatives and advisors and that such breach may cause
the non-breaching party hereto irreparable harm. Accordingly, the parties
hereto agree that, in the event of any such breach or threatened breach of this
Agreement by one of the parties hereto, Eco Endeavors (if Nava is the breaching
party) or Nava (if Eco Endeavors is the breaching party) will be entitled,
without the requirement of posting a bond or other security, to seek equitable
relief, including injunctive relief and specific performance. Subject to any
other provision hereof, such remedies will not be the exclusive remedies for
any breach of this Agreement but will be in addition to all other remedies
available hereunder or at law or in equity to each of the parties hereto.
7.3 Expenses
The parties agree that each party
shall pay for its costs incurred in connection with this Agreement and the
transactions contemplated hereby, the preparation of the Super 8-K, including
legal and accounting fees, printing costs, financial advisor fees and all
disbursements by advisors, shall be paid by the party hereto incurring such
expense and that nothing in this Agreement shall be construed so as to prevent
the payment of such expenses, whether or not the Amalgamation is completed. The
provisions of this Section 7.3 shall survive the termination of this Agreement.
- 50 -
7.4 Time of
the Essence
Time shall be of the essence in this Agreement.
7.5 Entire Agreement
This Agreement, together
with the agreements and other documents herein or therein referred to,
constitute the entire agreement between the parties pertaining to the subject
matter hereof and supersede all prior agreements, understandings, negotiations
and discussions, whether oral or written, between the parties with respect to
the subject matter hereof, including the Letter Agreement. There are no
representations, warranties, covenants or conditions with respect to the
subject matter hereof except as contained herein.
7.6 Further
Assurances
Each Party shall, from time
to time, and at all times hereafter, at the request of the other of them, but
without further consideration, do, or cause to be done, all such other acts and
execute and deliver, or cause to be executed and delivered, all such further
agreements, transfers, assurances, instruments or documents as shall be
reasonably required in order to fully perform and carry out the terms and
intent hereof including, without limitation, the Amalgamation.
7.7 Governing
Law
This Agreement shall be
governed by, and be construed in accordance with, the laws of the Province of
British Columbia and the laws of Canada applicable therein but the reference to
such laws shall not, by conflict of laws rules or otherwise, require the
application of the law of any jurisdiction other than the Province of British
Columbia. The parties hereto irrevocably attorn to the non-exclusive
jurisdiction of the courts of the Province of British Columbia.
7.8 Execution in
Counterparts
This Agreement may be
executed in one or more counterparts, each of which shall conclusively be
deemed to be an original and all such counterparts collectively shall be
conclusively deemed to be one and the same. Delivery of an executed counterpart
of the signature page to this Agreement by facsimile, email or other
functionally equivalent electronic means of transmission shall be effective as
delivery of a manually executed counterpart of this Agreement, and any party
hereto delivering an executed counterpart of the signature page to this Agreement
by facsimile, email or other functionally equivalent electronic means of
transmission to any other party hereto shall thereafter also promptly deliver a
manually executed original counterpart of this Agreement to such other party,
but the failure to deliver such manually executed original counterpart shall
not affect the validity, enforceability or binding effect of this Agreement.
7.9 Waiver
No waiver or release by any
party hereto shall be effective unless in writing and executed by the party granting
such waiver or release and any waiver or release shall affect only the matter,
and the occurrence thereof, specifically identified and shall not extend to any
other matter or occurrence. Waivers may only be granted upon compliance with
the provisions governing amendments set forth in Section 6.1.
7.10 No Personal
Liability
|
(a) |
No
director or officer of Eco Endeavors shall have any personal liability
whatsoever (other than in the case of fraud, negligence or wilful misconduct)
to Nava under this Agreement or any other document delivered in connection with
this Agreement or the Amalgamation by or on behalf of Eco Endeavors. |
- 51 -
|
(b) |
No
director or officer of Nava shall have any personal liability whatsoever (other
than in the case of fraud, negligence or wilful misconduct) to Eco Endeavors
under this Agreement or any other document delivered in connection with this
Agreement or the Amalgamation by or on behalf of Nava. |
7.11 Enurement and Assignment
This Agreement shall enure
to the benefit of the parties hereto and their respective successors and
permitted assigns and shall be binding upon the parties hereto and their
respective successors. This Agreement may not be assigned by any party hereto
without the prior written consent of the other parties hereto.
[EXECUTION PAGE FOLLOWS]
- 52 -
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first
above written.
|
Per: |
____________________________ |
|
____________________________ Name |
|
____________________________ Title |
|
INTERNATIONAL ECO ENDEAVOURS CORP. |
|
Per: |
____________________________ |
|
____________________________ Name |
|
____________________________ Title |
|
Per: |
____________________________ |
|
____________________________ Name |
|
____________________________ Title |
- 53 -
|
KENDERESH ENDEAVORS
CORP. |
|
Per: |
____________________________ |
|
____________________________ Name |
|
____________________________ Title |
|
KENDERES BIOGAZ TERMELO KORLATOLT FELE LOSSEGU TARSASAG |
|
Per: |
____________________________ |
|
____________________________ Name |
|
____________________________ Title |
SCHEDULE
A
FORM OF ECO ENDEAVORS RESOLUTION
BE IT RESOLVED as a special resolution that:
1. |
The amalgamation
(the “Amalgamation”) under the Business Corporations Act (British
Columbia) (the “BCBCA”) involving International Eco Endeavors Corp. (the
“Company”), Nava Resources, Inc. (“Nava”) and Ourco Capital Ltd.,
a wholly owned subsidiary of Nava, pursuant to the terms and conditions
contained in the amalgamation agreement (the “Amalgamation Agreement”)
dated June 19, 2013 (as the same may be or has been modified or amended), in
substantially the form attached hereto as Schedule A is hereby authorized and
approved. |
2. |
The execution and
delivery by the Company of the Amalgamation Agreement, substantially in the
form attached hereto as Schedule A, is hereby authorized and approved, and the
Amalgamation is hereby adopted. |
3. |
Any officer or
director of the Company is hereby authorized and directed, on behalf of the
Company, to execute and deliver an amalgamation application to the registrar
appointed under Section 400 of the BCBCA with respect to the Amalgamation. |
4. |
Notwithstanding
that this special resolution has been passed (and the Amalgamation Agreement
adopted) by the shareholders of the Company, the directors of the Company are
hereby authorized and empowered without further approval of the shareholders of
the Company at any time prior to the issuance by the registrar under the BCBCA
of a certificate of amalgamation in respect of the Amalgamation (i) to amend
the Amalgamation Agreement to the extent permitted by the Amalgamation
Agreement, and (ii) not to proceed with Amalgamation to the extent permitted by
the Amalgamation Agreement or otherwise give effect to these resolutions. |
5. |
Any officer or
director of the Company is hereby authorized and directed for and on behalf of
and in the name of the Company to execute, under the seal of the Company or
otherwise, and to deliver, all documents, agreements and instruments and to do
all such other acts and things, including delivering such documents as are
necessary or desirable to the registrar appointed under Section 400 of the
BCBCA for filing in accordance with the Amalgamation Agreement, as such officer
or director, in his absolute discretion, determines to be necessary or
desirable to give full effect to the foregoing resolutions and the matters
authorized thereby, such determination to be conclusively evidenced by the
execution and delivery of any such documents, agreements or instruments or
doing of any such act or thing. |
SCHEDULE
B
FORM OF NEWCO RESOLUTION
BE IT RESOLVED as a special resolution that:
1. |
The amalgamation
(the “Amalgamation”) under the Business Corporations Act (British
Columbia) (the “BCBCA”) involving International Eco Endeavors Corp.,
Nava Resources, Inc. (“Nava”) and Ourco Capital Ltd. (the “Company”),
a wholly owned subsidiary of Nava, pursuant to the terms and conditions
contained in the amalgamation agreement (the “Amalgamation Agreement”)
dated June 19, 2013 (as the same may be or has been modified or amended), in
substantially the form attached hereto as Schedule A is hereby authorized and
approved. |
2. |
The execution and
delivery by the Company of the Amalgamation Agreement, substantially in the
form attached hereto as Schedule A, is hereby authorized and approved, and the
Amalgamation is hereby adopted. |
3. |
Any officer or
director of the Company is hereby authorized and directed, on behalf of the
Company, to execute and deliver an amalgamation application to the registrar
appointed under Section 400 of the BCBCA with respect to the Amalgamation. |
4. |
Notwithstanding
that this special resolution has been passed (and the Amalgamation Agreement
adopted) by the shareholders of the Company, the directors of the Company are
hereby authorized and empowered without further approval of the shareholders of
the Company at any time prior to the issuance by the registrar under the BCBCA
of a certificate of amalgamation in respect of the Amalgamation (i) to amend
the Amalgamation Agreement to the extent permitted by the Amalgamation
Agreement, and (ii) not to proceed with Amalgamation to the extent permitted by
the Amalgamation Agreement or otherwise give effect to these resolutions. |
5. |
Any officer or
director of the Company is hereby authorized and directed for and on behalf of
and in the name of the Company to execute, under the seal of the Company or
otherwise, and to deliver all documents, agreements and instruments and to do
all such other acts and things, including delivering such documents as are
necessary or desirable to the registrar appointed under Section 400 of the
BCBCA for filing in accordance with the Amalgamation Agreement, as such officer
or director, in his absolute discretion, determines to be necessary or
desirable to give full effect to the foregoing resolutions and the matters
authorized thereby, such determination to be conclusively evidenced by the
execution and delivery of any such documents, agreements or instruments or
doing of any such act or thing. |
SCHEDULE
C
FORM OF AMALGAMATION APPLICATION
See Attached Document
SCHEDULE
D
FORM OF ARTICLES OF AMALCO
See Attached
FORM 13/WEB Rev. 2004 / 3/ 10 |
NOA Page 1 |
[ CW #: CW6165551.8] |
|
Incorporation
No. BC0960926
BUSINESS CORPORATIONS ACT
ARTICLES
OF
<>
Table of
Contents
Incorporation No. <>
BUSINESS CORPORATIONS ACT
ARTICLES
OF
<>
PART 1 – INTERPRETATION
|
Without limiting Article 1.2, in these Articles,
unless the context requires otherwise: |
|
(a) |
“adjourned meeting” means the meeting to
which a meeting is adjourned under Article 8.6 or 8.9; |
|
(b) |
“board” and “directors” mean the
board of directors of the Company for the time being; |
|
(c) |
“Business Corporations Act” means the Business
Corporations Act, S.B.C. 2002, c.57, and includes its regulations; |
|
(e) |
“Interpretation Act” means the Interpretation
Act, R.S.B.C. 1996, c. 238; and |
|
(f) |
“trustee”,
in relation to a shareholder, means the personal or other legal
representative of the shareholder, and includes a trustee in bankruptcy of the
shareholder. |
1.2 |
Business
Corporations Act definitions apply |
|
The definitions in the Business
Corporations Act apply to these Articles. |
1.3 |
Interpretation Act applies |
|
The Interpretation Act applies
to the interpretation of these Articles as if these Articles were an enactment. |
1.4 |
Conflict in
definitions |
|
If there is a conflict between a
definition in the Business Corporations Act and a definition or rule in
the Interpretation Act relating to a term used in these Articles, the
definition in the Business Corporations Act will prevail in relation to
the use of the term in these Articles. |
1.5 |
Conflict
between Articles and legislation |
|
If there is a conflict between these Articles and the Business
Corporations Act, the Business Corporations Act will prevail. |
- 2 -
PART 2 – SHARES AND
SHARE CERTIFICATES
2.1 |
Form of share certificate |
|
Each share certificate issued by the
Company must comply with, and be signed as required by, the Business
Corporations Act. |
2.2 |
Shareholder
Entitled to Certificate or Acknowledgement |
|
Unless the shares are uncertificated shares,
each shareholder is entitled, without charge, to (a) one share certificate
representing the shares of each class or series of shares registered in the
shareholder’s name or (b) a non-transferable written acknowledgement of the
shareholder’s right to obtain such a share certificate, provided that in
respect of a share held jointly by several persons, the Company is not bound to
issue more than one share certificate and delivery of a share certificate for a
share to one of several joint shareholders or to one of the shareholders’ duly
authorized agents will be sufficient delivery to all. |
2.3 |
Sending of
share certificate |
|
Any share certificate to which a
shareholder is entitled may be sent to the shareholder by mail and neither the
Company nor any agent is liable for any loss to the shareholder because the
certificate sent is lost in the mail or stolen. |
2.4 |
Replacement
of worn out or defaced certificate |
|
If the directors are satisfied that a
share certificate is worn out or defaced, they must, on production to them of
the certificate and on such other terms, if any, as they think fit: |
|
(a) |
order the certificate to be cancelled; and |
|
(b) |
issue
a replacement share certificate. |
2.5 |
Replacement
of lost, stolen or destroyed certificate |
|
If a share certificate is lost, stolen
or destroyed, a replacement share certificate must be issued to the person
entitled to that certificate if the directors receive: |
|
(a) |
proof satisfactory to them that the certificate
is lost, stolen or destroyed; and |
|
(b) |
any
indemnity the directors consider adequate. |
2.6 |
Splitting
share certificates |
|
If a shareholder surrenders a share
certificate to the Company with a written request that the Company issue in the
shareholder’s name 2 or more certificates, each representing a specified number
of shares and in the aggregate representing the same number of shares as the
certificate so surrendered, the Company must cancel the surrendered certificate
and issue replacement share certificates in accordance with that request. |
2.7 |
Shares
may be uncertificated |
|
Notwithstanding any other provisions of
this Part, the directors may, by resolution, provide that: |
|
(a) |
the shares of any or all of the classes and series of the
Company’s shares may be uncertificated shares; or |
|
(b) |
any
specified shares may be uncertificated shares. |
- 3 -
PART 3 – ISSUE OF
SHARES
3.1 |
Directors authorized to issue shares |
|
The directors may, subject to the
rights of the holders of the issued shares of the Company, issue, allot, sell,
grant options on or otherwise dispose of the unissued shares, and issued shares
held by the Company, at the times, to the persons, including directors, in the
manner, on the terms and conditions and for the issue prices that the
directors, in their absolute discretion, may determine. |
3.2 |
Company
need not recognize unregistered interests |
|
Except as required by law or these
Articles, the Company need not recognize or provide for any person’s interests
in or rights to a share unless that person is the shareholder of the share. |
PART 4 – SHARE TRANSFERS
4.1 |
Recording
or registering transfer |
|
A transfer of a share of the Company
must not be registered |
|
(a) |
unless a duly signed instrument of transfer in respect of
the share has been received by the Company and the certificate (or acceptable
documents pursuant to Article 2.5 hereof) representing the share to be
transferred has been surrendered and cancelled; or |
|
(b) |
if no
certificate has been issued by the Company in respect of the share, unless a
duly signed instrument of transfer in respect of the share has been received by
the Company. |
4.2 |
Form of
instrument of transfer |
|
The instrument of transfer in respect
of any share of the Company must be either in the form, if any, on the back of
the Company’s share certificates or in any other form that may be approved by
the directors from time to time. |
4.3 |
Signing of
instrument of transfer |
|
If a shareholder, or his or her duly
authorized attorney, signs an instrument of transfer in respect of shares
registered in the name of the shareholder, the signed instrument of transfer
constitutes a complete and sufficient authority to the Company and its
directors, officers and agents to register the number of shares specified in
the instrument of transfer, or, if no number is specified, all the shares represented
by share certificates deposited with the instrument of transfer: |
|
(a) |
in the name of the person named as transferee in
that instrument of transfer; or |
|
(b) |
if no
person is named as transferee in that instrument of transfer, in the name of
the person on whose behalf the share certificate is deposited for the purpose
of having the transfer registered. |
4.4 |
Enquiry as
to title not required |
|
Neither the Company nor any director, officer or agent
of the Company is bound to inquire into the title of the person named in the
instrument of transfer as transferee or, if no person is named as transferee in
the instrument of transfer, of the person on whose behalf the instrument is
deposited for the purpose of having the transfer registered or is liable for any
claim related to registering the transfer by the shareholder or by any
intermediate owner or holder of the shares, of any interest in the shares, of
any share certificate representing such shares or of any written acknowledgment
of a right to obtain a share certificate for such shares. |
- 4 -
|
There must be paid to the Company, in
relation to the registration of any transfer, the amount determined by the
directors from time to time. |
PART 5 – ACQUISITION OF
SHARES
5.1 |
Company
authorized to purchase shares |
|
Subject to the special rights and
restrictions attached to any class or series of shares, the Company may, if it
is authorized to do so by the directors, purchase or otherwise acquire any of
its shares. |
5.2 |
Company
authorized to accept surrender of shares |
|
The Company may, if it is
authorized to do so by the directors, accept a surrender of any of its shares. |
5.3 |
Company
authorized to convert fractional shares into whole shares |
|
The Company may, if it is authorized to
do so by the directors, convert any of its fractional shares into whole shares
in accordance with, and subject to the limitations contained in, the Business
Corporations Act. |
PART 6 – BORROWING POWERS
|
The directors may from time to time on
behalf of the Company: |
|
(a) |
borrow money in the manner and amount, on the security,
from the sources and on the terms and conditions that they consider
appropriate; |
|
(b) |
issue bonds, debentures and other debt obligations either
outright or as security for any liability or obligation of the Company or any
other person, and at any discount or premium and on such other terms as they
consider appropriate; |
|
(c) |
guarantee the repayment of money by any other person or
the performance of any obligation of any other person; and |
|
(d) |
mortgage
or charge, whether by way of specific or floating charge, or give other
security on the whole or any part of the present and future assets and
undertaking of the Company. |
PART 7 – GENERAL MEETINGS
7.1 |
Annual
general meetings |
|
Unless an annual general meeting is
deferred or waived in accordance with section 182(2)(a) or (c) of the Business
Corporations Act, the Company must hold its first annual general meeting
within 18 months after the date on which it was incorporated or otherwise
recognized, and after that must hold an annual general meeting at least once in
each calendar year and not more than 15 months after the last annual general
meeting. |
7.2 |
When annual
general meeting is deemed to have been held |
|
If all of the shareholders who are entitled to vote at
an annual general meeting consent by a unanimous resolution under the Business
Corporations Act to all of the business that is required to be transacted
at that annual general meeting, the annual general meeting is deemed to have
been held on the date of the unanimous resolution. The shareholders must, in
any unanimous resolution passed under this Article 7.2, select as the Company’s
annual reference date a date that would be appropriate for the holding of the
applicable annual general meeting. |
- 5 -
7.3 |
Calling
of shareholder meetings |
|
The directors may, whenever they think fit, call a
meeting of shareholders. |
7.4 |
Notice for meetings of
shareholders |
|
The Company must send notice of the
date, time and location of any meeting of shareholders, in the manner provided
in these Articles, or in such other manner, if any, as may be prescribed by
ordinary resolution (whether previous notice of the resolution has been given
or not), to each shareholder entitled to attend the meeting and to each
director, unless these Articles otherwise provide, at least the following
number of days before the meeting: |
|
(a) |
if and for so long as the Company is a public
company, 21 days; |
7.5 |
Record
date for notice |
|
The directors may set a date as the
record date for the purpose of determining shareholders entitled to notice of
any meeting of shareholders. The record date must not precede the date on which
the meeting is to be held by more than two months or, in the case of a general
meeting requisitioned by shareholders under the Business Corporations Act,
by more than four months. The record date must not precede the date on which
the meeting is held by fewer than: |
|
(a) |
if and for so long as the Company is a public
company, 21 days; |
|
If no record date is set, the record
date is 5 p.m. on the day immediately preceding the first date on which the
notice is sent or, if no notice is sent, the beginning of the meeting. |
7.6 |
Record
date for voting |
|
The directors may set a date as the
record date for the purpose of determining shareholders entitled to vote at any
meeting of shareholders. The record date must not precede the date on which the
meeting is to be held by more than two months or, in the case of a general
meeting requisitioned by shareholders under the Business Corporations Act,
by more than four months. If no record date is set, the record date is 5 p.m.
on the day immediately preceding the first date on which the notice is sent or,
if no notice is sent, the beginning of the meeting. |
7.7 |
Failure
to give notice and waiver of notice |
|
The accidental omission to send notice
of any meeting to, or the non-receipt of any notice by, any of the persons
entitled to notice does not invalidate any proceedings at that meeting. Any
person entitled to notice of a meeting of shareholders may, in writing or
otherwise, waive or reduce the period of notice of such meeting. |
7.8 |
Notice
of special business at meetings of shareholders |
|
If a meeting of shareholders is to
consider special business within the meaning of Article 8.1, the notice of
meeting must: |
|
(a) |
state the general nature of the special
business; and |
|
(b) |
if the
special business includes considering, approving, ratifying, adopting or
authorizing any document or the signing of or giving of effect to any document,
have attached to it a copy of the document or state that a copy of the document
will be available for inspection by shareholders: |
- 6 -
|
(i) |
at the
Company’s records office, or at such other reasonably accessible location in
British Columbia as is specified in the notice, and |
|
(ii) |
during
statutory business hours on any one or more specified days before the day set
for the holding of the meeting. |
PART 8 – PROCEEDINGS AT
MEETINGS OF SHAREHOLDERS
|
At a meeting of shareholders, the
following business is special business: |
|
(a) |
at a
meeting of shareholders that is not an annual general meeting, all business is
special business except business relating to the conduct of or voting at the
meeting or the election or appointment of directors; |
|
(b) |
at
an annual general meeting, all business is special business except for the
following: |
|
(i) |
business relating to the conduct of or voting
at the meeting, |
|
(ii) |
consideration
of any financial statements of the Company presented to the meeting, |
|
(iii) |
consideration
of any reports of the directors or auditor, |
|
(iv) |
the setting or changing of the number of directors, |
|
(v) |
the election or appointment of directors, |
|
(vi) |
the
appointment of an auditor, |
|
(vii) |
the setting
of the remuneration of an auditor, |
|
(viii) |
business
arising out of a report of the directors not requiring the passing of a special
resolution or an exceptional resolution, and |
|
(ix) |
any other
business which, under these Articles or theBusiness Corporations Act,
may be transacted at a meeting of shareholders without prior notice of the
business being given to the shareholders. |
|
The votes required for the Company to
pass a special resolution at a meeting of shareholders is two-thirds of the
votes cast on the resolution. |
|
Subject to the special rights and
restrictions attached to the shares of any affected class or series of shares,
the quorum for the transaction of business at a meeting of shareholders is one
or more persons, present in person or by proxy. |
8.4 |
Other persons
may attend |
|
The directors, the president, if any, the secretary,
if any, and any lawyer or auditor for the Company are entitled to attend any
meeting of shareholders, but if any of those persons do attend a meeting of
shareholders, that person is not to be counted in the quorum, and is not
entitled to vote at the meeting, unless that person is a shareholder or proxy
holder entitled to vote at the meeting. |
- 7 -
8.5 |
Requirement of
quorum |
|
No business, other than the election of
a chair of the meeting and the adjournment of the meeting, may be transacted at
any meeting of shareholders unless a quorum of shareholders entitled to vote at
the meeting is present at the commencement of the meeting. |
|
If, within 1/2 hour from the time set
for the holding of a meeting of shareholders, a quorum is not present: |
|
(a) |
in the case of a general meeting convened by requisition
of shareholders, the meeting is dissolved; and |
|
(b) |
in the
case of any other meeting of shareholders, the shareholders entitled to vote at
the meeting who are present, in person or by proxy, at the meeting may adjourn
the meeting to a set time and place. |
|
The following individual is entitled to
preside as chair at a meeting of shareholders: |
|
(a) |
the chair of the board, if any; |
|
(b) |
if
the chair of the board is absent or unwilling to act as chair of the meeting,
the president, if any. |
|
At any meeting of shareholders, the
directors present must choose one of their number to be chair of the meeting
if: (a) there is no chair of the board or president present within 15 minutes
after the time set for holding the meeting; (b) the chair of the board and the
president are unwilling to act as chair of the meeting; or (c) if the chair of
the board and the president have advised the secretary, if any, or any director
present at the meeting, that they will not be present at the meeting. If, in
any of the foregoing circumstances, all of the directors present decline to
accept the position of chair or fail to choose one of their number to be chair
of the meeting, or if no director is present, the shareholders present in
person or by proxy must choose any person present at the meeting to chair the
meeting. |
|
The chair of a meeting of shareholders
may, and if so directed by the meeting must, adjourn the meeting from time to
time and from place to place, but no business may be transacted at any
adjourned meeting other than the business left unfinished at the meeting from
which the adjournment took place. |
8.10 |
Notice
of adjourned meeting |
|
It is not necessary to give any notice
of an adjourned meeting or of the business to be transacted at an adjourned
meeting of shareholders except that, when a meeting is adjourned for 30 days or
more, notice of the adjourned meeting must be given as in the case of the
original meeting. |
8.11 |
Motion
need not be seconded |
|
No motion proposed at a meeting of
shareholders need be seconded unless the chair of the meeting rules otherwise,
and the chair of any meeting of shareholders is entitled to propose or second a
motion. |
8.12 |
Manner
of taking a poll |
|
Subject to Article 8.13, if a poll is
duly demanded at a meeting of shareholders: |
|
(a) |
the
poll must be taken |
- 8 -
|
(i) |
at the
meeting, or within 7 days after the date of the meeting, as the chair of the
meeting directs, and |
|
(ii) |
in
the manner, at the time and at the place that the chair of the meeting directs; |
|
(b) |
the result of the poll is deemed to be a resolution of,
and passed at, the meeting at which the poll is demanded; and |
|
(c) |
the
demand for the poll may be withdrawn. |
8.13 |
Demand for a poll on adjournment |
|
A poll demanded at a meeting of
shareholders on a question of adjournment must be taken immediately at the
meeting. |
8.14 |
Demand
for a poll not to prevent continuation of meeting |
|
The demand for a poll at a meeting of
shareholders does not, unless the chair of the meeting so rules, prevent the
continuation of a meeting for the transaction of any business other than the
question on which a poll has been demanded. |
8.15 |
Poll
not available in respect of election of chair |
|
No poll may be demanded in respect of
the vote by which a chair of a meeting of shareholders is elected. |
8.16 |
Casting
of votes on poll |
|
On a poll, a shareholder
entitled to more than one vote need not cast all the votes in the same way. |
8.17 |
Chair
must resolve dispute |
|
In the case of any dispute as to the
admission or rejection of a vote given on a poll, the chair of the meeting must
determine the same, and his or her determination made in good faith is final
and conclusive. |
8.18 |
Chair
has no second vote |
|
In case of an equality of votes, the
chair of a meeting of shareholders does not, either on a show of hands or on a
poll, have a casting or second vote in addition to the vote or votes to which
the chair may be entitled as a shareholder. |
8.19 |
Declaration
of result |
|
The chair of a meeting of shareholders
must declare to the meeting the decision on every question in accordance with
the result of the show of hands or the poll, as the case may be, and that
decision must be entered in the minutes of the meeting. |
8.20 |
Meetings
by telephone or other communications medium |
|
A shareholder or proxy holder who is
entitled to participate in a meeting of shareholders may do so in person, or by
telephone or other communications medium, if all shareholders and proxy holders
participating in the meeting are able to communicate with each other; provided,
however, that nothing in this Section shall obligate the Company to take any
action or provide any facility to permit or facilitate the use of any
communications medium at a meeting of shareholders. If one or more shareholders
or proxy holders participate in a meeting of shareholders in a manner
contemplated by this Section 8.20: |
|
(a) |
each such shareholder or proxy holder shall be
deemed to be present at the meeting; and |
|
(b) |
the
meeting shall be deemed to be held at the location specified in the notice of
the meeting. |
- 9 -
PART 9 –
ALTERATIONS
9.1 |
Alteration of Authorized Share Structure |
|
Subject to Article 9.2 and the Business
Corporations Act, the Company may by resolution of the directors: |
|
(a) |
create one or more classes or series of shares or, if
none of the shares of a class or series of shares are allotted or issued,
eliminate that class or series of shares; |
|
(b) |
increase,
reduce or eliminate the maximum number of shares that the Company is authorized
to issue out of any class or series of shares or establish a maximum number of
shares that the Company is authorized to issue out of any class or series of
shares for which no maximum is established; |
|
(c) |
if
the Company is authorized to issue shares of a class of shares with par value: |
|
(i) |
decrease the par value of those shares, |
|
(ii) |
if none
of the shares of that class of shares are allotted or issued, increase the par
value of those shares, |
|
(iii) |
subdivide all or any of its unissued or fully paid issued shares with par value
into shares of smaller par value, or |
|
(iv) |
consolidate all or any of its unissued or fully paid issued shares with par
value into shares of larger par value; |
|
(d) |
subdivide all or any of its unissued or fully
paid issued shares without par value; |
|
(e) |
change all or any of its unissued or fully paid issued
shares with par value into shares without par value or all or any of its
unissued shares without par value into shares with par value; |
|
(f) |
alter the identifying name of any of its
shares; |
|
(g) |
consolidate all or any of its unissued or fully
paid issued shares without par value; or |
|
(h) |
otherwise
alter its shares or authorized share structure when required or permitted to do
so by theBusiness Corporations Act. |
|
The Company may by resolution of the
directors authorize an alteration to its Notice of Articles in order to change
its name or adopt or change any translation of that name. |
|
If the Business Corporations Act does
not specify the type of resolution and these Articles do not specify another
type of resolution, the Company may by resolution of the directors authorize an
alteration of these Articles. |
PART 10 – VOTES OF
SHAREHOLDERS
|
Subject to any special rights or
restrictions attached to any shares and to the restrictions imposed on joint
registered holders of shares under Article 10.3: |
|
(a) |
on a vote
by show of hands, every person present who is a shareholder or proxy holder and
entitled to vote at the meeting has one vote; and |
- 10 -
|
(b) |
on a poll,
every shareholder entitled to vote has one vote in respect of each share held
by that shareholder that carries the right to vote on that poll and may
exercise that vote either in person or by proxy. |
10.2 |
Trustee of shareholder may vote |
|
A person who is not a shareholder may
vote on a resolution at a meeting of shareholders, whether on a show of hands
or on a poll, and may appoint a proxy holder to act at the meeting in relation
to that resolution, if, before doing so, the person satisfies the chair of the
meeting at which the resolution is to be considered, or satisfies all of the
directors present at the meeting, that the person is a trustee for a
shareholder who is entitled to vote on the resolution. |
10.3 |
Votes by
joint shareholders |
|
If there are joint shareholders
registered in respect of any share: |
|
(a) |
any one of the joint shareholders, but not both or all,
may vote at any meeting, either personally or by proxy, in respect of the share
as if that joint shareholder were solely entitled to it; or |
|
(b) |
if more
than one of the joint shareholders is present at any meeting, personally or by
proxy, the joint shareholder present whose name stands first on the central
securities register in respect of the share is alone entitled to vote in
respect of that share. |
10.4 |
Trustees as
joint shareholders |
|
Two or more trustees of a shareholder
in whose sole name any share is registered are, for the purposes of Article
10.3, deemed to be joint shareholders. |
10.5 |
Representative of a corporate shareholder |
|
If a corporation that is not a
subsidiary of the Company is a shareholder, that corporation may appoint a
person to act as its representative at any meeting of shareholders of the
Company, and: |
|
(a) |
for
that purpose, the instrument appointing a representative must |
|
(i) |
be received at the registered office of the Company or at
any other place specified, in the notice calling the meeting, for the receipt
of proxies, at least 2 business days before the day set for the holding of the
meeting, or |
|
(ii) |
unless
the notice of the meeting provides otherwise, be provided, at the meeting, to
the chair of the meeting; and |
|
(b) |
if
a representative is appointed under this Article 10.5, |
|
(i) |
the representative is entitled to exercise in respect of
and at that meeting the same rights on behalf of the corporation that the representative
represents as that corporation could exercise if it were a shareholder who is
an individual, including, without limitation, the right to appoint a proxy
holder, and |
|
(ii) |
the
representative, if present at the meeting, is to be counted for the purpose of
forming a quorum and is deemed to be a shareholder present in person at the
meeting. |
10.6 |
When proxy
provisions do not apply |
|
Articles 10.7 to 10.13 do not apply to the Company if
and for so long as it is a public company. |
- 11 -
10.7 |
Appointment of
proxy holder |
|
Every shareholder of the Company,
including a corporation that is a shareholder but not a subsidiary of the
Company, entitled to vote at a meeting of shareholders of the Company may, by
proxy, appoint a proxy holder to attend and act at the meeting in the manner,
to the extent and with the powers conferred by the proxy. |
10.8 |
Alternate
proxy holders |
|
A shareholder may appoint one or more
alternate proxy holders to act in the place of an absent proxy holder. |
10.9 |
When proxy
holder need not be shareholder |
|
A person must not be appointed as a
proxy holder unless the person is a shareholder, although a person who is not a
shareholder may be appointed as a proxy holder if: |
|
(a) |
the person appointing the proxy holder is a corporation
or a representative of a corporation appointed under Article 10.5; |
|
(b) |
the Company has at the time of the meeting for which the
proxy holder is to be appointed only one shareholder entitled to vote at the
meeting; or |
|
(c) |
the
shareholders present in person or by proxy at and entitled to vote at the
meeting for which the proxy holder is to be appointed, by a resolution on which
the proxy holder is not entitled to vote but in respect of which the proxy
holder is to be counted in the quorum, permit the proxy holder to attend and
vote at the meeting. |
|
A proxy, whether for a specified
meeting or otherwise, must be either in the following form or in any other form
approved by the directors or the chair of the meeting: |
(Name of Company)
|
The undersigned, being a shareholder of
the above named Company, hereby appoints
....................................... or, failing that person,
......................................., as proxy holder for the undersigned to
attend, act and vote for and on behalf of the undersigned at the meeting of
shareholders to be held on the day of and at any adjournment of that meeting. |
|
Signed this .......... day of
.............................................., ................. |
|
...............................................................
Signature of shareholder |
10.11 |
Provision
of proxies |
|
A proxy for a meeting of shareholders
must: |
|
(a) |
be received at the registered office of the Company or at
any other place specified in the notice calling the meeting for the receipt of
proxies, at least the number of business days specified in the notice or, if no
number of days is specified, 2 business days before the day set for the holding
of the meeting; or |
|
(b) |
unless the
notice of the meeting provides otherwise, be provided at the meeting to the
chair of the meeting. |
- 12 -
10.12 |
Revocation of proxies |
|
Subject to Article 10.13, every proxy may be revoked
by an instrument in writing that is: |
|
(a) |
received at the registered office of the Company at any
time up to and including the last business day before the day set for the
holding of the meeting at which the proxy is to be used; or |
|
(b) |
provided
at the meeting to the chair of the meeting. |
10.13 |
Revocation
of proxies must be signed |
|
An instrument referred to in Article
10.12 must be signed as follows: |
|
(a) |
if the shareholder for whom the proxy holder is appointed
is an individual, the instrument must be signed by the shareholder or his or
her trustee; or |
|
(b) |
if the
shareholder for whom the proxy holder is appointed is a corporation, the
instrument must be signed by the corporation or by a representative appointed
for the corporation under Article 10.5. |
10.14 |
Validity
of proxy votes |
|
A vote given in accordance with the
terms of a proxy is valid despite the death or incapacity of the shareholder
giving the proxy and despite the revocation of the proxy or the revocation of
the authority under which the proxy is given, unless notice in writing of that
death, incapacity or revocation is received: |
|
(a) |
at the registered office of the Company, at any time up
to and including the last business day before the day set for the holding of
the meeting at which the proxy is to be used; or |
|
(b) |
by
the chair of the meeting, before the vote is taken. |
10.15 |
Production
of evidence of authority to vote |
|
The chair of any meeting of
shareholders may, but need not, inquire into the authority of any person to
vote at the meeting and may, but need not, demand from that person production
of evidence as to the existence of the authority to vote. |
PART 11 – DIRECTORS
11.1 |
First
directors; number of directors |
|
The first directors are the persons
designated as directors of the Company in the Notice of Articles that applies
to the Company when it is recognized under the Business Corporations Act.
The number of directors, excluding additional directors appointed under Article
12.7, is set at: |
|
(a) |
subject to paragraphs (b) and (c), the number of
directors that is equal to the number of the Company’s first directors; |
|
(b) |
if the Company is a public company, the greater of three
and the number most recently elected by ordinary resolution (whether or not
previous notice of the resolution was given); and |
|
(c) |
if the
Company is not a public company, the number most recently elected by ordinary
resolution (whether or not previous notice of the resolution was given). |
11.2 |
Change in
number of directors |
|
If the number of directors is set under
Articles 11.1(b) or 11.1(c): |
|
(a) |
the
shareholders may elect or appoint the directors needed to fill any vacancies in
the board of directors up to that number; |
- 13 -
|
(b) |
if,
contemporaneously with setting that number, the shareholders do not elect or
appoint the directors needed to fill vacancies in the board of directors up to
that number, then the directors may appoint, or the shareholders may elect or
appoint, directors to fill those vacancies. |
11.3 |
Directors’ acts valid despite vacancy |
|
An act or proceeding of the directors
is not invalid merely because fewer directors have been appointed or elected
than the number of directors set or otherwise required under these Articles. |
11.4 |
Qualifications of directors |
|
A director is not required to hold a
share in the capital of the Company as qualification for his or her office but
must be qualified as required by the Business Corporations Act to
become, act or continue to act as a director. |
11.5 |
Remuneration of directors |
|
The directors are entitled to the
remuneration, if any, for acting as directors as the directors may from time to
time determine. If the directors so decide, the remuneration of the directors
will be determined by the shareholders. That remuneration may be in addition to
any salary or other remuneration paid to a director in such director’s capacity
as an officer or employee of the Company. |
11.6 |
Reimbursement of expenses of directors |
|
The Company must reimburse each
director for the reasonable expenses that he or she may incur in and about the
business of the Company. |
11.7 |
Special
remuneration for directors |
|
If any director performs any
professional or other services for the Company that in the opinion of the
directors are outside the ordinary duties of a director, or if any director is
otherwise specially occupied in or about the Company’s business, he or she may
be paid remuneration fixed by the directors, or, at the option of that
director, fixed by ordinary resolution, and such remuneration may be either in
addition to, or in substitution for, any other remuneration that he or she may
be entitled to receive. |
11.8 |
Gratuity,
pension or allowance on retirement of director |
|
Unless otherwise determined by ordinary
resolution, the directors on behalf of the Company may pay a gratuity or
pension or allowance on retirement to any director who has held any salaried
office or place of profit with the Company or to his or her spouse or
dependants and may make contributions to any fund and pay premiums for the
purchase or provision of any such gratuity, pension or allowance. |
PART 12 – ELECTION AND
REMOVAL OF DIRECTORS
12.1 |
Election at
annual general meeting |
|
At every annual general meeting and in
every unanimous resolution contemplated by Article 7.2: |
|
(a) |
the shareholders entitled to vote at the annual general
meeting for the election of directors may elect, or in the unanimous resolution
appoint, a board of directors consisting of up to the number of directors for
the time being set under these Articles; and |
|
(b) |
all the
directors cease to hold office immediately before the election or appointment
of directors under paragraph (a), but are eligible for re-election or
re-appointment. |
12.2 |
Consent to
be a director |
|
No election, appointment or designation of an
individual as a director is valid unless: |
- 14 -
|
(a) |
that individual consents to be a director in the manner
provided for in theBusiness Corporations Act; |
|
(b) |
that individual is elected or appointed at a meeting at
which the individual is present and the individual does not refuse, at the
meeting, to be a director; or |
|
(c) |
with
respect to first directors, the designation is otherwise valid under theBusiness
Corporations Act. |
12.3 |
Failure to
elect or appoint directors |
|
(a) |
the
Company fails to hold an annual general meeting, and all the shareholders who
are entitled to vote at an annual general meeting fail to pass the unanimous
resolution contemplated by Article 7.2, on or before the date by which the
annual general meeting is required to be held under theBusiness
Corporations Act; or |
|
(b) |
the shareholders fail, at the annual general meeting or
in the unanimous resolution contemplated by Article 7.2, to elect or appoint
any directors; |
|
then each director in office at such time continues to hold
office until the earlier of: |
|
(c) |
the date on which his or her successor is
elected or appointed; and |
|
(d) |
the date
on which he or she otherwise ceases to hold office under theBusiness
Corporations Act or these Articles. |
12.4 |
Directors
may fill casual vacancies |
|
Any casual vacancy occurring in the
board of directors may be filled by the remaining directors. |
12.5 |
Remaining
directors’ power to act |
|
The directors may act notwithstanding
any vacancy in the board of directors, but if the Company has fewer directors
in office than the number set pursuant to these Articles as the quorum of directors,
the directors may only act for the purpose of appointing directors up to that
number or for the purpose of summoning a meeting of shareholders to fill any
vacancies on the board of directors or for any other purpose permitted by the Business
Corporations Act. |
12.6 |
Shareholders may fill vacancies |
|
If the Company has no directors or
fewer directors in office than the number set pursuant to these Articles as the
quorum of directors, and the directors have not filled the vacancies pursuant
to Article 12.5 above, the shareholders may elect or appoint directors to fill
any vacancies on the board of directors. |
12.7 |
Additional
directors |
|
Notwithstanding Articles 11.1 and 11.2,
between annual general meetings or unanimous resolutions contemplated by
Article 7.2, the directors may appoint one or more additional directors, but
the number of additional directors appointed under this Article 12.7 must not
at any time exceed: |
|
(a) |
one-third of the number of first directors, if, at the
time of the appointments, one or more of the first directors have not yet
completed their first term of office; or |
|
(b) |
in any
other case, one-third of the number of the current directors who were elected
or appointed as directors other than under this Article 12.7. |
- 15 -
|
Any director
so appointed ceases to hold office immediately before the next election or
appointment of directors under Article 12.1(a), but is eligible for re-election
or re-appointment. |
12.8 |
Ceasing to
be a director |
|
A director ceases to be a director
when: |
|
(a) |
the term of office of the director expires; |
|
(c) |
the director resigns as a director by notice in writing
provided to the Company or a lawyer for the Company; or |
|
(d) |
the
director is removed from office pursuant to Articles 12.9 or 12.10. |
12.9 |
Removal
of director by shareholders |
|
The Shareholders may, by special
resolution, remove any director before the expiration of his or her term of
office, and may, by ordinary resolution, elect or appoint a director to fill
the resulting vacancy. If the shareholders do not contemporaneously elect or
appoint a director to fill the vacancy created by the removal of a director, then
the directors may appoint, or the shareholders may elect or appoint by ordinary
resolution, a director to fill that vacancy. |
12.10 |
Removal
of director by directors |
|
The directors may remove any director
before the expiration of his or her term of office if the director is convicted
of an indictable offence, or if the director ceases to be qualified to act as a
director of a company and does not promptly resign, and the directors may
appoint a director to fill the resulting vacancy. |
12.11 |
Nominations
of directors |
|
(a) |
Only
persons who are nominated in accordance with the following procedures shall be
eligible for election as directors of the Company. Nominations of persons for
election to the board may be made at any annual meeting of shareholders or at any
special meeting of shareholders if one of the purposes for which the special
meeting was called was the election of directors: |
|
(i) |
by or at the direction of the board, including
pursuant to a notice of meeting; |
|
(ii) |
by or at
the direction or request of one or more shareholders pursuant to a proposal
made in accordance with the provisions of theBusiness Corporations Act,
or a requisition of the shareholders made in accordance with the provisions of
the Business Corporations Act; or |
|
(iii) |
by any
person (a “Nominating Shareholder”): (A) who, at the close of business
on the date of the giving of the notice provided for below in this Section
12.11 and on the record date for notice of such meeting, is entered in the
securities register as a holder of one or more shares carrying the right to
vote at such meeting or who beneficially owns shares that are entitled to be
voted at such meeting; and (B) who complies with the notice procedures set
forth below in this Section 12.11. |
|
(b) |
In
addition to any other applicable requirements, for a nomination to be made by a
Nominating Shareholder, the Nominating Shareholder must have given timely
notice thereof in proper written form to the Secretary of the Company at the
principal executive offices of the Company. |
|
(c) |
To
be timely, a Nominating Shareholder’s notice to the Secretary of the Company
must be made: |
|
(i) |
in the
case of an annual meeting of shareholders, not less than 30 nor more than 65
days prior to the date of the annual meeting of shareholders; provided,
however, that in the event that the annual meeting of shareholders is to be
held on a date that is less than 50 days after |
- 16 -
|
the date (the
“Notice Date”) on which the first public announcement (as defined below)
of the date of the annual meeting was made, notice by the Nominating
Shareholder may be made not later than the close of business on the tenth
(10th) day after the Notice Date in respect of such meeting; and |
|
(ii) |
in the
case of a special meeting (which is not also an annual meeting) of shareholders
called for the purpose of electing directors (whether or not called for other
purposes), not later than the close of business on the fifteenth (15th) day
following the day on which the first public announcement of the date of the
special meeting of shareholders was made. In no event shall any adjournment or
postponement of a meeting of shareholders or the announcement thereof commence
a new time period for the giving of a Nominating Shareholder’s notice as
described above. |
|
(d) |
To be in
proper written form, a Nominating Shareholder’s notice to the Secretary of the
Company must set forth: |
|
(i) |
as to each person whom the Nominating Shareholder
proposes to nominate for election as a director: (A) the name, age, business
address and residential address of the person; (B) the principal occupation or
employment of the person; (C) the class or series and number of shares in the
capital of the Company which are controlled or which are owned beneficially or
of record by the person as of the record date for the meeting of shareholders
(if such date shall then have been made publicly available and shall have
occurred) and as of the date of such notice; and (D) any other information
relating to the person that would be required to be disclosed in a dissident’s
proxy circular in connection with solicitations of proxies for election of
directors pursuant to theBusiness Corporations Act and Applicable
Securities Laws (as defined below); and |
|
(ii) |
as to the
Nominating Shareholder giving the notice, any proxy, contract, arrangement,
understanding or relationship pursuant to which such Nominating Shareholder has
a right to vote any shares of the Company and any other information relating to
such Nominating Shareholder that would be required to be made in a dissident’s
proxy circular in connection with solicitations of proxies for election of
directors pursuant to theBusiness Corporations Act and Applicable
Securities Laws (as defined below). |
|
(e) |
The
Company may require any proposed nominee to furnish such other information as
may reasonably be required by the Company to determine the eligibility of such
proposed nominee to serve as an independent director of the Company or that
could be material to a reasonable shareholder’s understanding of the independence,
or lack thereof, of such proposed nominee. |
|
(f) |
No person
shall be eligible for election as a director of the Company unless nominated in
accordance with the provisions of this Section 12.11; provided, however, that
nothing in this Section 12.11 shall be
deemed to preclude discussion by a shareholder (as distinct from the nomination
of directors) at a meeting of shareholders of any matter in respect of which it
would have been entitled to submit a proposal pursuant to the provisions of theBusiness Corporations Act. The Chairman of the meeting shall have the
power and duty to determine whether a nomination was made in accordance with
the procedures set forth in the foregoing provisions and, if any proposed
nomination is not in compliance with such foregoing provisions, to declare that
such defective nomination shall be disregarded. |
|
(g) |
For
purposes of this Section 12.11: |
|
(i) |
“public announcement” shall mean disclosure in a press
release reported by a national news service in Canada, or in a document
publicly filed by the Company under its profile on the System of Electronic
Document Analysis and Retrieval at www.sedar.com; and |
|
(ii) |
“Applicable Securities Laws” means the applicable securities legislation of
each relevant province and territory of Canada, as amended from time to time,
the rules, regulations and forms made or promulgated under any such statute and
the published national instruments, |
- 17 -
|
multilateral instruments, policies, bulletins and
notices of the securities commission andsimilar regulatory
authority of each province and territory of Canada. |
|
(h) |
Notwithstanding any other provision of this Section 12.11, notice given to the
Secretary of the Company pursuant to this Section 12.11 may only be given by
personal delivery, facsimile transmission or by email (at such email address as
stipulated from time to time by the Secretary of the Company for purposes of
this notice), and shall be deemed to have been given and made only at the time
it is served by personal delivery, email (at the address as aforesaid) or sent
by facsimile transmission (provided that receipt of confirmation of such
transmission has been received) to the Secretary at the address of the
principal executive offices of the Company; provided that if such delivery or
electronic communication is made on a day which is a not a business day or
later than 5:00 p.m.
(Vancouver time) on a day which is a business day, then such delivery or
electronic communication shall be deemed to have been made on the subsequent
day that is a business day. |
|
(i) |
Notwithstanding the foregoing, the board may, in its sole discretion, waive any
requirement in this Section 12.11. |
PART 13– PROCEEDINGS OF
DIRECTORS
13.1 |
Meetings of
directors |
|
The directors may meet together for the
conduct of business, adjourn and otherwise regulate their meetings as they
think fit, and meetings of the board held at regular intervals may be held at
the place and at the time that the board may by resolution from time to time
determine. |
|
Meetings of directors are to be chaired
by: |
|
(a) |
the chair of the board, if any; |
|
(b) |
in
the absence of the chair of the board, the president, if any, if the president
is a director; or |
|
(c) |
any
other director chosen by the directors if: |
|
(i) |
neither the chair of the board nor the president, if a
director, is present at the meeting within 15 minutes after the time set for
holding the meeting, |
|
(ii) |
neither
the chair of the board nor the president, if a director, is willing to chair
the meeting, or |
|
(iii) |
the chair of
the board and the president, if a director, have advised the secretary, if any,
or any other director, that they will not be present at the meeting. |
|
Questions arising at any meeting of
directors are to be decided by a majority of votes and, in the case of an
equality of votes, the chair of the meeting does not have a second or casting
vote. |
13.4 |
Meetings by
telephone or other communications medium |
|
A director may participate in a meeting
of the directors or of any committee of the directors in person, or by
telephone or other communications medium, if all directors participating in the
meeting are able to communicate with each other. A director may participate in
a meeting of the directors or of any committee of the directors by a
communications medium other than telephone if all directors participating in
the meeting, whether in person or by telephone or other communications medium,
are able to communicate with each other and if all directors who wish to
participate in the meeting agree to such participation. A director who
participates in a meeting in a manner contemplated by this Article 13.4 is
deemed for all purposes of the Business Corporations Act and these Articles
to be present at the meeting and to have agreed to participate in that manner.
|
- 18 -
13.5 |
Who may call extraordinary meetings |
|
A director may call a meeting of the
board at any time. The secretary, if any, must on request of a director, call a
meeting of the board. |
13.6 |
Notice of
extraordinary meetings |
|
Subject to Articles 13.7 and 13.8, if a
meeting of the board is called under Article 13.4, reasonable notice of that
meeting, specifying the place, date and time of that meeting, must be given to
each of the directors: |
|
(a) |
by mail addressed to the director’s address as it appears
on the books of the Company or to any other address provided to the Company by
the director for this purpose; |
|
(b) |
by leaving it at the director’s prescribed address or at
any other address provided to the Company by the director for this purpose; or |
|
(c) |
orally, by
delivery of written notice or by telephone, voice mail, e-mail, fax or any
other method of legibly transmitting messages. |
13.7 |
When notice
not required |
|
It is not necessary to give notice of a
meeting of the directors to a director if: |
|
(a) |
the meeting is to be held immediately following a meeting
of shareholders at which that director was elected or appointed or is the
meeting of the directors at which that director is appointed; |
|
(b) |
the director has filed a waiver under Article
13.9; or |
|
(c) |
the
director attends such meeting. |
13.8 |
Meeting
valid despite failure to give notice |
|
The accidental omission to give notice
of any meeting of directors to any director, or the non-receipt of any notice
by any director, does not invalidate any proceedings at that meeting. |
13.9 |
Waiver
of notice of meetings |
|
Any director may file with the Company
a notice waiving notice of any past, present or future meeting of the directors
and may at any time withdraw that waiver with respect to meetings of the
directors held after that withdrawal. |
|
After a director files a waiver under
Article 13.9 with respect to future meetings of the directors, and until that
waiver is withdrawn, notice of any meeting of the directors need not be given
to that director unless the director otherwise requires in writing to the
Company. |
|
The quorum necessary for the
transaction of the business of the directors may be set by the directors and,
if not so set, is a majority of the directors. |
13.12 |
If
only one director |
|
If, in accordance with Article 11.1, the number of
directors is one, the quorum necessary for the transaction of the business of
the directors is one director, and that director may constitute a meeting. |
- 19 -
PART 14 –
COMMITTEES OF DIRECTORS
14.1 |
Appointment of committees |
|
The directors may, by resolution: |
|
(a) |
appoint
one or more committees consisting of the director or directors that they
consider appropriate; |
|
(b) |
delegate
to a committee appointed under paragraph (a) any of the directors’ powers,
except: |
|
(i) |
the power to fill vacancies in the board, |
|
(ii) |
the power
to change the membership of, or fill vacancies in, any committee of the board,
and |
|
(iii) |
the
power to appoint or remove officers appointed by the board; and |
|
(c) |
make
any delegation referred to in paragraph (b) subject to the conditions set out in
the resolution. |
14.2 |
Obligations
of committee |
|
Any committee formed under Article
14.1, in the exercise of the powers delegated to it, must: |
|
(a) |
conform to any rules that may from time to time
be imposed on it by the directors; and |
|
(b) |
report
every act or thing done in exercise of those powers to the earliest meeting of
the directors to be held after the act or thing has been done. |
|
The board may, at any time: |
|
(a) |
revoke the authority given to a committee, or override a
decision made by a committee, except as to acts done before such revocation or
overriding; |
|
(b) |
terminate the appointment of, or change the
membership of, a committee; and |
|
(c) |
fill
vacancies in a committee. |
|
Subject to Article 14.2(a): |
|
(a) |
the members of a directors’ committee may meet
and adjourn as they think proper; |
|
(b) |
a directors’ committee may elect a chair of its meetings
but, if no chair of the meeting is elected, or if at any meeting the chair of
the meeting is not present within 15 minutes after the time set for holding the
meeting, the directors present who are members of the committee may choose one
of their number to chair the meeting; |
|
(c) |
a majority of the members of a directors’
committee constitutes a quorum of the committee; and |
|
(d) |
questions
arising at any meeting of a directors’ committee are determined by a majority
of votes of the members present, and in case of an equality of votes, the chair
of the meeting has no second or casting vote. |
- 20 -
PART 15 – OFFICERS
15.1 |
Appointment of officers |
|
The board may, from time to time,
appoint a president, secretary or any other officers that it considers
necessary or desirable, and none of the individuals appointed as officers need
be a member of the board. |
15.2 |
Functions,
duties and powers of officers |
|
The board may, for each officer: |
|
(a) |
determine the functions and duties the officer
is to perform; |
|
(b) |
entrust to and confer on the officer any of the powers
exercisable by the directors on such terms and conditions and with such
restrictions as the directors think fit; and |
|
(c) |
from time
to time revoke, withdraw, alter or vary all or any of the functions, duties and
powers of the officer. |
|
All appointments of officers are to be
made on the terms and conditions and at the remuneration (whether by way of
salary, fee, commission, participation in profits or otherwise) that the board
thinks fit and are subject to termination at the pleasure of the board. |
PART 16 – CERTAIN
PERMITTED ACTIVITIES OF DIRECTORS
16.1 |
Other
office of director |
|
A director may hold any office or place
of profit with the Company (other than the office of auditor of the Company) in
addition to his or her office of director for the period and on the terms (as
to remuneration or otherwise) that the directors may determine. |
|
No director or intended director is
disqualified by his or her office from contracting with the Company either with
regard to the holding of any office or place of profit the director holds with
the Company or as vendor, purchaser or otherwise. |
16.3 |
Professional services by director or officer |
|
Subject to compliance with the
provisions of the Business Corporations Act, a director or officer of
the Company, or any corporation or firm in which that individual has an
interest, may act in a professional capacity for the Company, except as auditor
of the Company, and the director or officer or such corporation or firm is
entitled to remuneration for professional services as if that individual were
not a director or officer. |
16.4 |
Remuneration and benefits received from certain entities |
|
A director or officer may be or become a director,
officer or employee of, or may otherwise be or become interested in, any
corporation, firm or entity in which the Company may be interested as a
shareholder or otherwise, and, subject to compliance with the provisions of the
Business Corporations Act, the director or officer is not accountable to
the Company for any remuneration or other benefits received by him or her as
director, officer or employee of, or from his or her interest in, such other
corporation, firm or entity. |
- 21 -
PART 17 – INDEMNIFICATION
17.1 |
Indemnification of directors |
|
The directors must cause the Company to
indemnify its directors and former directors, and their respective heirs and
personal or other legal representatives to the greatest extent permitted by
Division 5 of Part 5 of the Business Corporations Act. |
|
Each director is deemed to have
contracted with the Company on the terms of the indemnity referred to in
Article 17.1. |
PART 18 – AUDITOR
18.1 |
Remuneration of an
auditor |
|
The directors may set the remuneration
of the auditor of the Company. |
18.2 |
Waiver of appointment
of an auditor |
|
The Company shall not be required to
appoint an auditor if all of the shareholders of the Company, whether or not
their shares otherwise carry the right to vote, resolve by a unanimous
resolution to waive the appointment of an auditor. Such waiver may be given
before, on or after the date on which an auditor is required to be appointed
under the Business Corporations Act, and is effective for one financial
year only. |
PART 19 – DIVIDENDS
19.1 |
Declaration of
dividends |
|
Subject to the rights, if any, of
shareholders holding shares with special rights as to dividends, the directors
may from time to time declare and authorize payment of any dividends the
directors consider appropriate. |
|
The directors need not give notice to
any shareholder of any declaration under Article 19.1. |
19.3 |
Directors may
determine when dividend payable |
|
Any dividend declared by
the directors may be made payable on such date as is fixed by the directors. |
19.4 |
Dividends to be
paid in accordance with number of shares |
|
Subject to the rights of shareholders,
if any, holding shares with special rights as to dividends, all dividends on
shares of any class or series of shares must be declared and paid according to
the number of such shares held. |
19.5 |
Manner of paying
dividend |
|
A resolution declaring a dividend may
direct payment of the dividend wholly or partly by the distribution of specific
assets or of paid up shares or fractional shares, bonds, debentures or other
debt obligations of the Company, or in any one or more of those ways, and, if
any difficulty arises in regard to the distribution, the directors may settle
the difficulty as they consider expedient, and, in particular, may set the
value for distribution of specific assets. |
19.6 |
Dividend bears no
interest |
|
No dividend bears interest against the Company. |
- 22 -
19.7 |
Fractional
dividends |
|
If a dividend to which a shareholder is
entitled includes a fraction of the smallest monetary unit of the currency of
the dividend, that fraction may be disregarded in making payment of the
dividend and that payment represents full payment of the dividend. |
19.8 |
Payment of
dividends |
|
Any dividend or other distribution
payable in cash in respect of shares may be paid by cheque, made payable to the
order of the person to whom it is sent, and mailed: |
|
(a) |
subject to paragraphs (b) and (c), to the
address of the shareholder; |
|
(b) |
subject to paragraph (c), in the case of joint
shareholders, to the address of the joint shareholder whose name stands first
on the central securities register in respect of the shares; or |
|
(c) |
to
the person and to the address as the shareholder or joint shareholders may
direct in writing. |
19.9 |
Receipt
by joint shareholders |
|
If several persons are joint shareholders
of any share, any one of them may give an effective receipt for any dividend,
bonus or other money payable in respect of the share. |
PART 20 – ACCOUNTING
RECORDS
20.1 |
Recording
of financial affairs |
|
The board must cause adequate
accounting records to be kept to record properly the financial affairs and
condition of the Company and to comply with the provisions of the Business
Corporations Act. |
PART 21 – EXECUTION OF
INSTRUMENTS
|
The Company’s seal, if any, must not be
impressed on any record except when that impression is attested by the
signature or signatures of: |
|
(b) |
any officer, together with any director; |
|
(c) |
if the Company has only one director, that
director; or |
|
(d) |
any
one or more directors or officers or persons as may be determined by resolution
of the directors. |
|
For the purpose of certifying under
seal a true copy of any resolution or other document, the seal must be
impressed on that copy and, despite Article 21.1, may be attested by the
signature of any director or officer. |
21.3 |
Execution
of documents not under seal |
|
Any instrument, document or agreement for which the
seal need not be affixed may be executed for and on behalf of and in the name
of the Company by any one director or officer of the Company, or by any other
person appointed by the directors for such purpose. |
- 23 -
PART 22 – NOTICES
22. |
Method of giving notice |
|
Unless the Business Corporations Act
or these Articles provides otherwise, a notice, statement, report or other
record required or permitted by the Business Corporations Act or these
Articles to be sent by or to a person may be sent by any one of the following
methods: |
|
(a) |
mail
addressed to the person at the applicable address for that person as follows: |
|
(i) |
for a record mailed to a shareholder, the
shareholder’s registered address, |
|
(ii) |
for a
record mailed to a director or officer, the prescribed address for mailing
shown for the director or officer in the records kept by the Company or the
mailing address provided by the recipient for the sending of that record or
records of that class, or |
|
(iii) |
in any
other case, the mailing address of the intended recipient; |
|
(b) |
delivery
at the applicable address for that person as follows, addressed to the person: |
|
(i) |
for a record delivered to a shareholder, the
shareholder’s registered address, |
|
(ii) |
for a
record delivered to a director or officer, the prescribed address for delivery
shown for the director or officer in the records kept by the Company or the
delivery address provided by the recipient for the sending of that record or
records of that class, |
|
(iii) |
in any
other case, the delivery address of the intended recipient; |
|
(c) |
sending the record by fax to the fax number provided by
the intended recipient for the sending of that record or records of that class; |
|
(d) |
sending the record by email to the email address provided
by the intended recipient for the sending of that record or records of that
class; |
|
(e) |
physical delivery to the intended recipient; or |
|
(f) |
such other
manner of delivery as is permitted by applicable legislation governing
electronic delivery. |
22. |
Deemed
receipt of mailing |
|
A record that is mailed to a person by
ordinary mail to the applicable address for that person referred to in Article
22.1 is deemed to be received by the person to whom it was mailed on the day,
Saturdays, Sundays and holidays excepted, following the date of mailing. |
22. |
Certificate
of sending |
|
A certificate signed by the secretary,
if any, or other officer of the Company or of any other corporation acting in
that behalf for the Company stating that a notice, statement, report or other
record was addressed as required by Article 22.1, prepaid and mailed or
otherwise sent as permitted by Article 22.1 is conclusive evidence of that
fact. |
22. |
Notice to
joint shareholders |
|
A notice, statement, report or other record may be
provided by the Company to the joint registered shareholders of a share by
providing the notice to the joint registered shareholder first named in the
central securities register in respect of the share. |
- 24 -
|
A notice, statement, report or other
record may be provided by the Company to the persons entitled to a share in
consequence of the death, bankruptcy or incapacity of a shareholder by: |
|
(a) |
mailing
the record, addressed to them: |
|
(i) |
by name, by the title of the legal personal
representative of the deceased or incapacitated shareholder, by the title of
trustee of the bankrupt shareholder or by any similar description, and |
|
(ii) |
at the
address, if any, supplied to the Company for that purpose by the persons
claiming to be so entitled; or |
|
(b) |
if an
address referred to in Article 22.5(a)(ii) has not been supplied to the
Company, by giving the notice in a manner in which it might have been given if
the death, bankruptcy or incapacity had not occurred. |
PART 23 – RESTRICTION ON
SHARE TRANSFER
|
Article 23.2 does not apply to the
Company if and for so long as it is a public company. |
23.2 |
2 Consent
required for transfer |
|
No shares may be sold, transferred or
otherwise disposed of without the consent of the directors and the directors
are not required to give any reason for refusing to consent to any such sale,
transfer or other disposition. |
PART 24 - SPECIAL RIGHTS
AND RESTRICTIONS
24.1 |
Preferred
shares issuable in series |
|
The Preferred shares may include one or
more series and, subject to the Business Corporations Act, the directors
may, by resolution, if none of the shares of any particular series are issued,
alter the Articles of the Company and authorize the alteration of the Notice of
Articles of the Company, as the case may be, to do one or more of the
following: |
|
(a) |
determine the maximum number of shares of that series
that the Company is authorized to issue, determine that there is no such
maximum number, or alter any such determination; |
|
(b) |
create an identifying name for the shares of that
series, or alter any such identifying name; and |
|
(c) |
attach
special rights or restrictions to the shares of that series, or alter any such
special rights or restrictions. |
|
|
|
|
Full Name and signature of incorporator |
Date of Signing |
|
|
|
<> |
|
|
|
|
|
|
|
|
_________________________________________ |
|
<> |
|
- 25 -
- 26 -
SCHEDULE E
LIST OF INTELLECTUAL PROPERTY
3. |
Plant diagrams
and schematics. |
- 27 -
SCHEDULE F
WARATAH ROYALTIES
Eco Endeavors and Waratah Capital Ltd. (“WCL”)
entered into a Royalty Deed dated June 1, 2012, whereby Eco Endeavors agreed to
pay WCL a royalty calculated as 3% of all revenue determined and calculated on
a quarterly basis each year. Royalties are calculated by including in such
revenues all revenues receivable by any of Eco Endeavors subsidiaries.
- 28 -
SCHEDULE G
DISCLOSURE STATEMENT
Section 3.1(b)
Eco Endeavors owes Palladio Projects Kft 75,000 Euros
pursuant to the terms of a consulting agreement. Payment is overdue pursuant to
the closing of the sale of Kenderes Biogaz to Kenderesh (the “Palladio
Agreement”).
Kenderes Biogaz owes Palladio Projects Kft certain
sums pursuant to the terms of the Kenderes Biogaz Royalty.
Kenderes Biogaz owes Középtiszai Mez Kenderes Biogaz owes Középtiszai Mez gazdasági Zártkör en M köd Részvénytársaság (“Középtiszai”) 13,333,333 Hungarian Forints pursuant to the terms of a Biowaste utilization contract (Biohulladék Hasznosítási Szerz dés) and an operating agreement (Együttm ködési Szerz dés).
Eco Endeavors owes Waratah certain
sums pursuant to the terms of the Deed of Undertaking, which, for greater
certainty, is anticipated to increase until the Effective Date as Waratah
continues to fund Eco Endeavors until such date.
General indebtedness occurred in the normal course of
business.
Section 3.1(g)
Payments required pursuant to Palladio
Agreement.
Payments required to Középtiszai pursuant to the Biowaste
utilization contract and the operating agreement.
Section 3.1(n)
Waratah Royalty
Kenderes Biogaz Royalty
Section 3.1(o)
See Section 3.1(n) disclosure of
royalties set out in this Schedule above which information is incorporated into this section by reference.
Section 3.1(t)
Eco
Endeavors has not filed tax returns for its fiscal years ended March 31, 2012
or 2013.
Section 3.1(w)
Monthly payments of 2,222,223 Hungarian Forints
are due to Középtiszai on the 10th day of each month. If the payments are not made,
Kenderes Biogaz will be in breach of the contract and run the risk of Középtiszai
confiscating the Sorghum, which is used to run the biogas plant. In this case,
the plant would likely not be able to run in a profitable fashion.
- 29 -
Section 3.1(bb)
See Section 3.1(w) set out
in this Schedule above which information is incorporated into this section by
reference.
Section 3.1(ff)
Supply has been secured
through to August 2013. Following this date, raw material supply is uncertain
and significant investment will be required to secure supply for the coming
year. If sufficient funding is not received, Kenderes Biogaz will not have
adequate supply and it will have a material adverse effect on the revenues and
operations of Kenderes Biogaz.
Kenderes Biogaz has an arrangement with Középtiszai
whereby they remove all fertilizer produced by the plant and spread it over
their farms. This arrangement will terminate in October of 2013, although the
farmer has refused to remove the fertilizer thus far in 2013. Kenderes Biogaz
will need to make significant investment in heat exchange infrastructure and
fertilizer certification to appropriately dispose of or sell the fertilizer.
Kenderes Biogaz has started the fertilizer certification, but requires further
funding for this endeavor and if sufficient funds are not received it will have
a material negative effect on the profitability of the plant.