SHARE EXCHANGE AGREEMENT
This
Agreement dated as of the 25th day of July, 2008 by and among WHITEMARK HOMES,
INC. a Colorado Corporation, with an address at 000 Xxxxx Xxxxxxxxxx Xxxxxxxxx,
Xxxxxxxx, Xxxxxxx 00000-0000 (“Whitemark”),
all
of the shareholders of Blue Sky Oil and Gas Corp. a Nevada Corporation, with
an
address at #00 0000 xxxxxxxx Xxxxxxxx, X.X. Xxxxxxx, Xxxxxxx Xxxxxx X0X 5MY
(Blue
Sky Oil and Gas Corp.)
hereafter referred to as “Blue
Sky”
who
are
listed on Exhibit “A”,
which
is annexed hereto and made part hereof, (the “Blue
Sky Shareholders”),
Blue
Sky, and TMK
HOLDINGS, INC.
a
Nevada corporation with an address at ____________________________
(“TMK”).
WITNESSETH
WHEREAS,
the
Board of Directors of Whitemark deems it advisable and in the best interests
of
Whitemark to exchange certain common stock of Whitemark for all of the shares
of
Blue Sky from the Blue Sky Shareholders in order to advance the long-term
business interests of Whitemark;
WHEREAS,
the
Blue Sky Shareholders desire to exchange all of their shares of Blue Sky for
seventy-eight million sixty eight thousand nine-hundred twenty-one (78,068,921)
shares of Whitemark’s Common Stock par value $0.001 (“Common
Stock”)
(the
seventy-eight million sixty eight thousand nine-hundred twenty-one (78,068,921)
shares of Whitemark common stock are hereinafter referred to as the “Exchange
Common Stock”), which shall be issued at a later date as hereinafter provided;
after such exchange Whitemark shall own one hundred (100%) percent of Blue
Sky’s
issued and outstanding common stock, and Blue Sky shall be a wholly-owned
subsidiary of Whitemark;
WHEREAS,
TMK
desires to sell 12,311,977 shares of Whitemark Common Stock in return for
payment of the Whitemark Note;
WHEREAS,
Whitemark shall issue the Exchange Common Stock to Blue Sky to be held in escrow
in accordance herewith;
WHEREAS,
the
Board of Directors of Whitemark has adopted, approved and authorized the
execution and delivery of this Agreement to implement the exchange of all of
the
shares of Blue Sky for Certain Common Stock by Whitemark from the Blue Sky
Shareholders in compliance with the Colorado Business Corporation Act, and
the
Board of Directors of Blue Sky has adopted, approved and authorized the
execution and delivery of this Agreement, in compliance with the provisions
of
the Nevada Revised Statutes with the result that Whitemark shall issue to the
Blue Sky Shareholders the Exchange Common Stock on the Closing Date as soon
as
practicable thereafter in exchange for one hundred (100%) percent of the issued
and outstanding shares of Blue Sky;
WHEREAS,
Blue
Sky and Whitemark intend that the exchange of all of the shares of Blue Sky
by
Whitemark from the Blue Sky Shareholders shall qualify as a tax-free
reorganization pursuant to Section 368 of the Internal Revenue Code of 1986,
as
amended;
WHEREAS,
the
Board of Directors of Whitemark intends to, and shall, prior to closing, have
this Agreement and the transactions with respect to this Agreement approved
by
the shareholders of Whitemark in accordance with the applicable provisions
the
Colorado Business Corporation Act; and
WHEREAS,
as of
the date of this Agreement, Whitemark has issued and outstanding twenty one
million three hundred thirty one thousand seventy nine (21,331,079) shares
of
common stock, par value $0.001 per share.
NOW,
THEREFORE,
in
consideration of the mutual covenants of the parties hereinafter set forth,
and
for good and valuable consideration, receipt of which is hereby acknowledged,
IT
IS AGREED:
1. Recitals.
The
parties hereby adopt as part of this Agreement each of the recitals which is
set
forth above in the WHEREAS clauses, and agree that such recitals shall be
binding upon the parties hereto by way of contract and not merely by way of
recital or inducement; such WHEREAS clauses are hereby confirmed and ratified
as
being accurate by each party as to itself, herself and himself.
2. Increase
in Authorized Shares.
Whitemark agrees as soon as practicable after the Closing Date to do the
following:
A. increase
its number of authorized shares so that there shall be five hundred million
(500,000,000) authorized shares, par value $.001 of Whitemark common stock.
3.
Closing
Transactions.
A. On
the
Closing Date, the Escrow Agent, subject to, and consistent with, the provisions
of this Agreement, shall, provided that the TMK NOTE shall have been paid,
release the Blue Sky stock to Blue Sky which shall cause the Stock to be
distributed to the Blue Sky Shareholders, all of which common stock shall be
held in Escrow pursuant to Paragraph “C” of this Article “3” of this Agreement,
in exchange for all of the shares of Blue Sky Common Stock, after which exchange
Whitemark shall own one hundred (100%) percent of Blue Sky common stock, and
Blue Sky shall thereby become a wholly-owned subsidiary of
Whitemark.
B.
Prior
to the Closing, TMK shall deposit the 12,311,977 shares in escrow with escrow
agent. The escrow will be released upon payment of the TMK Note.
C.
Upon
the signing of this Agreement Whitemark, the Blue Sky Shareholders, Blue Sky,
TMK shall enter into the Escrow Agreement Xxxx X. Xxxxxxxx, Esq. in the form
which is annexed hereto as Exhibit
“C”;
provided however, that TMK shall have full right to vote their respective shares
of Exchange Common Stock while they are held in escrow until the TMK Note shall
have been paid. TMK shall vote all shares of Whitemark owned by them in favor
if
the exchange with BlueSky.
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4.
Post-Closing Transactions.
A. The
Amendment. As
soon
as practicable after the Closing Date Whitemark shall take such action as may
be
necessary to amend its Certificate of Incorporation to (i) increase Whitemark’s
authorized shares of Common Stock to five hundred million (500,000,000), and
(ii) to authorize ten million (10,000,000) shares of preferred stock (the
“Amendment”).
5.
Directors and Officers.
A. Immediately
prior to the signing of this Agreement, the Board of Directors of Whitemark
shall appoint Blue Sky’s directors to serve as the directors of Whitemark, to
hold office in accordance with the certificate of incorporation and bylaws
of
Whitemark until their successors are duly elected or appointed and qualified.
Immediately after such appointment of Blue Sky’s directors, the current
directors other than Xxxxx Xxxxx of Whitemark shall resign. Xxxxx Xxxxx shall
be
elected President of the Company.
B. Immediately
prior to the signing of this Agreement, the officers of Whitemark serving
immediately shall resign and the Board shall elect new officers.
6. Closing
Date. The
closing of this transaction (the “Closing”) shall take place at the offices of
Xxxxxx Xxxxxx, Esq. at 11:00 AM Eastern Daylight Time (“EDT”) on August 8, 2008
or such other date which is mutually agreed upon in writing by the parties,
either of which is hereinafter referred to as the “Closing Date”.
7. Blue
Sky’s Representations, Warranties and Covenants.
Blue
Sky, represents, warrants and covenants to Whitemark (for the purpose of these
representations, warranties and covenants including all of its subsidiary
corporation) as follows:
A.
Corporate
Status.
i. Blue
Sky
is a corporation duly organized, validly existing and in good standing pursuant
to the laws of the State of Nevada, with all requisite power and authority
to
carry on its business as presently conducted in all jurisdictions where
presently conducted, to enter into this Agreement and to consummate the
transactions set forth in this Agreement
ii. Copies
of
(a) the Certificate of Incorporation of Blue Sky, and all amendments to the
Certificate of Incorporation, certified by the Secretary of State of the State
of Nevada and (b) the By-Laws of Blue Sky, as amended, certified by the
Secretary of Blue Sky are annexed to, and made a part of, this Agreement as
Exhibit 7A respectively, and are complete and correct as of the date of this
Agreement.
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B. Capitalization.
i.
Blue
Sky has one hundred thousand (100,000) authorized shares of common stock, all
of
which are issued and outstanding, all of which are owned by the shareholders
set
forth on Exhibit
“A”.
ii.
Blue
Sky does not have any (i) subscriptions, options, warrants, rights or other
agreements outstanding to acquire from Blue Sky shares of stock of Blue Sky
or
any other equity security or security convertible into an equity security of
Blue Sky, (ii) outstanding shares of preferred stock or (iii) agreements or
commitments to increase, decrease or otherwise alter the authorized capital
stock of Blue Sky.
C. Authority
of Blue Sky.
Blue
Sky has full corporate power and authority to execute, deliver and perform
this
Agreement and has taken all corporate action required by law and its
organizational documents to authorize the execution and delivery of this
Agreement and the consummation of the transactions set forth in this Agreement,
and no other corporate action on its part is necessary to authorize and approve
this Agreement or to consummate the transactions contemplated by this Agreement.
This Agreement and the consummation by Blue Sky of the transactions set forth
in
this Agreement have been duly and validly authorized, executed and delivered
by
the Blue Sky Shareholders, and (assuming the valid authorization, execution
and
delivery of this Agreement by Whitemark, this Agreement is valid and binding
upon Blue Sky and enforceable against Blue Sky in accordance with its terms
(except as the enforceability of this Agreement may be limited by bankruptcy,
insolvency, bank moratorium or similar laws affecting creditors' rights
generally and laws restricting the availability of equitable remedies, and
may
be subject to general principles of equity whether or not such enforceability
is
considered in a proceeding at law or in equity). A certified resolution of
the
Board of Directors of Blue Sky with respect to Section “7”, “10”, “12” through
“16” and “18” through “22” of this Agreement and a consent of Blue Sky’s
stockholders owning a majority of the issued and outstanding shares of Blue
Sky
Common Stock approving Blue Sky’s entry into this Agreement and the consummation
of the transactions set forth in this Agreement are annexed to, and made a
part
of, this Agreement as Exhibit 7C.
D. Compliance
with the Law and Other Instruments.
Blue Sky
is and has been in material compliance in all material respects with any and
all
legal requirements applicable to Blue Sky. Blue Sky (i) has not received or
entered into any citations, complaints, consent orders, compliance schedules,
or
other similar enforcement orders or received any written notice from any
governmental authority or any other written notice which would indicate that
Blue Sky is not currently in compliance with all applicable legal requirements,
and (ii) is not in default under any legal requirement applicable to Blue Sky,
and Blue Sky has no knowledge that any condition exists (whether or not covered
by insurance) that with or without notice or lapse of time or both would
constitute a default under, or breach or violation of, any legal requirement
applicable to Blue Sky.
E. Absence
of Conflicts.
The
execution and delivery of this Agreement, and the consummation by Blue Sky
and
the Blue Sky Shareholders of the transactions set forth in this Agreement:
(i)
do not and shall not conflict with or result in a breach of any provision of
Blue Sky’s Certificate of Incorporation or By-Laws, (ii) do not and shall not
result in any breach of, or constitute a default or cause an acceleration under
any arrangement, agreement or other instrument to which Blue Sky is a party
to
or by which any of its assets are bound, (iii) do not and shall not cause Blue
Sky to violate or contravene any provision of law or any governmental rule
or
regulation, and (iv) will not and shall not result in the imposition of any
lien, or encumbrance upon, any property of Blue Sky. Blue Sky has performed
in
all material respects all of its obligations which are, as of the date of this
Agreement, required to be performed, pursuant to the terms of any such
agreement, contract or commitment.
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F.
Financial
Statements.
Attached hereto as Exhibit 7F are the audited financial statements of Blue
Sky
(the “Blue
Sky Financial Statements”)
consisting of audited consolidated balance sheets and statements of income,
changes in stockholders’ equity, and cash flow as of and for June 30, 2008. The
Blue Sky Financial Statements (including the notes thereto) have been prepared
and audited in accordance with GAAP applied on a consistent basis throughout
the
periods covered thereby and present fairly the financial condition of Blue
Sky
as of such dates and the results of operations of Blue Sky for such periods.
Blue Sky has been advised by its auditors that the auditors are registered
with
the Public Company Accounting Oversight Board, which was created pursuant to
the
Xxxxxxxx-Xxxxx Act of 2002.
G.
Environmental
Compliance.
i.
Blue
Sky has complied and is in compliance, in all material respects, with all
applicable Environmental, Health and Safety Requirements.
H.
OSHA
Compliance.
Blue
Sky is in compliance with all applicable federal, state and local laws, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings
and
charges pursuant to OSHA and other governmental requirements relating to
occupational health and safety including, but not limited to, OSHA.
I.
Non-Tax
Liabilities.
Other
than set forth in the Blue Sky Financial Statements, Blue Sky does not have
any
liabilities of any nature, accrued or contingent, arising since June 30, 2008
and prior to the date of this Agreement in the ordinary course of business
(which are not inconsistent with the representations and warranties of Blue
Sky
or any other provision of this Agreement.)
J.
Representations
and Obligations with respect to Taxes.
i.
As
used in this Paragraph “J” of this Section “7” of this Agreement, “Affiliated
Group”
means
any affiliated group within the meaning of Section 1504(a) of the Internal
Revenue Code of 1986 (the “Code”)
or any
similar group defined under a similar provision of state, local, or foreign
law;
“Tax” means any Federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Section 59A of the Code),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not, and “Taxes”
means
any or all of the foregoing collectively; and “Tax
Return”
means
any return, declaration, report, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto and
including any amendment thereof.
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ii.
Blue
Sky has filed all tax returns which it was required to file, all such tax
returns were true, correct, and complete in all material respects, all taxes
owed by Blue Sky (whether or not shown on any tax return and whether or not
any
tax return was required) have been paid, Blue Sky is not currently the
beneficiary of any extension of time within which to file any tax return, no
claim has ever been made by a taxing authority in a jurisdiction where the
Blue
Sky does not file tax returns which it is or may be subject to taxation by
that
jurisdiction, and there are no liens on any of the assets of Blue Sky that
arose
in connection with any failure (or alleged failure) to pay any tax, except
for
liens for taxes not yet due.
iii.
Blue
Sky has withheld and paid all Taxes required to have been withheld and paid
in
connection with amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party.
iv.
No
director or officer (or employee responsible for tax matters) of Blue Sky has
received any notification (whether written or oral) that any taxing authority
will assess any additional taxes for any period for which tax returns have
been
filed. There is no dispute or claim concerning any tax liability of Blue Sky
either (i) claimed or raised by any taxing authority in writing or (ii) as
to
which Blue Sky has knowledge (after reasonable investigation). No issue relating
to taxes has been raised in writing by a taxing authority during any pending
audit or examination, and no issue relating to taxes was raised in writing
by a
taxing authority in any completed audit or examination, which reasonably can
be
expected to recur in a later taxable period.
v.
Blue
Sky has not waived any statute of limitations with respect to taxes or agreed
to
any extension of time with respect to a tax assessment or
deficiency.
vi.
Blue
Sky shall not be required to include in a taxable period ending after the
Closing Date taxable income attributable to income which accrued in a prior
taxable period but was not recognized in any prior taxable period as a result
of
the installment method of accounting, the completed contract method of
accounting, the long-term contract method of accounting, the cash method of
accounting, or Section 481 of the Code or any comparable provision of state,
local, or foreign tax law.
vii.
Blue
Sky is not a party to any joint venture, partnership, or other arrangement
or
contract which could be treated as a partnership for Federal income tax
purposes.
viii.
Blue Sky has not entered into any sale leaseback or leveraged lease transaction
which fails to satisfy the requirements of Revenue Procedure 75-21 (or similar
provisions of foreign law) or any safe harbor lease transaction.
ix.
All
elections with respect to taxes affecting Blue Sky are disclosed or attached
to
a tax return of Blue Sky.
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x.
All
private letter rulings issued by the Internal Revenue Service to Blue Sky (and
any corresponding ruling or determination of any state, local, or foreign taxing
authority) have been disclosed on Exhibit “M” (Section “7J”), and there are no
pending requests for any such rulings (or corresponding determinations).
K.
Contracts.
Except
as set forth on Exhibit “___” Blue Sky is not a party to any material contracts,
which is hereby defined as a an obligation by Blue Sky to pay a sum greater
than
ten thousand ($10,000) dollars.
L.
Absence
of Changes.
Since
June 30, 2008, there has not been any material adverse change in the business,
financial condition, operations, results of operations, or future prospects
of
Blue Sky taken as a whole. Without limiting the generality of the foregoing,
except as set forth on Exhibit “N” since June 30, 2008:
i.
Blue
Sky has not sold, leased, transferred, or assigned any material assets, tangible
or intangible, outside of the ordinary course of business;
ii.
Blue
Sky has not entered into any material agreement, contract, lease, or license
outside of the ordinary course of business;
iii.
no
party (including Blue Sky) has accelerated, terminated, made material
modifications to, or canceled any material agreement, contract, lease, or
license to which Blue Sky is a party;
iv.
Blue
Sky has not imposed any security interest upon any of its assets, tangible
or
intangible;
v.
Blue
Sky has not made any material expenditures of its capital outside of the
ordinary course of business;
vi.
Blue
Sky has not made any material capital investment in, or any material loan to,
any other person or entity outside of the ordinary course of
business;
vii.
Blue
Sky has not created, incurred, assumed, or guaranteed more than $50,000 in
aggregate indebtedness for borrowed money and capitalized lease
obligations;
viii.
Blue Sky has not granted any license or sublicense of any material rights under
or with respect to any intellectual property;
ix.
There
has been no change made or authorized in the Certificate of Incorporation or
By-Laws of Blue Sky;
x.
Blue
Sky has not issued, sold, or otherwise disposed of any of its capital stock,
or
granted any options, warrants, or other rights to purchase or obtain (including
upon conversion, exchange, or exercise) any of its capital
stock;
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xi.
Blue
Sky has not declared, set aside, or paid any dividend or made any distribution
with respect to its capital stock (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its capital stock;
xii.
Blue
Sky has not experienced any material damage, destruction, or loss (whether
or
not covered by insurance) to its property;
xiii.
Blue Sky has not made any loan to, or entered into any other transaction with,
any of its directors, officers, and employees outside of the ordinary course
of
business;
xiv.
Blue
Sky has not entered into any employment contract or collective bargaining
agreement, written or oral, or modified the terms of any existing such contract
or agreement;
xv.
Blue
Sky has not granted any increase in the base compensation of any of its
directors, officers, and employees outside of the ordinary course of
business;
xvi.
Blue
Sky has not adopted, amended, modified, or terminated any bonus, profit-sharing,
incentive, severance, or other plan, contract, or commitment for the benefit
of
any of its directors, officers, and employees (or taken any such action with
respect to any other employee benefit plan);
xvii.
Blue Sky has not made any other material change in employment terms for any
of
its directors, officers, and employees outside of the ordinary course of
business;
xviii.
Blue Sky has not experienced any event, circumstance, or change (other than
general economic conditions) which had or can reasonably be expected to have
a
material adverse effect upon the business, operations, prospects, properties,
financial condition, or working
xx.
Blue
Sky has not made any change in any existing election, or made any new election,
with respect to any tax law in any jurisdiction which election could have an
effect upon the tax treatment of Blue Sky or its business operations;
xxi.
Blue
Sky has not settled any claim or litigation, or filed any motions, orders,
briefs, or settlement agreements in any proceeding before any governmental
authority or any arbitrator;
xxii.
Blue Sky has not maintained its books of account other than in the usual,
regular, and ordinary manner and on a basis consistent with prior periods or
made any change in any of its accounting methods or practices;
xxiii.
Blue Sky has not suffered any extraordinary losses or waived any rights of
any
value;
xxiv.
Blue Sky has not committed to do any of the actions set forth in Subparagraphs
“i” through “xxiv” of this Paragraph “L” of this Section “7” of this
Agreement.
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M.
No
Approvals.
No
approval of any third party including, but not limited to, any governmental
authority is required in connection with the consummation of the transactions
set forth in this Agreement.
N.
Broker.
Blue
Sky has not had any dealing with respect to the transactions set forth in this
Agreement with any business broker, firm or salesman, or any person or
corporation, investment banker or financial advisor who is or shall be entitled
to any broker's or finder's fee or any other commission or similar fee with
respect to the transactions set forth in this Agreement. Blue Sky represents
that it has not dealt with any such person, firm or corporation and agrees
to
indemnify and hold harmless Whitemark from and against any and all claims for
brokerage commissions by any person, firm or corporation on the basis of any
act
or statement alleged to have been made by Blue Sky or its affiliates or
agents.
O.
Securities
Laws.
Neither
Blue Sky nor, to Blue Sky's knowledge, any director or executive officer of
Blue
Sky, is or has been the subject of any action involving a claim of violation
of
or liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the knowledge of Blue Sky, there
is
not, pending or contemplated, any investigation by the Securities and Exchange
Commission, the Financial Industry Regulatory Authority (“FINRA”),
or
other regulatory authority with respect to Blue Sky or, to Blue Sky's knowledge,
any current or former director or executive officer of Blue Sky.
P.
Intellectual
Property.
i.
Blue
Sky has not interfered with, infringed upon, misappropriated, or violated any
material intellectual property rights of third parties in any material respect,
and none of the directors and officers of Blue Sky has ever received any charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that Blue
Sky
must license or refrain from using any intellectual property rights of any
third
party). To the knowledge of Blue Sky, no third party has interfered with,
infringed upon, misappropriated, or violated any material intellectual property
rights of Blue Sky in any material respect.
ii.
Except as set forth on Exhibit “7P”, Blue Sky has no intellectual
property
iii.
Blue
Sky is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, which would interfere with his or her duties to Blue Sky or that would
conflict with Blue Sky’s business as proposed to be conducted.
Q.
Insurance.
Blue
Sky has no insurance policies.
R.
Employee
Benefits. Blue
Sky
has no employee benefits.
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S.
Guaranties.
Blue
Sky is not a guarantor or is not otherwise responsible for any liability or
obligation (including indebtedness) of any other person or entity.
T.
Certain
Business Relationships.
Except
as set forth in Exhibit “7T” none of the officers, directors or stockholders of
Blue Sky has been involved in any material business arrangement or relationship
with Blue Sky, and none of the officers, directors or stockholders of Blue
Sky
owns any material asset, tangible or intangible, which is used in the business
of Blue Sky.
U.
Registration
Rights.
Blue
Sky has not granted or agreed to grant to any person or entity any rights
(including piggyback registration rights) to have any securities of Blue Sky
registered with the United States Securities and Exchange Commission or any
other governmental authority.
V.
Change
of Control Payments.
Neither
the execution, delivery and performance by Blue Sky of this Agreement nor the
consummation of any of the transactions contemplated by this Agreement shall
require any payment by Blue Sky, in cash or kind, under any agreement, plan,
policy, commitment or other arrangement of Blue Sky. There are no agreements,
plans, policies, commitments or other arrangements with respect to any
compensation, benefits or consideration which will be materially increased,
or
the vesting of benefits of which will be materially accelerated, as a result
of
the execution and delivery of this Agreement and any of the Exhibits to this
Agreement or the occurrence of any of the transactions completed by this
Agreement. There are no payments or other benefits, the value of which will
be
calculated on the basis of any of the transactions contemplated by this
Agreement. Blue Sky has not made, is not obligated to make, and is not a party
to any agreement that under certain circumstances could obligate it to make
any
“excess parachute payment” as defined in Code Section 280G.
W.
Investments.
The
sole equity securities owned by Blue Sky are those of its subsidiary Blue Sky
Technologies, Inc. Blue Sky does not own any debt securities.
X.
Accounts
Receivable.
Except
as otherwise set forth on Exhibit “W” the accounts receivable reflected on the
July 22, 2008 balance sheet included in the Blue Sky Financial Statements and
all of Blue Sky’s accounts receivable arose from bona fide transactions in the
ordinary course of business, and the goods and services involved have been
sold,
delivered, and performed to the account obligors, and no further filings (with
governmental authorities, insurers or others) are required to be made, no
further goods are required to be provided and no further services are required
to be rendered in order to complete the sales and fully render the services
and
to entitle Blue Sky to collect the accounts receivable in full. Except as
otherwise set forth on Exhibit “W” (Section “7X”) attached hereto, no such
account has been assigned or pledged to any other person or entity, and, except
only to the extent fully reserved against as set forth in the July 22, 2008
balance sheet included in the Blue Sky Financial Statements, no defense or
set-off to any such account has been asserted by the account obligor, and Blue
Sky has no knowledge that any such defense or set-off exists.
Z.
Properties
and Assets.
All of
Blue Sky’s assets are set forth in the Blue Sky Financial Statements, which are
attached hereto as Exhibit “J”
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AA.
Real
Property.
i.
Blue
Sky has no interests in real property, including any leases of real property,
except as set forth on Exhibit “7AA”
BB.
Commitments.
i.
Blue
Sky is not a party to or bound by any of the following, whether written or
oral:
a.
any
contract which cannot by its terms be terminated by Blue Sky upon 30 days’ or
less notice without penalty or whose term continues beyond one year after the
date of this Agreement;
b.
any
contract or commitment for capital expenditures by Blue Sky in excess of an
aggregate of $25,000 per calendar quarter;
c.
any
lease or license with respect to any properties, real or personal, whether
as
landlord, tenant, licensor, or licensee;
d.
any
contract, indenture, or other instrument relating to the borrowing of money
or
the guarantee of any obligation or the deferred payment of the purchase price
of
any Properties;
e.
any
partnership agreement, joint venture agreement or limited liability company
agreement;
f.
any
contract with any affiliate of Blue Sky relating to the provision of goods
or
services by or to Blue Sky;
g.
any
contract for the sale of any assets which in the aggregate have a net book
value
on Blue Sky’s books of greater than $25,000;
h.
any
contract which purports to limit Blue Sky’s freedom to compete freely in any
line of business or in any geographic area;
i.
preferential purchase right, right of first refusal, or similar contract;
or
j.
other
contract with respect to the business of Blue Sky.
ii.
All
of the contracts listed or required to be listed on Exhibit ”Z” are valid,
binding, and in full force and effect, Blue Sky has not been notified or advised
by any party thereto of such party’s intention or desire to terminate or modify
any such contract in any respect, and Blue Sky is not, and Blue Sky has no
knowledge of any other party which is, in breach of any of the terms or
covenants of any contract listed or required to be listed on Exhibit “Z”.
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iii.
Blue
Sky is not a party to or bound by any contract or contracts the terms of which
were arrived at by or otherwise reflect less-than-arm’s-length negotiations or
bargaining.
CC.
Permits.
Blue
Sky has any and all permits, rights, approvals, licenses, authorizations, legal
status, orders, or contracts under any legal requirement or otherwise granted
by
any governmental authority (“Permits”) necessary for Blue Sky to own, operate,
use, and/or maintain its properties and to conduct its business and operations
as presently conducted and as it presently expects such business and operations
to be conducted in the future. All such Permits are in effect, no proceeding
is
pending to modify, suspend or revoke, withdraw, terminate, or otherwise limit
any such Permits, and Blue Sky has no knowledge of any such proceeding which
is
threatened. No administrative or governmental actions have been taken, and
Blue
Sky has no knowledge of any such actions which are threatened in connection
with
the expiration or renewal of such Permits which could reasonably be expected
to
adversely affect the ability of Blue Sky to own, operate, use, or maintain
any
of its properties or to conduct its business and operations as presently
conducted and as expected to be conducted in the future. Blue Sky has no
knowledge of (i) any violations which have occurred that remain uncured,
unwaived, or otherwise unresolved, or are occurring in respect of any such
Permits, other than inconsequential violations, and (ii) any circumstances
which
exist that would prevent or delay the obtaining of any requisite consent,
approval, waiver, or other authorization of the transactions contemplated by
this Agreement with respect to such Permits that by their terms or under
applicable law may be obtained only after Closing.
DD.
Absence
of Certain Business Practices.
Blue
Sky has no knowledge of any instance where Blue Sky or any affiliate or agent
of
Blue Sky, or any other person acting on behalf of or associated with Blue Sky,
acting alone or together, has received, directly or indirectly, any rebates,
payments, commissions, promotional allowances or any other economic benefits,
regardless of their nature or type, from any customer, supplier, employee,
or
agent of any customer or supplier.
EE.
Transactions
with Affiliates
Blue Sky
has not purchased, acquired, or leased any property or services from, or sold,
transferred, or leased any property or services to, or loaned or advanced any
money to, or borrowed any money from, or entered into or been subject to any
management, consulting, or similar agreement with, or engaged in any other
significant transaction with any officer, director, or stockholder of Blue
Sky
or any of their respective affiliates. Except as set forth on Exhibit “BB” no
officer, director, or stockholder of Blue Sky and none of their respective
affiliates is indebted to Blue Sky for money borrowed or other loans or
advances, and Blue Sky is not indebted to any such affiliate.
FF.
Litigation. There
are
no legal, administrative, arbitration or other proceedings or governmental
investigations materially affecting Blue Sky or its properties, assets or
businesses, or with respect to any matter arising out of the conduct of Blue
Sky’s business pending or to its knowledge threatened, by or against, any
officer or director of Blue Sky in connection with its affairs, whether or
not
covered by insurance. (i) neither Blue Sky nor its officers or directors are
subject to any order, writ, injunction or decree of any court, department,
agency or instrumentality affecting Blue Sky, and (ii) Blue Sky is not presently
engaged in any legal action
12
GG.
Complete
Disclosure.
No
representation or warranty of Blue Sky which is set forth in this Agreement,
or
in a writing furnished or to be furnished pursuant to this Agreement, to Blue
Sky’s knowledge contains or shall contain any untrue statement of a material
fact, or omits or shall omit to state any fact which is required to make the
statements which are contained in this Agreement or in a writing furnished
or to
be furnished pursuant to this Agreement, in light of the circumstances under
which they were made, not materially misleading. There is no fact relating
to
the business, affairs, operations, conditions (financial or otherwise) or
prospects of Blue Sky which would materially adversely affect same which has
not
been disclosed to Whitemark in this Agreement.
HH.
No
Defense.
It
shall not be a defense to a suit for damages for any misrepresentation or breach
of covenant or warranty that Whitemark knew or had reason to know that any
covenant, representation or warranty of Blue Sky in this Agreement or furnished
or to be furnished to Whitemark contained untrue statements.
8. Whitemark’s
Warranties and Covenants.
Whitemark, represents, warrants and covenants to Blue Sky and the Blue Sky
Shareholders as follows:
A. Corporate
Status.
i. Whitemark
is (a) corporation duly organized, validly existing and in good standing
pursuant to the laws of the State of Colorado, (b) a corporation with all of
the
requisite power and authority to carry on its business as presently conducted
and (c) authorized to do business in all jurisdictions where its business is
presently conducted; and
ii.
copies
of: (a) the Certificate of Incorporation of Whitemark, and all amendments to
the
Certificate of Incorporation, certified by the Secretary of State of the State
of Colorado and (b) the By-Laws of Whitemark, as amended, certified by the
Secretary of Whitemark, are annexed to, and made a part of, this Agreement
as
Exhibits “8A” (Section “8Aii”), respectively, and are complete and correct as of
the date of this Agreement.
C. Capitalization.
Whitemark’s current number of authorized shares is, and immediately subsequent
to the Closing Date of this Agreement shall be, one hundred million
(100,000,000) shares of Common Stock; provided however, that pursuant to Section
“2” of this Agreement, as soon as it is practicable after the Closing Date,
Whitemark shall increase its authorized shares to five hundred million
(500,000,000) shares of Common Stock.
D. Authority
of Whitemark.
Whitemark has full corporate power and authority to execute, deliver and perform
this Agreement and has taken all corporate action required by law and its
organizational documents to authorize the execution and delivery of this
Agreement and the consummation of the transactions set forth in this Agreement,
and no other corporate action on its part is necessary to authorize and approve
this Agreement or to consummate the transactions contemplated by this Agreement.
This Agreement and the consummation by Whitemark of the transactions set forth
in this Agreement have been duly and validly authorized, executed, and delivered
by the Board of Directors of Whitemark, this Agreement is valid and binding
upon
Whitemark and enforceable against Whitemark in accordance with its terms (except
as the enforceability of this Agreement may be limited by bankruptcy,
insolvency, bank moratorium or similar laws affecting creditors' rights
generally and laws restricting the availability of equitable remedies and may
be
subject to general principles of equity whether or not such enforceability
is
considered in a proceeding at law or in equity). A certified resolution of
the
Board of Directors of Whitemark approving Whitemark’s entry into this Agreement
and the consummation of the transactions set forth in this Agreement is annexed
to, and made a part of, this Agreement as Exhibit “8D”
13
E. Compliance
with the Law and Other Instruments.
Whitemark is and has been in material compliance in all material respects with
any and all legal requirements applicable to Whitemark, including, but not
limited to, all applicable federal and state “blue-sky” securities laws.
Whitemark (i) has not received or entered into any citations, complaints,
consent orders, compliance schedules, or other similar enforcement orders or
received any written notice from any governmental authority or any other written
notice which would indicate that Whitemark is not currently in compliance with
all applicable legal requirements, and (ii) is not in default under any legal
requirement applicable to Whitemark, and Whitemark has no knowledge that any
condition exists (whether or not covered by insurance) that with or without
notice or lapse of time or both would constitute a default under, or breach
or
violation of, any legal requirement applicable to Whitemark. Without limiting
the generality of the foregoing, Whitemark has not received notice of, and,
Whitemark has no knowledge of any basis for, any claim, action, suit,
investigation or proceeding which might result in a finding that Whitemark
is
not or has not been in compliance with legal requirements relating to (i) the
development, testing, manufacture, packaging, distribution, and marketing of
its
products, (ii) employment, safety and health, and/or (iii) environmental
protection, building, zoning and land use.
F. Absence
of Conflicts.
The
execution and delivery of this Agreement and the consummation by Whitemark
of
the transactions set forth in this Agreement: (i) do not and shall not conflict
with or result in a breach of any provision of Whitemark’s Certificate of
Incorporation or By-Laws, (ii) do not and shall not result in any breach of,
or
constitute a default or cause an acceleration under any arrangement, agreement
or other instrument to which Whitemark is a party to or by which any of its
assets are bound, (iii) do not and shall not cause Whitemark to violate or
contravene any provision of law or any governmental rule or regulation, and
(iv)
will not and shall not result in the imposition of any lien, or encumbrance
upon, any property of Whitemark. Whitemark has performed in all material
respects all of its obligations which are, as of the date of this Agreement,
required to be performed, pursuant to the terms of any such agreement, contract
or commitment.
G.
Financial
Statements.
Attached hereto as Exhibit “8G” are the following financial statements of
Whitemark (collectively the “Whitemark
Financial Statements”)
unaudited consolidated balance sheets and statements of income, changes in
stockholders’ equity, and cash flow as of and for the three months March 31,
2008, and audited financial statements for the year ended December 31, 2007.
The
Whitemark Financial Statements (including the notes thereto) have been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
covered thereby and present fairly the financial condition of Whitemark as
of
such dates and the results of operations of Whitemark for such
periods.
14
I.
Non-Tax
Liabilities.
Whitemark does not have any liabilities of any nature, accrued or contingent,
other than the following:
(i)
Liabilities for which full provision has been made on the Whitemark Financial
Statements; and
(ii)
Liabilities for professional fees and other expenses incurred in the ordinary
course of business.
J.
Representations
and Obligations with respect to Taxes.
i.
As
used in this Section “8J”, “Affiliated
Group”
means
any affiliated group within the meaning of Section 1504(a) of the Code or any
similar group defined under a similar provision of state, local, or foreign
law;
“Tax” means any Federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Section 59A of the Code),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not, and “Taxes” means any or all of
the foregoing collectively; and “Tax
Return”
means
any return, declaration, report, claim for refund or information return or
statement relating to Taxes, including any schedule or attachment thereto and
including any amendment thereof.
ii.
Except for Federal and State Tax Returns for 2007, Whitemark has filed all
Tax
Returns which it was required to file, all such Tax Returns were true, correct,
and complete in all material respects, all Taxes owed by Whitemark (whether
or
not shown on any Tax Return and whether or not any Tax Return was required)
have
been paid, Whitemark is not currently the beneficiary of any extension of time
within which to file any Tax Return, no claim has ever been made by a taxing
authority in a jurisdiction where the Whitemark does not file Tax Returns which
it is or may be subject to taxation by that jurisdiction, and there are no
liens
on any of the assets of Whitemark that arose in connection with any failure
(or
alleged failure) to pay any Tax, except for liens for Taxes not yet
due.
iii.
Whitemark has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party.
iv.
No
director or officer (or employee responsible for tax matters) of Whitemark
has
received any notification (whether written or oral) that any taxing authority
will assess any additional Taxes for any period for which Tax Returns have
been
filed. There is no dispute or claim concerning any tax liability of Whitemark
either (i) claimed or raised by any taxing authority in writing or (ii) as
to
which Whitemark has knowledge (after reasonable investigation). Exhibit “8J”
lists all Federal, state, local, and foreign income Tax Returns filed with
respect to Whitemark since January 1, 2005 and indicates those Tax Returns
which
have been audited and indicates those Tax Returns which currently are the
subject of audit or with respect to which any written or unwritten notice of
any
audit or examination has been received by Whitemark. Except as otherwise set
forth on Exhibit “8J” attached hereto, no issue relating to Taxes has been
raised in writing by a taxing authority during any pending audit or examination,
and no issue relating to Taxes was raised in writing by a taxing authority
in
any completed audit or examination, which reasonably can be expected to recur
in
a later taxable period.
15
v.
Whitemark has not waived any statute of limitations with respect to Taxes or
agreed to any extension of time with respect to a Tax assessment or
deficiency.
K.
Contracts.
Whitemark is not a party to any material contracts.
L.
Absence
of Changes.
Since
March 31, 2008, there has not been any material adverse change in the business,
financial condition, operations, results of operations, or future prospects
of
Whitemark taken as a whole.
M.
No
Approvals.
No
approval of any third party including, but not limited to, any governmental
authority is required in connection with the consummation of the transactions
set forth in this Agreement.
N.
Broker.
Whitemark has not had any dealing with respect to the transactions set forth
in
this Agreement with any business broker, firm or salesman, or any person or
corporation, investment banker or financial advisor who is or shall be entitled
to any broker's or finder's fee or any other commission or similar fee with
respect to the transactions set forth in this Agreement. Whitemark represents
that it has not dealt with any such person, firm or corporation and agrees
to
indemnify and hold harmless Blue Sky from and against any and all claims for
brokerage commissions by any person, firm or corporation on the basis of any
act
or statement alleged to have been made by Whitemark or its affiliates or
agents.
O.
Securities
Laws.
Neither
Whitemark nor, to Whitemark's knowledge, any director or executive officer
of
Whitemark, is or has been the subject of any action involving a claim of
violation of or liability under federal or state securities laws or a claim
of
breach of fiduciary duty. There has not been, and to the knowledge of Whitemark,
there is not, pending or contemplated, any investigation by the Securities
and
Exchange Commission, the Financial Industry Regulatory Authority (FINRA), or
other regulatory authority with respect to Whitemark or, to Whitemark's
knowledge, any current or former director or executive officer of
Whitemark.
P.
Employee
Benefits.
Whitemark does not have any employees, and has no employee benefit plans.
16
Q.
Guaranties.
Whitemark is not a guarantor or is not otherwise responsible for any liability
or obligation (including indebtedness) of any other person or
entity.
R.
Certain
Business Relationships.
None of
the officers, directors or stockholders of Whitemark has been involved in any
material business arrangement or relationship with Whitemark, and none of the
officers, directors or stockholders of Whitemark owns any material asset,
tangible or intangible, which is used in the business of Whitemark.
S.
Registration
Rights.
Whitemark has not granted or agreed to grant to any person or entity any rights
(including piggyback registration rights) to have any securities of Whitemark
registered with the United States Securities and Exchange Commission or any
other governmental authority.
T.
Change
of Control Payments.
Neither
the execution, delivery and performance by Whitemark of this Agreement nor
the
consummation of any of the transactions contemplated by this Agreement shall
require any payment by Whitemark, in cash or kind, under any agreement, plan,
policy, commitment or other arrangement of Whitemark. There are no agreements,
plans, policies, commitments or other arrangements with respect to any
compensation, benefits or consideration which will be materially increased,
or
the vesting of benefits of which will be materially accelerated, as a result
of
the execution and delivery of this Agreement and any of the Exhibits to this
Agreement or the occurrence of any of the transactions completed by this
Agreement. There are no payments or other benefits, the value of which will
be
calculated on the basis of any of the transactions contemplated by this
Agreement. Whitemark has not made, is not obligated to make, and is not a party
to any agreement that under certain circumstances could obligate it to make
any
“excess parachute payment” as defined in Code Section 280G.
U.
Investments.
Whitemark owns the debt or equity securities of the entities set forth in
Exhibit “___” attached hereto.
V.
SEC
Documents.
As of
the date of this Agreement, Whitemark is an issuer required to file reports
under Section 13(a) of the Securities Exchange Act of 1934, as amended (the
“Securities
Exchange Act”).
Whitemark has filed with the Securities and Exchange Commission (the
"SEC")
all
reports, statements, schedules and other documents (collectively, the
"SEC
Documents")
required to be filed by reporting companies pursuant to the Securities Act
of
1933, as amended (the “Securities
Act”)
and
the Securities Exchange Act. As of their respective dates, the financial
statements included in the SEC Documents filed since September 30, 2007 (the
"Financial Statements") complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of
the SEC with respect thereto. There are no material misstatements or omissions
in any periodic report previously filed by Whitemark pursuant to Section 13(a)
of the Securities Exchange Act or in any proxy or information material
previously furnished to its stockholders pursuant to Section 14 of the Exchange
Act.
AA.
Real
Property.
As
set
forth in Whitemark’s the Annual Report on Form 10-KSB for the year ended
December 31, 2007 filed with the SEC on April 15, 2008, Whitemark has no
interest in any real property.
17
BB.
Suppliers
and Customers.
Whitemark has no suppliers and no customers..
Transactions
with Affiliates.
Whitemark has not purchased, acquired, or leased any property or services from,
or sold, transferred, or leased any property or services to, or loaned or
advanced any money to, or borrowed any money from, or entered into or been
subject to any management, consulting, or similar agreement with, or engaged
in
any other significant transaction with any officer, director, or stockholder
of
Whitemark or any of their respective affiliates. No officer, director, or
stockholder of Whitemark and none of their respective affiliates are indebted
to
Whitemark for money borrowed or other loans or advances, and Whitemark is not
indebted to any such affiliate.
CC.
Litigation.
There
are no legal, administrative, arbitration, or other proceedings or governmental
investigations materially adversely affecting Whitemark or its properties,
assets or businesses, or with respect to any matter arising out of the conduct
of Whitemark’s business pending, or to its knowledge threatened, by or against,
any officer or director of Whitemark in connection with its affairs, whether
or
not covered by insurance. (i) neither Whitemark nor its officers or directors
are subject to any order, writ, injunction, or decree of any court, department,
agency, or instrumentality, affecting Whitemark, and (ii) Whitemark is not
presently engaged in any legal action.
DD.
Complete
Disclosure.
No
representation or warranty of Whitemark which is set forth in this Agreement,
or
in a writing furnished or to be furnished pursuant to this Agreement, to
Whitemark’s knowledge contains or shall contain any untrue statement of a
material fact, or omits or shall omit to state any fact which is required to
make the statements which are contained in this Agreement or in a writing
furnished or to be furnished pursuant to this Agreement, in light of the
circumstances under which they were made, not materially misleading. There
is no
fact relating to the business, affairs, operations, conditions (financial or
otherwise) or prospects of Whitemark which would materially adversely affect
same which has not been disclosed to Blue Sky and the Blue Sky Shareholders
in
this Agreement.
EE.
No
Defense.
It
shall not be a defense to a suit for damages for any misrepresentation or breach
of covenant or warranty that Blue Sky or the Blue Sky Shareholders knew or
had
reason to know that any covenant, representation or warranty of Whitemark in
this Agreement or furnished or to be furnished to Blue Sky or the Blue Sky
Shareholders contained untrue statements.
9.
Blue Sky Shareholders’ Representations, Warranties and
Covenants.
Each
of
the Blue Sky Shareholders, each as to himself, herself or itself, hereby
represents and warrants to each of the other parties to this Agreement that
the
statements contained
in this
Section “9” of this Agreement are true and correct:
A.
Ownership.
He, she
or it is the record, beneficial and equitable owner of such number of shares
of
Blue Sky Common Stock as is set forth opposite his or its name on Exhibit “A” He
or it holds said shares free and clear of all liens, claims or encumbrances,
and
has the full right and authority to exchange or transfer said shares pursuant
to
the terms of this Agreement.
18
B.
Absence
of Conflicts.
His,
she or its execution and delivery of this Agreement, the transfer of his or
its
shares of Blue Sky Common Stock and the consummation by him or it of the
transactions set forth in this Agreement do not and shall not cause him or
it to
violate or contravene any provision of law or any governmental rule or
regulation.
C.
No
Approvals.
No
approval of any governmental authority is required of him, her or it in
connection with the consummation of the transactions set forth in this
Agreement.
D.
Complete
Disclosure.
No
representation or warranty of him, her or it which is contained in this
Agreement, or in a writing furnished or to be furnished pursuant to this
Agreement, to his, her or its knowledge contains or shall contain any untrue
statement of a material fact, omits or shall omit to state any fact which is
required to make the statements which are contained herein or therein, in light
of the circumstances under which they were made, not materially misleading.
E.
No
Defense.
It
shall not be a defense to a suit for damages by another party to this Agreement
against him, her or it for any misrepresentation or breach of covenant or
warranty that the other party which is suing him, her or it knew or had reason
to know that any covenant, representation or warranty of him, her or it in
this
Agreement contained untrue statements.
F.
Broker.
He, she
or it has not had any dealing with respect to this transaction with any business
broker, firm or salesman, or any person or corporation, investment banker or
financial advisor who is or shall be entitled to any broker's or finder's fee
or
any other commission or similar fee with respect to the transactions set forth
in this Agreement. Each of the Blue Sky Shareholders represents that he, she
or
it has not dealt with any such person, firm or corporation and agrees to
indemnify and hold harmless Whitemark from and against any and all claims for
brokerage commissions by any person, firm or corporation on the basis of any
act
or statement alleged to have been made by him or it or his or its affiliates
or
agents.
10.
Mutual Covenants of All of the Parties Hereto.
A. Best
Efforts.
Each of
the parties hereto shall use its best efforts to perform or satisfy each
covenant or condition to be performed or satisfied by each of them before and
after the Closing Date.
B. Notice
of Developments and Updates.
Each of
the parties hereto shall give prompt written notice pursuant to Paragraph “C” of
Section “22” of this Agreement to the other parties hereto of any act, event or
occurrence which may cause or constitute a breach of any of its own
representations and warranties in Sections “7”, “8” or “9” of this Agreement, as
the case may be.
C. No
Public Announcement.
None of
the parties hereto shall, without the prior written approval of the Blue Sky
Shareholder’s Designee, as hereinafter defined in Subparagraph “x” of Paragraph
“B” of Article “15” of this Agreement, and Whitemark, make any press release or
other public announcement or communicate with any customer, competitor, or
supplier of, or others having business dealings with, either of Blue Sky or
Whitemark concerning the transactions contemplated by this Agreement, except
as
and to the extent that such party shall determine such disclosure is required
by
law (which determination shall be made by such party based upon the advice
of
its counsel), in which event the other parties hereto shall be advised and
the
parties shall use their best efforts to cause a mutually agreeable release
or
announcement to be issued.
19
D. Exclusivity.
Neither
Blue Sky nor Whitemark shall, without the prior written approval of (i) in
the
case of Whitemark, all of the Blue Sky Shareholders or (ii) in the case of
Blue
Sky, Whitemark, (i) enter into, or (ii) solicit, initiate or encourage any
inquiries or proposals that constitute, or could reasonably be expected to
lead
to, a proposal or offer for, a merger, consolidation, business combination,
sale
of substantial assets, sale of shares of capital stock (including, but not
limited to, by way of a tender offer) or similar transaction involving such
party, other than the transactions contemplated by this Agreement.
11. Conduct
of Whitemark’s Business prior to the Closing Date.
Between
the date of this Agreement and the Closing Date, and except as contemplated
by
this Agreement Whitemark, shall carry on its business in the ordinary course
and
in the same manner as heretofore conducted and shall preserve intact the
existing business organization of Whitemark, and use its best efforts to
preserve Whitemark’s relationships, if any, with customers, suppliers and others
having business dealings with Whitemark, to the end that its goodwill and
ongoing business shall not be materially impaired on the Closing Date. Without
the prior written consent of all of the Blue Sky Shareholders, Whitemark shall
not:
A.
make
any change in its Certificate of Incorporation or By-Laws, except pursuant
to
the terms and conditions of this Agreement;
B.
authorize or issue any capital stock or any rights, warrants, options or
convertible securities to acquire such stock, except pursuant to the terms
and
conditions of this Agreement;
C.
take
any action or omit to do any act which would cause the representations or
warranties of Whitemark contained herein to be untrue or incorrect in any
material respect;
D.
declare or make any payment or distribution to its shareholders (other than
payment of compensation for services rendered, if applicable) or purchase or
redeem any shares of capital stock, except pursuant to the terms and conditions
of this Agreement;
E. commit
any act or omit to do any act which would cause a material breach of any
agreement, contract or commitment which is listed in an Exhibit annexed to
this
Agreement;
F. wind
down
or transfer its business; or
G. engage
in
any business activities whatsoever.
20
12. Conduct
of Blue Sky Business Prior to the Closing Date.
Between
the date of this Agreement and the Closing Date, Blue Sky shall carry on its
business in the ordinary course and in the same manner as heretofore conducted
and shall preserve intact the existing business organization of Blue Sky, and
use its best efforts to (i) keep available to Blue Sky the services of Blue
Sky’s present officers and employees, (ii) preserve Blue Sky’s relationships, if
any, with customers, suppliers and others having business dealings with Blue
Sky, to the end that its goodwill and ongoing business shall not be materially
impaired on the Closing Date. Without the prior written consent of Whitemark,
Blue Sky shall not:
A.
make
any change in the Certificate of Incorporation or By-Laws of Blue Sky;
B.
conduct the business of Blue Sky in any manner other than in the ordinary
course;
C.
authorize or issue any capital stock or any rights, warrants, options or
convertible securities to acquire such stock;
D.
declare or make any payment or distribution to its shareholders (other than
payment of compensation for services rendered, if applicable) or purchase or
redeem any shares of capital stock, except pursuant to the terms and conditions
of this Agreement;
E.
take
any action or omit to do any act which would cause the representations or
warranties of Blue Sky contained herein to be untrue or incorrect in any
material respect;
F.
commit
any act or omit to do any act which would cause a material breach of any
agreement, contract or commitment which is listed in an Exhibit annexed to
this
Agreement; or
G.
commit
any other act or omit to do any other act which would have a material adverse
effect upon the business, financial condition or earnings of Blue Sky.
13. Nondisclosure
of Confidential Information/Non-Circumvent.
A.
As
used in this Agreement, “Confidential
Information”
shall
mean oral or written information which is directly or indirectly presented
to a
party, its past, present or future subsidiaries, parents, officers, consultants,
directors, shareholders, affiliates, attorneys, employees, agents and its and
their respective Immediate Families (as defined below; all of the foregoing
are
hereinafter collectively referred to as “Agents”) by another party or its
Agents, including, but not limited to, information which is developed, conceived
or created by the party, or disclosed to the other party or its Agents or known
by or conceived or created by the other party or its Agents during, or after
the
termination of, this Agreement if disclosed to the other party or its Agents
or
known by or conceived or created by the other party or its Agents as a result
of
this Agreement, with respect to the party, its business or any of said party’s
products, processes, and other services relating thereto relating to the past
or
present business or any plans with respect to future business of the party,
or
relating to the past or present business of a third party or plans with respect
to future business of a third party which are disclosed to the party.
Confidential Information includes, but is not limited to, all documentation,
hardware and software relating thereto, and information and data in written,
graphic and/or machine readable form, products, processes and services, whether
or not patentable, trademarkable or copyrightable or otherwise protectable,
including, but not limited to, information with respect to discoveries;
know-how; ideas; computer programs, source codes and object codes; designs;
algorithms; processes and structures; product information; marketing
information; price lists; cost information; product contents and formulae;
manufacturing and production techniques and methods; research and development
information; lists of customers and vendors and other information relating
thereto; financial data and information; business plans and processes;
documentation with respect to any of the foregoing; and any other information
of
the party that the party informs the other party or its Agents or the other
party or its Agents should know, by virtue of said party’s position or the
circumstances in which said party learned such other information, is to be
kept
confidential including, but not limited to, any information acquired by the
other party or its Agents from any sources prior to the commencement of this
Agreement. Confidential Information also includes similar information obtained
by the party in confidence from its vendors, licensors, licensees, customers
and/or clients. Confidential Information may or may not be labeled as
confidential.
21
For
purposes of this Agreement, “Immediate
Family”
shall
include the following: (A) any spouse, parent, spouse of a parent,
mother-in-law, father-in-law, brother-in-law, sister-in-law, child, spouse
of a
child, adopted child, spouse of an adopted child, sibling, spouse of a sibling,
grandparent, spouse of a grandparent, and any issue or spouse of any of the
foregoing, and (B) such child or issue of such child which is born and/or
adopted during or after the term of this Agreement and the issue (whether by
blood or adoption) of such person; provided, however, that it shall not include
any person who was legally adopted after attaining the age of eighteen (18)
by
any of the persons specified in this Paragraph “A” of this Article “13” of this
Agreement or any spouse or issue (whether by blood or adoption) of any such
person. A parent of a specified person shall include an affiliate.
B.
Except
as required in the performance of a party’s or its Agents’ obligations pursuant
to this Agreement, neither said party nor its Agents shall, during, or after
the
termination of, this Agreement, directly or indirectly, use any Confidential
Information or disseminate or disclose any Confidential Information to any
person, firm, corporation, association or other entity. Said Party or its Agents
shall take all reasonable measures to protect Confidential Information from
any
accidental, unauthorized or premature use, disclosure or destruction. The
foregoing prohibition shall not apply to any Confidential Information which:
(i)
was generally available to the public prior to such disclosure; (ii) becomes
publicly available through no act or omission of said party or its Agents (iii)
is disclosed as reasonably required in a proceeding to enforce said party’s
rights under this Agreement or (iv) is disclosed as required by court order
or
applicable law; provided, however, that if said party and/or its Agents are
legally requested or required by court order or applicable law, including,
but
not limited to, by oral question, interrogatories, request for information
or
documents, subpoenas, civil investigative demand or similar process to disclose
any Confidential Information, said party and/or its Agents, as the case may
be,
shall promptly notify the party of such request or requirement so that the
party
may seek an appropriate protective order; provided further, however; that if
such protective order is not obtained, said party and/or its Agents, as the
case
may be, agree to furnish only that portion of the Confidential Information
which
they are advised by their respective counsel is legally required.
22
C.
Upon
termination of this Agreement for any reason or at any time upon request of
a
party, the other party and its Agents agree to deliver to the requesting party
all materials of any nature which are in the other party’s or its Agents’
possession or control and which are or contain Confidential Information, or
which are otherwise the property of the requesting party or any vendor,
licensor, licensee, customer or client of the party, including, but not limited
to writings, designs, documents, records, data, memoranda, tapes and disks
containing software, computer source code listings, routines, file layouts,
record layouts, system design information, models, manuals, documentation and
notes. The other party and its Agents shall destroy all written documentation
prepared by them for internal purposes based in whole or in part on any
Confidential Information and such destruction shall be confirmed to the
requesting party in writing by the other party and/or its Agents.
D.
Upon
the consummation of the transaction set forth in this Agreement, all of the
Confidential Information shall be deemed to be the property of
Whitemark.
14.
Survival
of Representations, Warranties and Covenants.
All
covenants, agreements, representations and warranties made in or in connection
with this Agreement shall survive the Closing Date hereof, and shall continue
in
full force and effect, it being understood and agreed that each of such
covenants, agreements, representations and warranties is of the essence of
this
Agreement and the same shall be binding upon and shall inure to the benefit
of
the parties hereto, and their successors and assigns.
15.
Conditions of Closing.
A.
Conditions
to the Blue Sky Shareholders’ Obligation to Close.
The
obligation of the Blue Sky Shareholders to close the transactions set forth
in
this Agreement shall be subject to the following conditions:
i. Representations
and Warranties of Whitemark to be True.
To
Whitemark’s knowledge, the representations and warranties of Whitemark set forth
in this Agreement shall be true in all material respects on the Closing Date
with the same effect as though made at such time, except to the extent waived
or
affected by the transactions set forth in this Agreement; and Whitemark shall
have delivered to the Blue Sky Shareholders a certificate of Whitemark (the
“Whitemark Certificate”) in the form annexed to, and made a part of, this
Agreement as Exhibit “HHH” (Article “15Ai”), signed by the President of
Whitemark dated the Closing Date to such effect;
ii. Performance
of Obligations of Whitemark.
Whitemark shall have performed all obligations and complied with all covenants
set forth in this Agreement to be performed or complied with in all material
respects by it prior to the Closing Date, and Whitemark shall have delivered
to
the Blue Sky Shareholders the Whitemark Certificate signed by the President
of
Whitemark and dated the Closing Date to such effect;
iii. No
Adverse Change.
There
shall not have occurred any material adverse change since the date of this
Agreement and through the date of the Closing Date in the business, properties,
results of operations or business or financial condition of Whitemark, and
Whitemark shall have delivered to the Blue Sky Shareholders the Whitemark
Certificate signed by the President of Whitemark and dated the Closing Date
to
such effect;
23
iv. Statutory
Requirements.
Any
statutory requirement for the valid consummation by Whitemark of the
transactions set forth in this Agreement shall have been fulfilled; any
authorizations, consents and approvals of all federal, state and local
governmental agencies and authorities required to be obtained, in order to
permit consummation by Whitemark of the transactions set forth in this Agreement
and to permit the business presently carried on by Whitemark to continue
unimpaired following the Closing Date, shall have been obtained, and Whitemark
shall have delivered to the Blue Sky Shareholders the Whitemark Certificate
signed by the President of Whitemark and dated the Closing Date to such
effect;
v. No
Governmental Proceedings.
No
action or proceeding shall have been instituted before a court or other
governmental body by any governmental agency or public authority to restrain
or
prohibit the transactions set forth in this Agreement and Whitemark shall have
delivered to the Blue Sky Shareholders the Whitemark Certificate signed by
the
President of Whitemark and dated the Closing Date to such effect;
vi. Consents
Under Agreements.
Whitemark shall have obtained the consent or approval of each person whose
consent or approval shall be required in connection with the transactions set
forth in this Agreement and Whitemark shall have delivered to the Blue Sky
Shareholders the Whitemark Certificate signed by the President of Whitemark
and
dated the Closing Date to such effect;
vii. Good
Standing Certificate.
On the
Closing Date, Whitemark shall provide the Blue Sky Shareholders with a good
standing certificate for Whitemark issued by the Secretary of State of the
State
of Colorado , which certificate is complete and correct as of a date within
thirty (30) days prior to the Closing Date;
viii. Shareholder
Approval.
As soon
as it practicable subsequent to the execution of this Agreement, the
shareholders of Whitemark shall have approved this Agreement and its related
transactions in accordance with the applicable provisions of the Colorado
Business Corporation Act, and Whitemark shall have delivered to the Blue Sky
Shareholders a consent of the shareholders of Whitemark in the form annexed
to,
and made a part of, this Agreement as Exhibit “III” (Section “7C”);
and
ix. Directors
and Officers.
The
Board of Directors of Whitemark shall have appointed the individuals designated
by Blue Sky pursuant to Paragraph “A” of Section “4” of this Agreement, and the
directors and officers of Whitemark serving immediately prior to the Closing
Date shall have resigned pursuant to Paragraphs “A” and “B” of Section “4” of
this Agreement, respectively.
x. No
Liabilities.
Whitemark shall have no liabilities, contractual or other obligations, or
business activities, all of which shall have been satisfied, resolved or
transferred, except for the Promissory Note.
xi. Raising
Capital. Whitemark shall have raised at least $650,000 of capital for the
purpose of utilizing the proprietary system (the “System”)
of
Vector Resource Services Limited (“Vecto”)
for
use in gas producing properties.
24
B.
Conditions
to Whitemark’s Obligation to Close.
The
obligation of Whitemark to close the transactions set forth in this Agreement
shall be subject to the following conditions:
i.
Representations
and Warranties of Blue Sky and the Blue Sky Shareholders to be
True.
To Blue
Sky and the Blue Sky Shareholders’ knowledge, the representations and warranties
of Blue Sky and the Blue Sky Shareholders set forth in this Agreement shall
be
true in all material respects on the Closing Date with the same effect as though
made at such time, except to the extent waived or affected by the transactions
set forth in this Agreement; and the Blue Sky Shareholders shall have delivered
to Whitemark a certificate of Blue Sky (the “Blue
Sky Certificate”)
in the
form annexed hereto and made a part hereof as Exhibit “___” (Section “15Bi”),
signed by the President of Blue Sky and all of the Blue Sky Shareholders and
dated the Closing Date to such effect;
ii.
Performance
of Obligations of Blue Sky and the Blue Sky Shareholders.
Blue
Sky and each of the Blue Sky Shareholders shall have performed all obligations
and complied with all covenants set forth in this Agreement to be performed
or
complied with in all material respects by him or it prior to the Closing Date,
and the Blue Sky Shareholders shall have delivered to Whitemark the Blue Sky
Certificate signed by the President of Blue Sky and all of the Blue Sky
Shareholders and dated the Closing Date to such effect;
iii.
No
Adverse Change.
There
shall not have occurred any material adverse change through the date of the
Closing Date in the business, properties, results of operations or business
or
financial condition of Blue Sky, and Blue Sky shall have delivered to Whitemark
the Blue Sky Certificate signed by the President of Blue Sky and all of the
Blue
Sky Shareholders and dated the Closing Date to such effect;
iv.
Statutory
Requirements.
Any
statutory requirement for the valid consummation by Blue Sky and the Blue Sky
Shareholders of the transactions set forth in this Agreement shall have been
fulfilled; any authorizations, consents and approvals of all federal, state
and
local governmental agencies and authorities required to be obtained, in order
to
permit consummation by Blue Sky and the Blue Sky Shareholders of the
transactions set forth in this Agreement and to permit the business presently
carried on by Blue Sky to continue unimpaired following the Closing Date, shall
have been obtained, and the Blue Sky Shareholders shall have delivered to
Whitemark the Blue Sky Certificate signed by the President of Blue Sky and
all
of the Blue Sky Shareholders and dated the Closing Date to such effect;
v.
No
Governmental Proceedings.
No
action or proceeding shall have been instituted before a court or other
governmental body by any governmental agency or public authority to restrain
or
prohibit the transactions set forth in this Agreement, and the Blue Sky
Shareholders shall have delivered to Whitemark the Blue Sky Certificate signed
by the President of Blue Sky and all of the Blue Sky Shareholders and dated
the
Closing Date to such effect;
vi.
Consents
Under Agreements.
The
Blue Sky Shareholders shall have obtained the consent or approval of each person
whose consent or approval shall be required in connection with the transactions
set forth in this Agreement, and the Blue Sky Shareholders shall have delivered
to Whitemark the Blue Sky Certificate signed by the President of Blue Sky and
all of the Blue Sky Shareholders and dated the Closing Date to such effect;
and
25
vii.
Blue
Sky Shareholder
Approval.
The
Blue Sky Shareholders shall have approved this Agreement and its related
transactions pursuant to the applicable provisions of the Nevada Revised
Statutes, and the Blue Sky Shareholders shall have delivered to Whitemark a
consent of the Blue Sky Shareholders in the form annexed to, and made a part
of,
this Agreement as Exhibit “H” (Section 7B”).
viii.
Good
Standing Certificate.
On the
Closing Date, the Blue Sky Shareholders shall provide Whitemark with a status
certificate for Blue Sky issued by the Secretary of State of the State of
Nevada, which certificate is complete and correct as of a date within thirty
(30) days prior to the Closing Date;
ix.
Shareholder
Designation.
The
Blue Sky Shareholders irrevocably constitute and appoint Xxxxx Xxxxxx with
full
power of substitution and re-substitution, as its and their true and lawful
agent, attorney-in-fact and representative, with full power to act for and
on
behalf of the Shareholders, and each of them, for all purposes pursuant to
this
Agreement and in connection with the transactions therein as set forth in the
form annexed to, and made a part of, this Agreement as Exhibit “_____” (the
“Blue
Sky Shareholders’ Designee”).
If
Xxxxx Xxxxxx, shall die, resign, or for any reason cease to serve as the Blue
Sky Shareholders’ Designee before the completion of the transactions set forth
in this Agreement, then a new Blue Sky Shareholders’ Designee shall be appointed
by the Blue Sky Shareholders owning a majority issued and outstanding shares
of
stock.
16.
Documents, Certificates, etc. to be Delivered at Closing.
A.
At the
Closing, Whitemark shall deliver the following items to the Blue Sky
Shareholders:
i.
the
Whitemark Certificate (as defined in Subparagraph “i” of Paragraph “A” of
Section “15” of this Agreement), signed by the President of Whitemark, in the
form annexed to, and made a part of, this Agreement as Exhibit “HHH” (Section
“15Ai”);
ii.
stock
certificates evidencing the Exchange Common Stock, as defined in the third
“WHEREAS” clause of this Agreement;
iii.
a
good standing certificate of Whitemark, dated within thirty (30) days prior
to
the Closing Date;
iv.
a
consent of the shareholders of Whitemark, in the form annexed to, and made
a
part of, this Agreement as Exhibit “III” (Other than set forth in the Blue Sky
Financial Statements “7C”).
B.
At the
Closing, the Blue Sky Shareholders shall deliver the following items to
Whitemark:
26
i.
the
Blue Sky Certificate, as defined in Subparagraph “i” of Paragraph “B” of Other
than set forth in the Blue Sky Financial Statements “15” of this Agreement,
signed by the President of Blue Sky, in the form annexed to, and made a part
of,
this Agreement as Exhibit “___” (Other than set forth in the Blue Sky Financial
Statements “15Bi”);
ii.
stock
certificates evidencing all of the issued and outstanding shares of Blue Sky
Common Stock; and
iii.
a
consent of the Blue Sky Shareholders, in the form annexed to, and made a part
of, this Agreement as Exhibit “H” (Other than set forth in the Blue Sky
Financial Statements “7B”).
iv.
a
good standing certificate of Blue Sky, dated within thirty (30) days prior
to
the Closing Date.
17.
Equitable Relief.
A.
Whitemark acknowledges that the Blue Sky Shareholders shall be irreparably
damaged if this Agreement is not consummated. Therefore, in the event of any
breach by Whitemark of this Agreement, any of the Blue Sky Shareholders shall
have the right, at his or its election, to obtain equitable relief including,
but not limited to, an order for specific performance of this Agreement or
an
injunction, without the need to: (i) post a bond or other security, (ii) to
prove any actual damage or (iii) to prove that money damages would not provide
an adequate remedy. Resort to such equitable relief, however, shall not be
construed to be a waiver of any other rights or remedies which any of the Blue
Sky Shareholders may have for damages or otherwise.
B.
Each
of the Blue Sky Shareholders acknowledges that Whitemark shall be irreparably
damaged if this Agreement is not consummated. Therefore, in the event of any
breach by Blue Sky or any of the Blue Sky Shareholders of this Agreement,
Whitemark shall have the right, at its election, to obtain equitable relief
including, but not limited to, an order for specific performance of this
Agreement or an injunction, without the need to: (i) post a bond or other
security, (ii) to prove any actual damage or (iii) to prove that money damages
would not provide an adequate remedy. Resort to such equitable relief, however,
shall not be construed to be a waiver of any other rights or remedies which
Whitemark may have for damages or otherwise.
18. Method
of Termination.
This
Agreement may be terminated prior to the Closing Date, by any of the following
methods:
A.
by
mutual written consent of Board of Directors of Whitemark and all of the Blue
Sky Shareholders or the Blue Sky Shareholders’ Designee;
27
B.
by
written notice pursuant to Paragraph “C” of Other than set forth in the Blue Sky
Financial Statements “22” of this Agreement after the Closing Date which sets
forth that the closing did not timely occur from (i) Whitemark to all of the
Blue Sky Shareholders, or (ii) the Blue Sky Shareholders’ Designee to Whitemark.
If, within ten (10) business days after receipt of such written notice, the
Closing has not occurred, this Agreement shall be terminated; provided,
however,
that if
the Closing shall not have occurred on, or prior to, the Closing Date as a
result of any action taken, or failure to act, by any governmental or regulatory
authority including, but not limited to, the withholding of, or a delay in,
any
approval in connection with any aspect of the transactions contemplated hereby,
then the Closing Date shall automatically be extended until a date which is
a
reasonable time subsequent to the date upon which such governmental or
regulatory action is resolved which will allow the parties to complete the
procedures required to consummate the transactions contemplated hereby;
provided,
further, however,
that
the right to terminate this Agreement pursuant to this Paragraph “B” of this
Other than set forth in the Blue Sky Financial Statements “18” of this Agreement
shall not be available to any party whose failure to fulfill any obligation
pursuant to this Agreement has been the cause of or resulted in the failure
of
the Closing to occur on or before such date; provided,
further, however,
that
the parties upon mutual written consent in accordance with Paragraph “C” of
Other than set forth in the Blue Sky Financial Statements “22” of this Agreement
may agree to adjourn the Closing Date and designate a new Closing Date, and
after the designation of such a new Closing Date, this Paragraph “B” of this
Other than set forth in the Blue Sky Financial Statements “18” of this Agreement
shall have no effect until the new Closing Date has passed.
C.
by
Whitemark if there is a material breach of any representation or warranty set
forth by Blue Sky in Other than set forth in the Blue Sky Financial Statements
“7” of this Agreement or by any Blue Sky Shareholders in Other than set forth in
the Blue Sky Financial Statements “9” of this Agreement or any covenant or
agreement to be complied with or performed by Blue Sky or any of the Blue Sky
Shareholders pursuant to the terms of this Agreement, the covenants set forth
in
Other than set forth in the Blue Sky Financial Statements “10” of this
Agreement, or the failure of a condition set forth in Paragraph “B” of Other
than set forth in the Blue Sky Financial Statements “15” of this Agreement to be
satisfied (and such condition is not waived in writing by Whitemark) on or
prior
to the Closing Date, or the occurrence of any event which results in the failure
of a condition set forth in Paragraph “B” of Other than set forth in the Blue
Sky Financial Statements “15” of this Agreement to be satisfied on or prior to
the Closing Date; provided
however, that, Whitemark
may not terminate this Agreement prior to the Closing Date if Blue Sky or any
of
the Blue Sky Shareholders, as the case may be, has not had an adequate
opportunity to cure such failure, pursuant to Other than set forth in the Blue
Sky Financial Statements “20” of this Agreement; or
D.
by the
Blue Sky Shareholders Designee if there is a material breach of any
representation or warranty set forth in Other than set forth in the Blue Sky
Financial Statements “8” of this Agreement or any covenant or agreement to be
complied with or performed by Whitemark, the covenants set forth in Other than
set forth in the Blue Sky Financial Statements “10” of this Agreement, or the
failure of a condition set forth in Paragraph “A” of Other than set forth in the
Blue Sky Financial Statements “15” of this Agreement to be satisfied (and such
condition is not waived in writing by Blue Sky) on or prior to the Closing
Date,
or the occurrence of any event which results in the failure of a condition
set
forth in Paragraph “A” of Other than set forth in the Blue Sky Financial
Statements “15” of this Agreement to be satisfied on or prior to the Closing
Date; provided
however, that, the
Blue
Sky Shareholders may not terminate this Agreement by mutual written consent
prior to the Closing Date if Whitemark has not had an adequate opportunity
to
cure such failure pursuant to Other than set forth in the Blue Sky Financial
Statements “20” of this Agreement.
28
E.
by
written notice pursuant to Paragraph “C” of Other than set forth in the Blue Sky
Financial Statements “22” of this Agreement or TMK to Whitemark and the Blue Sky
Shareholders if the Promissory Note is not paid in accordance with its terms,
provided however, if, within ten (10) days receipt of such written notice,
the
Promissory Note, including all unpaid principal and accrued interest, is paid
in
full, then TMK may not terminate this Agreement
F.
Effect of Termination. If
this
Agreement is terminated pursuant to the provisions set forth in Section “18” of
this Agreement, then:
(i)
|
the
Acquisition Common Stock and the Acquisition Preferred Stock shall
released from escrow pursuant to the Escrow Agreement in the form
annexed
hereto as Exhibit “A” to TMK, and as soon a practicable thereafter, be
cancelled,
|
(ii)
|
the
shares of Blue Sky acquired pursuant to this Agreement shall be returned
to the Blue Sky Shareholders, and
|
(iii)
|
the
Redemption shall be cancelled and all shares redeemed by Whitemark
from
TMK shall be returned to TMK, and
|
and
this
Agreement shall become null and void and shall have no further effect,
20. Cooperation;
Notice; Cure. Subject
to compliance with applicable law, from the date of this Agreement until the
Closing Date, each of the parties shall confer on a regular and frequent basis
with one or more representatives of the other parties to report on the general
status of ongoing operations. Blue Sky or the Blue Sky Shareholders, as the
case
may be, shall promptly provide Whitemark or its counsel with copies of any
filings any of them made with any governmental entity in connection with this
Agreement and the transactions contemplated hereby and thereby.
Each of
the parties shall notify the others of, and will use all commercially reasonable
efforts to cure before the Closing Date, any event, transaction or circumstance,
as soon as practical after it becomes known to such party, that causes or will
cause any covenant or agreement of the parties pursuant to this Agreement to
be
breached or that renders or will render untrue any representation or warranty
of
the parties contained in this Agreement. Each of the parties shall also notify
the others in writing of, and will use all commercially reasonable efforts
to
cure, before the Closing Date, any violation or breach, as soon as practical
after it becomes known to such party, of any representation, warranty, covenant
or agreement made by the parties. No notice given pursuant to this paragraph
shall have any effect on the representations, warranties, covenants or
agreements contained in this Agreement for purposes of determining satisfaction
of any condition contained herein.
21.
Indemnification.
A.
Indemnification
by Whitemark.
In
order to induce Blue Sky and the Blue Sky Shareholders to enter into and perform
this Agreement, Whitemark does hereby indemnify, protect, defend and save and
hold harmless Blue Sky and each of the Blue Sky Shareholders and each of their
Agents (the "Blue
Sky Indemnified Parties"),
from
and against any loss resulting to any of them from any material loss, liability,
cost, damage, or expense which the Indemnified Parties may suffer, sustain
or
incur arising out of or due to a breach by Whitemark of the representations,
warranties and covenants set forth in Section “8” of this Agreement or in any
documents delivered pursuant hereto or of a breach by Whitemark of any of its
obligations pursuant to this Agreement or in any documents delivered pursuant
hereto.
29
B.
Indemnification
by the Blue Sky Shareholders.
In
order to induce Whitemark to enter into and perform this Agreement, each of
the
Blue Sky Shareholders hereby jointly indemnifies, protects, defends and saves
and holds harmless Whitemark and each of its Agents (the "Indemnified
Parties"),
from
and against any loss resulting to any of them from any material loss, liability,
cost, damage, or expense which the Indemnified Parties may suffer, sustain
or
incur arising out of or due to a breach by Blue Sky or such Blue Sky Shareholder
of the representations, warranties and covenants set forth in Section “7” or
Section “9” of this Agreement or in any documents delivered pursuant hereto or
of a breach by Blue Sky or such Blue Sky Shareholder of any of his or its
obligations pursuant to this Agreement or in any documents delivered pursuant
hereto.
C.
Reasonable
Costs, Etc.
The
indemnification, which is set forth in this Section “21” of this Agreement shall
be deemed to include not only the specific liabilities or obligation with
respect to which such indemnity is provided, but also all counsel fees,
reasonable costs, expenses and expenses of settlement relating thereto, whether
or not any such liability or obligation shall have been reduced to
judgment.
D.
Third
Party Claims.
If any
demand, claim, action or cause of action, suit, proceeding or investigation
(collectively, the “Claim”) is brought against an Indemnified Party for which
the Indemnified Party intends to seek indemnity from the other party hereto
(the
"Indemnifying Party"), then the Indemnified Party within twenty-one (21) days
after such Indemnified Party's receipt of the Claim, shall notify the
Indemnifying Party pursuant to Paragraph “C” of Section “22” of this Agreement
which notice shall contain a reasonably thorough description of the nature
and
amount of the Claim (the "Claim
Notice").
The
Indemnifying Party shall have the option to undertake, conduct and control
the
defense of such claim or demand. Such option to undertake, conduct and control
the defense of such claim or demand shall be exercised by notifying the
Indemnified Party within ten (10) days after receipt of the Claim Notice
pursuant to Paragraph “C” of Section “22” of this Agreement (such notice to
control the defense is hereinafter referred to as the “Defense Notice”). The
failure of the Indemnified Party to notify the Indemnifying Party of the Claim
shall not relieve the Indemnifying Party from any liability which the
Indemnifying Party may have pursuant to this Section “21” of this Agreement
except to the extent that such failure to notify the Indemnifying Party
prejudices the Indemnifying Party. The Indemnified Party shall use all
reasonable efforts to assist the Indemnifying Party in the vigorous defense
of
the Claim. All costs and expenses incurred by the Indemnified Party in defending
the Claim shall be paid by the Indemnifying Party. If, however, the Indemnified
Party desires to participate in any such defense or settlement, it may do so
at
its sole cost and expense (it being understood that the Indemnifying Party
shall
be entitled to control the defense). The Indemnified Party shall not settle
the
Claim. If the Indemnifying Party does not elect to control the defense of the
Claim, within the aforesaid ten (10) day period by proper notice pursuant to
Paragraph “C” of Section “22” of this Agreement, then the Indemnified Party
shall be entitled to undertake, conduct and control the defense of the Claim
(a
failure by the Indemnifying Party to send the Defense Notice to the Indemnified
Party within the aforesaid ten (10) day period by proper notice pursuant to
Paragraph “C” of Section “22” of this Agreement shall be deemed to be an
election by the Indemnifying Party not to control the defense of the Claim);
provided, however, that the Indemnifying Party shall be entitled, if it so
desires, to participate therein (it being understood that in such circumstances,
the Indemnified Party shall be entitled to control the defense). Regardless
of
which party has undertaken to defend any claim, the Indemnifying Party may,
without the prior written consent of the Indemnified Party, settle, compromise
or offer to settle or compromise any such claim or demand; provided however,
that if any settlement would result in the imposition of a consent order,
injunction or decree which would restrict the future activity or conduct of
the
Indemnified Party, the consent of the Indemnified Party shall be a condition
to
any such settlement. Notwithstanding the foregoing provisions of this Section
“21” of this Agreement, as a condition to the Indemnifying Party either having
the right to defend the Claim, or having control over settlement as indicated
in
this Section “21” of this Agreement, the Indemnifying Party shall execute an
agreement, in the form annexed hereto and made a part hereof as Exhibit “LLL”
(Article “21D”), acknowledging its liability for indemnification pursuant to
this Section “21” of this Agreement. Whether the Indemnifying Party shall
control and assume the defense of the Claim or only participate in the defense
or settlement of the Claim, the Indemnified Party shall give the Indemnifying
Party and its counsel access, during normal business hours, to all relevant
business records and other documents, and shall permit them to consult with
its
employees and counsel.
30
22.
Miscellaneous.
A.
Headings.
Headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
B.
Enforceability.
If any
provision which is contained in this Agreement, should, for any reason, be
held
to be invalid or unenforceable in any respect under the laws of any State of
the
United States, such invalidity or unenforceability shall not affect any other
provision of this Agreement and in this Agreement shall be construed as if
such
invalid or unenforceable provision had not been contained herein.
C.
Notices.
Any
notice or other communication required or permitted hereunder shall be
sufficiently given if sent by (i) mail by (a) certified mail, postage prepaid,
return receipt requested and (b) first class mail, (ii) overnight delivery
with
confirmation of delivery or (iii) facsimile transmission with an original mailed
by first class mail, postage prepaid, addressed as follows:
If
to Blue Sky:
|
BLUE
SKY OIL AND GAS CORP.
|
#10,
1511 High Field Crescent S.E.
|
|
Calgary,
Alberta, Canada T2G 5MY
|
|
Attn:
Xxxxx Xxxxxxx
|
|
Phone:
(000)-000-0000
|
|
If
to Whitemark:
|
WHITEMARK
HOMES, INC.
|
000
Xxxxx Xxxxxxxxxx Xxxx.
|
|
Xxxxxxxx,
XX, 00000-0000
|
|
Attn:
Xxxxx Xxxxx
|
|
Phone:
(941) 376 -2103
|
|
Facsimile:
(000) 000-0000
|
31
If
to any
of the Blue Sky Shareholders: To the address set forth for said party on Exhibit
“A”.
Xxxxxxx
Xxxxxx
|
|
Facsimile:
|
|
with
a copy to:
|
Xxxx
X. Xxxxxxxx, Esq.
|
0000
Xxxxxxxx, Xxxxx 0000
|
|
Xxxxxxx,
XX 00000-0000
|
|
Facsimile:
(000) 000-0000
|
or
in
each case to such other address and facsimile number as shall have last been
furnished by like notice. If all of the methods of notice set forth in this
Paragraph “C” of this Section “22” of this Agreement are impossible for any
reason, notice shall be in writing and personally delivered to the aforesaid
addresses. Each notice or communication shall be deemed to have been given
as of
the date so mailed or delivered as the case may be; provided, however, that
any
notice sent by facsimile shall be deemed to have been given as of the date
so
sent if a copy thereof is also mailed by first class mail on the date sent
by
facsimile. If the date of mailing is not the same as the date of sending by
facsimile, then the date of mailing by first class mail shall be deemed to
be
the date upon which notice is given; provided further, however, that any notice
sent by overnight delivery shall be deemed to have been given as of the date
of
delivery.
D.
Governing
Law; Disputes.
This
Agreement shall in all respects be construed, governed, applied and enforced
under the internal laws of the State of Florida without giving effect to the
principles of conflicts of laws and be deemed to be an agreement entered into
in
the State of Florida and made pursuant to the laws of the State of Florida.
The
parties agree that they shall be deemed to have agreed to binding arbitration
with respect to the entire subject matter of any and all disputes relating
to or
arising under this Agreement including, but not limited to, the specific matters
or disputes as to which arbitration has been expressly provided for by other
provisions of this Agreement and that any such arbitration shall be commenced
exclusively in Florida. Any such arbitration shall be by a panel of three
arbitrators and pursuant to the commercial rules then existing of the American
Arbitration Association in the State of Florida, County of Miami Dade. In all
arbitrations, judgment upon the arbitration award may be entered in any court
having jurisdiction. The parties specifically designate the courts in the City
of Miami, State of Florida as properly having jurisdiction for any proceeding
to
confirm and enter judgment upon any such arbitration award. The parties hereby
consent to and submit to the exclusive jurisdiction of the courts of the State
of Florida in any action or proceeding and submit to personal jurisdiction
over
each of them by such courts. The parties hereby waive personal service of any
and all process and specifically consent that in any such action or proceeding
brought in the courts of the State of Florida, any service of process may be
effectuated upon any of them by certified mail, return receipt requested, in
accordance with Paragraph “C” of this Section “22” of this Agreement. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
32
The
parties agree, further, that the prevailing party in any such arbitration as
determined by the arbitrators shall be entitled to such costs and attorney's
fees, if any, in connection with such arbitration as may be awarded by the
arbitrators. In connection with the arbitrators’ determination for the purpose
of which party, if any, is the prevailing party, they shall take into account
all of the factors and circumstances including, without limitation, the relief
sought, and by whom, and the relief, if any, awarded, and to whom. In addition,
and notwithstanding the foregoing sentence, a party shall not be deemed to
be
the prevailing party in a claim seeking monetary damages, unless the amount
of
the arbitration award exceeds the amount offered in a legally binding writing
by
the other party by fifteen percent (15%) or more. For example, if the party
initiating arbitration (“A”) seeks an award of $100,000 plus costs and expenses,
the other party (“B”) has offered A $50,000 in a legally binding written offer
prior to the commencement of the arbitration proceeding, and the arbitration
panel awards any amount less than $57,500 to A, the panel should determine
that
B has “prevailed”.
The
arbitration panel shall have no power to award non-monetary or equitable relief
of any sort. It shall also have no power to award (i) damages inconsistent
with
any applicable agreement between the parties or (ii) punitive damages or any
other damages not measured by the prevailing party’s actual damages; and the
parties expressly waive their right to obtain such damages in arbitration or
in
any other forum. In no event, even if any other portion of these provisions
is
held invalid or unenforceable, shall the arbitration panel have power to make
an
award or impose a remedy which could not be made or imposed by a court deciding
the matter in the same jurisdiction.
Discovery
shall be permitted in connection with the arbitration only to the extent, if
any, expressly authorized by the arbitration panel upon a showing of substantial
need by the party seeking discovery.
All
aspects of the arbitration shall be treated as confidential. The parties and
the
arbitration panel may disclose the existence, content or results of the
arbitration only as provided in the rules of the American Arbitration
Association in Florida. Before making any such disclosure, a party shall give
written notice to all other parties and shall afford such parties a reasonable
opportunity to protect their interest.
E.
Expenses.
Each
party to this Agreement shall bear and pay its own costs and expenses incurred
in connection with the execution and delivery of this Agreement and the
transactions set forth in this Agreement. Whitemark shall bear all legal fees
and expenses with respect to the preparation of this Agreement, and the
preparation and filing of the Offering as set forth in Subparagraph “xii” of
Paragraph “A” of Article “15” of this Agreement.
33
F.
Construction.
Each of
the parties hereto hereby further acknowledges and agrees that (i) each has
been
advised by counsel during the course of negotiations and (ii) each counsel
has
had significant input in the development of this Agreement and (iii) this
Agreement shall not, therefore, be construed more strictly against any party
responsible for its drafting regardless of any presumption or rule requiring
construction against the party whose attorney drafted this
Agreement.
G.
Entire
Agreement.
This
Agreement and all documents and instruments referred to herein (a) constitute
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and thereof, and (b) are not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder. Each party hereto
agrees that, except for the representations and warranties contained in this
Agreement, none makes any other representations or warranties, and each hereby
disclaims any other representations and warranties made by itself or any of
its
officers, directors, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement
or
the transactions contemplated hereby, notwithstanding the delivery or disclosure
to the other or the other's representatives of any documentation or other
information with respect to any one or more of the foregoing.
H.
Further
Assurances.
The
parties agree to execute any and all such other further instruments and
documents, and to take any and all such further actions which are reasonably
required to effectuate this Agreement and the intents and purposes
hereof.
I.
Binding
Agreement.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their heirs, executors, administrators, personal representatives, successors
and assigns.
J.
Non-Waiver.
Except
as otherwise expressly provided herein, no waiver of any covenant, condition,
or
provision of this Agreement shall be deemed to have been made unless expressly
in writing and signed by the party against whom such waiver is charged; and
(i)
the failure of any party to insist in any one or more cases upon the performance
of any of the provisions, covenants or conditions of this Agreement or to
exercise any option herein contained shall not be construed as a waiver or
relinquishment for the future of any such provisions, covenants or conditions,
(ii) the acceptance of performance of anything required by this Agreement to
be
performed with knowledge of the breach or failure of a covenant, condition
or
provision hereof shall not be deemed a waiver of such breach or failure and
(iii) no waiver by any party of one breach by another party shall be construed
as a waiver of any other or subsequent breach.
K.
Counterparts.
This
Agreement may be executed simultaneously in one or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
L.
Facsimile
Signatures.
Any
signature which is delivered via facsimile shall be deemed to be an original
and
have the same force and effect as if such facsimile signature were the original
thereof.
34
M.
Modifications.
This
Agreement may not be changed, modified, extended, terminated or discharged
orally, except by a written agreement specifically referring to this Agreement
which is signed by all of the parties to this Agreement.
N.
Exhibits.
All
Exhibits annexed or attached to this Agreement are incorporated into this
Agreement by reference thereto and constitute an integral part of this
Agreement.
O.
Severability.
The
provisions of this Agreement shall be deemed separable. Therefore, if any part
of this Agreement is rendered void, invalid or unenforceable, such rendering
shall not affect the validity or enforceability of the remainder of this
Agreement; provided, however, that if the part or parts which are void, invalid
or unenforceable as aforesaid shall substantially impair the value of this
whole
Agreement to any party, that party may cancel and terminate this Agreement
by
giving written notice to the other party.
[Remainder
of Page Intentionally Left Blank]
35
IN
WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the date first
above written.
BLUE
SKY OIL AND GAS CORP.
|
WHITEMARK
HOMES, INC.
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
By:
|
/s/
Xxxxx Xxxxx
|
|
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxx
|
|||
Title:
President
|
Title:
President
|
|||
The
BLUE SKY SHAREHOLDERS
|
|
|||
679600
Alberta Ltd
|
TMK
HOLDINGS, INC.
|
|||
|
||||
By:
|
/s/
Xxxxx Xxxxxx
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
|
Name:
Xxxxx Xxxxxx
|
Xxxxxxx
Xxxxxx, President
|
|||
Title:
President
|
36
Exhibit
“A”
BLUE
SKY SHAREHOLDERS
Before
the Closing Date
Common
Ownership
|
Blue Sky Common
Shares
|
|
%
|
Address
|
||||||
000000
Xxxxxxx Ltd
|
25,325,000
|
100
|
%
|
After
the Closing Date
Whitemark Post
Exchange Common
Shares
|
||||
679600
Alberta Ltd
|
51,000,000
|
|||
Other
Blue Sky Shareholders
|
27,668,921
|
|||
TOTAL
|
78,668,921
|
37