BUSINESS COMBINATION AGREEMENT
THIS AGREEMENT is made as of
November 9, 2010, among ecoTECH Energy Group (Canada) Inc., a corporation
incorporated under the Canada Business Corporation Act (the “ecoTECH”), Sea 2 Sky
Corporation, a corporation incorporated under the laws of the State of Nevada
(“SSKY”) and 7697112
Canada Corp., a corporation incorporated under the Canada Business Corporation
Act (“Subco”) (each a
“Party” and
collectively, the “Parties”).
WHEREAS:
A.
ecoTECH is a private company incorporated
under the laws of the Canadian Business Corporation Act;
B.
SSKY
incorporated under the laws of the State of Nevada whose common stock is quoted
on the Over the Counter Bulletin Board under the symbol “SSKY.OB”;
C.
Subco
is a corporation wholly owned by SSKY incorporated under the laws of the
Canadian Business Corporation Act;
D.
ecoTECH
and SSKY propose to combine the business and assets of ecoTECH with those of
SSKY; and
E.
the
Parties intend to carry out the proposed business combination by way of a
statutory amalgamation under the provisions of the Act and related transaction
steps;
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 are hereby
acknowledged by each of the Parties, the Parties covenant and agree as
follows:
ARTICLE
1
INTERPRETATION
Section
1.1 Definitions
In this
Agreement, unless there is something in the subject matter or context
inconsistent therewith, the following terms shall have the following meanings,
respectively:
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(a)
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“1933 Act” mean the United States Securities
Exchange Act of 1933;
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(b)
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“1934 Act” means the
United States Securities
Exchange Act of 1934;
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(c)
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“Act” means the Canada Business Corporations
Act as the same has been and may hereafter from time to time be
amended;
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(d)
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“Affiliate” has the
meaning ascribed thereto in the
Act;
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(e)
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“Agreement”, “this Agreement”, “herein”, “hereto”, and “hereof” and similar
expressions refer to this Agreement, as the same may be amended or
supplemented from time to time;
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(f)
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“Amalco” means the
amalgamated corporation resulting from the
Amalgamation;
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(g)
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“Amalco Shares” means the
common shares in the share capital of Amalco, all of which will be
beneficially owned by SSKY;
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(h)
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“Amalgamation” means the
amalgamation of ecoTECH and Subco pursuant to the applicable provisions of
the Act;
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(i)
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“Amalgamation Agreement”
means the agreement among ecoTECH, SSKY and Subco in respect of the
Amalgamation, to be substantially in the form attached as Schedule “A” to
this Agreement;
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(j)
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“Articles” means the
articles of Amalco;
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(k)
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“Amalgamation
Application” means the amalgamation application as contemplated by
the Act, which application will included the following: (A)
Amalgamation Agreement; (B) Articles of Amalgamation; and (C) the
documents required by Sections 19 (notice of registered office in Canada)
and 106 (notice of directors);
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(l)
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“Business Day” means any
day excepting a Saturday or Sunday or a day recognized as a
holiday;
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(m)
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“Business Combination”
means the series of transactions, as detailed in this Agreement, through
which the businesses of ecoTECH and SSKY will be combined, including the
Amalgamation;
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(n)
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“Completion Deadline”
means November 12, 2010 or such later date as may be agreed between the
Parties in writing;
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(o)
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“Director” means the
Director appointed under Section 260 of the
Act;
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(p)
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“Documents” means
collectively, this Agreement and the Amalgamation
Agreement;
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(q)
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“ecoTECH Shares” means
common shares in the capital of
ecoTECH;
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(r)
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“ecoTECH Shareholder”
means a registered holder of ecoTECH Shares, from time to time, and “ecoTECH Shareholders”
means all such holders;
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(s)
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“Effective Date” means
the date of the filing of the Amalgamation Application with the
Director;
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(t)
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“Effective Time” means
12:01 a.m. (Vancouver time) on the Effective
Date;
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(u)
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“GAAP” means generally
accepted accounting principles;
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(v)
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“in writing” means
written information including documents, files, software, records and
books made available, delivered or produced to one Party by or on behalf
of the other Party;
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(w)
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“material fact” has the
meaning ascribed thereto in the Securities Act (British
Columbia) as the same has been and may hereafter from time to time be
modified;
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(x)
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“Party” means each of
ecoTECH, SSKY, and Subco;
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(y)
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“Person” includes any
individual, firm, partnership, joint venture, venture capital fund,
association, trust, trustee, executor, administrator, legal personal
representative, estate, group, body corporate, corporation, unincorporated
association or organization, Government Authority, syndicate or other
entity, whether or not having legal
status;
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(z)
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“Personnel Obligations”
means any obligations or liabilities of a Party or any of its Subsidiaries
to pay any amount to its or their officers, directors, employees and
consultants, other than for salary, bonuses under its or their existing
bonus arrangements and directors’ fees in the ordinary course, in each
case in amounts consistent with historic practices and obligations or
liabilities in respect of insurance or indemnification contemplated by
this Agreement or arising in the ordinary and usual course of business
and, without limiting the generality of the foregoing, Personnel
Obligations shall include the obligations of such Party or any of its
Subsidiaries to directors, officers, employees and
consultants:
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(i)
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for
payments on or in connection with any change in control of such Party
pursuant to any change in control agreements, policies or arrangements,
including the payments specified herein;
and
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(ii)
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for
any special incentive bonus payments and
commitments;
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(aa)
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“Regulatory Approval”
means any approval, consent, waiver, permit, order or exemption from any
Government Authority having jurisdiction or authority over any Party or
the Subsidiary of any Party which is required or advisable to be obtained
in order to permit the Business Combination to be effected and “Regulatory Approvals”
means all such approvals, consents, waivers, permits, orders or
exemptions;
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(bb)
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“Resulting Issuer” means
SSKY upon completion of the Business
Combination;
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(cc)
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”SEC” means the
Securities and Exchange Commission;
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(dd)
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“Securities Authorities”
means the Securities regulatory authorities having jurisdiction over
SSKY;
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(ee)
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“Subco”, means 0894628
B.C. LTD, a corporation incorporated under the
Act;
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(ff)
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“Subco Shares” means the
common shares in the capital of
Subco;
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(gg)
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“Subsidiary” has the
meaning ascribed thereto in the
Act;
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(hh)
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“SSKY” means Sea 2 Sky
Corporation., a corporation incorporated under the laws of the State of
Nevada;
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(ii)
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“SSKY Shareholder” means
a registered holder of SSKY Shares, from time to time, and “SSKY Shareholders” means
all of such holders;
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(jj)
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“SSKY Shares” means the
common shares in the capital of
SSKY;
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Section
1.2 Singular, Plural, etc.
Words
importing the singular number include the plural and vice versa and words
importing gender include the masculine, feminine and neuter
genders.
Section
1.3 Deemed Currency
In the
absence of a specific designation of any currency any undescribed dollar amount
herein shall be deemed to refer to Canadian dollars.
Section
1.4 Headings, etc.
The
division of this Agreement into Articles and Sections, the provision of a table
of contents hereto and the insertion of the recitals and headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement and, unless otherwise stated, all references in
this Agreement to Articles and Sections refer to Articles and Sections of and to
this Agreement in which such reference is made.
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Section
1.5 Date for any Action
In the
event that any date on which any action is required to be taken hereunder by any
of the Parties hereunder is not a Business Day, such action shall be required to
be taken on the next succeeding day that is a Business Day.
Section
1.6 Governing Law
This
Agreement shall be governed by and interpreted in accordance with the Laws of
the Province of British Columbia and the Laws of Canada applicable
therein.
Section
1.7 Attornment
The
Parties hereby irrevocably and unconditionally consent to and submit to the
courts of the Province of British Columbia for any actions, suits or proceedings
arising out of or relating to this Agreement or the matters contemplated hereby
(and agree not to commence any action, suit or proceeding relating thereto
except in such courts) and further agree that service of any process, summons,
notice or document by single registered mail to the addresses of the Parties set
forth in this Agreement shall be effective service of process for any action,
suit or proceeding brought against either Party in such court. The Parties
hereby irrevocably and unconditionally waive any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
matters contemplated hereby in the courts of the Province of British Columbia
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit or proceeding so brought
has been brought in an inconvenient forum.
ARTICLE
2
THE
BUSINESS COMBINATION
Section
2.1 Business Combination Steps
ecoTECH
and SSKY agree to effect the combination of their respective businesses and
assets by way of a “three-cornered amalgamation” between a wholly-owned
subsidiary of SSKY (“Subco”) and ecoTECH (the
“Amalgamation”). When
completed, SSKY will become the “Resulting Issuer” with the
name “ecoTECH Energy Group, Inc.” or such other similar name as may be accepted
by the relevant regulatory authorities and approved by the board of directors of
SSKY. Each Party hereby agrees that as soon as reasonably practicable after the
date hereof or at such other time as is specifically indicated below in this
Section 2.1, and subject to the terms and conditions of this Agreement, it shall
take the following steps indicated for it:
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(a)
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ecoTECH
shall either (i) call and convene a meeting of the ecoTECH Shareholders or
(ii) distribute a resolution (which resolution shall waive notice and
attendance at a meeting) to be signed by all of the ecoTECH Shaeholders
for the purpose of approving the Amalgamation described in this Agreement
and the Amalgamation Agreement (the “ecoTECH Shareholder
Approval”);
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(b)
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ecoTECH
and Subco hereby agree to amalgamate by way of statutory amalgamation
under the Act on the terms and subject to the conditions contained in this
Agreement and the Amalgamation Agreement, and SSKY hereby covenants and
agrees to issue SSKY Shares required to be issued in connection with the
Amalgamation;
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(c)
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The
Parties shall cause the Amalgamation Application to be filed to effect the
Amalgamation. Under the
Amalgamation:
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(i)
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ecoTECH
and Subco will amalgamate under the provisions of the Act and continue as
“ecoTECH Energy Group (Canada) Inc.” (“Amalco”);
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(ii)
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Holders
of outstanding ecoTECH Shares shall receive one (1) SSKY Share for each
one (1) Share held (such ratio being the “Exchange Ratio”), and
each such SSKY Share, after giving completion of the Business Combination,
is herein called a “Resulting Issuer
Share”;
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(iii)
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Each
ecoTECH Share held by an ecoTECH Shareholder who has validly exercised
such Shareholder’s rights of dissent pursuant to Section 2.2(g) and which
rights of dissent remain valid immediately prior to the Effective Time
shall be cancelled and become an entitlement to be paid the fair value of
such Dissenter Shares (as defined below) shall cease to have any rights as
a ecoTECH Shareholder other than the right to be paid the fair value of
each ecoTECH Share by Amalco in accordance with Section
2.2(g).
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(iv)
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Each
outstanding Subco Share will be exchanged for one (1) Amalco
Share;
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(v)
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As
consideration for the issuance of SSKY Shares to effect the Amalgamation,
Amalco will issue to SSKY one (1) Amalco Share for each SSKY Share so
issued;
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(vi)
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All
of the property and assets of each of ecoTECH and Subco will be the
property and assets of Amalco and Amalco will be liable for all of the
liabilities and obligations of each of ecoTECH and Subco;
and
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(vii)
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The
articles of incorporation and bylaws of Subco, as in effect immediately
prior to the Effective Time, shall be the articles of incorporation and
bylaws of Amalco until thereafter changed or amended as provided therein
or by the Act.
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(viii)
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Amalco
will be a wholly-owned subsidiary of
SSKY;
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(f)
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As
soon as practicable after the Effective Date, in accordance with Section
2.4 below, the Resulting Issuer shall issue certificates representing the
appropriate number of the Resulting Issuer Shares to the former ecoTECH
Shareholders. No fractional Resulting Issuer Shares will be delivered to
any ecoTECH Shareholder otherwise entitled thereto. In lieu of
any fractional Resulting Issuer Shares, a shareholder otherwise entitled
to a fractional interest in a Resulting Issuer Share shall receive the
nearest whole number of Resulting Issuers Shares as applicable (with
fractions equal to exactly 0.5 being rounded up);
and
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(g)
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Dissenters
Rights. Notwithstanding anything in this Agreement to
the contrary, ecoTECH Shares (“Dissenter Shares”) that
are outstanding immediately prior to the Effective Time and that are held
by any person who is entitled to demand and properly demands payment for
such Dissenter Shares pursuant to, and who complies in all respects with,
Sections 190 et. seq. of the Act (the “Dissenter Rights”) shall
not be exchanged for SSKY Shares as provided in Section 2.1(c), but
rather the holders of Dissenter Shares shall be entitled to payment for
such Dissenter Shares in accordance with the Dissenter Rights; provided, however, that
if any such holder shall fail to perfect or otherwise shall waive,
withdraw or lose the right to receive payment under the Dissenter Rights,
then the right of such holder to be paid in accordance with the Dissenter
Rights shall cease and such Dissenter Shares shall be deemed to have been
converted as of the Effective Time into, and to have become exchangeable
solely for the right to receive, SSKY Shares as provided in
Section 2.1(c). ecoTECH shall serve prompt notice to SSKY
of any written notice of intent to demand payment, or any written demand
for payment, received by ecoTECH in respect of any ecoTECH Shares, and
SSKY shall have the right to participate in and direct all negotiations
and proceedings with respect to such demands. Prior to the
Effective Time, ecoTECH shall not, without the prior written consent of
SSKY, make any payment with respect to, or settle or offer to settle, any
such demands, or agree to do any of the
foregoing.
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(h)
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The
Parties shall take any other action and do anything, including the
execution of any other agreements, documents or instruments that are
necessary or useful to give effect to the Business
Combination.
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Section
2.2 Implementation Covenants
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(a)
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Preparation of
Documentation. ecoTECH and SSKY
shall each prepare documentation required in connection with the ecoTECH
Shareholder Approval, and deliver such documentation to ecoTECH
Shareholders (and ecoTECH).
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(b)
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Preparation of
Filings. ecoTECH and SSKY
shall cooperate in the preparation of any application for the orders and
the preparation of any other documents and taking of all actions
reasonably deemed by ecoTECH or SSKY to be necessary to discharge their
respective obligations under applicable Laws in connection with the
Business Combination and all other matters contemplated in the
Documents.
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(c)
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Amalgamation
Agreement, etc. The Parties hereby acknowledge that the
Amalgamation Agreement shall be substantially in the form attached as
Schedule “A”. Subco shall, subject to the terms and conditions of this
Agreement and subject to and following the receipt of all Regulatory
Approvals, deliver to ecoTECH the duly executed Amalgamation Application
and related documents which will be filed by ecoTECH with the
Director.
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Section
2.3 Board of Directors
Each of
the Parties hereby agrees that upon completion of the Business Combination, the
board of directors of the Resulting Issuer shall consist of the following
persons: Xxxxx X. Xxxx, Xxxx Xxxxx, Xxxxx X. Xxxxxxxx, Xxxx Xxxxxxxx, and Xxxx
Xxxxxxx.
Section
2.4 Exchange of Certificates
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(a)
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Exchange
Agent. Indeglia & Xxxxxx shall serve as Exchange
Agent (the “Exchange
Agent”) for payment of SSKY Shares pursuant to Section 2.1(c) upon
surrender of certificates representing ecoTECH Shares. Promptly
following the Effective Time, SSKY shall reserve and/or deposit with the
Exchange Agent, for the benefit of the holders of ecoTECH Shares, for
exchange in accordance with this Article II, through the Exchange Agent:
certificates representing the number of shares of SSKY Shares issuable and
pursuant to Section 2.1(c) in exchange for outstanding ecoTECH
Shares. The Exchange Agent shall, pursuant to irrevocable
instructions, deliver SSKY Shares contemplated to be issued pursuant to
Section 2.1(c).
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(b)
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Exchange
Procedures. As soon as reasonably practicable after the
Effective Time, each holder of record of a certificate or certificates
(the “Certificates”) that,
immediately prior to the Effective Time, represented outstanding ecoTECH
Shares whose shares were converted into the right to receive SSKY Shares
pursuant to Section 2.1(c) shall surrender such holder’s Certificate
for cancellation to ecoTECH and/or the Exchange Agent (or to such other
agent or agents as may be appointed by SSKY) together with a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to SSKY and shall be in such form and have such other
provisions as SSKY may reasonably specify), duly executed, and such other
documents as may reasonably be required by SSKY or the Exchange Agent, the
holder of such Certificate shall be entitled to receive in exchange
therefore the holder’s that number of SSKY Shares pursuant to the Exchange
Ratio, and the Certificate so surrendered shall forthwith be
canceled. Thereafter, such holder shall be treated as a holder
of SSKY Shares for purposes of voting or quorum for any meeting of the
stockholders of SSKY. In the event of a transfer of ownership
of ecoTECH Shares that is not registered in the transfer records of
ecoTECH, payment may be made to a person other than the person in whose
name the Certificate so surrendered is registered, if such Certificate
shall be properly endorsed or otherwise be in proper form for transfer and
the person requesting such payment shall pay any transfer or other taxes
required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of SSKY that
such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.2, each Certificate shall be deemed
at any time after the Effective Time to represent only the right to
receive upon such surrender SSKY Shares into which ecoTECH Shares
theretofore represented by such Certificate have been converted pursuant
to Section 2.1(c). No interest shall be paid or accrue on
any cash payable upon surrender of any
Certificate.
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(c)
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Restricted
Securities. SSKY Shares (i) shall not be registered
under the 1933 Act or any state securities laws, (ii) will be offered and
sold in reliance upon exemptions provided in the 1933 Act and state
securities laws for transactions not involving any public offering, and
(iii) therefore, shall constitute “restricted securities” within the
meaning of the 1933 Act and cannot be resold or transferred unless they
are subsequently registered under the 1933 Act and such applicable state
securities laws or unless an exemption from such registration is
available.
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(d)
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Investor
Certificates. On or before the Closing Date, each of the
ecoTECH Shareholders shall execute and deliver an Investor Representation
Certificate and Lock-Up Agreement, in the form attached hereto as Schedule
“B” (the “Investor
Certificate”), which contains certain representations designed to
confirm the availability to SSKY of the exemption from registration under
either Regulation S or Rule 506 of the 1933 Act in connection with the
issuance of SSKY Shares pursuant to this
Agreement. Notwithstanding anything to the contrary in this
Agreement, in the event that any ecoTECH Shareholder (a “Defaulting Shareholder”)
is unable or fails to execute and deliver an Investor Certificate in favor
of SSKY, or SSKY has a reasonable basis to believe that the
representations of such ecoTECH Shareholder in the Investor Certificate
are not true and correct in any material respects, then SSKY may in its
sole and absolute discretion refuse to issue SSKY Shares allocable to the
Defaulting Shareholder.
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(e)
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No Further Ownership
Rights in ecoTECH Shares. SSKY Shares paid and/or issued
in accordance with the terms of this Article II upon conversion of
any ecoTECH Shares shall be deemed to have been paid and/or issued in full
satisfaction of all rights pertaining to such ecoTECH Shares, subject,
however, to Amalco’s obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time that may have
been declared or made by ecoTECH on such ecoTECH Shares in accordance with
the terms of this Agreement or prior to the date of this Agreement and
which remain unpaid at the Effective Time, and after the Effective Time
there shall be no further registration of transfers on the stock transfer
books of Amalco of ecoTECH Shares that were outstanding immediately prior
to the Effective Time. If, after the Effective Time, any
Certificates formerly representing ecoTECHShares are presented to Amalco
or the Exchange Agent for any reason, they shall be canceled and exchanged
as provided in this
Article II.
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(f)
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Income Tax
Treatment. It is intended by the parties hereto that the
Business Combination qualify as a “reorganization” within the meaning of
Section 368(a) of the Code. The parties hereto hereby
adopt this Agreement as a “plan of reorganization” within the meanings of
Sections 1.368-2(g) and 1.368-3(a) of the U.S. Treasury
Regulations promulgated under the
Code.
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ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
Section
3.1 Representations and Warranties of ecoTECH
ecoTECH
hereby represents and warrants to SSKY and Subco, and acknowledges that SSKY and
Subco are relying upon such representations and warranties, that, except as set
forth on Schedule “3.1” attached hereto (the “ecoTECH Disclosure
Letter”):
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(a)
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Organization, Standing
and Power. ecoTECH is a corporation duly incorporated,
properly organized, and validly existing under the laws of Canadian
Business Corporation Act and has the corporate power and authority and
possesses all governmental franchises, licenses, permits, authorizations
and approvals necessary to enable it to own, lease or otherwise hold its
properties and assets and to conduct its businesses as presently
conducted, other than such franchises, licenses, permits, authorizations
and approvals the lack of which, individually or in the aggregate, has not
had and would not reasonably be expected to have a material adverse effect
on ecoTECH, a material adverse effect on the ability of ecoTECH to perform
its obligations under this Agreement or on the ability of ecoTECH to
consummate the Transactions (a “ecoTECH Material Adverse
Effect”). ecoTECH is duly qualified to do business in
each jurisdiction where the nature of its business or its ownership or
leasing of its properties make such qualification necessary except where
the failure to so qualify would not reasonably be expected to have a
ecoTECH Material Adverse Effect. ecoTECH has delivered to SSKY
true and complete copies of ecoTECH’s articles of incorporation and
bylaws, each as amended to the date of this Agreement (the “ecoTECH Constituent
Instruments”).
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(b)
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ecoTECH
Subsidiaries. ecoTECH does not own, directly or
indirectly, any capital stock, membership interest, partnership interest,
joint venture interest or other equity interest in any
person.
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(c)
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Capital
Structure.
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(i)
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ecoTECH
is authorized to issue an unlimited amount of shares of ecoTECH Class A
Shares and an unlimited amount of ecoTECH’s Class B Shares. As
of the date of this Agreement, (A) 110,606,239 shares of ecoTECH Class A
Shares are issued and outstanding, (B) no shares of ecoTECH Class B Shares
are issued and outstanding, and (C) no shares of ecoTECH Common Stock are
subject to outstanding and unexercised options (“ecoTECH
Options”). Since the date of this Agreement ecoTECH has
not issued any shares of ecoTECH Class A Shares or ecoTECH Class B
Shares. All outstanding capital shares of ecoTECH are duly
authorized, fully paid, nonassessable and were offered, issued and sold in
compliance with the securities laws regulations, rules, rulings, policies,
procedures and other instruments of the province of British
Columbia (the “Canadian
Securities Laws”) and all other applicable securities laws, in
distributions exempt from the prospectus and registration requirements of
such securities laws, and all notices and filings in respect of such
distributions have been made by ecoTECH within the time periods and in the
manner required by applicable securities laws. ecoTECH is not
under any obligation to register or to qualify by filing a prospectus,
nor, has it agreed to grant registration or qualification rights, with
respect to any of its presently outstanding securities or securities which
may hereafter be issued, under the Act or Canadian Securities Laws, as
applicable, or the securities laws of any other
jurisdiction. None of the outstanding capital shares of ecoTECH
are subject to or issued in violation of any purchase option, call option,
right of first refusal, preemptive right, subscription right or any
similar right or any Contract to which ecoTECH is a party or otherwise
bound. There are no bonds, debentures, notes or other
indebtedness of ecoTECH having the right to vote (or convertible into, or
exchangeable for, capital shares having the right to vote) on any matters
on which holders of ecoTECH Shares may vote (“Voting ecoTECH
Debt”).
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(ii)
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Except
as set forth in ecoTECH Disclosure Letter, there are no options, warrants,
rights, convertible or exchangeable securities, “phantom” stock rights,
stock appreciation rights, stock-based performance units, commitments,
Contracts, arrangements or undertakings of any kind to which ecoTECH is a
party or by which it is bound (i) obligating ecoTECH to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
capital shares or other equity interests in, or any security convertible
or exercisable for or exchangeable into any capital shares or other equity
interest in, ecoTECH or any Voting ecoTECH Debt, (ii) obligating
ecoTECH to issue, grant, extend or enter into any such option, warrant,
call, right, security, commitment, Contract, arrangement or undertaking or
(iii) that give any person the right to receive any economic benefit
or right similar to or derived from the economic benefits and rights
occurring to holders of the capital shares of ecoTECH. As of
the date of this Agreement, there are no outstanding contractual
obligations of ecoTECH to repurchase, redeem or otherwise acquire any
shares of capital stock of ecoTECH.
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(d)
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Authority; Execution
and Delivery; Enforceability. ecoTECH has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the Transactions. The execution and delivery by
ecoTECH of this Agreement and the consummation by ecoTECH of the
Transactions have been duly authorized and approved by the Board of
Directors of ecoTECH and no other corporate proceedings on the part of
ecoTECH are necessary to authorize this Agreement and the
Transactions. When executed and delivered, this Agreement will
be enforceable against ecoTECH in accordance with its terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws and equity principles related to or limiting creditors’
rights generally and by general principals of
equity.
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(e)
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No Conflicts;
Consents.
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(i)
|
The
execution and delivery by ecoTECH of this Agreement does not, and the
consummation of the Transactions and compliance with the terms hereof and
thereof will not, conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to
a right of termination, cancellation or acceleration of any obligation or
to loss of a material benefit under, or result in the creation of any Lien
upon any of the properties or assets of ecoTECH under, any provision of
(i) ecoTECH Constituent Instruments, (ii) any material contract,
lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument (“Contract”) to which
ecoTECH is a party or by which any of its properties or assets is bound or
(iii) subject to the filings and other matters referred to in (i), any
material judgment, order or decree (“Judgment”) or material
Law applicable to ecoTECH or its properties or assets, other than, in the
case of clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a ecoTECH Material Adverse
Effect.
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13
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(ii)
|
Except
for required filings with the Securities and Exchange Commission (the
“SEC”), pursuant
to the Canadian Securities Laws and applicable “Blue Sky” or state
securities commissions, no material consent, approval, license, permit,
order or authorization (“Consent”) of, or
registration, declaration or filing with, or permit from, any Governmental
Entity is required to be obtained or made by or with respect to ecoTECH in
connection with the execution, delivery and performance of this Agreement
or the consummation of the
Transactions.
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(f)
|
Taxes.
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(i)
|
ecoTECH
is not a non-resident of Canada for the purposes of the Income Tax Act
(Canada). ecoTECH does not have any liability, obligation or commitment,
actual or contingent for the payment of income taxes, corporation taxes,
goods and services taxes, value added taxes, sales taxes or any other
taxes, duties or imposts of any kind other than as disclosed in ecoTECH
Financial Statements (as defined in Section 3.1(o)), except as such as
have arisen in the ordinary course of Business consistent with past
practice. Except as set out in Section 3.1(f) of the Disclosure
Schedule, ecoTECH has duly prepared and timely filed, or will cause to be
timely filed, all Tax Returns required to be filed by it. All such Tax
Returns, and all materials accompanying such Tax Returns, are true,
correct and complete in all material respects and contain accurate
disclosure. ecoTECH has paid all taxes which are due and payable by it on
or prior to the date hereof, and all governmental or municipal charges or
levies, penalties, interest and fines in respect of such taxes due and
payable by it on or prior to the date hereof. To the extent required,
adequate provisions have been made for all such taxes, charges, levies,
penalties, interest and fines payable for the current year for which Tax
Returns are not yet filed. There is no action, suit, proceeding,
investigation or claim pending or, to the knowledge of ecoTECH,
threatened, against ecoTECH in respect of taxes, governmental or municipal
charges, levies or assessment, nor are there any matters under discussion
with any Governmental Entity relating to taxes, governmental or municipal
charges, levies or assessment asserted by any such authority. ecoTECH has
withheld from each payment made to any of its officers, directors,
employees, shareholders, creditors or other Persons, all amounts which it
is required by law to withhold or deduct, including without limitation
income tax, federal or provincial pension and medical plan contributions,
employment insurance and other deductions, and has duly remitted all
amounts so withheld or deducted to the proper recipients thereof within
the time periods and in the manner required by such laws. ecoTECH is a
Canadian controlled private corporation as defined in the Income Tax Act
(Canada). ecoTECH is properly registered and licensed for the purposes of
paying, collecting or remitting all applicable taxes relating to its
business. ecoTECH has properly applied for and filed, claims for all tax
refunds or rebates to which it is entitled, including without limitation,
any goods and services tax rebates. ecoTECH has not filed any waiver for
any taxation year under the Income Tax Act (Canada)
or any other legislation imposing tax on ecoTECH. ecoTECH has not filed or
been party to any election pursuant to Section 85 of the Income Tax Act (Canada)
or the corresponding provisions of any provincial statute. ecoTECH has not
at any time benefited from a forgiveness of debt or entered into any
transaction or arrangement (including conversion of debt into shares of
its share capital) which could have resulted in the application of Section
80 of the Income Tax
Act (Canada).
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14
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(ii)
|
ecoTECH
is eligible to apply and has applied for Refundable Investment Tax Credits
with respect to research and development activities within the meaning of
the Income Tax
Act (Canada) in respect of the year ended December 31,
2005.
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(iii)
|
ecoTECH
is duly registered under subdivision (d) of Division V of Part IX of the
Excise Tax Act
(Canada) with respect to the goods and services
tax.
|
For
purposes of this Section 3.1(f):
“Tax Legislation”
means collectively, the Income
Tax Act (Canada), the Internal Revenue Code (United
States), and all federal, provincial, state, municipal, county, territorial or
other tax statutes including all treaties, conventions, case law, interpretation
bulletins, circulars and releases, rules, regulations, orders and decrees of any
jurisdiction.
15
“Tax Return” means all
reports, returns and other documents required to be filed under the provisions
of the Tax Legislation and any tax forms required to be filed, whether in
connection with a tax return or not, under any provisions of any applicable Tax
Legislation.
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(g)
|
Benefit
Plans. Except as listed in Section 3.1(g) of ecoTECH
Disclosure Schedule, ecoTECH has not, and is not, subject to any present
or future obligation or liability under any pension plan, deferred
compensation plan, retirement income plan, stock option or stock purchase
plan, profit sharing plan, bonus plan or policy, employee group insurance
plan, hospitalization plan, disability plan or other employee benefit
plan, program, policy or practice, formal or informal, with respect to any
of the employees of the business, other than the Canada Pension Plan and
other similar plans established pursuant to statute. Section 3.1(g) of
ecoTECH Disclosure Schedule contains a description of the general
policies, procedures and work-related rules in effect with respect to
employees of ecoTECH’s business, whether written or oral, including but
not limited to policies regarding holidays, sick leave, vacation,
disability and death benefits, termination and severance pay, automobile
allowances and rights to company-provided automobiles and expense
reimbursements. (The plans, programs, policies, practices and procedures
listed in Section 3.1(g) of ecoTECH Disclosure Schedule are collectively
called the “ecoTECH
Benefit Plans”). Complete and correct copies of all documentation
establishing or relating to ecoTECH Benefit Plans or, where such ecoTECH
Benefit Plans are oral commitments, written summaries of the terms
thereof, if any, have been made available to
SSKY.
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|
(i)
|
ecoTECH
has no retirement, pension or deferred compensation plan or arrangement
for the benefit of employees or former employees of ecoTECH and makes no
such payments to any employees or former employees of
ecoTECH.
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16
|
(ii)
|
ecoTECH
has satisfied all material obligations regarding any ecoTECH Benefit Plan;
there are no outstanding defaults or violations by ecoTECH under any such
ecoTECH Benefit Plan or, to ecoTECH’s knowledge, by any other party
thereto. There are no outstanding actions, suits or claims against or
involving ecoTECH relating to any ecoTECH Benefit Plan or the assets of
any of such ecoTECH Benefit Plans, except for the payment of benefits
thereunder in the ordinary course of administration as such payments come
due. There are no pending claims by any employee covered under ecoTECH
Benefit Plans or by any other person which allege a breach of fiduciary
duties or violation of governing law or which may result in liability to
the employer and, to the best of the knowledge of ecoTECH, there is no
basis for such a claim.
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(iii)
|
The
terms of all such ecoTECH Benefit Plans are in compliance with applicable
laws and regulations.
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(h)
|
Litigation. There
is no action, suit, inquiry, notice of violation, proceeding (including
any partial proceeding such as a deposition) or investigation pending or
threatened in writing against or affecting ecoTECH or any of its
properties before or by any court, arbitrator, governmental or
administrative agency, regulatory authority (federal, state, county, local
or foreign), stock market, stock exchange or trading facility (“Action”) which
(i) adversely affects or challenges the legality, validity or
enforceability of any of this Agreement or ecoTECH Shares or
(ii) could, if there were an unfavorable decision, individually or in
the aggregate, have or reasonably be expected to result in a ecoTECH
Material Adverse Effect. ecoTECH, nor, to ecoTECH’s knowledge,
any director, officer or manager thereof (in his or her capacity as such),
is or has been the subject of any Action involving a claim or violation of
or liability under federal or state securities laws or a claim of breach
of fiduciary duty.
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|
(i)
|
Compliance with
Applicable Laws. ecoTECH is in compliance with all
applicable Laws, including those relating to occupational, health and
safety and the environment, except for instances of noncompliance that,
individually and in the aggregate, have not had and would not reasonably
be expected to have a ecoTECH Material Adverse Effect. ecoTECH
has not received any written communication during the past two years from
a Governmental Entity that alleges that ecoTECH is not in compliance in
any material respect with any applicable
Law.
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17
|
(j)
|
Brokers. No
broker, investment banker, financial advisor or other person is entitled
to any broker’s, finder’s, financial advisor’s or other similar fee or
commission in connection with the Transactions based upon arrangements
made by or on behalf of ecoTECH.
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|
(k)
|
Contracts. Except
as disclosed in the Contracts that are material to the business,
properties, assets, condition (financial or otherwise), results of
operations or prospects of ecoTECH taken as a whole, ecoTECH is not in
violation of or in default under (nor does there exist any condition which
upon the passage of time or the giving of notice would cause such a
violation of or default under by ecoTECH) any Contract to which it is a
party or by which it or any of its properties or assets is bound, except
for violations or defaults that would not, individually or in the
aggregate, reasonably be expected to result in a ecoTECH Material Adverse
Effect.
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|
(l)
|
Title to
Properties. ecoTECH does not own any real
property. ecoTECH has sufficient title to, or valid leasehold
interests in, all of its properties and assets used in the conduct of its
businesses. All such assets and properties, other than assets
and properties in which ecoTECH has leasehold interests, are free and
clear of all Liens except for Liens that, in the aggregate, do not and
will not materially interfere with the ability of ecoTECH to conduct
business as currently conducted.
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|
(m)
|
Intellectual
Property. ecoTECH owns, or is validly licensed or
otherwise has the right to use, all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, service marks, service
xxxx rights, copyrights and other proprietary intellectual property rights
and computer programs (collectively, “Intellectual Property
Rights”) which are material to the conduct of the business of
ecoTECH taken as a whole. ecoTECH Disclosure Letter sets forth
a description of all Intellectual Property Rights which are material to
the conduct of the business of ecoTECH taken as a whole. There
are no claims pending or, to the knowledge of ecoTECH, threatened that
ecoTECH is infringing or otherwise adversely affecting the rights of any
person with regard to any Intellectual Property Right. To the
actual knowledge of the officers, directors and managers of ecoTECH, no
person is infringing the rights of ecoTECH with respect to any
Intellectual Property Right.
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18
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(n)
|
Labor
Matters. Except as set out in Section 3.1(n) of ecoTECH
Disclosure Schedule, ecoTECH is not a party to and is not bound by
any:
|
|
(i)
|
Contract
for the employment of any employee, officer, consultant or agent, except
for contracts of indefinite hire terminable by ecoTECH without cause on
reasonable notice in accordance with applicable law;
or
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|
(ii)
|
Contract
with any labour union or employee association, and ecoTECH has not
conducted negotiations with respect to any such future contracts or
commitments and there are no current or, to the knowledge of ecoTECH after
appropriate enquiry, threatened attempts to organize or establish any
labour union or employee association with respect to
ecoTECH.
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|
(iii)
|
Section
3.1(n) of the Disclosure Schedule, contains a complete list of all
permanent and full-time employees of ecoTECH, their salaries and wage
rates, bonus arrangements, benefits, positions and length of
service.
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(iv)
|
There is no work
stoppage or other concerted action, grievance or dispute existing or, to
the best of the knowledge of ecoTECH after appropriate enquiry, threatened
against ecoTECH. There are no complaints against ecoTECH before any
employment standards branch or tribunal or human rights tribunal, nor, to
the best of the knowledge of ecoTECH, are there any threatened complaints
or any occurrence which might lead to a complaint under any human rights
legislation or employment standards legislation. There are no outstanding
decisions or settlements or pending settlements under applicable
employment standards legislation which place any obligation upon ecoTECH
to do or refrain from doing any act. ecoTECH is currently in full
compliance with all workers’ compensation, occupational health and safety
and similar legislation, including payment in full of all amounts owing
thereunder, and there are no pending claims or outstanding orders against
either of them under applicable workers’ compensation legislation,
occupational health and safety or similar legislation nor has any event
occurred which may give rise to any such
claim.
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19
|
(v)
|
ecoTECH
has complied in all material respects with all applicable laws, rules,
regulations and orders relating to employment in the business, including
those relating to wages, hours, collective bargaining, occupational health
and safety, employment standards, pay equity and workers’ compensation.
All salaries or wages, vacation pay (including banked vacation pay),
bonuses, commissions, premiums for employment insurance, pension plan,
premiums, and other employee benefit payments are accurately reflected and
have been accrued in the books and records of ecoTECH and no salaries or
wages are owing to any employee of ecoTECH except for those salaries and
wages accrued as of the date hereof at each employee’s current salary
level or wage amount payable on the next scheduled pay
period.
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(vi)
|
Since
the date of ecoTECH Financial Statements, ecoTECH has not paid or agreed
to pay any bonus, fee, distribution, remuneration or other compensation to
any Person other than as disclosed in Section 3.1(n) or Section 3.1(q) of
ecoTECH Disclosure Schedule.
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|
(vii)
|
To
the best of the knowledge of ecoTECH, no present or former employee or
independent contractor of ecoTECH has violated any term of any employment
contract, non-competition or non-solicitation agreement, patent or other
proprietary information agreement or similar contract with, or any
fiduciary duty in favour of, a former employer of such employee or
independent contractor or any other third party. ecoTECH has not received
any notice from any third party alleging that such a violation has
occurred. To the best of the knowledge of ecoTECH, the continued
employment or engagement by ecoTECH of its present employees and
independent contractors will not result in any such
violation.
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20
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(o)
|
Financial
Statements. ecoTECH has
previously delivered to SSKY its unaudited consolidated balance sheet as
of June 30, 2010 and unaudited consolidated statements of operations,
stockholders’ equity and cash flows for the fiscal years ended December
31, 2009 and 2008 and for the period from inception through June 30, 2010
(collectively, the “ecoTECH Financial
Statements”). ecoTECH Financial Statements comply in all
material respects with applicable accounting requirements and the rules
and regulations of the SEC with respect thereto. ecoTECH
Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout
the periods indicated (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and
except that ecoTECH Financial Statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the
financial position of ecoTECH as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject,
to normal, year-end audit
adjustments.
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|
(i)
|
Prior
to the Closing, ecoTECH shall deliver to SSKY audited ecoTECH Financial
Statements and an accompanying audit report prepared by an independent
audit firm that is registered with the Public Company Accounting Oversight
Board. ecoTECH Financial Statements delivered pursuant to this
subpart (b) shall not vary materially from ecoTECH Financial
Statements delivered pursuant to subpart (a) of this Section 3.1(o)
and shall otherwise comply with the requirements of subpart (a)
above.
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|
(p)
|
Undisclosed
Liabilities. Except as set forth in ecoTECH Financial
Statements, ecoTECH does not have any material liabilities or obligations,
contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to June 30, 2010, and
(ii) obligations under Contracts and commitments incurred in the
ordinary course of business and not required under generally accepted
accounting principles to be reflected in ecoTECH Financial Statements,
which, in both cases, individually and in the aggregate would not be
reasonably expected to result in a ecoTECH Material Adverse
Effect.
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21
|
(q)
|
Transactions With
Affiliates and Employees. Except as set forth in ecoTECH
Financial Statements, none of the officers, directors or managers of
ecoTECH and, to the knowledge of the officers, directors and managers of
ecoTECH, none of the employees of ecoTECH is presently a party to any
transaction with ecoTECH (other than for services as employees, officers,
directors and managers), including any Contract, agreement or other
arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director, manager or such employee or, to
the knowledge of the officers, directors and managers of ecoTECH, any
entity in which any officer, director, manager or any such employee has a
substantial interest or is an officer, director, manager, trustee or
partner.
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(r)
|
Internal Accounting
Controls. ecoTECH maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general
or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
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(s)
|
Corporate
Records. The corporate records and minute books of
ecoTECH, contain complete and accurate minutes of all meetings and
resolutions in lieu of a meeting, of directors and committees thereof and
shareholders held since its date of formation, and all such meetings were
duly called and held. The share certificate books, registers of
shareholders, registers of transfers and registers of directors of ecoTECH
are complete and accurate. There are no outstanding applications or
filings which would alter in any way the corporate status of
ecoTECH.
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(t)
|
Environmental
Matters. The operations of ecoTECH and the property or
assets of ecoTECH whether or not used in carrying on of ecoTECH’s business
are not in, and have not been in, violation of any applicable laws,
regulations, permits, licences, approvals, policies, guidelines or orders
of any Governmental Entity relating to environmental, health or safety
matters, including the release of hazardous substances. To the knowledge
of ecoTECH, there are no outstanding orders, notices or similar
requirements relating to ecoTECH issued by any building, environmental,
fire, health, labour or police authorities or from any other federal,
provincial or municipal authority which could reasonably be expected to
have a material adverse effect on ecoTECH or the business and there are no
matters under discussion with any such authorities relating to any such
orders, notices or similar
requirements.
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22
|
(u)
|
Insurance. All
physical assets of ecoTECH have been covered by fire and other insurance
with responsible insurers against such risks and in such amounts as are
reasonable for prudent owners of comparable
assets.
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|
(v)
|
Absence of Certain
Changes or Events. Except as disclosed in ecoTECH
Financial Statements, since June 30, 2010, ecoTECH has conducted its
business only in the ordinary course, and during such period there has not
been:
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|
(i)
|
any
change in the assets, liabilities, financial condition or operating
results of ecoTECH, except changes in the ordinary course of business that
have not caused, in the aggregate, a ecoTECH Material Adverse
Effect;
|
|
(ii)
|
any
damage, destruction or loss, whether or not covered by insurance, that
would have a ecoTECH Material Adverse
Effect;
|
|
(iii)
|
any
waiver or compromise by ecoTECH of a valuable right or of a material debt
owed to it;
|
|
(iv)
|
any
satisfaction or discharge of any lien, claim, or encumbrance or payment of
any obligation by ecoTECH, except in the ordinary course of business and
the satisfaction or discharge of which would not have a ecoTECH Material
Adverse Effect;
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23
|
(v)
|
any
material change to a material Contract by which ecoTECH or any of its
assets is bound or subject;
|
|
(vi)
|
any
mortgage, pledge, transfer of a security interest in, or lien, created by
ecoTECH, with respect to any of its material properties or assets, except
liens for taxes not yet due or payable and liens that arise in the
ordinary course of business and do not materially impair the ecoTECH’s
ownership or use of such property or
assets;
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|
(vii)
|
any
loans or guarantees made by ecoTECH to or for the benefit of its
employees, officers or directors, or any Shareholders of their immediate
families, other than travel advances and other advances made in the
ordinary course of its business;
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|
(viii)
|
any
material alteration to ecoTECH’s method of accounting or the identity of
its auditors;
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|
(ix)
|
any
declaration or payment of dividend or distribution of cash or other
property to the Shareholders or any purchase, redemption or agreements to
purchase or redeem any capital
shares;
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|
(x)
|
any
issuance of capital shares to any officer, director, manager or affiliate;
or
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|
(xi)
|
any
arrangement or commitment by ecoTECH to do any of the things described in
this (u).
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24
|
(w)
|
ecoTECH
is not bound by or a party to any employment contracts other than as
disclosed to SSKY. No current or former director, officer, shareholder,
employee or independent contractor of ecoTECH or any person not dealing at
arm’s length within the meaning of the Income Tax Act (Canada)
with any such person is indebted to ecoTECH. To the knowledge of ecoTECH,
there are no outstanding labour disputes, (whether filed or lodged with
ecoTECH or any other person or organization), pending labour disruptions
or pending unionization with respect to
ecoTECH;
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|
(x)
|
Since
the date of its incorporation, ecoTECH has not, directly or indirectly,
declared or paid any dividend or declared or made any other distribution
on any of its shares or securities of any class, or, directly or
indirectly, redeemed, purchased or otherwise acquired any of its shares or
securities or agreed to do any of the
foregoing;
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(y)
|
ecoTECH
does not have any loan or other indebtedness outstanding which has been
made to any of its shareholders, officers, directors or employees, past or
present, or any person not dealing at “arm’s length” (as such term is
defined in the Income
Tax Act (Canada)); and
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(z)
|
Disclosure. ecoTECH’s
representations and warranties set forth in this Agreement do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not
misleading.
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25
Section
3.2 Representations and Warranties of the ecoTECH Shareholders
The
ecoTECH Shareholders, severally but not jointly, represent and warrant to SSKY
as set forth in their respective Investor Certificates.
Section
3.3 Representations and Warranties of SSKY
SSKY
hereby represents and warrants to ecoTECH, as of the date hereof and as of the
Effective Date that, except as set forth on Schedule 3.3
(the “SSKY Disclosure
Letter”):and acknowledge that ecoTECH is relying upon these
representations and warranties in connection with the entering into of this
Agreement, as follows:
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(a)
|
Organization, Standing
and Power. SSKY is duly incorporated, validly existing
and in good standing under the laws of the State of Nevada and has full
corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to
own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or
in the aggregate, has not had and would not reasonably be expected to have
a material adverse effect on SSKY, a material adverse effect on the
ability of SSKY to perform its obligations under this Agreement or on the
ability of SSKY to consummate the Transactions (a “SSKY Material Adverse
Effect”). SSKY is duly qualified to do business in each
jurisdiction where the nature of its business or its ownership or leasing
of its properties make such qualification necessary and where the failure
to so qualify would reasonably be expected to have a SSKY Material Adverse
Effect. SSKY has delivered to ecoTECH true and complete copies
of SSKY’s certificate of incorporation and bylaws, each as amended to the
date of this Agreement (the “SSKY Constituent
Instruments”).
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(b)
|
Subsidiaries; Equity
Interests. SSKY does not own, directly or indirectly,
any capital stock, membership interest, partnership interest, joint
venture interest or other equity interest in any
person.
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26
|
(c)
|
Capital
Structure. The authorized capital stock of SSKY consists
of 225,000,000 SSKY Shares. As of November 2, 2010, (A)
80,583,239 SSKY Shares are issued and outstanding. Since the
date of this Agreement, SSKY has not issued SSKY Shares. Except
as set forth above, no shares of capital stock or other voting securities
of SSKY are issued, reserved for issuance or outstanding. All
outstanding shares of the capital stock of SSKY are duly authorized,
validly issued, fully paid and nonassessable and not subject to or issued
in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar
right. There are no bonds, debentures, notes or other
indebtedness of SSKY having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on
which holders of SSKY Shares may vote (“Voting SSKY
Debt”). Except as set forth on the SSKY Disclosure
Letter, There are no options, warrants, rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation
rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which SSKY is a party or by
which it is bound (i) obligating SSKY to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock
or other equity interests in, or any security convertible or exercisable
for or exchangeable into any capital stock of or other equity interest in,
SSKY or any Voting SSKY Debt, (ii) obligating SSKY to issue, grant,
extend or enter into any such option, warrant, call, right, security,
commitment, Contract, arrangement or undertaking or (iii) that give
any person the right to receive any economic benefit or right similar to
or derived from the economic benefits and rights occurring to holders of
the capital stock of SSKY. There are no outstanding contractual
obligations of SSKY to repurchase, redeem or otherwise acquire any shares
of capital stock of SSKY. SSKY is not a party to any agreement
granting any securityholder of SSKY the right to cause SSKY to register
shares of the capital stock or other securities of SSKY held by such
securityholder under the Act. At the Effective Time, SSKY shall
deliver to ecoTECH a certified stockholder list generated by its stock
transfer agent which shall accurately reflect all of the issued and
outstanding SSKY Shares.
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(d)
|
Authority; Execution
and Delivery; Enforceability. The execution and delivery
by SSKY of this Agreement and the consummation by SSKY of the Business
Combination have been duly authorized and approved by the Board of
Directors of SSKY and no other corporate proceedings on the part of SSKY
are necessary to authorize this Agreement and the Business Combination.
This Agreement constitutes a legal, valid and binding obligation of SSKY,
enforceable against SSKY in accordance with the terms hereof, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws and equity principles related to or limiting creditors’
rights generally and by general principals of
equity.
|
27
|
(e)
|
No Conflicts;
Consents.
|
|
(i)
|
The
execution and delivery by SSKY of this Agreement, does not, and the
consummation of the Business Combination and compliance with the terms
hereof and thereof will not, conflict with, or result in any violation of
or default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any Lien upon any of the properties or
assets of SSKY under, any provision of (i) SSKY Constituent
Instruments, (ii) any material Contract to which SSKY is a party or
by which any of its properties or assets is bound or (iii) subject to
the filings and other matters referred to in (i), any
material Judgment or material Law applicable to SSKY or its properties or
assets, other than, in the case of clauses (ii) and (iii) above, any such
items that, individually or in the aggregate, have not had and would not
reasonably be expected to have a SSKY Material Adverse
Effect.
|
|
(ii)
|
No
Consent of, or registration, declaration or filing with, or permit from,
any Governmental Entity is required to be obtained or made by or with
respect to SSKY in connection with the execution, delivery and performance
of this Agreement or the consummation of the Transactions, other than (A)
filing with the SEC of reports under Sections 13(a) of 1934 Act, and (B)
the filing of a Form D with the SEC and filings under state “blue sky”
laws, as may be required in connection with this Agreement and the
Transactions.
|
|
(f)
|
Financial
Statements. SSKY has previously delivered to ecoTECH its
audited balance sheets as of August 31, 2009, 2008, and 2007 and audited
statements of operations, stockholders’ equity and cash flows for the
fiscal years ended August 31, 2009, 2008, and 2007 and an
accompanying audit report prepared by an independent audit firm that is
registered with the Public Company Accounting Oversight Board (the “SSKY Audited Financial
Statements”), and its unaudited balance sheet as of May 31, 2010,
and its unaudited statements of operations, stockholders’ equity and cash
flows as of and for the three and nine months ended May 31, 2010 and 2009
(the “SSKY Unaudited
Financial Statements” and together with SSKY Audited Financial
Statements, the “SSKY
Financial Statements”). SSKY Financial Statements comply
in all material respects with applicable accounting requirements and the
rules and regulations of the SEC with respect thereto. SSKY
Financial Statements have been prepared in accordance with GAAP, except as
may be otherwise specified in such financial statements or the notes
thereto and except that SSKY Unaudited Financial Statements may not
contain all footnotes required by GAAP, and fairly present in all material
respects the financial position of SSKY as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject to in the case of SSKY Unaudited Financial Statements to normal,
year-end audit adjustments. SSKY Unaudited Financial Statements
have been prepared and reviewed in accordance with Rule 10-01 of
Regulation S-X promulgated under the 1934
Act.
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28
|
(g)
|
SEC Documents;
Undisclosed Liabilities. SSKY has filed, in a timely
manner, all reports, schedules, forms, statements and other documents
required to be filed by SSKY with the SEC since August 31, 2008 pursuant
to Sections 13(a) and 15(d) of the 1934 Act (“SSKY SEC
Documents”).
|
|
(i)
|
As
of its respective filing date, each SSKY SEC Document complied in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to such SSKY SEC
Document, and did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Except to the
extent that information contained in any SSKY SEC Document has been
revised or superseded by a later filed SSKY SEC Document, none of SSKY SEC
Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not
misleading.
|
|
(ii)
|
Except
as set forth in SSKY SEC Documents or SSKY Financial Statements, SSKY has
no liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a balance
sheet of SSKY or in the notes thereto. SSKY Disclosure Letter
sets forth all financial and contractual obligations and liabilities
(including any obligations to issue capital stock or other securities of
SSKY) due after the date hereof. As of the date hereof SSKY has
total liabilities of less than [$25,000], [all] of which liabilities shall
be paid off at or prior to the Closing and shall in no event remain
liabilities of SSKY, ecoTECH or the Shareholders following the
Closing.
|
29
|
(h)
|
Absence of Certain
Changes or Events. Except as disclosed in SSKY Financial
Statements or SSKY SEC Documents, since May 31, 2010, SSKY has conducted
its business only in the ordinary course, and during such period there has
not been:
|
|
(i)
|
any
change in the assets, liabilities, financial condition or operating
results of SSKY from that reflected in SSKY Unaudited Financial
Statements, except changes in the ordinary course of business that have
not caused, in the aggregate, a SSKY Material Adverse
Effect;
|
|
(ii)
|
any
damage, destruction or loss, whether or not covered by insurance, that
would have a SSKY Material Adverse
Effect
|
|
(iii)
|
any
waiver or compromise by SSKY of a valuable right or of a material debt
owed to it;
|
|
(iv)
|
any
satisfaction or discharge of any lien, claim, or encumbrance or payment of
any obligation by SSKY, except in the ordinary course of business and the
satisfaction or discharge of which would not have a SSKY Material Adverse
Effect;
|
|
(v)
|
any
material change to a material Contract by which SSKY or any of its assets
is bound or subject;
|
|
(vi)
|
any
material change in any compensation arrangement or agreement with any
employee, officer, director or
stockholder;
|
|
(vii)
|
any
resignation or termination of employment of any officer of
SSKY;
|
|
(viii)
|
any
mortgage, pledge, transfer of a security interest in, or lien, created by
SSKY, with respect to any of its material properties or assets, except
liens for taxes not yet due or payable and liens that arise in the
ordinary course of business and do not materially impair SSKY’s ownership
or use of such property or assets;
|
|
(ix)
|
any
loans or guarantees made by SSKY to or for the benefit of its employees,
officers or directors, or any Shareholders of their immediate families,
other than travel advances and other advances made in the ordinary course
of its business;
|
|
(x)
|
any
declaration, setting aside or payment or other distribution in respect of
any of SSKY’s capital stock, or any direct or indirect redemption,
purchase, or other acquisition of any of such stock by
SSKY;
|
30
|
(xi)
|
any
alteration of SSKY’s method of accounting or the identity of its
auditors;
|
|
(xii)
|
any
issuance of equity securities to any officer, director or affiliate,
except pursuant to existing SSKY stock option plans;
or
|
|
(xiii)
|
any
arrangement or commitment by SSKY to do any of the things described in
this Section 3.3(h).
|
|
(i)
|
Taxes
|
|
(i)
|
SSKY
has timely filed, has caused to be timely filed on its behalf, or has
qualified for an extension for filing, all Tax Returns required to be
filed by it, and all such Tax Returns are true, complete and accurate,
except to the extent any failure to file or any inaccuracies in any filed
Tax Returns, individually or in the aggregate, have not had and would not
reasonably be expected to have a SSKY Material Adverse
Effect. All Taxes shown to be due on such Tax Returns, or
otherwise owed, have been timely paid, except to the extent that any
failure to pay, individually or in the aggregate, has not had and would
not reasonably be expected to have a SSKY Material Adverse
Effect.
|
|
(ii)
|
The
most recent financial statements contained in SSKY Unaudited Financial
Statements reflect an adequate reserve for all Taxes payable by SSKY (in
addition to any reserve for deferred Taxes to reflect timing differences
between book and Tax items) for all Taxable periods and portions thereof
through the date of such financial statements. No deficiency
with respect to any Taxes has been proposed, asserted or assessed against
SSKY, and no requests for waivers of the time to assess any such Taxes are
pending, except to the extent any such deficiency or request for waiver,
individually or in the aggregate, has not had and would not reasonably be
expected to have a SSKY Material Adverse
Effect.
|
|
(iii)
|
There
are no Liens for Taxes (other than for current Taxes not yet due and
payable) on the assets of SSKY. SSKY is not bound by any
agreement with respect to Taxes
|
31
For
purposes of this Section 3.3(f):
“Taxes” includes all
forms of taxation, whenever created or imposed, and whether of the United States
or elsewhere, and whether imposed by a local, municipal, governmental, state,
foreign, federal or other Governmental Entity, or in connection with any
agreement with respect to Taxes, including all interest, penalties and additions
imposed with respect to such amounts.
“Tax Return” means all
federal, state, local, provincial and foreign Tax returns, declarations,
statements, reports, schedules, forms and information returns and any amended
Tax return relating to Taxes.
|
(j)
|
Benefit
Plans. SSKY does not have any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical or other
plan, arrangement or understanding (whether or not legally binding)
providing benefits to any current or former employee, officer or director
of SSKY (collectively, “SSKY Benefit
Plans”). There are no employment, consulting,
indemnification, severance or termination agreements or arrangements
between SSKY and any current or former employee, officer or director of
SSKY, nor does SSKY have any general severance plan or
policy.
|
|
(k)
|
ERISA Compliance;
Excess Parachute Payments. SSKY does not, and since its
inception never has, maintained, or contributed to any “employee pension
benefit plans” (as defined in Section 3(2) of ERISA), “employee
welfare benefit plans” (as defined in Section 3(1) of ERISA) or any
other SSKY Benefit Plan for the benefit of any current or former
employees, consultants, officers or directors of
SSKY.
|
|
(l)
|
Litigation. There
is no Action which (i) adversely affects or challenges the legality,
validity or enforceability of any of this Agreement or SSKY Shares or
(ii) could, if there were an unfavorable decision, individually or in
the aggregate, have or reasonably be expected to result in a SSKY Material
Adverse Effect. Neither SSKY nor any subsidiary, nor any
director or officer thereof (in his or her capacity as such), is or has
been the subject of any Action involving a claim or violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty.
|
|
(m)
|
Compliance with
Applicable Laws. SSKY is in compliance with all
applicable Laws, including those relating to occupational health and
safety and the environment, except for instances of noncompliance that,
individually and in the aggregate, have not had and would not reasonably
be expected to have a SSKY Material Adverse Effect. SSKY has
not received any written communication during the past two years from a
Governmental Entity that alleges that SSKY is not in compliance in any
material respect with any applicable
Law.
|
32
|
(n)
|
Contracts. There
are no Contracts that are material to the business, properties, assets,
condition (financial or otherwise), results of operations or prospects of
SSKY taken as a whole. SSKY is not in violation of or in
default under (nor does there exist any condition which upon the passage
of time or the giving of notice would cause such a violation of or default
under) any Contract to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that
would not, individually or in the aggregate, reasonably be expected to
result in a SSKY Material Adverse
Effect.
|
|
(o)
|
Title to
Properties. SSKY has good title to, or valid leasehold
interests in, all of its properties and assets used in the conduct of its
businesses. All such assets and properties, other than assets
and properties in which SSKY has leasehold interests, are free and clear
of all Liens other than those set forth in SSKY Disclosure Letter and
except for Liens that, in the aggregate, do not and will not materially
interfere with the ability of SSKY to conduct business as currently
conducted. SSKY has complied in all material respects with the
terms of all material leases to which it is a party and under which it is
in occupancy, and all such leases are in full force and
effect. SSKY enjoys peaceful and undisturbed possession under
all such material leases.
|
|
(p)
|
Intellectual
Property. SSKY owns, or is validly licensed or otherwise
has the right to use, all Intellectual Property Rights which are material
to the conduct of the business of SSKY taken as a whole. SSKY
Disclosure Letter sets forth a description of all Intellectual Property
Rights which are material to the conduct of the business of SSKY taken as
a whole. No claims are pending or, to the knowledge of SSKY,
threatened that SSKY is infringing or otherwise adversely affecting the
rights of any person with regard to any Intellectual Property
Right. To the knowledge of SSKY, no person is infringing the
rights of SSKY with respect to any Intellectual Property
Right.
|
|
(q)
|
Labor
Matters. There are no collective bargaining or other
labor union agreements to which SSKY is a party or by which it is
bound. No material labor dispute exists or, to the knowledge of
SSKY, is imminent with respect to any of the employees of
SSKY.
|
|
(r)
|
Market
Makers. SSKY has at least two market makers for the
shares of SSKY Common Stock and such market makers have obtained all
permits and made all filings necessary in order for such market makers to
continue as market makers of SSKY.
|
33
|
(s)
|
With Affiliates and
Employees. Except as set forth in SSKY Disclosure
Letter, none of the officers or directors of SSKY and, to the knowledge of
SSKY, none of the employees of SSKY is presently a party to any
transaction with SSKY (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of
real or personal property to or from, or otherwise requiring payments to
or from any officer, director or such employee or, to the knowledge of
SSKY, any entity in which any officer, director, or any such employee has
a substantial interest or is an officer, director, trustee or
partner.
|
|
(t)
|
Internal Accounting
Controls. SSKY maintains a system of internal accounting
controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general
or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. SSKY has established
disclosure controls and procedures for SSKY and designed such disclosure
controls and procedures to ensure that material information relating to
SSKY is made known to the officers by others within those
entities. SSKY’s officers have evaluated the effectiveness of
SSKY’s controls and procedures. Since September 30, 2007,
there have been no significant changes in SSKY’s internal controls or, to
SSKY’s knowledge, in other factors that could significantly affect SSKY’s
internal controls.
|
|
(u)
|
Solvency. Based
on the financial condition of SSKY as of the Effective Time (and assuming
that the Closing shall have occurred), (i) SSKY’s fair saleable value
of its assets exceeds the amount that will be required to be paid on or in
respect of SSKY’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) SSKY’s assets do not
constitute unreasonably small capital to carry on its business for the
current fiscal year as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital
requirements of the business conducted by SSKY, and projected capital
requirements and capital availability thereof, and (iii) the current
cash flow of SSKY, together with the proceeds SSKY would receive, were it
to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect
of its debt when such amounts are required to be paid. SSKY
does not intend to incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of cash to be
payable on or in respect of its
debt).
|
34
|
(v)
|
Application of
Takeover Protections. SSKY has taken all necessary
action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under
SSKY Constituent Instruments or the laws of the State of Nevada that is or
could become applicable to the Shareholders as a result of the
Shareholders and SSKY fulfilling their obligations or exercising their
rights under this Agreement, including, without limitation, the issuance
of SSKY Shares and the Shareholder’s ownership of SSKY
Shares.
|
|
(w)
|
No Additional
Agreements. SSKY does not have any agreement or
understanding with any Shareholder with respect to the transactions
contemplated by this Agreement other than as specified in this
Agreement.
|
|
(x)
|
Investment
Company. SSKY is not, and is not an affiliate of, and
immediately following the Closing will not have become, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.
|
|
(y)
|
Disclosure. All
disclosure provided to ecoTECH and the Shareholders regarding SSKY, its
business and the transactions contemplated hereby, furnished by or on
behalf of SSKY (including SSKY’s representations and warranties set forth
in this Agreement) are true and correct and do not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the
circumstances under which they were made, not
misleading.
|
|
(z)
|
Certain Registration
Matters. Except as specified in SSKY Disclosure Letter,
SSKY has not granted or agreed to grant to any person any rights
(including “piggy-back” registration rights) to have any securities of
SSKY registered with the SEC or any other governmental authority that have
not been satisfied.
|
|
(aa)
|
Listing and
Maintenance Requirements. SSKY is, and has no reason to
believe that it will not in the foreseeable future continue to be, in
compliance with the listing and maintenance requirements for continued
listing of SSKY Common Stock on the trading market on which SSKY Common
Stock is currently listed or quoted. The issuance and sale of
SSKY Shares under this Agreement does not contravene the rules and
regulations of the trading market on which SSKY Common Stock is currently
listed or quoted, and no approval of the stockholders of SSKY is required
for SSKY to issue and deliver to the Shareholders the Shares contemplated
by this Agreement.
|
35
|
(bb)
|
No Undisclosed Events,
Liabilities, Developments or Circumstances. No event,
liability, development or circumstance has occurred or exists, or is
contemplated to occur with respect to SSKY, its subsidiaries or their
respective business, properties, prospects, operations or financial
condition, that would be required to be disclosed by SSKY under applicable
securities laws on a registration statement on Form S-1 filed with the SEC
relating to an issuance and sale by SSKY of SSKY Shares and which has not
been publicly announced or disclosed in writing to
ecoTECH.
|
|
(cc)
|
Foreign Corrupt
Practices. Neither SSKY, nor, to SSKY’s knowledge, any
director, officer, agent, employee or other person acting on behalf of
SSKY has, in the course of its actions for, or on behalf of, SSKY
(i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.
|
|
(i)
|
SSKY
is not aware of any pending or contemplated change to any applicable Law
or governmental position that would materially affect the business of SSKY
and Subco taken as a whole or the legal environments under which SSKY and
Subco operate; and
|
|
(ii)
|
No
representation, warranty or statement of SSKY or Subco in the Documents
contains or will contain at the Effective Time any untrue statement of a
material fact or omits or will omit to state any material fact necessary
to make the statements contained herein or therein, in light of the
circumstances under which made, not
misleading.
|
36
Section
3.4 Representations and Warranties of Subco
Subco
hereby represents and warrants to ecoTECH as follows:
|
(g)
|
Organization, Standing
and Power. Subco is a corporation duly incorporated,
properly organized, and validly existing under the laws of Canadian
Business Corporation Act and has the corporate power and authority and
possesses all governmental franchises, licenses, permits, authorizations
and approvals necessary to enable it to own, lease or otherwise hold its
properties and assets and to conduct its businesses as presently
conducted, other than such franchises, licenses, permits, authorizations
and approvals the lack of which, individually or in the aggregate, has not
had and would not reasonably be expected to have a material adverse effect
on Subco, a material adverse effect on the ability of Subco to perform its
obligations under this Agreement or on the ability of Subco to consummate
the transactions contemplated under this Agreement (a “Subco Material Adverse
Effect”). Subco is duly qualified to do business in each
jurisdiction where the nature of its business or its ownership or leasing
of its properties make such qualification necessary except where the
failure to so qualify would not reasonably be expected to have a Subco
Material Adverse Effect. Subco has delivered to ecoTech true
and complete copies of Subco’s articles of incorporation and bylaws, each
as amended to the date of this Agreement (the “Subco Constituent
Instruments”).
|
|
(h)
|
Subco
Subsidiaries. Subco does not own, directly or
indirectly, any capital stock, membership interest, partnership interest,
joint venture interest or other equity interest in any
person.
|
|
(i)
|
Capital
Structure. Subco is authorized to issue an unlimited
amount of shares of common stock. As of the date of this
Agreement, 100 shares of Subco common stock are issued and outstanding and
held by SSKY.
|
|
(j)
|
Authority; Execution
and Delivery; Enforceability. Subco has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the Transactions. The execution and delivery by
Subco of this Agreement and the consummation by Subco of the Transactions
have been duly authorized and approved by the Board of Directors of Subco
and no other corporate proceedings on the part of Subco are necessary to
authorize this Agreement and the Transactions. When executed
and delivered, this Agreement will be enforceable against Subco in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equity
principles related to or limiting creditors’ rights generally and by
general principals of equity.
|
37
|
(k)
|
No Conflicts;
Consents. The execution and delivery by Subco of this
Agreement does not, and the consummation of the Transactions and
compliance with the terms hereof and thereof will not, conflict with, or
result in any violation of or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancellation
or acceleration of any obligation or to loss of a material benefit under,
or result in the creation of any Lien upon any of the properties or assets
of Subco under, any provision of the Subco Constituent
Instruments.
|
ARTICLE
4
CONDUCT
OF BUSINESS
Section
4.1 Conduct of Business by the Parties
Except as
required by Law or is otherwise expressly permitted or specifically contemplated
by this Agreement, each of the Parties covenants and agrees that, during the
period from the date of this Agreement until the earlier of either the Effective
Time or the time that this Agreement is terminated by its terms, unless each of
the other Parties shall otherwise agree in writing:
|
(a)
|
it
shall, and shall cause its Subsidiaries to conduct business in, and not
take any action except in, the usual and ordinary course of business and
consistent with past practice, and it shall and shall cause its
Subsidiaries to use all commercially reasonable efforts to maintain and
preserve its business organization, assets, employees and advantageous
business relationships;
|
|
(b)
|
other
than as contemplated by this Agreement, it shall not directly or
indirectly do or permit to occur any of the
following:
|
|
(i)
|
amend
its Constituent Documents;
|
|
(ii)
|
declare,
set aside or pay any dividend or other distribution or payment (whether in
cash, shares or property) in respect of its shares owned by any Person
other than the inter-corporate loans and
advances;
|
|
(iii)
|
issue,
grant, sell or pledge or agree to issue, grant, sell or pledge any shares,
or securities convertible into or exchangeable or exercisable for, or
otherwise evidencing a right to acquire shares other than as required
under the Documents;
|
38
|
(iv)
|
redeem,
purchase or otherwise acquire any of its outstanding shares or other
securities including, without limitation, under an issuer
bid;
|
|
(v)
|
split,
combine or reclassify any of its shares other than as contemplated
herein;
|
|
(vi)
|
adopt
a plan of liquidation or resolutions providing for the liquidation,
dissolution, merger, consolidation or reorganization of itself or any of
its Subsidiaries;
|
|
(vii)
|
reduce
its stated capital; or
|
|
(viii)
|
enter
into or modify any contract, agreement, commitment or arrangement with
respect to any of the foregoing, except as permitted
above;
|
|
(c)
|
it
and its Subsidiaries shall not, other than in the ordinary course of
business and consistent with past practice, or as required or contemplated
by this Agreement, without prior consultation with and the consent of the
other Parties, directly or indirectly do any of the
following:
|
|
(i)
|
sell,
pledge, dispose of or encumber any assets other than as contemplated
herein;
|
|
(ii)
|
acquire
(by merger, amalgamation, consolidation or acquisition of shares or
assets) any corporation, partnership or other business organization or
division thereof, or make any investment either by purchase of shares or
securities, contributions of capital or property
transfer;
|
|
(iii)
|
acquire
any material assets;
|
39
|
(iv)
|
incur
any indebtedness for borrowed money other than pursuant to existing
facilities other than as contemplated by this Agreement, or any other
material liability or obligation or issue any debt securities or assume,
guarantee, endorse or otherwise as an accommodation become responsible
for, the obligations of any other individual or entity, or make any loans
or advances, other than the Personnel Obligations and fees payable to
legal and accounting advisors in the ordinary course and fees payable to
legal, accounting, engineering and financial advisors in connection with
the matters and the Business Combination contemplated by this
Agreement;
|
|
(v)
|
authorize,
recommend or propose any release or relinquishment of any material
contractual right;
|
|
(vi)
|
waive,
release, grant or transfer any material rights of value or modify or
change in any material respect any existing material license, lease,
contract, production sharing agreement, government land concession or
other material document;
|
|
(vii)
|
enter
into or terminate any xxxxxx, swaps or other similar financial instruments
or business combination;
|
|
(viii)
|
enter
into any agreements with its directors or officers or their respective
Affiliates other than as shall be approved by the other parties hereto;
or
|
|
(ix)
|
authorize
or propose any of the foregoing, or enter into or modify any contract,
agreement, commitment or arrangement to do any of the
foregoing;
|
|
(d)
|
from
the date hereof, it will not, without prior consultation with and the
consent of the other Parties, enter into new commitments of a capital
expenditure nature or incur any new contingent liabilities other than (i)
ordinary course expenditures, (ii) expenditures required by Law, (iii)
expenditures made in connection with the Business Combination contemplated
in this Agreement, and (iv) capital expenditures required to prevent the
occurrence of a Material Adverse
Effect;
|
|
(e)
|
notwithstanding,
for greater certainty, Section 4.1(c), in no case shall it or any its
Subsidiaries create any new Personnel Obligations and, except for payment
of the existing Personnel Obligations (from which the applicable Party
shall make appropriate withholdings as required by applicable tax Laws),
no Party nor any Party’s Subsidiaries shall grant to any officer or
director an increase in compensation in any form, grant any general salary
increase other than in accordance with the requirements of any existing
collective bargaining or union contracts, grant to any other employee any
increase in compensation in any form other than routine increases in the
ordinary course of business consistent with past practices, make any loan
to any officer or director, or take any action with respect to the grant
of any severance or termination pay arising from the Business Combination
or a change of any Party or the entering into of any employment agreement
with, any senior officer or director, or with respect to any increase of
benefits payable under its current severance or termination pay policies;
and
|
40
|
(f)
|
neither
it nor any of its Subsidiaries shall adopt or amend or make any
contribution to any bonus, profit sharing, option, deferred compensation,
insurance, incentive compensation, other compensation or other similar
plan, agreement, trust, fund or arrangements for the benefit of employees,
except as is necessary to comply with the Law or with respect to existing
provisions of any such plans, programs, arrangements or agreements without
the consent of the other Parties.
|
ARTICLE
5
COVENANTS
Section
5.1 Recommendation of Amalgamation by ecoTECH
The board
of directors of ecoTECH shall recommend to the ecoTECH Shareholders the approval
of the Amalgamation and shall not withdraw, modify or qualify (or propose to
withdraw, modify or qualify) in any manner adverse to SSKY such recommendation
or take any action or make any statement in connection with the the obtaining of
ecoTECH Shareholder Approval that is inconsistent with such
recommendation.
Section
5.2 Waiver of Notice of Subco Shareholder Meeting and Resolution in Lieu of
Meeting by SSKY
SSKY, as
sole shareholder of Subco, shall waive notice of and its attendance at a meeting
of the shareholders of Subco to approve the Amalgamation and shall sign a
resolution in writing of the sole shareholder of Subco approving the
Amalgamation.
Section
5.3 Representations and Warranties
|
(a)
|
ecoTECH
covenants and agrees that from the date hereof until the termination of
this Agreement it shall not take any action, or fail to take any action,
which would or may reasonably be expected to result in the representations
and warranties set out in Section 3.1 being untrue in any material
respect.
|
41
|
(b)
|
Each
of SSKY and Subco covenants and agrees that, from the date hereof until
the termination of this Agreement it shall not take any action, or fail to
take any action, which would or may reasonably be expected to result in
the representations and warranties set out in Sections 3.3 and 3.4 being
untrue in any material respect.
|
Section
5.4 Notice of Material Change
|
(a)
|
From
the date hereof until the termination of this Agreement, each Party shall
promptly notify the other Parties in writing
of:
|
|
(i)
|
any
material change (actual, anticipated, contemplated or, to the knowledge of
such Party or any of its Subsidiaries, threatened, financial or otherwise)
in the business, affairs, operations, assets, liabilities (contingent or
otherwise) or capital of such Party and its Subsidiaries, taken as
whole;
|
|
(ii)
|
any
change in the facts relating to any representation or warranty set out in
Section 3.1, Section 3.3 or Section 3.4 hereof, as applicable, which
change is or may be of such a nature as to render any such representation
or warranty misleading or untrue in a material respect;
or
|
|
(iii)
|
any
material fact which arises and which would have been required to be stated
herein had the fact arisen on or prior to the date of this
Agreement.
|
|
(b)
|
Each
of the Parties shall in good faith discuss with the other any change in
circumstances (actual, anticipated, contemplated or, to its knowledge
threatened, financial or otherwise) which is of such a nature that there
may be a reasonable question as to whether notice need to be given to the
other pursuant to this section.
|
Section
5.5 Non-Solicitation
None of
the Parties shall solicit any offers to purchase its shares or assets and
neither of SSKY nor ecoTECH will initiate or encourage any discussions or
negotiations with any third party with respect to such a transaction or
amalgamation, merger, take-over, plan of arrangement or similar transaction
during the period commencing on the date hereof and ending on the termination of
this Agreement. The Parties shall immediately cease and cause to be terminated
any existing discussions or negotiations with any other party related to any of
the foregoing. In the event any of the Parties is approached in respect of any
such transaction, it shall immediately notify the other.
42
Section
5.6 Covenants
|
(a)
|
Compliance with
Securities Laws. SSKY shall take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified) required to be taken under any applicable state securities laws
or Canadian Securities Law in connection with the issuance of SSKY Shares
in connection with this Agreement.
|
|
(b)
|
Public
Announcements. SSKY and ecoTECH will consult with each
other before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to
this Agreement and the Transactions and shall not issue any such press
release or make any such public statement prior to such consultation,
except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange.
|
|
(c)
|
Fees and
Expenses. All fees and expenses incurred in connection
with this Agreement shall be paid by the Party incurring such fees or
expenses, whether or not this Agreement is
consummated.
|
|
(d)
|
Continued
Efforts. Each Party shall use commercially reasonable
efforts to (a) take all action reasonably necessary to consummate the
Transactions, and (b) take such steps and do such acts as may be
necessary to keep all of its representations and warranties true and
correct as of the Closing Date with the same effect as if the same had
been made, and this Agreement had been dated, as of the Effective
Date.
|
|
(e)
|
Exclusivity. SSKY
shall not (i) solicit, initiate, or encourage the submission of any
proposal or offer from any person relating to the acquisition of any
capital stock or other voting securities of SSKY, or any assets of SSKY
(including any acquisition structured as a merger, consolidation, share
exchange or other business combination), (ii) participate in any
discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner
any effort or attempt by any person to do or seek any of the foregoing, or
(iii) take any other action that is inconsistent with the
Transactions and that has the effect of avoiding the Closing contemplated
hereby. SSKY shall notify ecoTECH immediately if any person
makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.
|
|
(f)
|
Filing of Form 8-K and
Press Release. SSKY shall file, within four business
days of the Effective Time, a current report on Form 8-K (“Super 8-K”) and
attach as exhibits all relevant agreements with the SEC disclosing the
terms of this Agreement and other disclosure regarding the Transactions
and including the requisite audited consolidated financial statements of
ecoTECH and Form 10 disclosure regarding ecoTECH. In addition,
SSKY shall issue a press release prior to 9:30 a.m. (New York Time) on the
business day following the Effective Time, announcing the closing of the
transaction.
|
43
|
(g)
|
Furnishing of
Information. As long as any Shareholder owns Resulting
Issuer Shares, SSKY covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by SSKY after the date hereof pursuant to either the
1934 Act or as may be required in Section 5 of BC Instrument
51-109. As long as any Shareholder owns Resulting Issuer
Shares, if SSKY is not required to file reports pursuant to such laws, it
will prepare and furnish to the Shareholders and make publicly available
in accordance with Rule 144 promulgated by the SEC pursuant to the
Act, such information as is required for each Shareholder to sell SSKY
Shares under Rule 144. SSKY further covenants that it will
take such further action as any holder of SSKY Shares may reasonably
request, all to the extent required from time to time to enable such
person to sell SSKY Shares without registration under the Act within the
limitation of the exemptions provided by
Rule 144.
|
|
(h)
|
Access. Each
Party shall permit representatives of the other Party to have full access
to all premises, properties, personnel, books, records (including Tax
records), contracts, and documents of or pertaining to such
Party.
|
|
(i)
|
Preservation of
Business. From the date of this Agreement until the
Effective Time, each of ecoTECH and SSKY shall operate only in the
ordinary and usual course of business consistent with past practice
(provided, however, that SSKY shall not issue any securities without the
prior written consent of ecoTECH), and shall use reasonable commercial
efforts to (a) preserve intact its respective business organization,
(b) preserve the good will and advantageous relationships with
customers, suppliers, independent contractors, employees and other Persons
material to the operation of its respective business, and (c) not
permit any action or omission which would cause any of its respective
representations or warranties contained herein to become inaccurate or any
of its respective covenants to be breached in any material
respect.
|
|
(j)
|
Directors and
Officers.
|
|
(i)
|
SSKY
shall take all necessary corporate action
to:
|
|
(a)
|
appoint
the executive officers of SSKY set forth on Schedule 5.6(j)
to be effective as of the Effective Time,
and
|
|
(b)
|
to
elect those persons set forth on Schedule 5.6(j)
to the Board of Directors of SSKY, to be effective as of the Effective
Time, and
|
44
|
(ii)
|
Any
executive officer or director of Resulting Issuer at the Effective Time
must, concurrent with the Closing, provide complete executed copies of BC
Form 51-509F3—Personal Information Form and Authorization of Indirect
Collection, Use and Disclosure of Personal
Information.
|
Section
5.7 Other Covenants
Each of
the Parties covenants and agrees that it shall:
|
(a)
|
use
all commercially reasonable efforts to consummate the Business Combination
and all matters described herein, subject only to the terms and conditions
hereof and thereof;
|
|
(b)
|
use
all commercially reasonable efforts to obtain all appropriate Regulatory
Approvals;
|
|
(c)
|
not
take any action or permit any of its Subsidiaries to take any action that
would render, or may reasonably be expected to render, any representation
or warranty made by it in this Agreement untrue in any material respect at
any time prior to the Effective Date or termination of this Agreement,
whichever is first;
|
|
(d)
|
not
split, consolidate or reclassify any of its outstanding securities, nor
declare, set aside or pay any dividends on or make any other distributions
on or in respect of its outstanding securities;
and
|
|
(e)
|
not,
other than in connection with the Business Combination, reorganize,
amalgamate or merge with any other person, nor acquire by amalgamating,
merging or consolidating with, purchasing a majority of the voting
securities or substantially all of the assets of or otherwise, any
business or Person which acquisition or other transaction would reasonably
be expected to prevent or materially delay the Business Combination
contemplated hereby.
|
45
ARTICLE
6
MUTUAL
COVENANTS
Section
6.1 Other Filings
The
Parties shall, as promptly as practicable hereafter, prepare and file all
filings required under any securities Laws, or any other applicable Laws
relating to the Business Combination contemplated hereby.
Section
6.2 Additional Agreements
Subject
to the terms and conditions of this Agreement and subject to fiduciary
obligations under applicable Laws, each of the Parties hereto agrees to use all
commercially reasonable efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective as promptly as practicable the Business Combination
contemplated by this Agreement and to cooperate with each other in connection
with the foregoing, including using commercially reasonable
efforts:
|
(a)
|
to
obtain all necessary waivers, consents and approvals from other Parties to
material agreements, leases and other contracts or
agreements;
|
|
(b)
|
to
defend all lawsuits or other legal proceedings challenging this Agreement
or the consummation of the Business Combination contemplated
hereby;
|
|
(c)
|
to
cause to be lifted or rescinded any injunction or restraining order or
other order adversely affecting the ability of the Parties to consummate
the Business Combination contemplated
hereby;
|
|
(d)
|
to
effect all necessary registrations and other
filings;
|
|
(e)
|
to
effect all necessary registrations and other filings and submissions of
information requested by Governmental Authorities;
and
|
|
(f)
|
to
fulfill all conditions and satisfy all provisions of this
Agreement.
|
For
purposes of the foregoing, the obligation to use “commercially reasonable
efforts” to obtain waivers, consents and approvals to loan agreements,
leases and other contracts shall not include any obligation to agree to a
materially adverse modification of the terms of such documents or to prepay or
incur additional material obligations to such other Parties.
Section
6.3 Deliveries of SSKY
At or
prior to the Effective Time, SSKY shall deliver:
|
(a)
|
to
ecoTECH, a copy of this Agreement executed by SSKY and
Subco;
|
|
(b)
|
to
ecoTECH, a copy of the Amalgamation Agreement, executed by SSKY and
Subco;
|
46
|
(c)
|
to
ecoTECH, a certificate from SSKY, signed by its Chief Executive Officer
certifying that (i) the attached copies of SSKY Constituent
Instruments and resolutions of the Board of Directors of SSKY approving
the Agreement and the Transactions, are all true, complete and correct and
remain in full force and effect; (ii) SSKY’s representations and covenants
referred to in Section 7.2(a) are accurate as of the Closing; (iii)
the attached resolutions of the Board of Directors of SSKY electing the
directors and appointing the executive officers as discussed in
Section 5.6(j) are all true, complete and correct and remain in full
force and effect and (iv) Subco meets the requirements set forth in
Section 185 of the Act in respect of the
Amalgamation.
|
|
(d)
|
to
ecoTECH, SSKY Financial Statements as set forth in
Section 3.3(f).
|
|
(e)
|
to
ecoTECH, evidence in form and substance satisfactory to ecoTECH that SSKY
has total liabilities of less than $25,000,
|
|
(f)
|
to
ecoTECH, a list of the record holders of SSKY Common stock as of the
Closing Date certified to by the transfer agent for SSKY Common
Stock;
|
|
(g)
|
to
ecoTECH, a certificate of good standing of SSKY from the Nevada Secretary
of State as of a recent date; and
|
|
(h)
|
to
each ecoTECH Shareholder, certificates representing SSKY Shares to be
issued to such ecoTECH Shareholder.
|
Section
6.4 Deliveries of ecoTECH
At or
prior to the Effective Time, ecoTECH shall deliver to the SSKY:
|
(a)
|
this
Agreement executed by ecoTECH;
|
|
(b)
|
the
Amalgamation Agreement, executed by
ecoTECH;
|
47
|
(c)
|
the
corporate minute book, seal and stock ledger of
ecoTECH;
|
|
(d)
|
the
Amalgamation Application;
|
|
(e)
|
original
counterparts to the Investor Certificates, duly executed by each ecoTECH
Shareholder;
|
|
(f)
|
certified
consents of the board of directors and shareholders of ecoTECH authorizing
the transactions contemplated by this
Agreement
|
|
(g)
|
a
certificate from ecoTECH, signed by its Chief Executive Officer certifying
that (i) the attached copies of ecoTECH Constituent Instruments and
resolutions of the Board of Directors of ecoTECH approving the Agreement
and the Transactions, are all true, complete and correct and remain in
full force and effect; (ii) ecoTECH’s representations and covenants
referred to in Section 7.2(a)
are accurate as of the Effective Time: and (iii) ecoTECH meets
the requirements set forth in Section 185(2) of the Act in respect of the
Amalgamation;
|
|
(h)
|
the
audited ecoTECH Financial Statements as set forth in Section
3.15(b); and
|
|
(i)
|
the
Certificates that immediately prior to the Effective Time represented
outstanding ecoTECH Shares, whose shares were converted to receive SSKY
Shares pursuant to Section 2.1(c), together with a duly executed letter of
transmittal; and
|
|
(j)
|
a
certificate of status of ecoTECH from both Canada Director, Industry of
Canada and the British Columbia Ministry of Government Services as of a
recent date.
|
ARTICLE
7
CONDITIONS
Section
7.1 Mutual Conditions Precedent
The
respective obligations of the Parties hereto to complete each step of the
Business Combination contemplated by this Agreement shall be subject to the
satisfaction, on or before the Effective Date, of the following conditions
precedent, each of which may be waived only by the mutual consent of the
Parties:
|
(a)
|
each
Party being satisfied with the results of a complete due diligence review
of the other Parties by November 10, 2010, following which, in the absence
of notice of termination, such condition is deemed to be
satisfied;
|
|
(b)
|
there
shall not be in force any order or decree restraining or enjoining the
consummation of the Business
Combination;
|
48
|
(c)
|
this
Agreement shall not have been terminated pursuant to Article
8;
|
|
(d)
|
all
Regulatory Approvals and corporate approvals shall have been
obtained;
|
|
(e)
|
each
Party shall not have entered into any transaction or contract which would
have a material effect on the financial and operational condition, or the
assets of each Party, excluding those transactions or contracts undertaken
in the ordinary course of business, without first discussing and obtaining
the approval of the other Parties;
|
|
(f)
|
the
board and the shareholders of ecoTECH shall have adopted all necessary
resolutions and all other necessary corporate actions shall have been
taken by ecoTECH to permit the consummation of the Business Combination;
and
|
|
(g)
|
SSKY
and Subco boards shall have adopted all necessary resolutions and all
other necessary corporate actions shall have been taken by SSKY and Subco
to permit the consummation of the Business
Combination;
|
If any of
the above conditions shall not have been complied with or waived by the Parties
on or before the Completion Deadline or, if earlier, the date required for the
performance thereof, then a Party may terminate this Agreement in circumstances
where the failure to satisfy any such condition is not the result, directly or
indirectly, of a breach of this Agreement by the Party terminating the
Agreement. In the event that the failure to satisfy any one or more of the above
conditions precedent results from a material default by a Party of its
obligations under this Agreement and if such condition (s) precedent would have
been satisfied but for such default, such defaulting Party shall not rely on
such failure (to satisfy one or more of the above conditions) as a basis for its
own non-compliance with its obligations under this Agreement.
Section
7.2 Additional Conditions Precedent to the Obligations of ecoTECH
The
obligations of ecoTECH to complete the Business Combination contemplated by this
Agreement shall also be subject to the satisfaction, on or before the Effective
Date, to each of the following conditions precedent (each of which is for the
exclusive benefit of ecoTECH and may be waived by ecoTECH and any one or more of
which, if not satisfied or waived, will relieve ecoTECH of any obligation under
this Agreement):
|
(a)
|
Representations and
Covenants. The representations and warranties of SSKY contained in
this Agreement shall be true in all material respects on the date of this
Agreement and as of the Closing Date. All of the
representations and warranties of SSKY contained in this Agreement that
contain an express materiality qualification shall have been true and
correct in all respects as of the date of this Agreement and shall be true
and correct in all respects as of the Closing Date. SSKY shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by
SSKY on or prior to the Closing Date. SSKY shall have delivered
to the Shareholders and ecoTECH, a certificate, dated as of the Closing
Date, to the foregoing effect.
|
49
|
(b)
|
Litigation. No
action, suit or proceeding shall have been instituted before any court or
governmental or regulatory body or instituted or threatened by any
governmental or regulatory body to restrain, modify or prevent the
carrying out of the Transactions or to seek damages or a discovery order
in connection with such Transactions, or which has or may have a SSKY
Material Adverse Effect.
|
|
(c)
|
No Material Adverse
Effect. There shall not have been any occurrence, event,
incident, action, failure to act, or transaction since May 31, 2010 which
has had or is reasonably likely to cause a SSKY Material Adverse
Effect.
|
|
(d)
|
OTC Bulletin
Board. SSKY shall have maintained its status as a
company whose common stock is quoted on OTC Bulletin Board and no reason
shall exist as to why such status shall not continue immediately following
the Closing.
|
|
(e)
|
Deliveries. The
deliveries specified in Section 6.3
shall have been made by SSKY.
|
|
(f)
|
No Suspensions of
Trading in SSKY Common Stock; Listing. Trading in SSKY
Common Stock shall not have been suspended by the SEC or any trading
market (except for any suspensions of trading of not more than one trading
day solely to permit dissemination of material information regarding SSKY)
at any time since the date of execution of this Agreement, and SSKY Common
Stock shall have been at all times since such date listed for trading on a
trading market.
|
If any of
the above conditions shall not have been complied with or waived by the Parties
on or before the Completion Deadline or, if earlier, the date required for the
performance thereof, then, ecoTECH may terminate this Agreement in circumstances
where the failure to satisfy any such condition is not the result, directly or
indirectly, of a breach of this Agreement by ecoTECH. In the event that the
failure to satisfy any one or more of the above conditions precedent results
from a material default by ecoTECH of its obligations under this Agreement and
if such condition(s) precedent would have been satisfied but for such default,
ecoTECH shall not rely on such failure (to satisfy one or more of the above
conditions) as a basis for its own non-compliance with its obligations under
this Agreement.
50
Section
7.3 Additional Conditions Precedent to the Obligations of SSKY and
Subco
The
obligations of SSKY and Subco to complete each step of the Business Combination
contemplated by this Agreement shall also be subject to the satisfaction, on or
before the Effective Date, of each of the following conditions precedent (each
of which is for the exclusive benefit of SSKY and Subco and may be waived by
SSKY and Subco and any one or more of which, if not satisfied or waived, will
relieve SSKY and Subco of any obligation under this Agreement):
|
(a)
|
Representations and
Covenants. The representations and warranties of the Shareholders
and ecoTECH contained in this Agreement shall be true in all material
respects on the date of this Agreement and as of the Closing
Date. All of the representations and warranties of the
Shareholders and ecoTECH contained in this Agreement that contain an
express materiality qualification shall have been true and correct in all
respects as of the date of this Agreement and shall be true and correct in
all respects as of the Closing Date. The Shareholders and
ecoTECH shall have performed and complied in all material respects with
all covenants and agreements required by this Agreement to be performed or
complied with by the Shareholders and ecoTECH on or prior to the Closing
Date. ecoTECH shall have delivered to SSKY, if requested, a
certificate, dated the Closing Date, to the foregoing
effect.
|
|
(b)
|
Litigation. No
action, suit or proceeding shall have been instituted before any court or
governmental or regulatory body or instituted or threatened by any
governmental or regulatory body to restrain, modify or prevent the
carrying out of the Transactions or to seek damages or a discovery order
in connection with such Transactions, or which has or may have, in the
reasonable opinion of SSKY, a ecoTECH Material Adverse
Effect.
|
|
(c)
|
No Material Adverse
Effect. There shall not have been any occurrence, event,
incident, action, failure to act, or transaction since June 30, 2010 which
has had or is reasonably likely to cause a ecoTECH Material Adverse
Effect.
|
|
(d)
|
Deliveries. The
deliveries specified in Section 6.4
shall have been made by the ecoTECH Shareholders and ecoTECH,
respectively.
|
|
(e)
|
Delivery of Audit
Report and Financial Statements. ecoTECH shall have
completed the audited ecoTECH Financial Statements as set forth in (o) and
shall have received an audit report from an independent audit firm that is
registered with the Public Company Accounting Oversight Board relating to
the fiscal years ended June 30, 2009 and 2008. The form and
substance of ecoTECH Audited Financial Statements shall be satisfactory to
SSKY in its sole and absolute
discretion.
|
|
(f)
|
Filing of Amalgamation
Application. The Amalgamation Application shall have
been filed with the Director.
|
51
|
(g)
|
No Dissenter
Rights No ecoTECH Shareholder shall have exercised
Dissenter Rights.
|
If any of
the above conditions shall not have been complied with or waived by the Parties
on or before the Completion Deadline or, if earlier, the date required for the
performance thereof, then, SSKY and Subco may terminate this Agreement in
circumstances where the failure to satisfy any such condition is not the result,
directly or indirectly, of a breach of this Agreement by SSKY or Subco. In the
event that the failure to satisfy any one or more of the above conditions
precedent results from a material default by SSKY or Subco of its obligations
under this Agreement and if such condition(s) precedent would have been
satisfied but for such default, either Party shall rely on such failure (to
satisfy one or more of the above conditions) as a basis for its own
non-compliance with its obligations under this Agreement.
ARTICLE
8
TERMINATION
AND AMENDMENT
Section
8.1 Termination
This
Agreement may be terminated by written notice promptly given to the other Party
hereto, at any time prior to the Effective Date:
|
(a)
|
by
mutual agreement in writing by the
Parties;
|
|
(b)
|
if
the Effective Date has not occurred by the Completion Deadline;
or
|
|
(c)
|
as
set forth in Section 7.1, Section 7.2 and Section 7.3 of this
Agreement.
|
Section
8.2 Effect of Termination
In the
event of the termination of this Agreement as provided in Section 8.1 hereof,
this Agreement shall forthwith have no further force or effect and there shall
be no obligation on the part of SSKY or ecoTECH hereunder except as set forth in
Section 8.3 hereof and this Section 8.2, which provisions shall survive the
termination of this Agreement. Nothing herein shall relieve any Party from
liability for any breach of this Agreement.
Section
8.3 Fees and Expenses
The
Parties hereto shall be responsible for the payment of their own professional
fees (including but not limited to legal and accounting fees) and other expenses
incurred by them in connection with this Agreement.
Section
8.4 Amendment
This
Agreement may, at any time on or before the Effective Date be amended by mutual
agreement between the Parties hereto. This Agreement may not be amended except
by an instrument in writing signed by the appropriate officers on behalf of each
of the Parties hereto.
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Section
8.5 Waiver
A Party
may (i) extend the time for the performance of any of the obligations or other
acts of the other Party, (ii) waive compliance with any of the other Party’s
agreements or the fulfillment of any of its conditions contained herein or (iii)
waive inaccuracies in another Party’s representations or warranties contained
herein or in any document delivered by the other Party hereto; provided,
however, that any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such Party.
ARTICLE
9
INDEMNIFICATION
9.1 Survival of Representations
and Warranties. All representations and warranties of the
Shareholders, ecoTECH in this Agreement shall survive the Closing until the
eighteenth (18th) month anniversary of the Closing Date (the “Survival Date”);
provided, however, that
any claim for indemnification based upon a breach of any such representation or
warranty and asserted prior to the Survival Date by written notice in accordance
with Section 9.03
shall survive until final resolution of such claim.
9.2 Indemnification by the
Parties.
(a) Indemnification by
ecoTECH. Subject to the limitations set forth in this ARTICLE
9, ecoTECH shall indemnify, defend and hold harmless SSKY from and against any
expense, settlement, judgment, award, fine, penalty, or Tax (including any
reasonable legal or accounting fee related thereto) (collectively “Damages”),
arising out of, relating to or resulting from any breach of a representation,
warranty or covenant of ecoTECH and the Shareholders contained in this
Agreement.
(b) Indemnification by
SSKY. Subject to the limitations set forth in this Article 9,
SSKY shall indemnify, defend and hold harmless ecoTECH from and against any
Damages arising out of, relating to or resulting from any breach of a
representation, warranty or covenant of SSKY contained in this
Agreement.
9.3
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Procedures for
Indemnification. Promptly after receipt by a party
entitled to indemnification hereunder (the “Indemnitee”) of
written notice of the assertion or the commencement of any proceeding by a
third-party with respect to any matter referred to in Section 9.2,
the Indemnitee shall give written notice thereof to the party obligated to
indemnify Indemnitee (the “Indemnitor”),
and thereafter shall keep the Indemnitor reasonably informed with respect
thereto; provided,
however, that failure of the Indemnitee to give the Indemnitor
notice as provided herein shall not relieve the Indemnitor of its
obligations hereunder except to the extent that the Indemnitor is
prejudiced thereby. A claim for indemnification for any matter
not involving a third-party proceeding may be asserted by notice to the
party from whom indemnification is sought and shall be paid promptly after
such notice.
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53
9.4 Limitations on
Indemnification. Notwithstanding anything herein to the
contrary, no party shall not be obligated to indemnify any other party or the
Shareholders under this Article 9 for any amount that One Million Dollars
($1,000,000) in the aggregate (the “Indemnification Cap”) and only in the event
that the aggregate of all damages exceeds Twenty Five Thousand Dollars
($25,000.00) (the “Basket”).
ARTICLE
10
GENERAL
Section
10.1 Notices
All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered or sent if delivered personally or sent by facsimile or electronic
mail or sent by prepaid overnight courier to the Parties at the following
addresses (or at such other addresses as shall be specified by the Parties by
like notice):
if to
ecoTECH:
ecoTECH
Energy Group (Canada) Inc.
000-00000
Xxxxxxxxxx Xxx
Xxxxxxx,
XX X0X 0X0
Attention: Xxxxx
Xxxx
if to SSKY or
Subco:
Sea
to Sky Corp.
000 Xxxxx
Xxxxxx, Xxx 0000
Xxxxxxx,
XX 00000
Attention: Xxxx
Xxxxx
Section
10.2 Assignment
Except as
expressly permitted by the terms hereof, neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either of the
Parties hereto without the prior written consent of the other
Party.
54
Section
10.3 Complete Agreement
This
Agreement sets forth the entire understanding between the Parties hereto and
supersedes all prior agreements, arrangements and communications, whether oral
or written, with respect to the subject matter hereof, including but not limited
to, the Letter of Intent dated May 12, 2010, as extended, between ecoTECH and
SSKY. No other agreements, representations, warranties or other matters, whether
oral or written, shall be deemed to bind the Parties hereto with respect to the
subject matter hereof.
Section
10.4 Further Assurances
Each
Party hereto shall, from time to time, and at all times hereafter, at the
request of the other Party hereto, but without further consideration, do all
such further acts and execute and deliver all such further documents and
instruments as shall be reasonably required in order to fully perform and carry
out the terms and intent hereof.
Section
10.5 Severability
Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable Law. Any provision of this
Agreement that is invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining provisions hereof, and any
such invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section
10.6 Counterpart Execution
This
Agreement may be executed by facsimile transmission and in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
Section
10.7 Investigation by Parties
No
investigations made by or on behalf of either Party or any of their respective
authorized agents at any time shall have the effect of waiving, diminishing the
scope of or otherwise affecting any representation, warranty or covenant made by
the other Party in or pursuant to this Agreement.
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IN WITNESS WHEREOF, the
Parties have caused this Agreement to be executed as of the date first written
above by their respective officers thereunto duly authorized.
ECOTECH
ENERGY GROUP
(CANADA) INC.
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By:
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/s/ Xxxxx Xxxx
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Name:
Xxxxx Xxxx
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Title:
President
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By:
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/s/ Xxxx Xxxxx
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||
Name:
Xxxx Xxxxx
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Title:
President
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7697112
CANADA CORP.
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By:
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/s/ Xxxx Xxxxx
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Name:
Xxxx Xxxxx
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Title:
Director
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