UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2013

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to ____________________.

Commission File Number: 000-53565

BLOX, INC.
 (Exact name of registrant as specified in its charter)

Nevada
  (State or other jurisdiction of incorporation or
organization)
20-8530914
(I.R.S. Employer Identification No.)

Suite 206 – 595 Howe Street
Vancouver, B.C., Canada V6C 2T5
(Address of principal executive offices, zip code)

(778)-218-9638
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:  Common Stock, $0.00001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes  [  ]   No  [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes  [  ]   No  [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  [X]   No  [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes  [X]   No  [  ]


 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [ x ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [  ] Accelerated filer  [  ]
Non-accelerated filer [  ]  (Do not check if a smaller reporting company) Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  [  ]   No  [X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity as of December 31, 2012 was $367,800.

The number of shares outstanding of the registrant’s common stock as of September 11, 2013 was 12,338,604.

Documents Incorporated By Reference:        None

2


 

TABLE OF CONTENTS

Page

PART I   
Item 1. Business 5
Item 1A. Risk Factors 12
Item 1B. Unresolved Staff Comments 17
Item 2. Properties 17
Item 3. Legal Proceedings 17
Item 4. Mine Safety Disclosures 17
   
PART II  
Item 5. Market for Common Equity, Related Stockholder Matters and Purchases of Equity Securities 17
Item 6. Selected Financial Data 18
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 18
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 21
Item 8. Financial Statements and Supplementary Data 21
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 21
Item 9A. Controls and Procedures 21
Item 9B. Other Information 23
   
PART III  
Item 10. Directors, Executive Officers and Corporate Governance 23
Item 11. Executive Compensation 24
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 25
Item 13. Certain Relationships and Related Transactions and Director Independence 26
Item 14. Principal Accountant Fees and Services 26
   
PART IV  
Item 15. Exhibits, Financial Statement Schedules 37
Glossary of Geological and Mining Terms 38

3


 

PART I.

                As used in this Form 10-K, references to the “Company,” the “Registrant,” “we,” “our” or “us” refer to Blox Inc. unless the context otherwise indicates .

Forward-Looking Statements

                This Annual Report on Form 10-K contains forward-looking information. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management of the Company and other matters.  The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information in order to encourage companies to provide prospective information about themselves without fear of litigation, so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. Forward-looking information may be included in this Annual Report on Form 10-K or may be incorporated by reference from other documents filed with the Securities and Exchange Commission by the Company. You can find many of these statements by looking for words including, for example, “believes,” “expects,” “anticipates,” “estimates” or similar expressions in this Annual Report on Form 10-K or in documents incorporated by reference in this Annual Report on Form 10-K.  Except as otherwise required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events.

                The Company has based the forward-looking statements relating to the Company’s operations on management’s current expectations, estimates and projections about the Company and the industry in which it operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In particular, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, the Company’s actual results may differ materially from those contemplated by these forward-looking statements. Any differences could result from a variety of factors, including, but not limited to the following:

4


 

Item 1.  Business

We are an exploration stage company formed for the purposes of acquiring, exploring and, if warranted and feasible, developing natural resource properties.

Organization

On July 21, 2005, the Company was incorporated in the State of Nevada under the name Nava Resources, Inc. for the purpose of conducting mineral exploration activities. We were authorized to issue 400,000,000 shares of common stock, par value $.001 per share, and initially issued 100,000 shares of common stock to each of Jag Sandhu, our President, Chief Executive Officer and a director, and Johnny Astorino, our Chief Financial Officer. Said issuances were paid at a purchase price of the par value per share. Our wholly owned subsidiary, Nava Resources Canada Inc. (“Nava Canada”), was organized under the Federal laws of Canada on August 9, 2005.

On January 4, 2007, the Company obtained written consent from the shareholders to amend our Articles of Incorporation to change the par value of our common stock from $0.001 to $0.00001 per share. On February 28, 2007, the Board of Directors of the Company amended the Articles of Incorporation changing the par value of the Company’s common stock.

In March 2007 we issued 19,900,000 shares of common stock to each of Messrs. Sandhu and Astorino in consideration for the payment of par value per share. Mr. Astorino subsequently returned 18,000,000 shares to the Company’s treasury for cancellation.

On March 20, 2007, we accepted subscriptions for 874,104 shares of our common stock from 37 investors. The shares of common stock were sold at a purchase price of $0.15 per share, amounting in the aggregate to $131,116. The offering was made to non-U.S. persons in offshore transactions pursuant to the exemption from registration provided by Regulation S of the Securities Act of 1933, as amended (the “Securities Act”).

On April 18, 2007, Mr. Sandhu returned an aggregate of 10,000,000 shares and Mr. Astorino returned an aggregate of 1,000,000 shares of common stock to the Company’s treasury for cancellation.

On June 1, 2007, we accepted subscriptions for 352,000 units from 10 investors. The units were sold at a purchase price of $0.16 per unit, amounting in the aggregate to $56,320. Each unit was comprised of one share of our common stock and one warrant. Each warrant entitles the warrant holder to purchase one share of common stock at an exercise price of $0.20 per share. Each warrant expired on June 1, 2009. The offering was made to non-U.S. persons in offshore transactions pursuant to the exemption from registration provided by Regulation S of the Securities Act.

On November 10, 2011, Mr. Sandhu sold 4,500,000 shares of common stock of the Company held by him to Pamela Kathleen Pickett in consideration for 490,000 shares of common stock of PMI Gold Corp., a British Columbia corporation, valued at $235,200. Also on November 10, 2011, John Astorino, the Company’s former Chief Financial Officer, sold 1,000,000 shares of the Company’s common stock to Ms. Pickett for $30,000 in cash. After giving effect to these sales, (i) Mr. Sandhu beneficially owns an aggregate of 5,500,000 shares (which includes 2,000,000 shares held by Amarjit Sandhu, Mr. Sandhu’s wife), (ii) Mr. Astorino owns no shares, and (iii) Ms. Pickett beneficially owns 5,500,000 shares, of the Company’s common stock. Each of Mr. Sandhu and Ms. Pickett own approximately 44.6% of the issued and outstanding common stock of the Company based upon 12,338,604 shares issued and outstanding as of the date of the sales. These sales were made not pursuant to any written stock purchase or other agreement.  

Effective July 30, 2013, the Company changed its name from Nava Resources, Inc. to Blox Inc.

Exploratory Activities

In July 2005 we commenced our mineral exploration activities. On October 10, 2006, the Company entered into an agreement with Jag Sandhu, our President, Chief Executive Officer and Director, pursuant to which the Company obtained an option to acquire a 100% interest in and to the mineral claim located in Lillooett Mining Division called the Noel Creek Claim.   On October 2, 2007, the option expired due to the Company not making the required payments as per the option agreement.

5


 

On August 28, 2007, Mr. Jag Sandhu, our President and Chief Executive Officer and a director, acquired two claims for a 637.39 hectare (approximately 1575.03 acres) mineral concession in the Cowichan Lake area of Vancouver Island, in the Province of British Columbia, Canada through British Columbia’s online staking service. These mineral claims are known as the North 1 and North 2 Claims. On November 22, 2007, Mr. Sandhu transferred the claims to Nava Canada using British Columbia’s Mineral Title Online web site.  Our intention was to conduct exploratory activities with respect to these claims, and if viable mineral deposits were discovered, develop and extract such minerals. In addition, subject to funding and exploration results, we anticipated acquiring additional properties of interest and either abandoning our existing properties or entering into agreements to sell all or a portion of those properties.  

In October 2007, we engaged a professional mining engineering service and consulting firm, MineStart Management Inc. (“MineStart”), to review the geologic premise and information upon which the North Claims were staked, and to provide a technical report as to its merit as an exploration prospect, including recommendations on appropriate next steps.  The report on the claims, entitled “North 1 and 2 Project – A VMS Investigation” and dated December 7, 2007, describes the mineral claim (tenures, location and access) and the regional, local and property geology. It also includes relevant information on targeted deposit types and mineralization, and recommendations with associated budgets, regarding the initial strategy that should be followed in exploring the claim.

We performed an exploration program on the North 1 and North 2 Claims in August 2008.   This program involved a review of property geology based on government compilations, acquisition of relevant air photo coverage and a visit to the property by Jag Sandhu and Don Blackadar.  The purpose of this visit was to become familiar with the general layout of the property and related road access, and to prospect and collect rock samples in readily accessible areas. Work was concentrated in the south part of the property on the North 2 Claim which is accessible just off of the Cowichan Lake highway, with foot access via an overgrown secondary road leading into the claim.

The North Claim is primarily underlain by felsic to intermediate volcanic and volcaniclastic rocks of the middle to upper Devonian Sicker Group (McLaughlin Ridge Formation), which is prospective for Kuroko-type massive sulphide deposits rich in copper, lead, zinc, gold and silver.  Outcrop exposure in the area prospected was minimal due to overburden cover of bolder till with hardpan noted in some rock cuts. A total of 30 rock samples were taken for multi-element geochemical analysis.  These samples were primarily float but several samples may have been from small outcrops visible in the road cut.  All samples were of intermediate composition (andesite), ranging from fine to medium grained, and relatively massive in texture (weekly foliated in some cases), possibly representing intermediate tuffs with some intrusive equivalents. Samples were sent to Acme Labs in Vancouver, crushed to 200 mesh, and processed by Aqua Regia digestion CCP-MS analysis.  Gold was also determined by fire assay fusion by ICP-ES. No significant anomalies were identified in the pathfinder suite.  However, the first three samples demonstrate a weakly anomalous Cu-Pb-Zn-Ag-As-Ba signature, which may be of interest.

On October 24, 2010 we allowed our North Claims to expire in order to concentrate on our Molly1 claim.

The Molly1 claim was staked by Nava Canada on October 20, 2010.  The claim comprises 20 contiguous units totaling 424.96 hectares.

The claim is located in the Cowichan Lake area, Vancouver Island, British Columbia, about 30 kilometers west of the city of Duncan and about 5 kilometers northwest of the town of Lake Cowichan.  It is accessible via the Meade Lake forestry road from Highway 18, which extends along the north shore of Lake Cowichan from Duncan. The claim is about four kms east and along geologic strike from the North claim.

Sicker Group Geology and Mineral Potential

Vancouver Island is dominated by rocks of the Wrangellia Terrane, which is interpreted to represent a Paleozoic Island Arc assemblage, accreted to the North American content about 100 million years ago.  Mid-Devonian volcanic rocks of the Sicker Group, representing the basement of this complex, are the oldest rocks on Vancouver Island and are exposed in four major structural uplifts – Buttle Lake, Beddington, Nanoose, and Cowichan Lake.  The Molly1 Claim lies toward the southeast end of the Cowichan Lake Uplift, along the north shore of the east end of Cowichan Lake.  In the Cowichan Lake Uplift, the Sicker Group comprises three distinct volcanic / volcaniclastic assemblages – the Duck Lake Formation as the oldest member and overlain by the Nitnat Formation, which in turn is overlain, possibly unconformably, by the McLaughlin Ridge Formation.

Volcanic rocks of the Sicker Group are highly prospective for economically viable volcanogenic massive sulphide (“VMS”) deposits, which are the primary exploration target on the Molly1 Claim.   As a group, these deposits are rich in copper and zinc and also carry significant gold and silver values.

The most significant mineral deposit in the Sicker Group is the Myra Falls mine, a deposit located in the Buttle Lake Uplift. Other significant deposits, notably the Lara and Mount Sicker deposits, are located in the southeast part of the Cowichan Lake uplift, several kilometers northeast of the Molly1 Claim and separated from the property by a major geologic fault.

6


 

Massive sulphide mineralization was first discovered in the Sicker Group with the Mount Sicker discoveries in the late 1800s.  Production was from one main ore body via three separate underground mines (Tyee, Lenora and Richard III), which operated for several years. These mines were subsequently amalgamated and re-operated as the Twin J mine from 1942 to 1952.  Production from the Tyee mine (1901 – 09) totaled 5,840,593 kilograms copper and 13,725,069 grams silver, and 762,553 grams gold from 152,668 tonnes mined.  The Buttle Lake mine, which has been in operation since 1966, currently produces approximately 1 million equivalent of ore per year.  Over the 39 years to 2005, the mine yielded 24 million cqui with an average grade of 1.8% copper, 5.0% zinc, 2g/T gold and 52g/T silver. The Lara deposit, discovered in the mid-1980s, contains a drill indicated resource of 528,839 tonnes grading 1.01% copper, 1.22% lead, 5.87% zinc, 100.09 g/T sliver and 4.73 g/T gold.

Discovery of the Lara deposit and ongoing interest in the nearby Mount Sicker deposits, all of which are hosted in felsic volcanic rocks of the McLaughlin Ridge formation, stimulated significant interest and exploration activity in the Cowichan uplift during the mid-to late 1980s.  During this period the Striker Property, comprising 31 contiguous mineral claims (528 units) and extending along virtually the entire north shore of Cowichan Lake, was explored by Utah Mines.  This property is underlain predominantly by the Sicker Group, with Nitnat rocks dominant in the western part of the property and McLaughlin Ridge sediments and volcanics dominant in the east.  Work on this property is documented in a number of BC government assessment reports, from which the following descriptions are derived.  McLaughlin Ridge rocks, as mapped, divide grossly into 3 units, dominated by diverse sedimentary lithologies with volcanic members, particularly lower in the sequence.  Volcanic rocks are described as interbedded lithic and crystal tuff, cherty dust tuff, chert and minor lapilli tuff.  The lower unit consists of fine-grained andesitic lithic crystal tuffs and cherty tuffs with local coarse lapilli beds and dacitic tuff units.  

Exploration on the Striker property included airborne geophysics, with ground follow-ups and grid work in selected areas in the eastern part of the property because of the distribution of geophysical and geochemical targets. While massive sulphides were not encountered, encouraging mineralization of various types was noted, including exhalative horizons, which occasionally contain anomalous molybdenum, copper and silver.  Significant barium, silver, molybdenum and zinc values are also associated with syndepositional pyrite in argillite units and significant gold-silver-copper-zinc values are associated with several structures.  Anomalous silt and heavy metal values (copper-lead-zinc-silver-gold) were also identified.  The latest assessment report on the Striker property recommended further, more detailed work in the eastern part of the property including detailed mapping, sampling, trenching and limited drilling.  

The Cowichan Lake area generally, has been the subject of mineral exploration since the late 1800s and a large number and variety of mineral showings in the area are documented in B.C. government Minfile records.  Massey and Friday (1986) grouped Cowichan area mineral showings into five categories:

1. Volcanogenic gold-bearing massive sulphides (Sicker Group Kuroko deposits).

2. Gold-bearing, pyrite-chalcopyrite-quart-carbonate veins along shears, which are quite common cutting Sicker Group and Karmutsen Formation sills north of Cowichan Lake.

3. Epithermal gold-silver deposits within Bonanza Group volcanics.

4. Copper skarns developed in limy sediments apparently interbedded with basalts of the Karmutsen formation.

5. Copper-molybdenum quartz veins in granodiorite and adjacent country rock on several properties.  Chalcopyrite and pyrite, with or without molybdenite are the principle sulphides and minor sphalerite, galena and arsenopyrite are also reported.

The Molly 1 Claim

The Molly1 claim, comprising 20 units (424.96 hectares) was staked in October 2010 to cover outcroppings of the prospective McLaughlin Ridge formation (within the Sicker), approximately 4.5 kilometers along geological strike to the east of the North claim, which was prospected by the Company in 2008 and was allowed to lapse in 2010.  The Molly1 claim is bounded to the east by the Meade Creek valley, and is accessible via logging roads extending north from the main highway along the steep western slope of the valley.

Exploration on Molly1 during 2010 comprised a reconnaissance traverse of logging roads on and in the general vicinity of the claim.   Outcroppings of Sicker Group and other rocks are exposed in road cuts over a distance of perhaps 2 kilometers along the Meade Creek access road that crosses the claim.  The McLaughlin Ridge Formation is well exposed over a distance of about one kilometer in this area and comprises a relatively uniform section of steeply dipping, banded, medium grey fine grained tuffites and cherty tuffites with occasional quartz veining and local finely disseminated pyrite.  Exposures of siltstone and grit representing the much younger Nanaimo Group (Benson Formation) occur at the north end of this section, which is bounded to the south by outcroppings of the Mount Hall Gabbro and intermediate intrusive rocks of the Nitnat Formation.

7


 

This section of rocks was prospected over a distance of about one kilometer within the claim boundary, focusing on the McLaughlin Ridge Formation. No visible mineralization, other than occasional minor disseminated pyrite was noted.  A total of 46 grab samples were taken at intervals across the section and sent for multi-element geochemical analysis (36 element suite), which included the Kuroko indicator elements copper, lead, zinc, silver, gold, barium, and arsenic.  No significant anomalies were indicated in this analysis, though three samples (tuffite) demonstrated weakly anomalous barium concentrations.

McLaughlin Ridge rocks in the Cowichan Lake area are described on government geological maps as thickly-bedded tuffite and lithic tuffite, feldspar-crystal tuff, lapilli tuff, rhyolite, dacite, laminated tuff and chert.  On the Molly1 claim, the assemblage is well-exposed in a logging road cut over a distance of about 1 km.  This assemblage consists predominantly of bedded tuffites, which are locally siliceous and cherty.  A total of 46 grab samples have been taken across strike in this area and will be analyzed geochemically for a multi-element suite (37 elements) in order to accrue a foundation of geochemical data, and to test for the presence of copper, lead, zinc, silver, gold, barium and arsenic values which are potential indications of Kuroko-type environments.

Property and Claim Position

The Molly1 claim was staked by Nava Canada on October 20, 2010.  The claim comprises 20 contiguous units totaling 424.96 hectares. The Molly1 property is in the Victoria mining division of British Columbia and lies on the north shore of Cowhichan lake in southern Vancouver Island about 30km west of the town of Duncan and 10km west of the town of Lake Cowichan. (See location map below.)

8


 

9


 

Geology North of Cowichan Lake Including Molly1 Property

Conditions to Retain Title to the Claims

The Molly1 mineral titles are subject to annual renewal and government permits for specific field work.  The Molly1 claims are valid until their next anniversary date of October 20, 2013.  They can be renewed indefinitely by performance and recording of assessment work as defined in the Mineral Act (B.C.) or by payment of cash in lieu of work.  Work or cash payment of the equivalent of CAN$4.00 per hectare or approximately CAN$1,700 for each of the first, second and third anniversary years, and the equivalent of CAN$8.00 per hectare for each subsequent anniversary year is required. Contiguous claims may be grouped for purposes of applying the value of work from the site of work to other claims. Failure to perform and record valid exploration work or pay the equivalent sum to the Province of British Columbia on the anniversary dates will result in forfeiture of title to the claim.

10


 

Present Condition of the Claims

The Molly1 Claim was staked on October 20, 2010 by Nava Canada. The Claim was staked to acquire a position in the Sicker Group, a sequence of volcanic rocks known to be very prospective for the occurrence of polymetallic volcanogenic massive sulphide deposits (VMS), commonly referred to as Kuroko type deposits.

Our objective is to conduct exploration activities on the Molly1 Claim to assess whether they possess evidence of mineralization sufficient to merit further exploration activities.  The Molly1 Claim is without known reserves.  

Competitive Conditions

The mineral exploration business is an extremely competitive industry. We are competing with many other exploration companies looking for minerals.  We are a very early stage mineral exploration company and a very small participant in the mineral exploration business. Being a junior mineral exploration company, we compete with other companies like ours for financing and joint venture partners. Additionally, we compete for resources such as professional geologists, camp staff, helicopters and mineral exploration supplies.

Government Approvals and Recommendations

We will be required to comply with all regulations defined in the British Columbia Mineral Tenure Act for the Province of British Columbia (the “Act”). The Act sets forth rules for:

  • locating claims
  • posting claims
  • working claims
  • reporting work performed

We also have to comply with the British Columbia Mineral Exploration Code which dictates how and where we can explore for minerals.  We must comply with these laws to operate our business.  In order to explore for minerals on our mineral claim we must submit our exploration plan for review.  We believe that our exploration plan as described below will be accepted and an exploration permit will be issued to our agent or us. The exploration permit is the only permit or license we will need to explore for precious and base minerals on the mineral claim.

We will be required to obtain additional work permits from the British Columbia Ministry of Energy and Mines for any exploration work that results in a physical disturbance to the land.  Accordingly, we may be required to obtain a work permit depending on the complexity and affect on the environment if we proceed beyond the exploration work contemplated by our proposed exploration programs.  The time required to obtain a work permit is approximately four weeks.  We will incur the expense of our consultants to prepare the required submissions to the Ministry of Energy and Mines.  We will be required by the Mining Act of British Columbia to undertake remediation work on any work that results in physical disturbance to the land.  The cost of remediation work will vary according to the degree of physical disturbance.  No remediation work is anticipated as a result of completion of Stage One and Stage Two of our exploration program.

If we enter into substantial exploration, the cost of complying with permit and regulatory environment laws will be greater than in Stages One and Two because the impact on the project area is greater.  Permits and regulations will control all aspects of any program if the project continues to that stage because of the potential impact on the environment.  We may be required to conduct an environmental review process under the British Columbia Environmental Assessment Act if we determine to proceed with a substantial project.  An environmental review is not required under the Environmental Assessment Act to proceed with the recommended Stage One and Two exploration programs on our Molly1 Claim.

11


 

Costs and Effects of Compliance with Environmental Laws

Although we currently have no costs to comply with environmental laws concerning our exploration program, we will have to sustain the cost of reclamation and environmental remediation for all work undertaken which causes sufficient surface disturbance to necessitate reclamation work.  Both reclamation and environmental remediation refer to putting disturbed ground back as close to its original state as possible.  Other potential pollution or damage must be cleaned and renewed along standard guidelines outlined in the usual permits.  Reclamation is the process of bringing the land back to a natural state after completion of exploration activities.  Environmental remediation refers to the physical activity of taking steps to remediate, or remedy, any environmental damage caused, i.e. refilling trenches after sampling or cleaning up fuel spills.  Our initial programs do not require any reclamation or remediation other than minor clean up and removal of supplies because of minimal disturbance to the ground.  The amount of these costs is not known at this time as we do not know the extent of the exploration program we will undertake, beyond completion of the recommended phases.  Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on our earnings or competitive position in the event a potentially economic deposit is discovered.

Employees

We currently have no employees. Our sole officer and director provides consulting services to us on a part time basis. We intend to retain the services of geologists, prospectors and consultants on a contract basis to conduct the exploration programs on our mineral claims and to assist with regulatory compliance and preparation of financial statements.

Item 1A.  Risk Factors

An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this Annual Report in evaluating our Company and its business, before purchasing shares of our Company’s common stock. Additional risks not presently known to us may also impair our business operations. You could lose all or part of your investment due to any of these risks.

Risks Relating to Our Company

1.  Our auditors have expressed substantial doubt about our ability to continue as a going concern.

We will be required to expend substantial amounts of working capital in order to explore and develop our mineral claim.  We have not generated revenues since inception, have incurred losses in developing our business, and further losses are anticipated. Our operations to date were funded entirely from capital raised from our private offerings of securities. We will continue to require additional financing to meet our obligations and the costs of operations and to execute our business strategy.  For the year ended June 30, 2013 we have incurred a loss of $78,412 and from inception on July 21, 2005 to June 30, 2013 we have incurred a loss of $296,350 and we expect losses to continue in the future.  These factors raise substantial doubt about the Company’s ability to continue as a going concern. After auditing our financial statements, our independent auditor issued a going concern opinion and our ability to continue is dependent on our ability to raise additional capital. If we are unable to obtain necessary financing, we will likely be required to curtail our development plans which could cause us to become dormant and could cause our shareholders to lose their investment in our company.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2.  We will require additional funds which we plan to raise through the sale of our common stock, which requires favorable market conditions and interest in our activities by investors.  We may not be able to sell our common stock and funding may not be available for continued operations.

Our ability to continue is dependent on our ability to raise additional capital and our operations could be curtailed if we are unable to obtain required additional funding when needed. We have a working capital deficit of $58,795 as of June 30, 2013 and we do not have sufficient funds to complete any further work on the Molly1 Claim. Subsequent exploration activities will require additional funding. Our only present means of funding is through the sale of our common stock. The sale of common stock requires favorable market conditions for junior exploration companies like ours, as well as specific interest in our stock, neither of which may exist. If we are unable to raise additional funds in the future, we may have to cease our operations.  

12


 

3.  We have a very limited history of operations and accordingly there is no track record that would provide a basis for assessing our ability to conduct successful mineral exploration activities.  We may not be successful in carrying out our business objectives.

We were incorporated on July 21, 2005, and to date have been involved primarily in organizational activities, obtaining financing, acquiring an interest in the claims and conducting exploration work on the claims. Accordingly we have no track record of successful exploration activities, strategic decision making by management, fund-raising ability, and other factors that would allow an investor to assess the likelihood that we will be successful as a junior resource exploration company. Junior exploration companies often fail to achieve or maintain successful operations, even in favorable market conditions.  There is a substantial risk that we will not be successful in our exploration activities, or if initially successful, in thereafter generating any operating revenues or in achieving profitable operations.

4.  Our failure to perform exploratory activities with respect to the claims, or our failure to make required payments or expenditures, could cause us to lose title to the mineral claim.

The Molly1 Claim has an expiration date of October 20, 2013. In order to maintain the tenure of our ownership of the claims in good standing, it will be necessary for us to coordinate an agent to perform and record valid exploration work with value of approximately $1,700 Canadian dollars, or pay the equivalent sum to the Province of British Columbia in lieu of the exploratory work. Failure to perform and record valid exploration work or pay the equivalent sum to the Province of British Columbia on October 20, 2013, will result in the forfeiture of our title to the claims.

5.  Due to the speculative nature of mineral property exploration, there is substantial risk that no commercially viable mineral deposits will be found on our Molly1 Claim or other mineral properties that we may acquire.

In order for us to even commence mining operations we face a number of challenges which include finding qualified professionals to conduct our exploration program, obtaining adequate financing to continue our exploration program, locating a viable mineral body, partnering with a senior mining company, obtaining mining permits, and ultimately selling minerals in order to generate revenue. Moreover, exploration for commercially viable mineral deposits is highly speculative in nature and involves substantial risk that no viable mineral deposits will be located on any of our present or future mineral properties.  There is a substantial risk that the exploration program that we will conduct on the claims may not result in the discovery of any significant mineralization, and therefore no commercially viable mineral deposit.  There are numerous geological features that we may encounter that would limit our ability to locate mineralization or that could interfere with our exploration programs as planned, resulting in unsuccessful exploration efforts. In such a case, we may incur significant costs associated with an exploration program, without any benefit.  This would likely result in a decrease in the value of our common stock.

6.  Due to the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.

The search for minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or may elect not to insure. We currently have no such insurance nor do we expect to obtain such insurance for the foreseeable future. If a hazard were to occur, the costs of rectifying the hazard may exceed our asset value and cause us to liquidate all our assets and cease operations, resulting in the loss of your entire investment.

7.  Access to the Molly1 Claim is seasonally restricted by inclement weather, which may delay our exploration and any future mining efforts.

Access to the Molly1 Claim could potentially be restricted to the period between October and May of each year due to snowfall in the area. This presents both a short and long term risk to us in that poor weather could delay our exploration program and prevent us from exploring the Claim as planned. Attempts to visit, test, or explore the property may be limited to the few months of the year when weather permits such activities. These limitations can result in significant delays in exploration efforts, as well as mining and production in the event that commercial amounts of minerals are found. Such delays can result in our inability to meet deadlines for exploration expenditures required to be made in order to retain title to our claims under provincial mineral property laws. 

13


 

8.  The market price for precious metals is based on numerous factors outside of our control. There is a risk that the market price for precious metals will significantly decrease, which will make it difficult for us to fund further mineral exploration activities, and would decrease the probability that any significant mineralization that we locate can be economically extracted.  

Numerous factors beyond our control may affect the marketability of minerals. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection.  The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our not receiving an adequate return on invested capital and you may lose your entire investment in the Company.

9.  Changes in the exchange rates between the United States dollar and foreign currencies may be volatile and may negatively impact our costs, which in turn could adversely affect our operating results.

When operating in foreign countries, such as Canada, we expect to incur a certain amount of our expenses from our operations in foreign currency and translate these amounts into United States dollars for purposes of reporting operating results. As a result, fluctuations in foreign currency exchange rates may adversely affect our expenses and results of operations, as well as the value of our assets and liabilities. Fluctuations may adversely affect the comparability of period-to-period results. In addition, we anticipate holding foreign currency balances, which will create foreign exchange gains or losses, depending upon the relative values of the foreign currency at the beginning and end of the reporting period, which may affect our net income and earnings per share. Although we may use hedging techniques in the future (which we currently do not use), we may not be able to eliminate the effects of currency fluctuations. Thus, exchange rate fluctuations could have a material adverse impact on our operating results and stock price.

10.  Since the majority of our shares of common stock are owned by our President, Chief Executive Officer and director, and one other significant stockholder our other stockholders may not be able to influence control of the Company or decision making by management of the Company.   

Mr. Jag Sandhu, our President, Chief Executive Officer and a director and one other stockholder each beneficially own approximately 45% of our outstanding common stock. The interests of Mr. Sandhu and this stockholder may not be, at all times, the same as that of our other shareholders. As an executive officer and director of the Company, Mr. Sandhu’s interests as an executive may, at times be adverse to those of shareholders. Where those conflicts exist, our shareholders will be dependent upon Mr. Sandhu exercising, in a manner fair to all of our shareholders, his fiduciary duties as an officer or as a member of the Company’s Board of Directors. Also, Mr. Sandhu and the other significant shareholder will have the ability to significantly influence the outcome of most corporate actions requiring shareholder approval, including our merger with or into another company, the sale of all or substantially all of our assets and amendments to our articles of incorporation. This concentration of ownership may also have the effect of delaying, deferring or preventing a change of control of our company, which may be disadvantageous to minority shareholders.

11.  Since our sole officer and director has the ability to be employed by or consult for other companies, his other activities could slow down our operations .

Mr. Jag Sandhu, our President, Chief Executive Officer and a director, works with other mineral exploration companies. Our officers and directors are not required to work exclusively for us and do not devote all of their time to our operations. Therefore, it is possible that a conflict of interest with regard to their time may arise based on their employment by other companies. Their other activities may prevent them from devoting full-time to our operations which could slow our operations and may reduce our financial results because of the slowdown in operations. It is expected that each of our director will devote between 10 and 20 hours per week to our operations on an ongoing basis, and when required will devote whole days and even multiple days at a stretch when property visits are required or when extensive analysis of information is needed. We do not have any written procedures in place to address conflicts of interest that may arise between our business and the business activities of Mr. Sandhu.

12. Because our sole officer and director works for other companies engaged in mineral exploration, a potential conflict of interest could negatively impact our ability to acquire properties to explore and to run our business.

Our sole director and officer works for other mining and mineral exploration companies.  Due to time demands placed on him and due to the competitive nature of the exploration business, the potential exists for conflicts of interest to occur from time to time that could adversely affect our ability to conduct our business. His employment with other entities in addition to limiting the amount of time they can dedicate to us as a director or officer, may present a conflict of interest in helping us identify and obtain the rights to mineral properties and as to other business opportunities because he may also be considering the same properties or opportunities for other companies he may work or consult for.

14


 

13. Damage to the environment could result from our operations.  If our business is involved in one or more of these hazards, we may be subject to claims of a significant size which could force us to cease our operations.

Mineral resource exploration, production and related operations are subject to extensive rules and regulations. Failure to comply with these rules and regulations can result in substantial penalties.  Our cost of doing business may be affected by the regulatory burden on the mineral industry since the rules and regulations frequently are amended or interpreted.  We cannot predict the future cost or impact of complying with these laws.

Environmental enforcement efforts with respect to mineral operations have increased over the years, and it is possible that regulation could expand and have a greater impact on future mineral exploration operations.  Although our management intends to comply with all legislation and/or actions of local, provincial, state and federal governments, non-compliance with applicable regulatory requirements could subject us to penalties, fines and regulatory actions, the cost of which could harm our results of operations.  We cannot be sure that our proposed business operations will not violate environmental laws in the future.

We are subject to extensive regulations relating to environmental protection, including the generation, storage, handling, emission, transportation and discharge of materials into the environment, and relating to safety and health. We will also have to sustain the cost of reclamation and environmental remediation for all work undertaken which causes sufficient surface disturbance to necessitate reclamation work.   Other potential pollution or damage must be cleaned and renewed.  Our initial programs do not require any reclamation or remediation other than minor clean up and removal of supplies because of minimal disturbance to the ground.  The amount of these costs is not known at this time as we do not know the extent of the exploration program we will undertake, beyond completion of the recommended phases.  Because there is presently no information on the size, tenor, or quality of any resource or reserve at this time, it is impossible to assess the impact of any capital expenditures on our earnings or competitive position in the event a potentially economic deposit is discovered.

Risks Relating to Our Common Stock

14.  Since public trading in our common stock is limited and sporadic, there can be no assurance that our stockholders will be able to liquidate their holdings of our common stock.

Our common stock price is currently quoted on the OTCQB under the symbol “BLXX”.  However, trading has been limited and sporadic and we can provide no assurance that the market for our common stock will be sustained.   We cannot guarantee that any stockholder will find a willing buyer for our common stock at any price, much less a price that will result in realizing a profit on an investment in our shares.  There may be limited opportunity for stockholders to liquidate any of their holdings in common stock of the Company.  Trading volume may be insignificant and stockholders may be forced to hold their investment in Company shares for an extended period of time.  The lack of liquidity may also cause stockholders to lose part or all of their investment in our common stock.

15.  Since public trading in our common stock is limited and sporadic, the market price of our common stock may be subject to wide fluctuations.

There is currently a limited public market for our common stock and we can provide no assurance that the market for our common stock will be sustained.  If a market is sustained, however, we anticipate that the market price of our common stock will be subject to wide fluctuations in response to several factors, including:

(1) actual or anticipated variations in our results of operations;

(2) our ability or inability to generate revenues;

(3) increased competition; and

(4) conditions and trends in the mining industry.

Further, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance.  These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations, may adversely affect the market price of our common stock.

15


 

16.  Our common stock is subject to the “penny stock” rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

Under U.S. federal securities legislation, our common stock will constitute “penny stock”.  Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions.  For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential  investor’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.  In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.  The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, which, in highlight form, sets forth the basis on which the broker or dealer made the suitability determination.  Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.  Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.  Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

17.  We may, in the future, issue additional shares of common stock, which would reduce investors’ percent of ownership and may dilute our share value.

Our Articles of Incorporation authorize the issuance of 400,000,000 shares of common stock. As of September 11, 2013, the Company had 12,338,604 shares of common stock outstanding. Accordingly, we may issue up to an additional 387,661,396 shares of common stock. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis.  The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.

18.  State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell shares of our common stock.

Secondary trading in our common stock will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or an exemption from registration is available for secondary trading in the state.  If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of our common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment.

19.  Restrictions on the resale of securities for British Columbia residents and other Canadian residents may limit the ability of our shareholders to sell their securities.

Shareholders who are residents of British Columbia have to rely on an exemption from prospectus and registration requirements of B.C. securities laws to sell their shares.  Shareholders have to comply with B.C. Securities Commission’s BC Instrument 72-502 “Trade In Securities of U.S. Registered Issuers” to resell their shares.  BC Instrument 72-502 requires, among other conditions, that B.C. residents hold the shares for four months and limit the volume of shares sold in a 12-month period.  These restrictions will limit the ability of B.C. resident shareholders to resell our common stock in the United States, and therefore may materially affect the market value of your shares.  Residents of other Canadian provinces have to rely on available prospectus exemptions to re-sell their securities, and if no exemptions can be relied upon then the shareholders may have to hold the securities for an indefinite period of time. 

20.  Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.  

16


 

Item 1B.  Unresolved staff comments

None.

Item 2.  Properties

Our executive offices are located at Suite 206 – 595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5. The space is being provided to us without charge. This space may not be available to us free of charge in the future. We believe that this space is sufficient until we are able to generate revenues, if at all, and hire employees.

We do not have any ownership or lease interests in any property other than our interest in the Molly1 Claim described above in Item 1.

Item 3.  Legal Proceedings

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, or any owner of record or beneficially of more than 5% of any class of voting securities of the Company is a party adverse to the Company or has a material interest adverse to the Company.  The Company’s property is not the subject of any pending legal proceedings.    

Item 4.  Mine Safety Disclosures

The Company currently has no mining operations .

PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Quotation of our shares of common stock on the OTCQB was approved on July 18, 2008 under the symbol “NAVA”. Since July 31, 2013  our common stock has been quoted on the OTCQB under the symbol “BLXX”.  Prior to July 18, 2008, there was no active market for our common stock, and since that date there have only been limited or sporadic quotations and only a very limited public trading market for our common stock. The following table sets forth the high and low bid prices of our common stock for our fiscal years ended June 30, 2012 and June 30, 2013 as reported on the OTCQB. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

Fiscal 2012        HIGH           LOW    
First Quarter $ 0.10   $ 0.015  
Second Quarter $ 0.10   $ 0.015  
Third Quarter $ 0.10   $ 0.045  
Fourth Quarter $ 0.09   $ 0.03  
Fiscal 2013   HIGH       LOW    
First Quarter $ 0.09   $ 0.03  
Second Quarter $ 0.05   $ 0.03  
Third Quarter $ 0.05   $ 0.02  
Fourth Quarter $ 0.15   $ 0.05  

17


 

Holders

As of September 11, 2013, the Company had 12,338,604 shares of our common stock issued and outstanding held by 50 holders of record.

The last reported sales price of our common stock on the OTCQB on September 11, 2013 was $0.17

Dividend Policy

We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends.

Securities Authorized Under Equity Compensation Plans

On October 26, 2009, our Board of Directors of Company adopted .our Stock Incentive Plan (the “Plan”).  As of June 30, 2013, securities issued and securities available for future issuance under the Plan were as follows:

Equity Compensation Plan Information

    Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
    Weighted average
exercise price of
outstanding options,
warrants and rights
    Number of securities
 remaining available for future
issuance under equity
compensation plans
 
Equity compensation plans approved by security holders       $ -        
Equity compensation plans not approved by security holders   375,000 (1) $ 0.01     9,525,000  
Total   375,000   $ 0.01     9,525,000  

The Plan provides for the granting of up to 10,000,000 stock options to key employees, directors and consultants, of common shares of the Company.  Options granted are not to exceed terms beyond five years. 

(1) Represents options to purchase 250,000, 25,000 and 100,000 shares of common stock at an exercise price of $0.01 on August 31, 2010, November 30, 2010 and January 16, 2013 respectively. These grants have no vesting.

Recent Sales of Unregistered Securities

None

Item 6.  Selected Financial Data

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Company’s financial statements which are included elsewhere in this Annual Report. Certain statements contained in this Annual Report, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and the products we expect to offer, and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements.  Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

18


 

All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

Plan of Operation

Our plan of operation for the next twelve months is to complete the following objectives within the time periods specified, subject to our obtaining any additional funding necessary for the continued exploration of our mineral claims. We currently do not have any funding to continue work on our claims.

1.  Prior to the next anniversary date of the Molly1Claims on October 20, 2013, we will need to arrange some exploration work worth approximately $1,700 or pay the Province of British Columbia $1,700 in lieu of filing exploration expenses in order to keep the claims in good standing.

2.  We conducted a phase one program of prospecting and lithogeochemical sampling of Sicker Group rocks in the Lake Cowichan area, Vancouver Island in 2010.  The Sicker Group is prospective for polymetallic ‘Kuroko-type’ massive sulphide deposits rich in copper, lead, zinc, silver and gold and is exposed in a number of structural uplifts on Vancouver Island.  Two of these uplifts host economically significant Kuroko deposits, including the Myra Falls mine in the Buttle Lake Uplift, and the Mount Sicker (intermittent producer up to 1952) and Lara deposits in the Cowichan Lake Uplift.

Blox’s exploration was focused in the southeast end of the Cowichan Lake uplift, which extends in an arcuate, northwest-trending belt over approximately 100 km between Saltspring Island (in the southeast) and Horne Lake in the north.

The Molly1 claim, comprising 20 units (424.96 hectares) was staked in October 2010 to cover outcroppings of the prospective McLaughlin Ridge formation (within the Sicker), approximately 4.5 kilometers along geological strike to the east of the North claim, which was prospected by Blox in 2008; this claim was allowed to lapse in 2010.  The Molly1 claim is bounded to the east by the Meade Creek valley, and is accessible via logging roads extending north from the main highway along the steep western slope of the valley. 

Exploration on Molly1 during 2010 comprised reconnaissance traverse of roads in the area in late October 2010.   Outcroppings of Sicker Group and other rocks are exposed in road cuts over a distance of perhaps 2 kilometers along the main access road.  The McLaughlin Ridge Formation is well exposed over a distance of about one kilometer in this area and comprises a relatively uniform section of steeply dipping, banded, medium grey fine grained tuffites and cherty tuffites with occasional quartz veining and local finely disseminated pyrite.  Exposures of siltstone and grit representing the much younger Nanaimo Group (Benson Formation) occur at the north end of this section, which is bounded to the south by outcroppings of the Mount Hall Gabbro and intermediate intrusive rocks of the Nitnat Formation.

This section of rocks was prospected over a distance of about one kilometer within the claim boundary, focusing on the McLaughlin Ridge Formation. No visible mineralization, other than occasional minor disseminated pyrite was noted.  A total of 46 grab samples were taken at intervals across the section and sent for multi-element geochemical analysis (36 element suite), which included the Kuroko indicator elements copper, lead, zinc, silver, gold, barium, and arsenic.  No significant anomalies were indicated in this analysis, though three samples (tuffite) demonstrated weakly anomalous barium concentrations.

2.  If we can raise additional funding, we plan to further analyze the data received and if warranted conduct further work on the Molly1 Claim in the fall of 2013, which  may include geological mapping, a geochemical survey, trenching, sampling and analysis.

3.  If we are able to raise sufficient funds to complete the Phase Two exploration program, we plan to review its results in December 2013.  Subject to funding, further work on the Molly1 Claim property may be undertaken if justified by the results of Phase Two. A joint venture relationship may be explored at some future point as justified to offset the costs of continued exploration and drilling if warranted.

We may consider entering into a joint venture with a major resource company to obtain funding necessary to complete exploration beyond Phase Two in exchange for a percentage of our interest in our mineral claims. We have not undertaken any efforts to locate a joint venture partner and there can be no assurances that we will be successful doing so or that a major resource company or any other third party would be interested in such a partnership or that sufficient funds would be available.

19


 

4.  On June 19, 2013, the Company signed an agreement with International Eco Endeavors Corp. (“Eco Endeavors”) to complete a business combination with Eco Endeavors and Ourco Capital Ltd. (“Ourco”), a wholly owned subsidiary of the Company formed for the purpose of this business combination.  At amalgamation, all of Eco Endeavors common shares outstanding shall be cancelled, and the holders of Eco Endeavors’ common shares, other than the Company and Ourco, shall receive in exchange for their Eco Endeavors’ common shares cancelled, 60,000,000 units of the Company on a pro-rata basis with a deemed value of $0.05 per unit. Neither the Company nor Ourco shall receive any repayment of capital in respect of any Eco Endeavors’ common shares held by them that are cancelled. All of the common shares of Ourco outstanding immediately prior to the effective time shall be cancelled and replaced with an equal number of common shares of the amalgamated company (“Amalco”) formed between Eco Endeavors and Ourco, and will be a wholly owned subsidiary of the Company. As consideration for the issuance of the Company’s units, Amalco shall issue the Company one common share of Amalco for each unit issued. This agreement is subject to the Company’s completion of due diligence of Eco Endeavors which has not yet been completed.

On June 22, 2013, the Company entered into a share purchase agreement with Waratah Investments Limited (“Waratah”) where the Company shall purchase all of Waratah’s right, title, and interest in the Quivira Gold (“Quivira”) shares, of which Waratah holds 100% of the outstanding shares. As consideration for the Quivira shares, the Company will issue to Waratah 60,000,000 shares of common stock and 60,000,000 warrants. Each warrant entitles the holder to purchase one additional common share at $0.05 for a period of five years from the closing date. This agreement is subject to the Company’s completion of due diligence of Quivira which has not yet been completed.

The closing of the agreements is subject to the completion of due diligence and the completion of a private placement..  The Agreements provide that closing is subject to completion of a private placement financing of up to US$2,500,000, consisting of units priced at $0.05 per unit, with each unit comprises a share in the common stock of Blox and a share purchase warrant, exercisable at $0.05 for five years.  As of the issuance date of these financial statements, the due diligence and financing has not yet been completed.

The Company has not yet completed its due diligence examinations or raised any funding with respect to these agreements and there can be no assurances that it will be successful in doing so.

Results of Operations

We have had no operating revenues since our inception on July 21, 2005. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral property.  We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our property, or if such resources are discovered, that we will enter into commercial production of our mineral property.

For the year ended June 30, 2013 we incurred expenses of $78,412, compared to expenses of $24,091 in the year ended June 30, 2012.  Professional fees increased from $20,055 in the year ended June 30, 2012 to $76,168 in the year ended June 30, 2013.  In addition, in the year ended June 30, 2012 we incurred $2,850 of exploration costs, as compared to no exploration costs in the year ended June 30, 2013.

In the year ended June 30, 2013 we had a net loss of $78,412, as compared to a net loss of $24,064 in the year ended June 30, 2012.  For the period from July 21, 2005 (inception) to June 30, 2012, we have a net  loss of $296,350.

Liquidity and Capital Resources

Our activities have been financed from the proceeds of share subscriptions. From our inception on July 21, 2005 to June 30, 2013 we have raised a total of $188,870 from private offerings of our common stock. At June 30, 2013, we had cash and cash equivalents in the amount of $19,544, as compared to cash and cash equivalents in the amount of $23,075 on June 30, 2012. As of June 30, 2013, our total current assets were $21,189 and total current liabilities were $79,984. We currently do not have funds to conduct any more work on our Molly 1 claim.    Additional funds are required, the additional funding will likely come from equity financing from the sale of our common stock or sale of part of our interest in our mineral claims. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. However, we do not have any agreements or arrangements for additional financing  and we cannot provide investors with any assurance that we will be able to raise sufficient funding, from the sale of our common stock or any other form of additional financing to fund our exploration activities. In the absence of such financing, we will not be able to continue our exploration of the Claims and our business will likely fail.

Going Concern Consideration

We have not generated any revenues since inception. As of June 30, 2013, the Company had accumulated losses of $296,350. Our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors. Our financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

20


 

Off Balance Sheet Arrangements.

We have no off-balance sheet arrangements.

Summary of Critical Accounting Estimates

Recently issued accounting pronouncements  

Recent pronouncements with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company, as defined by Item 10 of Regulation S-K is not required to provide the information required by this item.

Item 8.   Financial Statements and Supplementary Data

The financial statements are set forth immediately following the signature page and are incorporated herein by reference.

Item 9.   Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.  Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2013. Based on this evaluation, our principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective, as of June 30, 2013, to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that the Company’s disclosure and controls are designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, except for the lack of segregation of accounting duties as a result of limited personnel resources.

Lack of Segregation of Duties

Management is aware that there is a lack of segregation of accounting duties as a result of limited personnel. However, at this time management has decided that considering the abilities of the personnel now involved and the control procedures in place, the risks associated with such lack of segregation are low and the potential benefits of adding employees to clearly segregate duties do not justify the substantial expenses associated with such increases. Management will periodically reevaluate this situation.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rules 13a-15(f) under the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive, principal operating and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

21


 

The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records, that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management, including the Company’s Chief Executive Officer and Principal Financial Officer assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2013. In making this assessment, management used the framework in “Internal Control - Integrated Framework” promulgated by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the “COSO” criteria.

In performing the assessment, management noted that our board of directors is performing the duties of the audit committee, there is no independent director, and none of the members is considered a financial expert. Our management believes that the lack of a financial expert on our board of directors means that no member of our board of directors has the financial expertise to review our financial statements for potential errors and provide the necessary oversight over our management's activities in the event of a management override of our internal control policies. Our management believes that this lack of a financial expert on our board of directors raises a reasonable possibility that a material misstatement of our annual or interim financial statements may not be timely prevented or detected and that it should therefore be considered a material weakness in our internal control over financial reporting. Because of this material weakness, our management believes that as of June 30, 2013, our company’s internal controls over financial reporting were not effective. The Company does have plans to add additional directors.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

CHANGES IN INTERNAL CONTOLS

There were no changes in our internal controls over financial reporting that occurred during our fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Company’s management, including the chief executive officer and principal financial officer, do not expect that its disclosure controls or internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management’s override of the control. The design of any systems of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Individual persons perform multiple tasks which normally would be allocated to separate persons and therefore extra diligence must be exercised during the period these tasks are combined. Management is aware of the risks associated with the lack of segregation of duties at the Company due to the small number of employees currently dealing with general administrative and financial matters. Although management will periodically reevaluate this situation, at this point it considers the risks associated with such lack of segregation of duties and that the potential benefits of adding employees to segregate such duties do not justify the substantial expense associated with such increases. It is also recognized the Company has not designated an audit committee and no member of the board of directors has been designated or qualifies as a financial expert. The Company should address these concerns at the earliest possible opportunity.

22


 

Item 9B.  Other Information

None.

PART III

Item 10.                 Directors, Executive Officers and Corporate Governance

The following sets forth certain information regarding our director and executive officer:

Name   Age Positions and Offices
     
Jag Sandhu 45  President, Chief Executive Officer, Chief Financial Officer and Director

Jag Sandhu

Jag Sandhu has been our President and Director since our inception on July 21, 2005 and has acted as our Chief Executive Officer since July 22, 2006 and our Chief Financial Officer since September 7, 2010. From January 2007 to present, Mr. Sandhu has been the president of JNS Capital Corp., a company engaged in providing Corporate Finance/Development and Investor Relations services to publicly traded junior exploration companies. From November 2004 to January 2007, Mr. Sandhu was Vice President of Corporate Finance for Pacific North West Capital Corp., a public company trading on the TSX Exchange and the OTCBB. From March 2002 to October 2004 Mr. Sandhu was Vice President of Corporate Development and Director of Nicer Canada Corp, a public company trading on the TSX Venture Exchange. From February 2000 to November 2001 Mr. Sandhu was the Chief Financial Officer and Director of Network Technology Professionals Inc., which was a public company trading on the TSX Venture Exchange. From September 1998 to January 2000, Mr. Sandhu was Vice President of Corporate Development of Group West Systems Ltd. which traded on the Toronto Stock Exchange. Mr. Sandhu’s experience in the mining exploration business and as an officer of a public company and as our President and Chief Executive Officer led to his appointment to the board of directors.

Directors holds office until the next annual meeting of stockholders or until their successor have been duly elected and qualified. Executive officers are elected annually and serve at the discretion of our board of directors.

Significant Employees and Consultants

Other than our officers and directors, we currently have no other significant employees.

Conflicts of Interest

Mr. Jag Sandhu works with other mineral exploration companies. We do not have any written procedures in place to address conflicts of interest that may arise between our business and the business activities of Mr. Sandhu.

The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board established compensation or nominating committees. Since the Company is an early exploration stage company and has only one director such director performs the functions of such committees. Thus, there is a potential conflict of interest in that our sole director and officer has the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.

23


 

Involvement in Certain Legal Proceedings

There are no legal proceedings that have occurred within the past ten years concerning our directors or control persons, which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.

None of our directors or officers has been affiliated with any company that has filed for bankruptcy within the last ten years.  We are not aware of any proceedings to which any of our officers or directors, or any associate of any such officer or director, is a party adverse to our company or has a material interest adverse to it. 

Code of Ethics

The Company has not adopted a code of ethics because of the small size and limited resources of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance.

Section 16(a) of the Securities Exchange Act of 1934 requires officers and directors of the Company and persons who own more than 10% of a registered class of the Company's equity securities to file reports of ownership and changes in their ownership with the Securities and Exchange Commission, and forward copies of such filings to the Company. Based solely on our review of copies of such reports and representations from our executive officers and directors, we believe that our executive officers and directors complied with all Section 16(a) filing requirements during the fiscal year ended June 30, 2013.

Item 11.  Executive Compensation

The table below sets forth all compensation awarded to, earned by, or paid to our chief executive officer for all services rendered in all capacities to us for the last two fiscal years. No executive officer earned compensation in excess of $100,000 during our 2013 fiscal year.

SUMMARY COMPENSATION TABLE

            Non-Equity  Nonqualified All  
Name and       Stock Option Incentive Plan  Deferred Other  
Principal   Salary Bonus Awards Awards Compensation  Compensation Compensation  Total
Position Year ($) ($) ($) ($) ($)  Earnings ($) ($) ($)
Jag Sandhu 2013 0 0 0 0 0 0 $0(1) $0(1)
President, Chief
Executive Officer,
Chief Financial
Officer
2012 0 0 0 0 0 0 $0(1) $0(1)
                   

  (1) Represents compensation paid to Mr. Sandhu for consulting services provided to us.

Outstanding Equity Awards

There have been no equity awards of any kind granted to any of the Company’s executive officers since our inception on July 21, 2005.  

24


 

Employment Agreements

We are not presently a party to any employment or consulting agreements. 

Director Compensation

Our directors have not received any compensation for services rendered in their capacity as directors of the Company except that Don Blackadar, a former director, was granted  immediately exercisable options to purchase 250,000 shares of our common stock at $0.01 per share on August 31, 2010. 

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table lists, as of September 11, 2013, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

The percentages below are calculated based on 12,338,604 shares of our common stock issued and outstanding as of September 11, 2013. Unless otherwise indicated, the address of each person listed is c/o Nava Resources, Inc., Suite 206 – 595 Howe Street, Vancouver, B.C., Canada V6C 2T5.

Title of Class Name of Beneficial Owner Amount and
Nature of
Beneficial
Ownership
Percent of Class
Common Stock: Jag Sandhu
President, Chief Executive
Officer and Director
5,500,000 (1) 44.6%
Common Stock: Pamela Pickett
120 Caspian Way
Brigadoon
Perth, Australia 6069
5,500,000 44.6%
All executive officers and directors as a group 1 person)   5,500,000 44.6%

(1)     Includes 2,000,000 shares held by Amarjit Sandhu, the wife of Jag Sandhu.

Item 13.  Certain Relationships and Related Transactions

Jag Sandhu, our President, Chief Executive Officer and a director provides consulting services to us. Since July 1, 2011 to date we have paid Mr. Sandhu an aggregate of $ NIL for his services.

As of June 30, 2013 $511 was due to a director of the Company. This amount is unsecured, is due on demand and has no fixed terms of repayment.

25


 

Director Independence

We are not subject to the listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.”  Our director  does not meet the definition of “independent” as promulgated by the rules and regulations of the NYSE Alternext US (formerly known as the American Stock Exchange).

Item 14.   Principal Accounting Fees and Services

On July 9, 2012 we changed our registered independent auditor to Dale Matheson Carr-Hilton Labonte LLP

Chartered Accountants ("DMCL”) from Mackay LLP. The fees billed to the Company from DMCL and Mackay are set forth below:

  Fiscal year ending
June 30, 2013
  Fiscal year ending
June 30, 2012
 
Audit Fees $7,000 (DMCL)     $7,000 (DMCL)  
Audit Related Fees $3,000 (DMCL)   $3,900 (Mackay)  
Tax Fees 0   0  
All Other Fees 0   0  

As of June 30, 2013, the Company did not have a formal documented pre-approval policy for the fees of the principal accountant. 

PART IV

Item 15.  Exhibits, Financial Statement Schedules

(a) Financial Statements:

Our financial statements, as indicated by the Index to Consolidated Financial Statements set forth below, begin on page F-1 of this Form 10-K, and are hereby incorporated by reference. Financial statement schedules have been omitted because they are not applicable or the required information is included in the financial statements or notes thereto.

BLOX, INC. (Formerly Nava Resources, Inc.)
 (An Exploration Stage Company)
June 30, 2013

Index

ConsolidatedBalance Sheets 28
ConsolidatedStatements of Operations 29
ConsolidatedStatements of Cash Flows 30
ConsolidatedStatement of Stockholders' Deficit 31
Notes to the Consolidated Financial Statements 32 - 36

26


 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Blox, Inc.

We have audited the accompanying consolidated balance sheets of Blox, Inc. (an exploration stage company) as of June 30, 2013 and 2012, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years ended June 30, 2013 and 2012, and the period from July 21, 2005 (inception) through June 30, 2013.  These consolidated financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position Blox, Inc. as of June 30, 2013 and 2012, and the results of its operations and its cash flows for the years ended June 30, 2013 and 2012,  and the period from July 21, 2005 (inception) through June 30, 2013 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated.  The Company requires additional funds to meet its obligations and the costs of its operations.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in this regard are described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Dale Matheson Carr-Hilton Labonte LLP
CHARTERED ACCOUNTANTS

Vancouver, Canada
September 5, 2013

27


 

BLOX, INC. (Formerly Nava Resources, Inc.)
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS

    June 30,
2013
    June 30,
2012
 
             
ASSETS            
             
Current            
      Cash and cash equivalents $ 19,544   $ 23,075  
      Prepaid expense   995     2,500  
             
    20,539     25,575  
Equipment   650     76  
             
TOTAL ASSETS $ 21,189   $ 25,651  
             
             
LIABILITIES            
             
Current            
      Accounts payable and accrued liabilities $ 34,474   $ 5,584  
      Due to related party (note 5)   511     1,089  
      Loan payable (note 5)   45,000     -  
             
Total current liabilities   79,985     6,673  
             
STOCKHOLDERS’ EQUITY (DEFICIT)            
      Common stock            
      400,000,000 common shares authorized, $0.00001 par value            
      12,338,604 common shares issued and outstanding
            (June 30, 2012 –  12,338,604)
  123     123  
      Additional paid-in capital   237,431     236,793  
      Deficit accumulated during the exploration stage   (296,350 )   (217,938 )
             
Total stockholders’ equity (deficit)   (58,796 )   18,978  
             
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) $ 21,189   $ 25,651  

The accompanying notes are an integral part of these consolidated financial statements.

28


 

BLOX, INC. (Formerly Nava Resources, Inc.)
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS

                Accumulated
from July 21,
 
    Year ended     Year ended     2005 (date of
inception) to
 
    June 30,
2013 
    June 30,
2012 
    June 30,
2013  
 
                   
EXPENSES                  
      Amortization $ 352   $ 47   $ 1,593  
      Consulting   -     -     16,000  
      Consulting – stock-based compensation   -     -     48,047  
      Exploration costs   -     2,850     19,474  
      Office and miscellaneous   1,255     1,139     12,222  
      Professional fees   76,168     20,055     207,529  
      Professional fees - stock-based compensation   638     -     638  
                   
Operating loss   (78,413 )   (24,091 )   (305,503 )
                   
Other items                  
      Cost recovery   -     -     1,000  
      Interest income   1     27     8,153  
                   
NET AND COMPREHENSIVE LOSS $ (78,412 ) $ (24,064 ) $ (296,350 )
                   
                   
BASIC AND DILUTED LOSS                  
PER SHARE $ (0.01 ) $ (0.00 )      
                   
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:                  
                   
BASIC AND DILUTED   12,338,604     12,338,604        

The accompanying notes are an integral part of these consolidated financial statements.

29


 

BLOX, INC. (Formerly Nava Resources, Inc.)
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS

                Accumulated  
                from July 21,  
    Year ended     Year ended     2005 (date of inception) to  
    June 30, 2013     June 30, 2012      June 30, 2013  
                   
CASH FLOWS FROM OPERATING ACTIVITIES                  
      Net loss $ (78,412 ) $ (24,064 ) $ (296,350 )
      Non-cash operating items:                  
           Amortization   351     47     1,592  
           Consulting – stock based compensation   -     -     48,047  
           Professional fees – stock based compensation   638     -     638  
      Changes in non-cash working capital items:                  
           Prepaid expense   1,505     (2,500 )   (995 )
           Accounts payable and accrued liabilities   28,480     (9,001 )   34,064  
      Net cash used in operating activities     (47,437 )   (35,518 )   (213,003 )
                   
CASH FLOWS FROM INVESTING ACTIVITIES                  
           Acquisition of equipment   (925 )   -     (2,243 )
      Net cash used in investing activities   (925 )   -     (2,243 )
                   
CASH FLOWS FROM FINANCING ACTIVITIES                  
           Issuance of capital stock   -     -     188,870  
           Loan payable   45,000     -     45,000  
           Due to related parties   (169 )   (3,587 )   920  
      Net cash provided by financing activities   44,831     (3,587 )   234,790  
Change in cash and cash equivalents   (3,532 )   (39,105 )   19,544  
                   
Cash and cash equivalents, beginning   23,075     62,180     -  
Cash and cash equivalents, ending $ 19,544   $ 23,075   $ 19,544  
                   
Cash and cash equivalents consists of:                  
           Cash on hand $ 19,544   $ 1,202   $ 19,544  
           Term deposit   -     21,873     -  
  $ 19,544   $ 23,075   $ 19,544  
                   
Supplemental disclosures with respect to cash flows:                  
      Cash paid during the period for:                  
           Interest $ -   $ -   $ -  
           Income taxes $ -   $ -   $ -  

The accompanying notes are an integral part of these consolidated financial statements.

30


 

BLOX, INC. (Formerly Nava Resources, Inc.)
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF DEFICIT

  Common
shares –
number
Common
shares –
paid-in
capital
Additional
paid-in
capital
Subscription
received in
advance
Deficit
accumulated
during
exploration stage
Total
July 21, 2005 (inception) - $- $- $- $- $-
             
Issuance of capital stock ($0.001/share) 200,000 2 198 - - 200
Subscriptions received - - - 14,000 - 14,000
Net loss - - - - (1,750) (1,750)
             
Balance, June 30, 2006 200,000 2 198 14,000 (1,750) 12,450
             
Issuance of capital stock ($0.00001/share) 39,800,000 398 - - - 398
Cancellation of common stock ($0.00001/share) (29,000,000) (290) - - - (290)
Issuance of capital stock ($0.15/share) 874,104 9 131,107 (14,000) - 117,116
Issuance of capital stock ($0.16/share) 352,000 4 56,316 - - 56,320
Net loss - - - - (16,103) (16,103)
             
Balance, June 30, 2007 12,226,104 123 187,621 - (17,853) 169,891
             
Net loss - - - - (42,281) (42,281)
             
Balance, June 30, 2008 12,226,104 123 187,621 - (60,134) 127,610
             
Net loss - - - - (30,388) (30,388)
             
Balance, June 30, 2009 12,226,104 123 187,621 - (90,522) 97,222
             
Issuance of capital stock ($0.01/share) 37,500 - 375 - - 375
Stock-based compensation - - 2,798 - - 2,798
Net loss - - - - (25,286) (25,286)
             
Balance, June 30, 2010 12,263,604 123 190,794 - (115,808) 75,109
             
Issuance of capital stock ($0.01/share) 75,000 - 750 - - 750
Stock-based compensation - - 45,249 - - 45,249
Net loss - - - - (78,066) (78,066)
             
Balance, June 30, 2011 12,338,604 123 236,793 - (193,874) 43,042
             
Net loss - - - - (24,064) (24,064)
             
Balance, June 30, 2012 12,338,604 123 236,793 - (217,938) 18,978
             
Stock-based compensation - - 638 - - 638
Net loss - - - - (78,412) (78,412)
             
Balance, June 30, 2013 12,338,604 $123 $237,431 $- $(296,350) $(58,796)

31


 

BLOX, INC. (Formerly Nava Resources, Inc.)
(An Exploration Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2013

1. NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS

Blox, Inc. (the "Company") was incorporated on July 21, 2005 under the laws of the state of Nevada. The Company’s wholly owned subsidiary, Nava Resources, Canada Inc. (“Nava Resources, Canada”), was incorporated in Canada on August 9, 2005. The Company is an exploration stage company. The Company’s principal business is the acquisition and exploration of mineral properties. The Company has not yet determined whether its property contains mineral reserves that are economically recoverable. In January 2013, the Company changed its name from Nava Resources, Inc. to Blox, Inc.

On June 19, 2013, the Company signed an agreement with International Eco Endeavors Corp. (“Eco Endeavors”) to complete a business combination with Eco Endeavors and Ourco Capital Ltd. (“Ourco”), a wholly owned subsidiary of the Company formed for the purpose of this business combination.  At amalgamation of Eco Endeavors and Ourco, all of Eco Endeavors common shares outstanding shall be cancelled, and the holders of Eco Endeavors’ common shares, other than the Company and Ourco, shall receive in exchange for their Eco Endeavors’ common shares cancelled, 60,000,000 units of the Company on a pro-rata basis with a deemed value of $0.05 per unit. Neither the Company nor Ourco shall receive any repayment of capital in respect of any Eco Endeavors’ common shares held by them that are cancelled. All of the common shares of Ourco outstanding immediately prior to the effective time shall be cancelled and replaced with an equal number of common shares of the amalgamated company (“Amalco”) formed between Eco Endeavors and Ourco, and will be a wholly owned subsidiary of the Company. As consideration for the issuance of the Company’s units, Amalco shall issue the Company one common share of Amalco for each unit issued. This agreement is subject to the Company’s completion of due diligence of Eco Endeavors which has not yet been completed. Eco Endeavors sources, develops, and operates renewable energy projects worldwide with a focus on Europe and North America.

On June 22, 2013, the Company entered into a share purchase agreement with Waratah Investments Limited (“Waratah”) where the Company shall purchase all of Waratah’s right, title, and interest in the Quivira Gold (“Quivira”) shares, of which Waratah holds 100% of the outstanding shares. As consideration for the Quivira shares, the Company will issue to Waratah 60,000,000 shares of common stock and 60,000,000 warrants. Each warrant entitles the holder to purchase one additional common share at $0.05 for a period of five years from the closing date. Quivira, a subsidiary of Waratah Investments, owns and operates gold and diamond mining properties in Ghana.

The closing of the agreement is subject to the completion of due diligence and the completion of a private placement.  The Agreements provide that closing is subject to completion of a private placement financing of up to US$2,500,000, consisting of units priced at $0.05 per unit, with each unit comprises a share in the common stock of Nava and a share purchase warrant, exercisable at $0.05 for five years.  As of the issuance date of these financial statements, the due diligence and financing has not yet been completed.

Going Concern

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and has not paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The Company has incurred a net loss of $78,412 and $24,064 for the years ended June 30, 2013 and 2012, respectively, and has incurred cumulative losses since inception of $296,350. These factors raise substantial concern about the ability of the Company to continue as going concern. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties.

These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management of the Company has undertaken steps as part of a plan with the goal of sustaining Company operations for the next twelve months and beyond. These steps include: (a) continuing efforts to raise additional capital and/or other forms of financing; and (b) controlling overhead and expenses. There can be no assurance that any of these efforts will be successful.

32


 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These financial statements are presented in accordance with generally accepted accounting principles in the United States ("US GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") and are expressed in US dollars. The Company's fiscal year-end is June 30.

Principles of Consolidation

These consolidated financial statements include the accounts of the Company and Nava Resources, Canada. All intercompany balances and transactions have been eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas of estimate include the recognition of deferred income tax assets and the measurement of financial instruments and stock bases transactions. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash and short-term investments with original maturities of less than three months.

Foreign Currency Translation

The Company’s functional currency is the Canadian dollar. The financial statements of the Company are translated to United States dollar equivalents. Assets and liabilities denominated in foreign currencies are translated into United States dollar equivalents at rates of exchange in effect at the balance sheet date. Average rates for the year are used to translate revenues and expenses.

The cumulative translation adjustment, if any, on translation to the reporting currency is reported as a separate component of shareholders’ equity, whereas gains and losses arising from foreign currency transactions are included in results of operations.

Equipment

Amortization is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives. Amortization is computed at 45% per annum using the declining balance method.

Impairment or Disposal of Long-Lived Assets

The Company accounts for the impairment or disposal of long-lived assets according to the Financial Accounting Standards Board’s (“FASB’) Accounting Standards Codification (“ASC”) 360 “Property Plant and Equipment”.  ASC 360 clarifies the accounting for the impairment of long-lived assets and for long-lived assets to be disposed of, including the disposal of business segments and major lines of business. Long-lived assets are reviewed when facts and circumstances indicate that the carrying value of the asset may not be recoverable. When necessary impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates.

Mineral Property Interest

The Company is engaged in the acquisition, exploration and development of mineral properties. In accordance with the SEC Industry Guide 7, mineral property acquisition costs are capitalized and mineral properly option payments and exploration costs are expensed to operations as incurred. Mineral property exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized.

To date the Company has not established any proven or probable reserves on its mineral property.

Basic and Diluted Net Loss Per Share

The Company computes loss per share in accordance with ASC 260, “Earnings per Share”, which requires presentation of both basic and diluted loss per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted loss per share, the average stock price for the period issued in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted loss per share excludes all dilutive potential shares if their effect is anti-dilutive.

33


 

Stock Based Compensation

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation – Stock Compensation”, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and additional paid-in capital in shareholders’ equity/(deficit) over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

The Company issues stock to consultants for various services. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services.

Income Taxes

Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

The FASB has issued ASC 740 “Income Taxes”. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company has not met the more-likely-than-not threshold as of June 30, 2012.

Fair Value of Financial Instruments

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

  Level 1 – fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
  Level 2 – fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
  Level 3 – fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Financial instruments classified as Level 1 – quoted prices in active markets include cash and cash equivalents.

These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.

34


 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2012. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash and cash equivalents, accounts payable and due to related parties.

Recent Accounting Pronouncements

Recent pronouncements with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company.

3. EQUIPMENT

    Total  
Cost:      
At June 30, 2011 and 2012   1,317  
Additions   926  
At June 30, 2013 $ 2,243  
       
Amortization:      
At July 1, 2011 $ 1,194  
Charge for the year   47  
At June 30, 2012   1,241  
Charge for the year   352  
At June 30, 2013 $ 1,593  
       
Net book value:      
At June 30, 2012 $ 76  
At June 30, 2013 $ 650  

4. MINERAL PROPERTY INTEREST

On October 20, 2010, the Company staked a claim located in the Victoria mining division of the Province of British Columbia, Canada. During the year ended June 30, 2012, the Company incurred exploration costs amounting to $Nil (2012 - $2,850) on the Property.

5. RELATED PARTY TRANSACTIONS

As at June 30, 2013, $511 (2012 - $1,089) was due to a director of the Company and a company controlled by a director of the Company. These amounts are unsecured, do not bear interest and have no fixed terms of repayment.

As at June 30, 2013, $45,000 is owing to a related company of Waratah Investments Limited (note 1). The loan is unsecured, does not bear interest and has no fixed terms of repayment.

6. STOCK OPTIONS

The Company has adopted a Stock Incentive Plan (the “Plan”). The Plan provides that the total number of shares of stock reserved and available for distribution under the plan shall be 10,000,000 shares of common stock of the Company. The stock options granted under the Plan shall have a maximum term of five years.

During the year ended June 30, 2013, the Company granted 100,000 stock options, exercisable at $0.01 per share until January 16, 2018. The stock options vested immediately and were recorded at a fair value of $638. The fair value of the options granted was estimated at the grant date using the Black-Scholes Option Pricing Model with the following weighted average assumptions: expected annual volatility: 80.30%, risk-free interest rate:  0.75%, expected life: 5 years and expected dividend yield: 0%. The stock options carry a minimum exercise clause whereby the minimum shares exercised must be the lesser of 25,000 shares or the remaining number of unexercised shares outstanding.

35


 

A summary of the status of the Company’s stock options as of June 30, 2013 and changes during the year are as follows:

    Number of  
    options  
Options outstanding, June 30, 2011 and 2012   287,500  
Granted   100,000  
Options outstanding and exercisable, June 30, 2013   387,500  

At June 30, 2013, the weighted average exercise price and weighted average life of the options are $0.01 and 2.8 years, respectively.

7. INCOME TAXES

A reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company's income tax expense as reported is as follows:

    June 30,     June 30,  
    2013     2012  
Net loss before income taxes per financial statements $ (78,412 ) $ (24,064 )
Income tax rate   34%     34%  
Income tax recovery   (26,678 )   (8,200 )
Unrecognized items for tax purposes   -     -  
Change in tax rate   -     800  
Valuation allowance change   26,678     7,400  
Provision for income taxes $ -   $ -  

The significant components of deferred income tax assets at June 30, 2013 and 2012 are as follows:

    June 30,     June 30,  
    2013     2012  
Net operating loss carryfoward $ 85,178   $ 58,500  
Valuation allowance   (85,178 )   (58,500 )
Net deferred income tax asset $ -   $ -  

The amount recognized as a deferred income tax asset must reflect that portion of the income tax loss carry forwards that is more likely-than-not to be realized from future operations. The Company has chosen to provide a full valuation allowance against all available income tax loss carry forwards. The Company has recognized a valuation allowance for the deferred income tax asset since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years: The valuation allowance is reviewed annually. When circumstances change and which cause a change in management's judgment about the realizability of deferred income tax assets, the impact of the change on the valuation allowance is generally reflected in current income.

No provision for income taxes has been provided in these consolidated financial statements due to the net loss for the years ended June 30, 2013 and 2012. At June 30, 2013, the Company has net operating loss carry forwards of approximately $250,000, which expire commencing 2026. The potential tax benefit of these losses may be limited due to certain change in ownership provisions under Section 382 of the Internal Revenue Code ("IRS") and similar state provisions. IRS Section 382 places limitations (the "Section 382 Limitation") on the amount of taxable income which can be offset by net operating loss carry forwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct operating loss carry forwards in excess of the Section 382 Limitation. Due to these "change in ownership" provisions, utilization of the net operating loss and tax credit carry forwards may be subject to an annual limitation regarding their utilization against taxable income in future periods. The Company has not concluded its analysis of Section 382 through June 30, 2013, but believes the provisions will not limit the availability of losses to offset future income.

36


 

(b) Exhibits:

Exhibit Description
3.1 Articles of Incorporation of Registrant*
3.2 Bylaws of the Registrant*
3.3 Articles of Incorporation of Nava Resources Canada, Inc.*
3.4 Certificate of Amendment to Articles of Incorporation of Registrant*
3.5 Company’s amended Articles of Incorporation which reflects its name change
4.1 Specimen Common Stock Certificate*
4.2 Form of Regulation S Subscription Agreement for Shares of Common Stock*
4.3 Form of Regulation S Subscription Agreement for Units*
4.4 Form of Warrant Certificate*
10.1 Bill of Sale of North Claim 1 to Jag dated August 22, 2007*
10.2 Bill of Sale of North Claim 2 to Jag dated August 22, 2007*
10.3 Mineral Tenure Bill of Sale Completion for North Claim 1 dated November 22, 2007*
10.4 Mineral Tenure Bill of Sale Completion for North Claim 2 dated November 22, 2007*
10.5 Stock Option Plan
10.6 Share Purchase Agreement with Quivira Gold Ltd.. and Waratah Investments Ltd.
10.7 Amalgamation Agreement with International Eco Endeavors Corp. and KENDERESH ENDEAVORS CORP and KENDERES BIOGAZ TERMELO KORLATOLT FELE LOSSEGU TARSASAG
21.1 Subsidiaries of Registrant Nava Resources Canada Inc. and Ourco Capital Ltd.
31 Rule 13a-14(a)/15d14(a) Certifications
32 Section 1350 Certification
99.1 Report of MineStart Management Inc. dated December 7, 2007*

* Incorporated by reference to the registration statement on Form S-1, as filed by the Company with the Securities and Exchange Commission on May 1, 2008.

37


 

GLOSSARY OF GEOLOGICAL AND MINING TERMS

Certain terms used in this section and elsewhere in this prospectus are defined below.

Assessment  The amount of work, specified by provincial law, that must be performed each year in order to retain legal control of mining claims.  An assessment report is a description of work performed, documented according to specific guidelines.
   
Exploration  The work involved in looking for an economically viable mineral deposit (see “ore”).  This work involves a variety of techniques including prospecting, geological mapping, geochemical sampling and assaying, geophysical surveying, trenching and drilling.  
   
Exploration Stage  A discrete activity or group of related activities performed at a specific point in an exploration program.  Exploration programs typically proceed in stages as more information is obtained and the mineral potential becomes better understood.  The nature of work performed varies with both the nature of the property and the level of knowledge that exists regarding the geology and mineral potential of the area.  In areas or properties where little is known, mapping and geophysical and geochemical techniques are generally used to identify areas of particular interest which justify more detailed work.  Drilling is ultimately undertaken to explore targets of particular interest.  
   
Island Arc  An arcuate chain of islands in volcanically and seismically active zones at destructive plate margins.
   
Kuroko  A class of VMS deposit (see entry) formed in island arc environments. Named after mines on Honshu Island Japan.  The main metals in Kuroko deposits, in decreasing order of abundance are iron-zinc-lead and copper with associated silver and gold values.
   
Mineral Deposit  A mass of naturally occurring mineral material; e.g., metal ores or nonmetallic minerals, usually of economic value, without regard to mode of origin.  Mineral occurrence of sufficient size and grade that it might, under favorable circumstances, be considered to have economic potential.
   
Mineral Reserve The economically mienable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study.  This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.  A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.
   
Mineral Resource A concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material, including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction.  The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.  Mineral resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
   
MINFILE A computerized mineral inventory system maintained by the BC Ministry of Energy Mines and Petroleum Resources.  This represents a readily accessible information base for describing the nature and distribution of over 12,000 metallic, industrial mineral and coal occurrences within specific geological settings of British Columbia.

38


 
Ore The naturally occurring material from which a mineral or minerals of economic value can be extracted profitably or to satisfy social or political objectives. The term is generally but not always used to refer to metalliferous material, and is often modified by the names of the valuable constituent; e.g., iron ore.; ore mineral.
   
Polymetallic A mineral deposit with substantial metal values of different metals, for example, copper, lead, zinc, silver and gold.  
   
VMS Volcanogenic Massive Sulphide. VMS deposits are associated with, and created by volcanic-associated hydrothermal events in submarine environments.  Hence they occur within environments dominated by volcanic or volcanic-derived rocks. They typically occur as stratiform bodies within the enclosing host rocks.  

39


 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  BLOX, INC.

By: /s/Jag Sandhu
Name: Jag Sandhu
Title: President and Chief Executive Officer
(Principal Executive, Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. 

Signature   Title Date
     
/s/ Jag Sandhu     President, Chief Executive Officer September 11, 2013
Jag Sandhu and Director ( Principal Executive,  
  Financial and Accounting Officer)  


 
 


 




  SHARE PURCHASE AGREEMENT

           THIS SHARE PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into on June 19, 2013, among NAVA RESOURCES, INC., a Nevada corporation (the “ Purchaser ”), QUIVIRA GOLD LTD., a company incorporated in Ghana (the “ Company "), and WARATAH INVESTMENTS LIMITED, a limited liability company registered under the laws of Ghana (the “ Seller ”).

WITNESSETH:

           WHEREAS, the Seller owns all the issued and outstanding capital stock (the “ Shares" ) of the Company; 

           WHEREAS, on Closing, the Company will own all the issued and outstanding capital stock of Strategic Marketing Australia Pty. Ltd. (“ SMA ”), a company incorporated in Australian with an Australian business number of ABN 43009146089;

           WHEREAS, Leo Shield Exploration Ghana Ltd., a company incorporated in Ghana (" Leo Shield "), is a wholly-owned subsidiary of Okore Mining Pty Ltd. (“Okore”), a company incorporated in Ghana;

           WHEREAS, Okore is a party to an agreement (the " Leo Shield Agreement ") to sell 90% of the equity of Leo Shield to the Company, and obtain an assignment of a loan from Equus Mining Limited to Leo Shield; and

           WHEREAS, upon the consummation of the transactions described in the Leo Shield Agreement, the Purchaser desires to acquire from the Seller, and the Seller desires to sell to the Purchaser, the Shares upon the terms and conditions set forth herein.

           NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: 

ARTICLE I
DEFINITIONS

           Section 1.1 Certain Definitions . As used in this Agreement, the following terms have the respective meanings set forth below. 

                      (a) “ Action ” means any administrative, regulatory, judicial or other proceeding by or before any Governmental Authority or arbitrator.

                      (b) “ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” means the possession, directly or


 

indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the ability to elect the members of the board of directors or other governing body of a Person, and the terms “controlled” and “controlling” have correlative meanings.

                      (c) “Business Day” means a day on which banks are open for business in the State of Nevada.

                      (d) “Claims” means any and all claims, demands or causes of action, relating to or resulting from an Action.

                      (e) “ Contract ” means any contract, agreement, indenture, deed of trust, license, note, bond, mortgage, lease, guarantee and any similar understanding or arrangement, whether written or oral.

                      (f) “ Employees ” mean individuals who provide employment or employment-type services to the Company, SMA or Leo Shield or any of its respective Affiliates, other than any such individuals who cease such employment prior to the Closing, but including any such individuals hired after the date hereof and prior to the Closing. 

                      (g) “ Employee Benefit Plan ” means any employee benefit plan, program, policy, practices, or other arrangement providing benefits to any Employee or Former Employee, officer or director of the Company, SMA or Leo Shield or any of its respective Affiliates or any beneficiary or dependent thereof that is sponsored or maintained by the Company, SMA, Leo Shield or any of its Affiliates or contribute or are obligated to contribute, whether or not written, including without limitation any employee welfare benefit plan and any bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance, employment, change of control or fringe benefit plan, program or policy. 

                      (h) “ Employment Agreement ” means a written Contract or offer letter with or addressed to any Employee or Former Employee pursuant to which the Company, SMA, Leo Shield or any of its respective Affiliates shall, directly or indirectly, have any actual or contingent liability or obligation to provide compensation and/or benefits in consideration for past, present or future services.

                      (i) “ Encumbrances ” means security interests, liens, Claims, charges, title defects, deficiencies or exceptions (including, with respect to real property, defects, deficiencies or exceptions in, or relating to, marketability of title, or leases, subleases or the like affecting title), mortgages, pledges, easements, encroachments, restrictions on use, rights of-way, rights of first refusal, conditional sales or other title retention agreements, covenants, conditions or other similar restrictions (including restrictions on transfer), options, proxies or other encumbrances of any nature whatsoever.

                      (j) “ Former Employee ” means individuals who, prior to the Closing, provided employment or employment-type services to the Company, SMA, Leo Shield or any of its Affiliates. 

2


 

                      (k) “ GAAP ” means United States generally accepted accounting principles.

                      (l) “ Governmental Authority ” means any supranational, national, federal, state or local government, foreign or domestic, or the government of any political subdivision of any of the foregoing, or any entity, authority, agency, ministry or other similar body exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining to government, including any authority or other quasi-governmental entity established by a Governmental Authority to perform any of such functions. 

                      (m) “ Indebtedness ” of any Person means, without duplication, (i) all obligations of such Person for money borrowed; (ii) all obligations of such Person evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (iii) all obligations of such Person issued or assumed for deferred purchase price payments associated with acquisitions, divestments or other transactions; (iv) all obligations of such Person under leases required to be capitalized in accordance with GAAP, as consistently applied by such Person, and (v) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker's acceptance, guarantees or similar credit transaction, excluding in all cases in clauses (i) through (v) current accounts payable, trade payables and accrued liabilities incurred in the ordinary course of business. 

                      (n) “ Laws ” means all Australian, Canadian, Ghana and United States federal, state or local or foreign laws, constitutions, statutes, codes, rules, regulations, ordinances, executive orders, decrees or edicts by a Governmental Authority having the force of law and pertaining to the matters contemplated under this Agreement. 

                      (o) “ Liabilities ” means any and all debts, liabilities, commitments and obligations, whether or not fixed, contingent or absolute, matured or unmatured, direct or indirect, liquidated or unliquidated, accrued or unaccrued, known or unknown, whether or not required by GAAP to be reflected in financial statements or disclosed in the notes thereto. 

                      (p) “ Material Adverse Change ” means, when used in connection with a Person, means any change, event, violation, circumstance or effect that is, or could reasonably be expected to be, materially adverse to the business, assets, liabilities, capitalization, financial condition or results of operations of such Person and its parent (if applicable) or subsidiaries, taken as a whole, other than any change, event, violation, inaccuracy, circumstance or effect, (1) relating to the global economy or securities market in general, (2) resulting from changes in the price of precious or base metals, (3) resulting from the rate at which Canadian dollars or United States dollars can be exchanged into each other or for any foreign currency, or (4) relating to the precious or base metal mining industries in general and not specifically relating to or affecting such Person.

                      (q) “ Material Adverse Effect ” means, with respect to a Person, any change, effect, event, occurrence or state of facts which would reasonably be expected to be materially adverse to the business, operations or financial condition of such Person, and its Subsidiaries, taken as a whole, or on the ability of such Person to consummate the transactions contemplated by this Agreement, other than any change, effect, event, occurrence or state of facts, (1) that is generally applicable in the economy of the United States, (2) that is generally applicable in the United States securities markets, (3) generally affecting the industry in which the Person operates, (4) arising from or related to an act of international terrorism, or (5) relating to the announcement or disclosure of this Agreement and the transactions contemplated hereby. 

3


 

                      (r) “ MI 51-105 ” means Multilateral Instrument 51-105 – Issuers Quoted in the U.S. Over-the-Counter Markets as implemented as a rule or regulation in all jurisdictions of Canada other than Ontario.

                      (s) “ Person ” means an individual, partnership, corporation, limited liability company, joint stock company, unincorporated organization or association, trust, joint venture or Governmental Authority. 

                      (t) “ Required Consents ” means, collectively, (1) each consent or novation with respect to any Contract to which the Company, SMA, Leo Shield or any of its respective Affiliates is a party or by which any of its assets are bound required to be obtained from the other parties thereto by virtue of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby in order to avoid the invalidity of the transfer of such Contract, the termination or acceleration thereof, giving rise to any obligation to make a payment thereunder or to any increased, additional or guaranteed rights of any Person thereunder, a breach or default thereunder or any other change or modification to the terms thereof, and (2) each registration, filing, application, notice, transfer, consent, approval, order, qualification and waiver required from any third party or Governmental Authority by virtue of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. 

                      (u) “SEC” means the Securities and Exchange Commission.

                      (v) “Securities” means the Consideration Shares and the Warrants issued under Section 2.2.

                      (w) “Securities Act” means the Securities Act of 1933, as amended.

                      (x) “Subsidiaries” of any entity means, at any date, any Person, (1) the accounts of which would be consolidated with those of the applicable entity in such entity's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, or (2) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests or more than fifty percent (50%) of the profits or losses of which are, as of such date, owned, controlled or held by the applicable entity or one or more subsidiaries of such entity.

                      (y) “ Tax ” means any federal, state, local or foreign taxes, including but not limited to any income, gross receipts, payroll, employment, excise, severance, stamp, business, premium, windfall profits, environmental, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, service, service use, lease, lease use, transfer, registration, value added tax, or similar tax, any alternative or add-on minimum tax, and any estimated tax, in each case, including any interest, penalty, or addition thereto, whether disputed or not. 

4


 

                      (z) “ Tax Benefit ” means the Tax effect of any item of loss, deduction or credit or any other item (including increases in Tax basis) which decreases Taxes paid or required to be paid, including any interest with respect thereto or interest that would have been payable but for such item.

                      (aa) “ Tax Returns ” means all returns, declarations, reports, estimates, information returns and statements required to be filed in respect of Taxes. 

                      (bb) “ Taxing Authority ” means any Governmental Authority having jurisdiction over the assessment, determination, collection or other imposition of Taxes.

                      (cc) “ Warrants ” means stock purchase warrants of the Purchaser, each such warrant being exercisable to acquire one share in the common stock of the Purchaser at a price of $0.05 for a period of five (5) years from the Closing (as defined in Section 2.3), and each a “Warrant”. ”

           Section 1.2 References and Title . All references in this Agreement to articles, sections, subsections and other subdivisions refer to the articles, sections, subsections and other subdivisions of this Agreement unless expressly provided otherwise. Titles appearing at the beginning of any section or subdivision are for convenience only and do not constitute any part of such subdivisions and shall be disregarded in construing the language contained in such subdivisions. The words “this Agreement,” “this instrument,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited.  The phrases “this Section” and “this subsection” and similar phrases refer only to the sections or subsections hereof in which such phrases occur. Pronouns in masculine, feminine and neutral genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires. All dollar references herein shall be to United States dollars unless otherwise stated herein.

ARTICLE II
PURCHASE AND SALE OF SHARES

           Section 2.1 Purchase and Sale of Shares .  Upon the terms and subject to the conditions set forth herein, and on the basis of the representations and warranties contained herein, at the Closing (defined in Section 2.3), the Seller shall sell, convey, transfer, assign and deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller, all of the Seller's right, title and interest in and to the Shares, free and clear of any Encumbrance. The Shares constitute one hundred percent (100%) of the Company’s outstanding capital stock on a fully diluted basis, and no other Person has any Claim to the Shares or any equity interest in the Company. 

5


 

           Section 2.2 Consideration . As consideration for the purchase of the Shares, the Purchaser shall issue to the Seller 60,000,000 shares of common stock of the Purchaser (the “ Consideration Shares ”) valued at $0.05 per share, or an aggregate value of three million United States Dollars ($3,000,000), with each such Consideration Share having a Warrant attached for no additional consideration. The Purchaser agrees that it will account for the purchase of the Consideration Shares in accordance with the purchase price specified in this Section 2.2.  

           Section 2.3 Closing . The closing of the acquisition of the Shares by the Purchaser in consideration for the Securities (the “ Closing ”) shall occur at such place and in such manner as the Parties may reasonably determine, and in any event no later than two (2) Business Days after the date on which all of the conditions and obligations of the parties as set forth in Articles VII and VIII of this Agreement shall have been substantially satisfied in all material respects or otherwise duly waived, or on such other date and at such other place as the Purchaser and the Seller may hereafter agree upon in writing (such date and time of the Closing being referred to herein as the “ Closing Date ”).

           Section 2.4 Deliveries by the Purchaser . At the Closing, the Purchaser shall deliver to the Seller or a duly appointed representative of the Seller: 

  (a) Certificates representing the Securities, or an irrevocable instruction letter executed by the Purchaser instructing the transfer agent for the Purchaser to issue the Securities to the Seller;

  (b) The certificates described in Sections 8.1(a) and 8.1(b);

  (c) A good standing certificate of the Purchaser, dated not more than five (5) Business Days prior to the Closing Date; and

  (d) Such other

           Section 2.5 Deliveries by the Seller. At the Closing, the Seller shall deliver to the Purchaser the following:

  (a) Stock certificates representing the Shares, duly endorsed in blank or accompanied by stock powers duly executed in blank, or other instruments of transfer in form and substance reasonably satisfactory to the Purchaser;

  (b) The certificates described in Sections 8.2(a) and 8.2(b);

  (c) An abstract of the commercial register relating to the ownership and good standing of each of the Company, SMA and Leo Shield, dated not more than five (5) Business Days prior to the Closing Date;

  (d) An opinion of counsel to the Seller and the Company, opining as to the validity and enforceability of this Agreement and the transactions contemplated herein, the validity of the transfer of the Shares to the Purchaser, that all necessary governmental consents under the laws of Ghana have been duly and properly obtained to permit the transfer of the Shares to the Purchaser, that the Company and Leo Shields are duly incorporated and in good standing under the laws of Ghana, that the assets held by the Company, and Leo Shields are lawfully so held and any registrable interests are in good standing with applicable governmental authorities in Ghana, and the other matters reasonably requested by counsel to the Purchaser;

6


 
  (e) An opinion of counsel to the Seller and the Company, opining that SMA is duly incorporated and in good standing under the laws of Australia, that the assets held by SMA are lawfully so held and any registrable interests are in good standing with applicable governmental authorities in Australia, and the other matters reasonably requested by counsel to the Purchaser;

  (f) Signed agreements and other closing documents and records confirming that the Company has acquired 100% of SMA free and clear of Encumbrances, the Company has acquired 90% of Leo Shields free and clear of Encumbrances, and further signed agreements confirming that 90% of the debt receivable by Equus Mining from Leo Shields in the amount of $11,091,588.12 (the “ Equus Debt ”) has been assigned by Equus Mining to the Company, in consideration for the repayment by the Company to Equus of the Equus Debt;

  (g) Financial statements for the Company, SMA and Leo Shields prepared in accordance with U.S. GAAP and audited in accordance with applicable U.S. auditing standards, and in the case of Leo Shields, confirming the existence of the Equus Debt, and other information required under the rules of the SEC for purposes of inclusion in the Purchaser's filing of a Current Report on Form 8­K disclosing the consummation of the transactions contemplated by this Agreement;

  (h) A technical report on the mineralization and resources (if applicable)  on the Kwatechi prospecting license and the Grumesa-Awisam concession in such form as the Purchaser may reasonably request in order to comply with the Laws; and

  (i) Such other documents and instruments as reasonably requested by the Purchaser, including but not limited to maters required to be disclosed in the Form 8-K to be filed by the Purchaser as described in Section 2.7(f).

           Section 2.6 Further Assurances . From time to time from and after the Closing Date, as and when reasonably requested by a party, the other parties shall execute and deliver all such other instruments and shall take further actions as the party reasonably may deem necessary or desirable in order to confirm or record or otherwise effectuate the purchase and sale of the Shares for the issuance of the Securities.

7


 

ARTICLE III
THE SECURITIES

           Section 3.1 Securities . The Securities issued to the Seller upon the Closing shall be deemed to have been issued in full satisfaction of all rights of the Seller pertaining to his rights in and to the Shares. After the Closing, the holders of certificates formerly representing shares of the Company’s common stock shall cease to have any rights as shareholders of the Company.

           Section 3.2 Registration Exemption . It is intended that the Securities to be issued pursuant to this Agreement will be issued pursuant to Regulation S of the Securities Act and therefore shall not require registration under the Securities Act or any Law.  

           Section 3.3 Restrictive Legends . Certificates evidencing the Securities, pursuant to this Agreement and any securities issued on exercise or exchange of any of the Securities, may bear one or more of the following legends, including without limitation, any legend required by the laws of any jurisdiction in which a holder of Securities resides, and any legend required by applicable law, including without limitation, any legend that will be useful to aid compliance with Regulation S or other regulations adopted by the SEC under the Securities Act:

“THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”

“TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”

           Section 3.4 Subsidiary of the Purchaser . Effective as of the Closing, the Company shall be a wholly-owned subsidiary of the Purchaser (or an entity that is itself directly or indirectly wholly controlled by the Purchaser). 

           Section 3.5 Seller Undertaking .

           (a) Pursuant to MI 51-105 a subsequent trade in the Securities in or from any province in Canada will be a distribution subject to the prospectus and registration requirements of applicable Canadian securities legislation unless certain conditions are met, which conditions include, among others, a requirement that any certificate representing the Securities (or ownership statement issued under a direct registration system or other book entry system) bear the restrictive legend (the “ 51-105 Legend ”) specified in MI 51-105.

8


 

           (b) The Seller undertakes not to trade or resell any of the Securities in or from any provinces subject to MI 51-105. The Seller understands and agrees that the Purchaser and others will rely upon the truth and accuracy of these representations and warranties and agrees that if such representations and warranties are no longer accurate or have been breached, the Seller will immediately notify the Purchaser.

           (c) By executing and delivering this Agreement and as a consequence of the representations and warranties made by the Seller in this section, the Seller will have directed the Purchaser not to include the 51-105 Legend on any certificates representing the Securities to be issued to the Seller. As a consequence, the Seller will not be able to rely on the resale provisions of MI 51-105, and any subsequent trade in any of the Securities in or from the provinces subject to MI 51-105 will be a distribution subject to the prospectus and registration requirements of MI 51-105.

           (d) If the Seller wishes to trade or resell any of the Securities in or from a province subject to MI 51-105, the Seller agrees and undertakes to return, prior to any such trade or resale, any certificate representing the Securities to the Purchaser’s transfer agent to have the 51-105 Legend imprinted on such certificate or to instruct the Purchaser’s transfer agent to include the 51-105 Legend on any ownership statement issued under a direct registration system or other book entry system.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

           As an inducement to the Seller to enter into this Agreement and to consummate the transactions contemplated herein, the Purchaser represents and warrants to the Company and the Seller that the following are true and correct as of the date hereof and will be true and correct at Closing:

           Section 4.1 Organization . The Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada.  The Purchaser has all requisite power to own, operate and lease its business and assets and carry on its business as the same is now being conducted.

           Section 4.2 Corporate Power and Authority . The Purchaser has all requisite power and authority to enter into and deliver this Agreement and the other agreements, documents and instruments to be executed and delivered in connection with this Agreement (collectively, the “ Transaction Documents ”) and to consummate the transactions contemplated hereby and thereby. The execution, delivery, and performance of this Agreement and the Transaction Documents by the Purchaser and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Purchaser and no other action or corporate proceeding on the part of the Purchaser is necessary to authorize the execution, delivery, and performance by the Purchaser of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and thereby.  This Agreement and each of the Transaction Documents have been duly executed and delivered by the Purchaser and constitute the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with their respective terms.

9


 

           Section 4.3 Conflicts; Consents and Approvals . Neither the execution nor delivery by the Purchaser of this Agreement and the Transaction Documents to be executed and delivered by it in connection with this Agreement or the Transaction Documents, nor the consummation of the transactions contemplated hereby and thereby, will:

           (a) conflict with, or result in a breach of any provision of, the organizational documents of the Purchaser;

           (b) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event that, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or entitle any Person (with the giving of notice, the passage of time or otherwise) to terminate, accelerate, modify or call a default under, or give rise to any obligation to make a payment under, or to any increased, additional or guaranteed rights of any Person under, or result in the creation of any Encumbrance upon any of the properties or assets of the Purchaser or the Securities under any of the terms, conditions or provisions of, (1) the organizational documents of the Purchaser, (2) any Contract to which the Purchaser is a party or to which any of its properties or assets may be bound which, if so affected, would either have a Material Adverse Effect or be reasonably likely to prevent the consummation of the transactions contemplated herein, or (3) any permit, registration, approval, license or other authorization or filing to which the Purchaser is subject or to which any of its properties or assets may be subject; 

           (c) require any action, consent or approval of any non-governmental third party, other than the consent of the Purchaser’s Board of Directors; 

           (d) violate any order, writ, or injunction, or any material decree, or material Law applicable to the Purchaser or any of its, business, properties, or assets; or

           (e) require any action, consent or approval of, or review by, or registration or filing by the Purchaser with any Governmental Authority other than the filing of a Current Report on Form 8-K regarding the consummation of the transactions contemplated hereby. 

           Section 4.4 Securities . As of the Closing, all of the Consideration Shares shall be duly authorized, validly issued, fully paid and non-assessable, and not issued in violation of any preemptive or similar rights, and the Warrants will be duly authorized and validly issued.  As of the Closing, the Seller will acquire good and valid title to such Securities, free and clear of any Encumbrances, other than restrictions under applicable securities laws.

           Section 4.5 No Material Adverse Effect . As of the date of this Agreement, (a) the Purchaser has (1) maintained its books and records in accordance with past accounting practice, and (2) used all reasonable commercial efforts to preserve intact the assets and the business organization and operations of the Purchaser, to keep available the services of its employees and to preserve its relationships with customers, suppliers, licensors, licensees, contractors and other persons with whom the Purchaser have business relations, (b) no Material Adverse Effect on the Purchaser has occurred, and (c) there has been no event, occurrence or development that has had, or would reasonably be expected to have, a Material Adverse Effect on the ability of the Purchaser to timely consummate the transactions contemplated hereby.

10


 

           Section 4.6 Compliance with Law . The Purchaser and each of its officers, directors, employees and agents have complied in all respects with all Laws applicable to the Purchaser and its operations. Neither the Purchaser nor any of its officers, directors or agents have received any notice from any Governmental Authority that the Purchaser has been or is being conducted in violation of any applicable Law or that an investigation or inquiry into any noncompliance with any applicable Law is ongoing, pending or threatened. 

           Section 4.7 Litigation . There is no Action pending or threatened against the Purchaser or any of its officers or directors in each case that, (a) relates to the Purchaser, its assets or its business, or (b) as of the date hereof, seeks, or could reasonably be expected, to prohibit or restrain the ability of the Purchaser to enter into this Agreement or to timely consummate any of the transactions contemplated hereby, and there is no reasonable basis for any such Action. There are no judgments, decrees, agreements, memoranda of understanding or orders of any Governmental Authority outstanding against the Purchaser. 

           Section 4.8 Permits; Compliance . The Purchaser is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and assets and to carry on its business as it is now being conducted and as it will be conducted through to the Closing (collectively, the “ Purchaser Permits ”). There is no Action pending, or threatened, regarding any of the Purchaser Permits and each such Permit is in full force and effect.  The Purchaser is not in conflict with, or in material default (or would be in default with the giving of notice, the passage of time, or both) with, or in violation of, any of the Purchaser Permits.

           Section 4.9 SEC Reports; Financial Statements . The Purchaser has filed all reports, schedules, forms, statements and other documents required to be filed by the Purchaser under the Securities Act and the Exchange Act (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Reports ”).  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The financial statements of the Purchaser included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Purchaser as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

11


 

           Section 4.10 Material Changes . Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Purchaser has not incurred any liabilities (contingent or otherwise) other than, (a) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice which in the aggregate will not exceed $10,000 as of the Closing Date, and (b) liabilities not required to be reflected in the Purchaser’s financial statements pursuant to GAAP or disclosed in filings made with the SEC, (iii) the Purchaser has not altered its method of accounting, (iv) the Purchaser has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, or made any agreements to purchase, any shares of its capital stock and (v) the Purchaser has not issued any equity securities to any officer, director or Affiliate. The Purchaser does not have pending before the SEC any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no event, liability or development has occurred or exists with respect to the Purchaser or its business, properties, operations or financial condition, that would be required to be disclosed by the Purchaser under applicable securities laws at the time this representation is made that has not been publicly disclosed at least four (4) Business Day prior to the date that this representation is made.

           Section 4.11 No Brokers or Finders . The Purchaser has not, nor have any of its Affiliates, employed any broker or finder or incurred any Liability for any brokerage or finder's fee or commissions or similar payment in connection with the transactions contemplated herein, and no Person has or will have any right, interest or valid claim against or upon the Purchaser the Sellers, the Company or its or their Affiliates for any such fee or commission.

           Section 4.12 Tax Matters.

           (a) The Purchaser has filed or caused to be filed on a timely basis all Tax Returns that are or were required to be filed by it, pursuant to the Laws or administrative requirements of each Governmental Body with taxing power over it or its assets.  As of the time of filing, all such Tax Returns correctly reflected the facts regarding the income, business, assets, operations, activities, status, and other matters of the Purchaser and any other information required to be shown thereon. An extension of time within which to file any such Tax Return that has not been filed has not been requested or granted. There is no audit, Action, Claim or any investigation or inquiry, whether formal or informal, public or private, now pending or threatened against or with respect to the Purchaser in respect of any Tax.  

           (b) With respect to all amounts in respect of Taxes imposed on the Purchaser or for which it is or could be reasonably liable, whether to Governmental Authorities (as, for example, under Law) or to other Persons (as, for example, under tax allocation agreements), with respect to all taxable periods or portions of periods since its inception through the Closing, (i) all applicable tax laws and agreements have been complied with in all material respects, (ii) all such amounts required to be paid by the Purchaser to Governmental Authorities or others on or before the date hereof have been paid, and (iii) reserves have been established for the payment of all Taxes not yet due and payable, which reserves are reflected in the Financial Statements (described below) and are adequate and in accordance with the past custom and practice of the Purchaser.

12


 

           (c) As of the date hereof, the Purchaser has not requested, executed or filed with the IRS or any other Governmental Authority any agreement or other document extending or having the effect of extending the period for assessment or collection of any Taxes for which the Purchaser could be liable and which still is in effect. There exists no tax assessment, proposed or otherwise, against the Purchaser nor any Encumbrance for Taxes against any assets or property of the Purchaser.

           (d) All Taxes that the Purchaser is or was required by Law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Authorities or other Person.

           (e) The Purchaser is not a party to, bound by or subject to any obligation under any tax sharing, tax indemnity, tax allocation or similar agreement.

           (f) There is no Claim, audit, Action, proceeding, or investigation with respect to Taxes due or claimed to be due from the Purchaser or of any Tax Return filed or required to be filed by the Purchaser pending or threatened against or with respect to the Purchaser. The Purchaser has not filed a consent pursuant to Section 341(f) of the Code (or any corresponding provision of state, local or foreign income tax law) or agreed to have Section 341(f)(2) of the Code (or any corresponding provision of state, local or foreign income tax law) apply to any disposition of a subsection (f) asset (as such term is defined in Section 341(f)(4) of the Code) owned by the Purchaser.

           Section 4.13 Full Disclosure . No representation or warranty of the Purchaser in this Agreement omits to state a material fact necessary to make the statements herein, in light of the circumstances in which they were made, not misleading. There is no fact known to the Purchaser that Materially Adversely affects or, as far as can be reasonably foreseen, materially threatens, the assets, business, prospects, financial condition or results of operations of the Purchaser that has not been set forth in this Agreement.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER

           As an inducement to the Purchaser to enter into this Agreement and to consummate the transactions contemplated herein, the Seller represents and warrants to the Purchaser that the following are true and correct as of the date hereof and will be true and correct at Closing: 

           Section 5.1 Power and Authority . The Seller has all requisite power and authority, to enter into and deliver this Agreement and the Transaction Documents and to consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance of this Agreement and the Transaction Documents by the Seller and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by all necessary action, and no other action or proceeding on the part of the Seller is necessary to authorize the execution, delivery and performance by such the Seller of this Agreement and the Transaction Documents and the consummation by the Seller of the transactions contemplated hereby and thereby.  This Agreement and each of the Transaction Documents have been duly executed and delivered by the Seller and constitutes the legal, valid and binding obligation of the Seller, enforceable against him in accordance with their respective terms.

13


 

           Section 5.2 Conflicts; Consents and Approvals . Neither the execution nor delivery by the Seller of this Agreement and the Transaction Documents to be executed and delivered by it in connection with this Agreement and the Transaction Documents, nor the consummation of the transactions contemplated hereby and thereby, will: 

           (a) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event that, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or entitle any Person (with the giving of notice, the passage of time or otherwise) to terminate, accelerate, modify or call a default under, or give rise to any obligation to make a payment under, or to any increased, additional or guaranteed rights of any Person under, or result in the creation of any Encumbrance upon any of the properties or assets of the Company under any of the terms, conditions or provisions of, (1) the organizational documents of the Company or Leo Shield, (2) any Contract to which such the Seller is a party or to which any of his properties or assets may be bound or (3) any permit, registration, approval, license or other authorization or filing to which the Seller is subject or to which any of its properties or assets may be subject; 

           (b) require any action, consent or approval of any Governmental Authority or non­governmental third party, other than as set forth in the Seller’s response to the Purchaser’s due diligence questionnaire (the “ DD Questionnaire ”); or 

           (c) violate any order, writ or injunction, or any decree, or Law applicable to the Seller or any of his businesses, properties or assets.

           Section 5.3 Title to Shares . The Seller is the sole record and beneficial owner of the Shares and has good and marketable title to the Shares, free and clear of all Encumbrances. Upon Closing, the Purchaser shall be the lawful record and beneficial owner of the Shares, free and clear of all Encumbrances. The Shares represent 100% ownership of the Company on a fully-diluted basis. The assets of the Company are, or will be on Closing: (1) a 90% registered and beneficial interest in the issued and outstanding equity of Leo Shield; (2) the assignment of 90% of the Equus Debt; (3) the Osenase, Pramkese and Asamankese prospecting licenses in Ghana (collectively, the “ Prospecting Licenses ”); and (4) a 100% registered and beneficial interest in the issued and outstanding equity of SMA. No other Person has any direct or indirect interest or right to the Company, SMA or Leo Shield other than 10% of the issued and outstanding shares of Leo Shield which are held by Okore.

           Section 5.4 Title to Underlying Assets . Leo Shield holds the following, which are as at the date hereof and shall be as at Closing, in good standing and duly registered with applicable governmental authorities (i) a 0.5% Production Royalty on the Grumesa-Awisam concession in Ghana, and (ii) a free carried right to earn-in to a 7% equity interest in a joint venture company to be formed with Sun Gold, Tropical Exploration and Mining Company Limited and the government of Ghana, for the purpose of conducting mining operations on the Kwatechi concession.

14


 

           Section 5.5 Assets and Liabilities of SMA . On Closing, all of the assets and liabilities of SMA will be as described in Schedule “A” hereto.

           Section 5.6 Securities Representations.

           (a) Investment Purposes . The Seller is acquiring the Securities for his own account as principal, not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part in any transactions that would be in violation of the Securities Act or any state securities or "blue-sky" laws.  Other than the Seller’s Affiliates, no other Person has a direct or indirect beneficial interest in, and the Seller does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third party, with respect to, the Securities or any part thereof.

           (b) No General Solicitation .  The Seller is not receiving the Securities as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio; or presented at any seminar or similar gathering; or any solicitation of a subscription by a Person, other than the Purchaser’s personnel, previously known to the Seller.

           (c) No Obligation to Register Shares . The Seller understands that the Purchaser is under no obligation to register the Securities under the Securities Act, or to assist the Seller in complying with the Securities Act or the securities laws of any state of the United States or of any foreign jurisdiction. The Seller understands that the Securities must be held indefinitely unless the sale thereof is subsequently registered under the Securities Act and applicable state securities laws or exemptions from such registration are available.  All certificates evidencing the Securities will bear a legend stating that the Securities have not been registered under the Securities Act or state securities laws and they may not be resold unless they are registered under the Securities Act and applicable state securities laws or exempt therefrom.

           (d) Investment Experience . The Seller, or his professional advisors, has such knowledge and experience in finance, securities, taxation, investments and other business matters as to evaluate investments of the kind described in this Agreement.  By reason of the business and financial experience of the Seller or his professional advisor, the Seller can protect his own interests in connection with the transactions described in this Agreement.  The Seller is able to afford the loss of his entire investment in the Securities.

           (e) Exemption from Registration . The Seller acknowledges his understanding that the offering and sale of the Shares is intended to be exempt from registration under the Securities Act. In furtherance thereof, in addition to the other representations and warranties of the Seller made herein, the Seller further represents and warrants to and agrees with the Purchaser as follows:

                      (1) The Seller has the financial ability to bear the economic risk of his investment, has adequate means for providing for his current needs and personal contingencies and has no need for liquidity with respect to the Securities; 

15


 

                      (2) The Seller has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Securities;

                      (3) The Seller has been provided an opportunity for a reasonable period of time prior to the date hereof to obtain additional information concerning the Purchaser and all other information to the extent the Purchaser possesses such information or can acquire it without unreasonable effort or expense; and

                      (4) The Seller has received and reviewed the documents filed by the Purchaser with the SEC and has also considered the uncertainties and difficulties frequently encountered by companies such as the Purchaser. 

           (f) Regulation S Exemption . The Seller understands that the Securities are being offered and sold in reliance on an exemption from the registration requirements of United States federal and state securities laws under Regulation S promulgated under the Securities Act and that the Purchaser is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Seller set forth herein in order to determine the applicability of such exemptions and the suitability of the Seller to acquire the Securities. In this regard, the Seller represents, warrants and agrees that:

  1. The Seller is not a U.S. Person (as defined below) or an affiliate (as defined in Rule 501(b) under the Securities Act) of the Purchaser and is not acquiring the Securities for the account or benefit of a U.S. Person.  A U.S. Person means any one of the following:

   
  • any natural person resident in the United States of America;
  • any partnership or corporation organized or incorporated under the laws of the United States of America;
  • any estate of which any executor or administrator is a U.S. person;
  • any trust of which any trustee is a U.S. person;
  • any agency or branch of a foreign entity located in the United States of America;
  • any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;
  • any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States of America; and

16


 
   
  • any partnership or corporation if:

  (A) organized or incorporated under the laws of any foreign jurisdiction; and (B) formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.

  2. At the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement, the Seller was outside of the United States.

  3. The Seller will not, during the period commencing on the date of issuance of the Securities and ending no less than the twelve (12) month anniversary of such date, (the “ Restricted Period ”), offer, sell, pledge or otherwise transfer the Securities in the United States, or to a U.S. Person for the account or for the benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S. 

  4. The Seller will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the Securities only pursuant to registration under the Securities Act or an available exemption therefrom and in accordance with all applicable state and foreign securities laws.

  5. The Seller was not in the United States, engaged in, and prior to the expiration of the Restricted Period will not engage in, any short selling of or any hedging transaction with respect to the Securities, including without limitation, any put, call or other option transaction, option writing or equity swap.

  6. Neither the Seller nor any Person acting on his behalf has engaged, nor will engage, in any directed selling efforts to a U.S. Person with respect to the Securities and the Seller and any Person acting on his behalf have complied and will comply with the “offering restrictions” requirements of Regulation S under the Securities Act.

  7. The transactions contemplated by this Agreement have not been pre-arranged with a buyer located in the United States or with a U.S. Person, and are not part of a plan or scheme to evade the registration requirements of the Securities Act.

  8. Neither the Seller nor any Person acting on his behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories or possessions, for any of the securities of the Purchaser. The Seller agrees not to cause any advertisement of the securities of the Purchaser to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to such securities, except such advertisements that include the statements required by Regulation S

17


 
    under the Securities Act, and only offshore and not in the U.S. or its territories, and only in compliance with any local applicable securities laws.

           (g) No Reliance . Other than as set forth herein, the Seller is not relying upon any other information, representation or warranty by the Purchaser or any officer, director, stockholder, agent or representative of the Purchaser in determining to transfer and sell the Shares to the Purchaser in consideration for the issuance of the Securities to the Seller. The Seller has consulted, to the extent deemed appropriate by the Seller, with his own advisers as to the financial, tax, legal and related matters concerning an investment in the Securities and on that basis believes that his investment in the Securities is suitable and appropriate for him.

           (h) No Governmental Review . The Seller is aware that no federal or state agency has (1) made any finding or determination as to the fairness of this investment, (2) made any recommendation or endorsement of the Securities or the Purchaser, or (3) guaranteed or insured any investment in the Securities or any investment made by the Purchaser.

           Section 5.7 Non-Canadian Resident . The Seller is not a resident of Canada. 

           Section 5.8 Full Disclosure . No representation or warranty of the Seller in this Agreement omits to state a material fact necessary to make the statements herein, in light of the circumstances in which they were made, not misleading.

           Section 5.9 No Material Adverse Effect .  As of the date of this Agreement, no Material Adverse Effect on the Seller has occurred and there has been no event, occurrence or development that has had, or would reasonably be expected to have, a Material Adverse Effect on the ability of the Seller to timely consummate the transactions contemplated herein.  

ARTICLE VI
REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY AND
THE SELLER

           As an inducement to the Purchaser to enter into this Agreement and to consummate the transactions contemplated herein, the Company and the Seller jointly and severally represent and warrant to the Purchaser as follows: 

           Section 6.1 Organization . The Company is a corporation duly organized and validly existing under the laws of Ghana. The Company has all requisite power to own, operate and lease its business and assets and carry on its business as the same is now being conducted. Leo Shield is a corporation duly organized and validly existing under the laws of Ghana.  Leo Shield has all requisite power to own, operate and lease its business and assets and carry on its business as the same is now being conducted. SMA is a corporation duly organized and validly existing under the laws of Australia. SMA has all requisite power to own, operate and lease its business and assets and carry on its business as the same is now being conducted.

18


 

           Section 6.2 Corporate Power and Authority . The Company has all requisite power and authority to enter into and deliver this Agreement and the Transaction Documents and to consummate the transactions contemplated hereby and thereby.  The execution, delivery, and performance of this Agreement and the Transaction Documents by the Company and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action, and no other action or proceeding on the part of the Company is necessary to authorize the execution, delivery and performance by the Company of this Agreement and the Transaction Documents and the consummation by the Company of the transactions contemplated hereby and thereby. 

           This Agreement and each of the Transaction Documents have been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against it in accordance with their respective terms.

           Section 6.3 Conflicts; Consents and Approvals . Neither the execution and delivery by the Company of this Agreement and the Transaction Documents to be executed and delivered by it in connection with this Agreement and the Transaction Documents, nor the consummation of the transactions contemplated hereby and thereby, will: 

                      (a) conflict with, or result in a breach of any provision of, the organizational documents of either the Company, SMA or Leo Shield;

                      (b) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event that, with the giving of notice, the passage of time or otherwise, would constitute a default) under, or entitle any Person (with the giving of notice, the passage of time or otherwise) to terminate, accelerate, modify or call a default under, or give rise to any obligation to make a payment under, or to any increased, additional or guaranteed rights of any Person under, or result in the creation of any Encumbrance upon any of the properties or assets of the Company, SMA or Leo Shield under any of the terms, conditions or provisions of, (1) the organizational documents of the Company, SMA or Leo Shield, (2) any Contract to which the Company, SMA or Leo Shield is a party or to which any of its respective properties or assets may be bound, or (3) any permit, registration, approval, license or other authorization or filing to which the Company, SMA or Leo Shield is subject or to which any of its respective properties or assets may be subject; 

                      (c) require any action, consent or approval of any Person, other than as indicated in the DD Questionnaire;

                      (d) violate any order, writ, or injunction, or any decree, or Law applicable to the Company, SMA or Leo Shield or any of its respective business, properties, or assets; or

                      (e) require any action, consent or approval of, or review by, or registration or filing by the Company, SMA or Leo Shield with any Governmental Authority, other than as indicated in the DD Questionnaire.

19


 

           Section 6.4 Capital Structure . The authorized capital of the Company consists of 1,000,000 shares of common stock, with no par value per share, of which 500 shares are issued and outstanding,  (i) with each holder thereof being entitled to cast one vote for each Share held on all matters  properly submitted  to the shareholders for their vote; and (ii) there being no pre-preemptive  rights and no cumulative voting.  The Company has no shares reserved for issuance pursuant to a stock option plan or pursuant to securities exercisable for, or convertible into or exchangeable for, shares of common stock.  All of the issued and outstanding shares of the Company are duly authorized, validly issued, fully paid and nonassessable and owned by the Seller. The Shares constitute one hundred percent (100%) of the issued and outstanding capital stock of the Company on a fully-diluted basis, and, upon the Closing, the Purchaser will own one hundred percent (100%) of the issued and outstanding capital stock of the Company. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights. There are, (i) no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, proxies, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company, (ii) no agreements or arrangements under which the Company is obligated to register the sale of any of its securities under the Securities Act or any other Law, and (iii) no anti-dilution or price adjustment provisions contained in any security issued by the Company (or any agreement providing any such rights).

           The authorized capital of Leo Shield consists of 100,000 shares  of common stock, with no par value per share, all of which are issued and outstanding, (i) with each holder thereof being entitled to cast one vote for each  share held on all matters  properly submitted to the shareholders for their vote; and (ii) there being no  pre-preemptive  rights and no cumulative voting. Leo Shield has no shares reserved for issuance pursuant to a stock option plan or pursuant to securities exercisable for, or convertible into or exchangeable for, shares of common stock. At Closing, all of the issued and outstanding shares of Leo Shield are duly authorized, validly issued, fully paid and nonassessable and 90 percent  owned by the Company and 10% by Okore. The shares owned by the Company at Closing will constitute ninety percent (90%) of the issued and outstanding capital stock of Leo Shield on a fully-diluted basis. The Company owns no asset as of the date hereof. On the Closing, the Company will own 90% of the issued and outstanding capital stock of Leo Shield and the assignment of the debt owed by Leo Shield to Equus. No shares of capital stock of Leo Shield are subject to preemptive rights or any other similar rights.  There are (i) no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, proxies, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of Leo Shield or arrangements by which Leo Shield is or may become bound to issue additional shares of capital stock of Leo Shield, (ii) no agreements or arrangements under which Leo Shield is obligated to register the sale of any of its securities under the Securities Act or any other Law, and (iii) no anti-dilution or price adjustment provisions contained in any security issued by Leo Shield (or any agreement providing any such rights).

20


 

           The authorized capital of SMA consists of four shares  of common  stock, with no par value per share, of which four shares are issued and outstanding,  (i) with each holder thereof being entitled to cast one vote for each share held  on all matters  properly submitted  to the shareholders for their vote; and (ii) there being no  pre-preemptive  rights and no cumulative voting. SMA has no shares reserved for issuance pursuant to a stock option plan or pursuant to securities exercisable for, or convertible into or exchangeable for, shares of common stock.  All of the issued and outstanding shares of SMA are duly authorized, validly issued, fully paid and nonassessable and owned by the Company.  The shares constitute one hundred percent (100%) of the issued and outstanding capital stock of SMA on a fully-diluted basis, and, upon the Closing, the Purchaser will own one hundred percent (100%) of the issued and outstanding capital stock of SMA. No shares of capital stock of SMA are subject to preemptive rights or any other similar rights.  There are (i) no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, proxies, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of SMA or arrangements by which SMA is or may become bound to issue additional shares of capital stock of SMA, (ii) no agreements or arrangements under which SMA is obligated to register the sale of any of its securities under the Securities Act or any other Law, and (iii) no anti-dilution or price adjustment provisions contained in any security issued by SMA (or any agreement providing any such rights).

           Section 6.5 Intellectual Property . Neither the Company nor Leo Shield has any, (i) patents and applications therefor throughout the world, and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof; (ii) inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (iii) copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world; (iv) industrial designs and any registrations and applications therefor throughout the world, (v) trade names, logos, URLs, websites, domain names, common law trademarks and service marks, trademark and service mark registrations and applications therefor throughout the world; (vi) databases and data collections and all rights therein throughout the world; (vii) moral and economic rights of authors and inventors, however denominated, throughout the world, or (viii) similar or equivalent rights to any of the foregoing anywhere in the world (collectively, “ Intellectual Property ”). No Intellectual Property is necessary to effectuate the business or operations of either the Company or Leo Shield. SMA owns the Intellectual Property rights for Abacus and Contracts Prop, and their respective technologies as more particularly described in Schedule “A” hereto.

           Section 6.6 Tax Matters .

           (a) Each of the Company, SMA and Leo Shield has filed or caused to be filed on a timely basis all Tax Returns that are or were required to be filed by it, pursuant to the Laws or administrative requirements of each Governmental Body with taxing power over it or its assets. As of the time of filing, all such Tax Returns correctly reflected the facts regarding the income, business, assets, operations, activities, status, and any other information required to be shown thereon. An extension of time within which to file any such Tax Return that has not been filed has not been requested or granted. There is no audit, Action, Claim or any investigation or inquiry, whether formal or informal, public or private, now pending or threatened against or with respect to the Company, SMA or Leo Shield in respect of any Tax.  

           (b) With respect to all amounts in respect of Taxes imposed on the Company, SMA or Leo Shield or for which any of them are or could be reasonably liable, whether to Governmental Authorities (as, for example, under Law) or to other Persons (as, for example, under tax allocation agreements), with respect to all taxable periods or portions of periods since its inception through the Closing, (i) all applicable tax laws and agreements have been complied with in all material respects, (ii) all such amounts required to be paid by the Company, SMA and Leo Shield to Governmental Authorities or others on or before the date hereof have been paid, and (iii) reserves have been established for the payment of all Taxes not yet due and payable, which reserves are reflected in the Financial Statements (described below) and are adequate.

21


 

           (c) As of the date hereof, neither the Company, SMA nor Leo Shield has requested, executed or filed with any Governmental Authority any agreement or other document extending or having the effect of extending the period for assessment or collection of any Taxes for which the Company, SMA or Leo Shield could be liable and which still is in effect.  There exists no tax assessment, proposed or otherwise, against the Company, SMA or Leo Shield nor any Encumbrance for Taxes against any assets or property of the Company, SMA or Leo Shield.

           (d) All Taxes that the Company, SMA and Leo Shield is or was required by Law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Authorities or other Person.

           (e) Neither the Company, SMA, nor Leo Shield is a party to, bound by or subject to any obligation under any tax sharing, tax indemnity, tax allocation or similar agreement.

           (f) There is no Claim, audit, Action, proceeding or investigation with respect to Taxes due or claimed to be due from the Company, SMA or LeoShield or of any Tax Return filed or required to be filed by the Company, SMA orLeoShieldpending or threatened against or with respect to the Company, SMA or LeoShield.

           Section 6.7 Financial Statements .

           (a) Attached to the DD Questionnaire are the financial statements of the Company and Leo Shield as of and for the years ended December 31, 2012, December 31, 2011 and December 31, 2010 and audit reports thereon and the financial statements of SMA as of and for the years ended June 30, 2013, and June 30, 2012 and audit reports thereon (collectively, the " Financial Statements ") which, (i) were prepared in all material respects in accordance with the books and records of the Company, SMA and Leo Shield, (ii) present fairly the financial condition of the Company, SMA and Leo Shield at the dates thereof and the results of its operations and cash flows for the periods then ended, (iii) are true and accurate in all material respects and (iv) were prepared in conformity with GAAP, consistently applied.

           (b) Neither the Company, nor SMA nor LeoShield has any liabilities or obligations (whether absolute, accrued, contingent or otherwise) that were not fully reflected or reserved against in the balance sheet of the Company as of December 31, 2012 (the " Recent Balance Sheet ") which is attached to the DD Questionnaire. The reserves reflected in the Recent Balance Sheet are adequate, appropriate and reasonable and the reserves reflected in the Recent Balance Sheet are in accordance with GAAP consistently applied.

22


 

           Section 6.8 Properties and Assets . The DD Questionnaire lists all properties and assets of the Company, SMA and Leo Shield, indicating which properties and assets are owned and which ones are subject to lease agreements.  The Company, SMA and Leo Sheild have good and marketable title to all of their properties and assets, real and personal, free and clear of all Encumbrances.  All equipment used by the Company, SMA and Leo Shields is in good operating condition and repair and is adequate for the uses to which they are being put.

           Section 6.9 Compliance with Law . The Company, SMA and Leo Shield and each of the respective officers, managers, directors, employees and agents of the Company, SMA and Leo Shield have complied in all respects with all Laws applicable to it and its operations. Neither the Company, SMA, Leo Shield nor any of its respective officers, managers, directors, Affiliates, employees, or agents has received any notice from any Governmental Authority that it has been or is being conducted in violation of any applicable Law or that an investigation or inquiry into any noncompliance with any applicable Law is ongoing, pending or threatened. 

           Section 6.10 Litigation . There is no Action pending or threatened against the Seller, the Company, SMA or Leo Shield or its respective assets or business, and there is no reasonable basis for any such Action, other than as disclosed in the DD Questionnaire. There are no judgments, decrees, agreements, memoranda of understanding or orders of any Governmental Authority outstanding against the Company, SMA, Leo Shield or the Seller, other than as disclosed in the DD Questionnaire.

           Section 6.11 Contracts . The DD Questionnaire contains a complete list, as of the date hereof, of all Contracts to which the Company, SMA and Leo Shield is, or will be at Closing, a party or bound, or that otherwise relate to its business or assets.  The Company has made available to the Purchaser or its representatives correct and complete copies of all such Contracts with all amendments thereof.  Each such Contract is, and will at Closing be, valid, binding and enforceable against the Company, SMA or Leo Shield, as the case may be, and the other parties thereto in accordance with its terms, and is, and will at Closing be, in full force and effect. Neither the Company, SMA nor Leo Shield is, and will at Closing be, in default under or in breach of or otherwise delinquent in performance under any such Contract, and no event has occurred, or will as of the Closing have occurred, that, with notice or lapse of time, or both, would constitute such a default. Each of the other parties thereto has performed in all respects all of the obligations required to be performed by it under, and is not in default under, any such Contract and no event has occurred that, with notice or lapse of time, or both, would constitute such a default. There are no disputes pending or threatened in writing with respect to any such Contracts. Neither the Company, SMA, Leo Shield nor any other party to any such Contract has exercised any option granted to it to terminate or shorten or extend the term of such Contract, and neither the Company, SMA nor Leo Shield has given notice or received notice to such effect.  All of such Contracts will continue to be valid, binding, enforceable and in full force and effect on substantially identical terms following the consummation of the transactions contemplated hereby.

           Section 6.12 Labor and Employment Matters .

23


 

           (a) There are no collective bargaining agreements, union contracts or similar agreements or arrangements in effect that cover any Employee or Former Employee (each, a " Collective Bargaining Agreement "). With respect to any Employee, as at the date of this Agreement, (i) there is no labor strike, dispute, slowdown, lockout or stoppage pending or threatened against the Company, SMA or Leo Shield or with respect to any Employees, and neither the Company, SMA nor Leo Shield has experienced any labor strike, dispute, slowdown, lockout or stoppage; and (ii) there is no grievance or arbitration arising out of any Collective Bargaining Agreement or other grievance procedure. 

           (b) Each of the Company, SMA and Leo Shield is in compliance in all respects with all Laws, regulations and orders relating to the employment of labor, including all such Laws, regulations and orders relating to wages, hours, and any similar state or local "mass layoff" or "plant closing" Law, collective bargaining, discrimination, civil rights, safety and health, workers' compensation and the collection and payment of withholding and/or social security taxes and any similar tax. 

           Section 6.13 Permits; Compliance . The Company, SMA and Leo Shield are in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and assets and to carry on its business as it is now being conducted and as it will be conducted through to the Closing (collectively, the “ Permits ”). All such Permits are listed in the DD Questionnaire. There is no Action pending or threatened regarding any of the Permits, and each such Permit is in full force and effect.  Neither the Company, SMA nor Leo Shield is in conflict with, or in default (or would be in default with the giving of notice, the passage of time, or both) with, or in violation of, any of the Permits. 

           Section 6.14 Environmental Matters . There are no past or present violations of Environmental Laws (as defined below) by the Company, SMA or Leo Shield, releases of any material into the environment by the Company, SMA or Leo Shield, actions, activities, circumstances, conditions, events, incidents, or contractual obligations of the Company, SMA or Leo Shield which may give rise to any liability of the Company, SMA or Leo Shield,  and neither the Company, SMA nor Leo Shield has received any notice with respect to any of the foregoing, nor is any action pending or threatened in connection with any of the foregoing.  The term “ Environmental Laws ” means all laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “ Hazardous Materials ”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.  Other than those that are or were stored, used or disposed of in compliance with applicable Law, no Hazardous Materials are contained by the Company, SMA or Leo Shield on or about any real property currently owned, leased or used by the Company, SMA or Leo Shield, and no Hazardous Materials were released by the Company, SMA or Leo Shield on or about any real property previously owned, leased or used by the Company, SMA or Leo Shield. There are no underground storage tanks on or under any real property owned, leased or used by the Company, SMA or Leo Shield.

24


 

           Section 6.15 Affiliated Transactions .  Other than as set forth in the DD Questionnaire, no Affiliate or other family member has directly or indirectly (i) borrowed or been advanced funds from or loaned funds to the Company, SMA or Leo Shield, (ii) is a party to a Contract with the Company, SMA or Leo Shield or (iii) engaged in any transaction with the Company, SMA or Leo Shield.

           Section 6.16 Ordinary Course . Since the date of the Recent Balance Sheet, the Company’s business has been conducted only in the ordinary and usual course of business. Without limiting the generality of the foregoing, the Company has not since the Recent Balance Sheet, (i) suffered any adverse change in its financial condition, the business or operations or in the Company, SMA or Leo Shield; or (ii) sold, transferred, or otherwise disposed of any portion of its properties or assets.

           Section 6.17 Debts and Guaranties . Since the date of the Recent Balance Sheet, neither the Company, SMA nor Leo Shield had debts, liabilities, obligations, direct, indirect, absolute or contingent, whether accrued, vested or otherwise, whether known or unknown, other than as set forth in the DD Questionnaire. In addition, neither the Company, SMA nor Leo Shield is directly or indirectly, (a) liable, by guarantee or otherwise, upon or with respect to, or (b) obligated to provide funds with respect to, or to guarantee or assume, any Indebtedness or other obligation of any Person.

           Section 6.18 No Brokers or Finders . Neither the Seller, the Company, SMA nor Leo Shield has employed any broker or finder or incurred any Liability for any brokerage or finder's fee or commissions or similar payment in connection with the transactions contemplated herein, and no Person has or will have any right, interest or valid claim against or upon the Seller, the Company, SMA or Leo Shield for any such fee or commission.

           Section 6.19 Full Disclosure . No representation or warranty of the Seller, the Company, SMA nor Leo Shield omits to state a fact necessary to make the statements herein, in light of the circumstances in which they were made, not misleading.  There is no fact known to the Seller, the Company, SMA or Leo Shield that Materially Adversely affects or, as far as can be reasonably foreseen, materially threatens, the assets, business, prospects, financial condition or results of operations of the Company, SMA or Leo Shield that has not been set forth in this Agreement.

           Section 6.20 No Material Adverse Effect .  As of the date of this Agreement, no Material Adverse Effect on the Company has occurred and there has been no event, occurrence or development that has had, or would reasonably be expected to have, a Material Adverse Effect on the ability of the Company to timely consummate the transactions contemplated hereby.

ARTICLE VII
ADDITIONAL AGREEMENTS AND COVENANTS

           Section 7.1 Access and Information . Prior to the Closing, the Purchaser, on one hand, and the Seller and the Company, on the other hand, shall permit representatives of the other to have reasonable access during normal business hours and upon reasonable notice to all premises, properties, personnel, books, records, Intellectual Property, technology, technical support, Contracts, commitments, reports of examination and documents of or pertaining to, as may be necessary to permit the other to, at its sole expense, make, or cause to be made, such investigations thereof as the other reasonably deems necessary or advisable in connection with the consummation of the transactions contemplated by this Agreement, and the Purchaser and the Seller shall reasonably cooperate with any such investigations.  No investigation by a party or its representatives or advisors prior to or after the date of this Agreement (including any information obtained by a party pursuant to this Section 7.1) shall diminish, obviate or cure any breach of any representation, warranty, covenant or agreement contained in this Agreement nor shall the conduct or completion of any such investigation be a condition to any of such party's obligations under this Agreement. 

25


 

           Section 7.2 Confidentiality . Each of the parties shall use reasonable efforts to cause their respective Affiliates, officers, directors, employees, auditors, attorneys, consultants, advisors and agents to treat as confidential and hold in strict confidence, unless required to be disclosed by judicial or administrative process or, in the opinion of its counsel, by other requirements of Law, and after prior written notice to the other parties, all confidential information of the Purchaser, the Seller, Leo Shield, the Company or SMA, as the case may be, that is made available in connection with this Agreement, and will not release or disclose such confidential information to any other Person, except to their respective auditors, attorneys, financial advisors and other consultants, agents, and advisors in connection with this Agreement. If the Closing does not occur, (a) such confidence shall be maintained by the Parties, and each Party shall use reasonable efforts to cause its officers, directors, Affiliates and such other Persons to maintain such confidence, except to the extent such information comes into the public domain (other than as a result of an action by such Party, its officers, directors or such other Persons in contravention of this Agreement), and (b) upon the request of any Party, the other Party shall promptly return to the requesting Party any written materials remaining in its possession, which materials it has received from the requesting Party or its representatives, together with any analyses or other written materials based upon the materials provided.

           Section 7.3 Conduct of Business . From and after the date hereof until the Closing, except as otherwise expressly contemplated by this Agreement, or as consented to in writing by the Purchaser, each of the Company, SMA and Leo Shield shall:

           (a) use reasonable commercial efforts to preserve its business, operations, physical facilities, working conditions and its business relationships with customers, suppliers, licensors, licensees, contractors and other persons with whom it has significant business relations; 

           (b) not take any action that would cause a breach of the representations and warranties contained herein;

           (c) not amend its Articles of Incorporation or Bylaws (or other similar governing instrument);

           (d) not split, combine or reclassify any of its shares, declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its equity interests, make any other actual or constructive distribution in respect of its interests or otherwise make any payments to holders in their capacity as such, or redeem or otherwise acquire any of its securities or any other securities;

26


 

           (e) not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization or otherwise permit its corporate existence to be suspended, lapsed or revoked; 

           (f) not create or form any Subsidiary;

           (g) other than in the ordinary course of its business, (1) incur or assume any Liability in excess of US$1,000; (2) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; (3) make any loans, advances or capital contributions to or investments in any other Person; nor (4) pledge or otherwise Encumber its shares; 

           (h) not acquire, sell, lease, license, transfer or otherwise dispose of any assets in any single transaction or series of related transactions having a fair market value in excess of US$1,000 in the aggregate or that are otherwise material to it other than in the ordinary course of business;

           (i) not, (1) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other entity or division thereof or any equity interest therein; (2) amend, modify, waive or terminate any right under any material contract in any material way; nor (3) authorize any new capital expenditure or expenditures; 

           (j) not enter into any Contract other than in the ordinary course of its business; 

           (k) issue, promise or contract to issue any securities or instruments convertible into securities of such Person; or

           (l) other than in the ordinary course of its business, not make any change with respect to the compensation or benefits of any officer, director or Employee or Former Employee. 

           Section 7.4 Efforts to Consummate . Subject to the terms and conditions of this Agreement, each party hereto shall use all reasonable commercial efforts to take, or to cause to be taken, all actions and to do, or to cause to be done, all things necessary, proper or advisable as promptly as practicable to satisfy the conditions set forth in Article VIII, including, without limitation, obtaining any shareholder and director consents and completing all filings required by the SEC and to consummate the transactions contemplated hereby.

           Section 7.5 No-Shop . From the date hereof until the earlier of the Closing Date or the termination of this Agreement in accordance with the terms hereof, neither the Company, the Seller nor its or his respective officers, managers, directors, employees, agents, representatives and Affiliates, shall, directly or indirectly, make, solicit, initiate or encourage submission of proposals or offers from any Persons relating to an Acquisition Proposal (as defined below).  As used herein, “ Acquisition Proposal ” means any proposal or offer involving a liquidation, dissolution, re-capitalization, merger, consolidation or acquisition or purchase of all or substantially all of the assets of, or equity interest in, the Company, SMA or Leo Shield or any other similar transaction or business combination involving the same.  The Seller, the Company, SMA and Leo Shield shall immediately cease and cause to be terminated all discussions or negotiations with third parties with respect to any Acquisition Proposal, if any, existing on the date hereof.

27


 

           Section 7.6 Notification by the Parties . Each party hereto shall use its reasonable commercial efforts to as promptly as practicable inform the other parties hereto in writing if, prior to the consummation of the Closing, it obtains knowledge that any of the representations and warranties made by such party in this Agreement ceases to be accurate and complete in any material respect (except for any representation and warranty that is qualified hereunder as to materiality or Material Adverse Effect, as to which such notification shall be given if the notifying party obtains knowledge that such representation and warranty ceases to be accurate and complete in any respect).  Each party hereto shall also use its reasonable commercial efforts to promptly inform the other parties hereto in writing if, prior to the consummation of the Closing, it becomes aware of any fact or condition that constitutes, in its reasonable judgment, a breach of any covenant of such party as of the date of this Agreement or that would reasonably be expected to cause any of its covenants to be breached as of the Closing Date.  Any such notification shall not be deemed to have cured any breach of any representation, warranty, covenant or agreement made in this Agreement for any purposes of this Agreement. 

           Section 7.7 Cooperation with Respect to Financial Reporting . Prior to the Closing, the Seller and the Company shall reasonably cooperate with the Purchaser in connection with the Purchaser’s preparation of its financial statements and other information as required for the Purchaser’s filings in connection with the transactions contemplated by this Agreement under the Exchange Act.

           Section 7.8 Board of Directors . Effective upon the Closing, the Board of Directors of the Purchaser and the Company shall consist of two existing directors of the Purchaser and one nominee of the Seller.   

           Section 7.9 Name Change . Prior to the Closing, the Purchaser shall have prepared and mailed to its shareholders an Information Statement under the Exchange Act to change the Purchaser’s corporate name to Blox Inc.

           Section 7.10 Loans to the Purchaser . In the event that the Seller or the Company make any loan advances to the Purchaser prior to the Closing, the parties agree that on Closing such loan advances will be applied to the purchase price of the Financing.

           Section 7.11 Net Smelter Royalty . Notwithstanding any other provision in this Agreement and as an exception to any and all warranties, statements or representations given by the Seller or the Company to the contrary, the Purchaser acknowledges and confirms acceptance of the right for the Seller, to receive and to continue to receive a 3% net smelter royalty, as more particularly described in Schedule “B” hereto, from Leo Shield, being a Subsidiary of the Company, or any assignee or transferee or successor in title of any or all of the concessions held by Leo Shield as at the date of this Agreement, which concessions, for greater certainty, will include the Prospecting Licenses.

28


 

           Notwithstanding any other provision in this Agreement and as an exception to any and all warranties, statements or representations given by the Seller or the Company to the contrary, the Purchaser acknowledges and confirms acceptance of the right for the Seller, to receive and to continue to receive a royalty of 3%, as more particularly described in Schedule “C” hereto, of gross sales of non-smeltered minerals from Leo Shield, being a Subsidiary of the Company, or any assignee or transferee or successor in title of any or all of the concessions held by Leo Shield as at the date of this Agreement, which concessions, for greater certainty, will include the Prospecting Licenses.

           It is further understood that if a future project is introduced by the Seller to the Purchaser, a 3% royalty will be payable by the Purchaser to the Seller.

           Section 7.12 Software Royalty. Notwithstanding any other provision in this Agreement and as an exception to any and all warranties, statements or representations given by the Seller or the Company to the contrary, the Purchaser acknowledges and confirms acceptance of the right for the Seller, to receive and to continue to receive a 3% royalty for all and any sales of software, including ‘Abacus’ or any software derived therefrom, by the Purchaser or its Affiliates, such right of the Seller shall apply to and be binding on the Purchaser’s Affiliates and any owner, or assignee or transferee, of the intellectual property in such software, as if this was an obligation on them.

           Section 7.13   Access to Software . Notwithstanding any other provision in this Agreement and as an exception to any and all warranties, statements or representations given by the Seller or the Company to the contrary, the Purchaser acknowledges and confirms it shall grant to the Seller and its Affiliates, a royalty free and irrevocable license to the latest edition of all and any software which it or any of its Affiliates own, including ‘Abacus’, “Contracts Pro” or any software derived therefrom.

           Section 7.14 Financing . Concurrent with the Closing and to be completed on or before the Closing Date, the Seller will complete a non-brokered private placement financing (the “ Financing ”) in the common stock of the Purchaser for minimum aggregate gross proceeds of one million United States Dollars ($1,000,000) and up to a maximum of one million five hundred thousand United States Dollars ($1,500,000). The Financing will consist of a minimum of 20,000,000 units, and up to a maximum of 30,000,000 units, at a deemed price of $0.05 per Unit. Each unit will be comprised of one share of common stock of the Purchaser and one common share purchase warrant, with each whole warrant entitling the holder thereof to purchase one additional common share of the Purchaser at a price of $0.05 per share for a period of five (5) years from the closing date of the Financing. For greater certainty, the Seller’s obligation to complete the Financing is in addition to any financing obligation contemplated in any agreement entered into or that may be entered into between the Purchaser and International Eco Endeavors Corp. (“ IEE ”) regarding the acquisition of IEE.

29


 

ARTICLE VIII
CONDITIONS TO CLOSING

           Section 8.1 Conditions to the Sellers’ Obligations to Close . All obligations of the Seller to consummate the transactions contemplated hereunder are subject to the fulfillment or waiver prior to or at the Closing of each of the following conditions:

           (a) Subject to Section 7.6, all representations and warranties of the Purchaser contained in this Agreement and the Transaction Documents shall be true and correct in all respects when made and shall be deemed to have been made again at and as of the Closing and shall then be true and correct in all respects (except that representations and warranties made as of a specified date, shall be true and correct only as of such specified date), and the Purchaser shall have delivered to the Company and the Seller a certificate, signed by it, to such effect in form and substance satisfactory to the Company and the Seller;

           (b) The Purchaser shall have performed in all material respects each obligation and agreement to be performed by it and shall have complied in all material respects with each covenant required by this Agreement to be performed or complied with by it at or prior to the Closing, and the Purchaser shall have delivered to the Company and the Seller a certificate, signed by it, to such effect in form and substance satisfactory to the Company and the Seller;

           (c) Prior to or at the Closing, the Purchaser shall have delivered to the Seller the items to be delivered pursuant to Sections 2.4 and 2.6; and

           (d) The Purchaser, with the assistance of the Company, shall have prepared the Current Report on Form 8-K required as a result of the consummation of the transactions contemplated hereby.

           Section 8.2 Conditions to the Purchaser’s Obligations to Close . All obligations of the Purchaser to consummate the transactions contemplated hereunder are subject to the fulfillment or waiver prior to or at the Closing of each of the following conditions:

           (a) Subject to Section 7.6, all representations and warranties of the Company and the Seller contained in this Agreement and the Transaction Documents shall be true and correct in all respects when made and shall be deemed to have been made again at and as of the Closing and shall then be true and correct in all respects (except that representations and warranties made as of a specified date, shall be true and correct only as of such specified date), and the Company and the Seller shall have delivered to the Purchaser a certificate, signed by them, to such effect in form and substance satisfactory to the Purchaser;

           (b) The Company and the Seller shall have performed in all respects each obligation and agreement to be performed by it or them, and shall have complied in all respects with each covenant required by this Agreement to be performed or complied with by it or them at or prior to the Closing, and the Company and the Seller shall have delivered to the Purchaser a certificate, signed by them, to such effect in form and substance satisfactory to the Purchaser; 

30


 

           (c) Prior to the Closing, the Purchaser shall be satisfied, in its sole and absolute discretion, with its due diligence examination of the Company, SMA and Leo Shield;

           (d) Prior to or at the Closing, the Seller shall have delivered to the Purchaser the items to be delivered pursuant to Section 2.5 and 2.6, including without limitation, the legal opinion and Financial Statements;

           (e) The Company shall have provided to the Purchaser consolidated financial statements prepared in accordance with U.S. GAAP and audit reports prepared pursuant to U.S. auditing standards and other information required under the rules of the SEC for purposes of inclusion in the Purchaser’s filing of a Current Report on Form 8-K disclosing the consummation of the Transaction, and the Purchaser shall have substantially completed a Form 8-K such that the filing of the Form 8-K can reasonably be made within four business days from the Closing Date; and

           (f) The Financing being fully funded as evidenced by signed subscription, with closing of the Financing being subject to only to the concurrent Closing of the acquisition of the Shares.

           (g) No Material Adverse Change will have occurred with respect to the Company, Leo Shield or SMA.

ARTICLE IX
TERMINATION

           Section 9.1 Termination . This Agreement may be terminated at any time prior to the consummation of the Closing under the following circumstances: 

           (a) by mutual written consent of the Purchaser, the Seller and the Company;

           (b) by the Purchaser, if the Company or the Seller has breached this Agreement in any respect and such breach is not cured within ten (10) days after written notice from the Purchaser to the Company and the Seller; 

           (c) by the Company or the Seller, if the Purchaser has breached this Agreement in any respect and such breach is not cured within ten (10) days after written notice from the Company or the Seller to the Purchaser; 

           (d) by any party, if there shall be in effect a final, non-appealable order of a court or government administrative agency of competent jurisdiction permanently prohibiting the consummation of the transactions contemplated hereby; or 

           (e) by the Purchaser if any of the conditions to closing, including for greater certainty, the condition contained in Section 8.2(c), has not been remedied to the satisfaction of the Purchaser, acting reasonably, within 10 business days of the Seller receiving notice from the Purchaser of the Seller’s failure to satisfy a condition of closing contained herein. 

31


 

           Section 9.2 Termination Procedure . Written notice of any termination (“ Termination Notice ”) pursuant to this Article IX shall be given by the party electing termination of this Agreement (“ Terminating Party ”) to the other parties (collectively, the “ Terminated Party ”), and such notice shall state the reason for termination. 

           Section 9.3 Effect of Termination . Upon termination of this Agreement prior to the consummation of the Closing and in accordance with the terms hereof, this Agreement shall become void and of no effect, and none of the parties shall have any liability to the others. 

           Section 9.4 Expenses . The parties shall each bear their own respective expenses incurred in connection with this Agreement and the contemplated Transaction.

ARTICLE X
INDEMNIFICATION; SURVIVAL

           Section 10.1 Indemnification by the Purchaser . The Purchaser shall indemnify and hold harmless the Company, the Seller and its and his Affiliates, officers, directors, stockholders, employees and agents and the successors and assigns of all of them (the “ Company Indemnified Parties ”), and shall reimburse the Company Indemnified Parties for, any loss, liability, claim, damage, expense (including, but not limited to, costs of investigation and defense and attorneys’ fees) (collectively, “ Damages ”), arising from or in connection with, (a) any inaccuracy or breach of any of the representations and warranties of the Purchaser in this Agreement or in any certificate or document delivered by or on behalf of the Purchaser pursuant to this Agreement, or any actions, omissions or statements of fact inconsistent with in any respect any such representation or warranty, or (b) any failure by the Purchaser to perform or comply with any agreement, covenant or obligation in this Agreement or in any certificate or document delivered by or on behalf of the Purchaser pursuant to this Agreement to be performed by or complied with by or on behalf of the Purchaser.

           Section 10.2 Indemnification by the Seller . The Seller shall indemnify and hold harmless the Purchaser and its Affiliates, officers, directors, shareholders, employees and agents and the successors and assigns of all of them (the “ Purchaser Indemnified Parties ”), and shall reimburse the Purchaser Indemnified Parties for, any Damages arising from or in connection with, (a) any inaccuracy or breach of any of the representations and warranties of the Seller, the Company, SMA or Leo Shield in this Agreement or in any certificate or document delivered by or on their behalf pursuant to this Agreement, or any actions, omissions or statements of fact inconsistent with in any respect any such representation or warranty, or (b) any failure by the Seller, the Company, SMA or Leo Shield to perform or comply with any agreement, covenant or obligation in this Agreement or in any certificate or document delivered by or on their behalf pursuant to this Agreement to be performed by or complied with by or on their behalf.    

           Section 10.3 Survival; Limitations . All representations, warranties, covenants and agreements of the parties contained herein shall survive the Closing through the expiration of the applicable statutes of limitations (as tolled by any waiver or extension thereof).  

32


 

           Section 10.4 Limit of Liability . Notwithstanding the extent of the Damages for which the indemnities may apply under either Sections 10.1 or 10.2, as the case may be, the aggregate limit of all Damages arising from or in connection with the matters the subject of the indemnities provided under those Sections shall be limited to three million United States dollars ($3,000,000).

ARTICLE XI
MISCELLANEOUS

           Section 11.1 Notices . All notices or other communications required or permitted hereunder shall be in writing.  Any notice, request, demand, claim or other communication hereunder shall be deemed duly given (a) if by personal delivery, when so delivered, (b) if mailed, three (3) Business Days after having been sent by registered or certified mail, return receipt requested, postage prepaid and addressed to the intended recipient as set forth below, or (c) if sent through an overnight delivery service in circumstances to which such service guarantees next day delivery, the day following being so sent (d) if sent by facsimile, one (1) business day after confirmation of transmission, or (e) if sent by email, upon written or electronic confirmation of receipt by the recipient of the email:

  (1) If to the Purchaser:

  NAVA RESOURCES, INC.
Suite 206 – 595 Howe Street
Vancouver, British Columbia, Canada
Attn: Jagtar Sandhu, President
Email: jagsandhu@telus.net

  (2) If to the Seller or the Company:

  WARATAH INVESTMENTS LIMITED
P.O. Box PMP, Airport
Accra, Ghana
Attention: Nicholas Taylor
Facsimile: + 61892961669
Email: ntmidcap@gmail.com

           Any party may change the address to which notices and other communications hereunder are to be delivered by giving the other parties notice in the manner herein set forth.

           Section 11.2 Choice of Law . This Agreement shall be governed, construed and enforced in accordance with the laws of the State of Nevada, without giving effect to principles of conflicts of law.

33


 

           Section 11.3 Jurisdiction .  The parties hereby irrevocably consent to the in personam jurisdiction of the competent courts in the State of Nevada, in connection with any action or proceeding arising out of or relating to this Agreement or the transactions and the relationships established thereunder.  The parties hereby agree that such courts shall be the venue and exclusive and proper forum in which to adjudicate such matters and that they will not contest or challenge the jurisdiction or venue of these courts. 

           Section 11.4 Entire Agreement . This Agreement and such other agreements related to this transaction executed simultaneously herewith set forth the entire agreement and understanding of the parties in respect of the transactions contemplated hereby and supersedes all prior agreements, arrangements and understandings of the parties relating to the subject matter hereof. No representation, promise, inducement, waiver of rights, agreement or statement of intention has been made by any of the parties which is not expressly embodied in this Agreement, such other agreements, notes or instruments related to this transaction executed simultaneously herewith, or the written statements, certificates or other documents delivered pursuant to this Agreement or in connection with the transactions contemplated hereby.  

           Section 11.5 Assignment . Each party's rights and obligations under this Agreement shall not be assigned or delegated, by operation of law or otherwise, without the other party's prior consent, and any such assignment or attempted assignment shall be void, of no force or effect, and shall constitute a material default by such party. 

           Section 11.6 Amendments . This Agreement may be amended, modified, superseded or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by all the parties.

           Section 11.7 Waivers . The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same.  No waiver by any party of any condition, or the breach of any term, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other term, covenant, representation or warranty of this Agreement.

           Section 11.8 Counterparts . This Agreement may be executed simultaneously in two or more counterparts and by facsimile or other electronic means, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

           Section 11.9 Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.  Upon such determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible. 

34


 

           Section 11.10 Interpretation .  The parties agree that this Agreement shall be deemed to have been jointly and equally drafted by them and that the provisions of this Agreement therefore shall not be construed against a party or parties on the ground that such party or parties drafted or was more responsible for the drafting of any such provision(s).  The parties further agree that they have each carefully read the terms and conditions of this Agreement, that they know and understand the contents and effect of this Agreement and that the legal effect of this Agreement has been fully explained to its satisfaction by counsel of its own choosing.

[Remainder of page intentionally left blank; Signature pages to follow]

35


 

           IN WITNESS WHEREOF, the parties have duly executed this Share Purchase Agreement as of the date first above written.

NAVA RESOURCES, INC. QUIVIRA GOLD LTD.
   
By: _______________________________ By: ________________________________
Name: Jag Sandhu Name: 
Title:  President Title: 

WARATAH INVESTMENTS LIMITED

By: _______________________________
Name:  
Title:   

36


 

SCHEDULE “A”

DESCRIPTION OF ASSETS AND LIABILITIES OF SMA

See attached document


 

Strategic Marketing (Australia) Pty Ltd
T/As Able Computing Services

Balance Sheet
As At 30 June 2013

This statement should be read in conjunction with the
attached compilation report of Byfields CPA.


 

Strategic Marketing (Australia) Pty Ltd
T/As Able Computing Services

Balance Sheet
As At 30 June 2013

This statement should be read in conjunction with the
attached compilation report of Byfields CPA.


 

SCHEDULE “B”

NET SMELTER RETURNS TO THE SELLER

For the purposes of this Agreement, the term "Net Smelter Royalty" shall mean an agreed percentage of 3% of the gold bullion produced by the smelting company from any and all of the concessions held by Leo Shield at the date of this Agreement. Leo Shield shall instruct the smelting company to deposit the agreed net percentage of bullion into the bullion account of Waratah, This net smelter royalty shall be unencumbered by any further deductions.


 

SCHEDULE “C”

OTHER ROYALTIES TO THE SELLER

In addition to royalties for the production of gold as per Schedule “B”, the Seller shall receive a royalty of 3% of the gross sales of all non-gold mineral production from any and all of the concessions held by Leo Shield at the date of this agreement. These royalties shall be unencumbered by any further deductions. Payment of these royalties shall be made to the Seller on the 10 th day of the month following the month in which the sales were made, regardless of whether the sales were on a cash, credit basis, terms basis, lease basis, or any kind of deferred settlement basis, and regardless of whether or not payment for the sales has been received by the Purchaser.




AMALGAMATION AGREEMENT

among

NAVA RESOURCES, INC.

and

OURCO CAPITAL LTD.

and

INTERNATIONAL ECO ENDEAVORS CORP.

and

KENDERESH ENDEAVORS CORP.

and

KENDERES BIOGAZ TERMELO KORLATOLT FELE LOSSEGU TARSASAG

Dated as of June 19, 2013


 

AMALGAMATION AGREEMENT

T HIS AGREEMENT made the 19th day of June, 2013.

AMONG:

NAVA RESOURCES, INC. , a corporation incorporated under the laws of the State of Nevada

(“ Nava ”)

AND:

OURCO CAPITAL LTD. , a corporation existing under the British Columbia Business Corporations Act

(“ Newco ”)

AND:

INTERNATIONAL ECO ENDEAVORS CORP. ,a corporation existing under the British Columbia Business Corporations Act

(“ Eco Endeavors ”)

AND:

KENDERESH ENDEAVORS CORP. , a corporation existing under the British Columbia Business Corporations Act

(“ Kenderesh ”)

AND:

KENDERES BIOGAZ TERMELO KORLATOLT FELE LOSSEGU TARSASAG , a Hungarian company

(“ Kenderes Biogaz ”)

WHEREAS:

A. Nava and Eco Endeavors propose to complete a business combination by way of an amalgamation under the provisions of the BCBCA (as hereinafter defined) of Eco Endeavors and Newco, a wholly-owned subsidiary of Nava;

B. Kenderes Biogaz is a wholly-owned subsidiary of Kenderesh which, in turn, is a wholly-owned subsidiary of Eco Endeavors;


- 2 -

C. Kenderes Biogaz owns and operates a biogas plant located in Budapest, Hungary (the “ Kenderes Biogas Plant ”); and

D. Kenderes Biogaz and Kenderesh have each agreed to be a party to this Agreement in order to make certain representations and warranties with respect to their respective business to Nava;

NOW THEREFORE in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto, the parties hereto hereby covenant and agree as follows:

ARTICLE 1
 DEFINITIONS, INTERPRETATION AND SCHEDULES

1.1       Definitions

In this Agreement, unless the context otherwise requires, the following words and terms with the initial letter or letters thereof capitalized shall have the meanings ascribed to them below:

  (a) 1933 Act ” means the United States Securities Act of 1933 , as amended;

  (b) 1940 Act ” means the United States Investment Company Act of 1940 , as amended;

  (c) affiliate ” shall have the meaning ascribed to such term under the BCBCA;

  (d) Agreement ” means this amalgamation agreement, together with the schedules attached hereto, as amended, amended and restated or supplemented from time to time;

  (e) Amalco ” means the company resulting from the amalgamation of Eco Endeavors and Newco pursuant to the Amalgamation;

  (f) Amalco Shares ” means the common shares in the capital of Amalco;

  (g) Amalgamating Corporations ” means Eco Endeavors and Newco;

  (h) Amalgamation ” means the amalgamation of Eco Endeavors and Newco pursuant to section 269 of the BCBCA on the terms and conditions set forth in this Agreement, subject to any amendment thereto in accordance herewith;

  (i) Amalgamation Application ” means the amalgamation application that will be filed with the Registrar under subsection 275(1)(a) of the BCBCA in order to give effect to the Amalgamation, substantially in the form attached hereto as Schedule C;

  (j) Articles of Amalco ” means the articles of Amalco in the form to be mutually agreed to by the Parties, substantially in the form attached hereto as Schedule D;

  (k) Applicable Securities Laws ” means all applicable securities legislation in all jurisdictions relevant to the issuance of the Nava Common Shares;

  (l) BCBCA ” means the British Columbia Business Corporations Act ;


- 3 -

  (m) Business Day ” means a day, other than a Saturday or Sunday, on which the principal commercial banks located in the City of Vancouver, British Columbia are open for business;

  (n) Canadian Eco Endeavors Shareholders ” means an Eco Endeavors Shareholder that is a Canadian Resident and is not a U.S. Person;

  (o) Canadian Resident ” means a person that is resident of Canada for the purposes of the Income Tax Act (Canada);

  (p) Completion Deadline ” means the latest date by which the transactions contemplated by this Agreement are to be completed, which date shall be September 30, 2013 or such later date as the Parties may mutually agree;

  (q) Contract ” means any note, mortgage, indenture, non-governmental permit or license, franchise, lease or other contract, agreement, commitment or arrangement binding upon Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be;

  (r) Deed of Undertaking ” means the Deed of Undertaking dated June 1, 2012 between Eco Endeavors and Waratah Capital Ltd., who subsequently assigned all rights thereto to Waratah, whereby Eco Endeavors agreed to repay amounts advanced by Waratah Capital Ltd. to Eco Endeavors;

  (s) Directed Selling Efforts ” means directed selling efforts as that term is defined in Regulation S and without limiting the foregoing, but for greater clarity in this Agreement, it means, subject to the exclusions from the definition of directed selling efforts contained in Regulation S, any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the Nava Common Shares and includes the placement of any advertisement in a publication with a general circulation in the United States that refers to the Nava Common Shares;

  (t) Dissent Rights ” means the rights of dissent of Eco Endeavors Shareholders in respect of the Eco Endeavors Resolution under section 272 of the BCBCA;

  (u) Eco Endeavors ” shall have the meaning ascribed thereto on the first page of this Agreement;

  (v) Eco Endeavors Assets ” has the meaning ascribed in Section 3.1(m) of this Agreement;

  (w) Eco Endeavors Board ” means the board of directors of Eco Endeavors;

  (x) Eco Endeavors Common Shares ” means the authorized common shares in the capital of Eco Endeavors, as presently constituted;

  (y) Eco Endeavors Financial Statements ” has the meaning ascribed in Section 3.1(k);

  (z) Eco Endeavors Assets ” has the meaning ascribed thereto in Section 3.1(m) of this Agreement;


- 4 -

  (aa) Eco Endeavors Preferred Shares ” means the authorized preferred shares in the capital of Eco Endeavors, as presently constituted;

  (bb) Eco Endeavors Resolution ” means the Special Resolution of the Eco Endeavors Shareholders approving the Amalgamation and this Agreement substantially in the form attached hereto as Schedule A;

  (cc) Eco Endeavors Shareholder Approval ” means the approval of the Eco Endeavors Shareholders in respect of the Eco Endeavors Resolution; and

  (dd) Eco Endeavors Shareholders ” means, at any time, the holders of outstanding Eco Endeavors Common Shares.

  (ee) EDGAR ” means the Electronic Data-Gathering, Analysis, and Retrieval system;

  (ff) Effective Date ” means the date shown on the certificate of amalgamation issued by the Registrar in respect of the Amalgamation in accordance with section 281 of the BCBCA;

  (gg) Effective Time ” means the earliest moment on the Effective Date or such other time on the Effective Date as the Parties hereto may agree in writing;

  (hh) Encumbrance ” means any mortgage, pledge, assignment, charge, lien, claim, security interest, adverse interest, other third person interest or encumbrance of any kind, whether contingent or absolute, and any agreement, option, right or privilege (whether by law, contract or otherwise) capable of becoming any of the foregoing;

  (ii) Environmental Approvals ” means all permits, certificates, licences, authorizations, consents, instructions, registrations, directions or approvals issued or required by any Governmental Entity pursuant to any Environmental Laws;

  (jj) Environmental Laws ” means all applicable Laws, including applicable common law, relating to the protection of the environment and employee and public health and safety, and includes Environmental Approvals;

  (kk) Former Eco Endeavors Shareholders ” means the holders of Eco Endeavors Common Shares immediately prior to the Effective Time;

  (ll) GAAP ” means United States generally accepted accounting principles;

  (mm) Governmental Entity ” means any applicable:

    (i) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign;

  (ii) subdivision, agent, commission, board or authority of any of the foregoing;

  (iii) quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing; or


- 5 -

  (iv) stock exchange, including the OTC Bulletin Board;

  (nn) Intellectual Property ” means the following intellectual property rights, both statutory and common law rights, if applicable: (i) copyrights, registrations and applications for registration thereof, (ii) trademarks, service marks, trade names, industrial designs, inventions, manuals, technology, software, slogans, domain names, logos, trade dress, and registrations and applications for registrations thereof, (iii) patents, as well as any reissued and re-examined patents and extensions corresponding to the patents, and any patent applications, as well as any related continuation, continuation in part and divisional applications and patents issuing, (iv) trade secrets, proprietary confidential information and proprietary know-how or (v) any other intellectual property;

  (oo) Kenderes Biogas Plant ” has the meaning set out in Recital C of this Agreement;

  (pp) Kenderes Biogaz Royalty ” means the royalty payable by Kenderes Biogaz to Palladio Projects Kft calculated as 10% of profits of the operating biogas plant operated by Kenderes Biogaz;

  (qq) Laws ” means all laws, statutes, codes, ordinances, decrees, rules, regulations, by-laws, statutory rules, principles of law, published policies and guidelines, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, including general principles of common and civil law, and terms and conditions of any grant of approval, permission, authority or license of any Governmental Entity, statutory body or self-regulatory authority, and the term “applicable” with respect to such Laws and in the context that refers to one or more Persons, means that such Laws apply to such Person or Persons or its or their business, undertaking, property or securities and emanate from a Governmental Entity (or any other Person) having jurisdiction over the aforesaid Person or Persons or its or their business, undertaking, property or securities;

  (rr) Material Adverse Change ” means any one or more changes, effects, events, occurrences or states of facts that, either individually or in the aggregate, have, or would reasonably be expected to have, a Material Adverse Effect on the applicable Party and its Subsidiaries on a consolidated basis;

  (ss) Material Adverse Effect ” means any change, effect, event, occurrence or state of facts that, individually or in the aggregate, with other such changes, effects, events, occurrences or states of facts, is or would reasonably be expected to be material and adverse to the business, properties, operations, results of operations or financial condition of the applicable Party and its Subsidiaries on a consolidated basis, except any change, effect, event, occurrence or state of facts resulting from or relating to:

  (i) the announcement of the execution of this Agreement or the transactions contemplated hereby or the performance of any obligation hereunder or communication by the applicable Party of its plans or intentions with respect to the other Party and/or any of its Subsidiaries;

  (ii) changes in the United States and Canadian economies in general or the United States and Canadian capital or currency markets in general;


- 6 -

  (iii) the threat, commencement, occurrence or continuation of any war, armed hostilities, acts of environmental groups, civil strife, or acts of terrorism;

  (iv) any change in applicable Laws or in the interpretation thereof by any Governmental Entity;

  (v) any change in GAAP;

  (vi) any natural disaster;

  (vii) any change in the price of uranium or gold;

  (viii) any change relating to foreign currency exchange rates; or

  (ix) changes affecting the mining industry generally,

  provided that, in the case of any changes referred to in clauses (ii) to (ix) above, inclusive such changes do not have a materially disproportionate effect on the applicable Party relative to comparable mineral exploration companies;

  (tt) Material Contracts ” means all Contracts or other obligations or rights (and all amendments, modifications and supplements thereto and all side letters to which Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, is a party affecting the obligations of any party thereunder) to which Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, is a party or by which any of their respective properties or assets are bound that are material to the business, properties or assets of Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, taken as a whole, including to the extent any of the following are material to the business, properties or assets of Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, taken as a whole, all:

  (i) employment, severance, personal services, consulting, non-competition or indemnification contracts (including any Contract to which Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, is a party involving employees);

  (ii) Contracts granting a right of first refusal or first negotiation;

  (iii) partnership or joint venture agreements;

  (iv) Contracts for the acquisition, sale or lease of material properties or assets of Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, (by purchase or sale of assets or stock or otherwise);

  (v) Contracts with any Governmental Entity;

  (vi) loan or credit agreements mortgages, indentures or other Contracts or instruments evidencing indebtedness for borrowed money by Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may


- 7 -

  be, or any such agreement pursuant to which indebtedness for borrowed money may be incurred;

  (vii) Contracts that purport to limit, curtail or restrict the ability of Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, to compete in any geographic area or line of business;

  (viii) commitments and agreements to enter into any of the foregoing; and

  (ix) all Contracts that provide for annual payments to or from Nava (or any Subsidiary of Nava) or Eco Endeavors (or any Subsidiary of Eco Endeavors), as the case may be, in excess of $25,000 per annum;

  (uu) MI 51-105 ” means Multilateral Instrument 51-105 – Issuers Quoted in the U.S. Over­the-Counter Markets as adopted by the British Columbia Securities Commission.

  (vv) Nava ” shall have the meaning ascribed thereto on the first page of this Agreement;

  (ww) Nava Board ” means the board of directors of Nava;

  (xx) Nava Common Shares ” means the authorized common shares in the capital of Nava as presently constituted;

  (yy) Nava Financial Statements ” shall have the meaning ascribed thereto in Section 3.2(j);

  (zz) Nava Options ” means the outstanding options of Nava which entitle the holders to purchase an aggregate of up to 275,000 Nava Common Shares;

  (aaa) Nava Placement Units ” means the units to be offered by Nava in the Private Placement, each unit consisting of one Nava Common Share and one Nava Placement Warrant;

  (bbb) Nava Placement Warrant ” means a share purchase warrant issued by Nava in the Private Placement, each share purchase warrant of which is exercisable into one Nava Common Share at the exercise price of $0.05 for a period of five years from the closing of the Private Placement;

  (ccc) Nava Properties and Assets ” has the meaning ascribed thereto in Section 3.2(m) of this Agreement;

  (ddd) Nava Public Documents ” means the public documents filed by Nava since January 1, 2013 and available on SEDAR under Nava’s SEDAR profile and filed with the SEC and available on EDGAR;

  (eee) Nava Units ” means the units to be issued by Nava to the Eco Endeavors Shareholders at the Effective Time in accordance with Section 2.1(b)(i), each unit consisting of one Nava Common Share and one Nava Warrant;

  (fff) Nava Warrant ” means a share purchase warrant of Nava issued as part of the Nava Units, each of which entitles the holder to acquire one Nava Common Share at the exercise price of $0.05 for a period of five years from the Effective Date;


- 8 -

  (ggg) Newco ” shall have the meaning ascribed thereto on the first page of this Agreement;

  (hhh) Newco Shares ” means common shares in the capital of Newco;

  (iii) Non-Canadian Eco Endeavors Shareholders ” means an Eco Endeavors Shareholder that is not a Canadian Resident and is not a U.S. Person;

  (jjj) Party ” shall mean, as the context requires, either Nava, Newco, Eco Endeavors, Kenderesh or Kenderes Biogaz as applicable and “ Parties ” shall mean all of them;

  (kkk) Person ” means any individual, firm, partnership, joint venture, association, trust, trustee, executor, administrator, legal personal representative, estate, group, body corporate, corporation, unincorporated association or organization, Governmental Entity, syndicate or other entity, whether or not having legal status;

  (lll) Private Placement ” means the non-brokered private placement of Nava Placement Units to be offered by Nava at a price of $0.05 per Nava Placement Unit for gross proceeds of at least $1,000,000;

  (mmm) Registrar ” means the registrar appointed under section 400 of the BCBCA;

  (nnn) Regulation D ” means Regulation D adopted by the SEC under the 1933 Act;

  (ooo) Regulation S ” means Regulation S adopted by the SEC under the 1933 Act;

  (ppp) SEC ” means the United States Securities and Exchange Commission;

  (qqq) Securities Authorities ” means the securities commissions and/or other securities regulatory authorities in the provinces and territories of Canada;

  (rrr) SEDAR ” means the System for Electronic Document Analysis and Retrieval;

  (sss) Subsidiary ” has that meaning as set out in section 2(2) of the BCBCA;

  (ttt) Substantial U.S. Market Interest ” means substantial U.S. market interest as that term is defined in Regulation S;

  (uuu) Tax ” and “ Taxes ” means all taxes, assessments, charges, dues, duties, rates, fees, imposts, levies and similar charges of any kind lawfully levied, assessed or imposed by any Governmental Entity, including all income taxes (including any tax on or based upon net income, gross income, income as specially defined, earnings, profits or selected items of income, earnings or profits) and all capital taxes, gross receipts taxes, environmental taxes, sales taxes, use taxes, ad valorem taxes, value added taxes, transfer taxes (including, without limitation, taxes relating to the transfer of interests in real property or entities holding interests therein), franchise taxes, license taxes, withholding taxes, payroll taxes, employment taxes, Canada Pension Plan contributions, excise, severance, social security, workers’ compensation, employment insurance or compensation taxes or premium, stamp taxes, occupation taxes, premium taxes, property taxes, windfall profits taxes, alternative or add-on minimum taxes, goods and services tax, customs duties or other taxes, fees, imports, assessments or charges of any kind whatsoever, together with any interest and any penalties or additional amounts imposed by any taxing authority


- 9 -

  (domestic or foreign) on such entity, and any interest, penalties, additional taxes andadditions to tax imposed with respect to the foregoing;

  (vvv) Tax Act ” means the Income Tax Act (Canada), as amended and the regulations thereunder, as amended;

  (www) Tax Returns ” means all returns, schedules, elections, declarations, reports, information returns, notices, forms, statements and other documents made, prepared or filed with any taxing authority or required to be made, prepared or filed with any taxing authority relating to Taxes;

  (xxx) United States ” or “ U.S. ” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;

  (yyy) U.S. Person ” has the meaning ascribed to such term in Rule 902 of Regulation S;

  (zzz) Waratah ” means Waratah Investments Limited;

  (aaaa) Waratah Loan ” means the amounts advanced by Waratah to Eco Endeavors pursuant to the terms of the Deed of Undertaking; and

  (bbbb) Waratah Royalty ” means the royalty granted by Eco Endeavors as described in Schedule F attached hereto.

In addition, words and phrases used herein and defined in the BCBCA shall have the same meaning herein as in the BCBCA unless the context otherwise requires.

1.2 Interpretation Not Affected by Headings

The division of this Agreement into articles, sections, subsections, paragraphs and subparagraphs and the insertion of headings herein are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “herein”, “hereto”, “hereunder” and similar expressions refer to this Agreement and the schedules attached hereto and not to any particular article, section or other portion hereof and include any agreement, schedule or instrument supplementary or ancillary hereto or thereto.

1.3 Number and Gender

In this Agreement, unless the context otherwise requires, words importing the singular only shall include the plural and vice versa and words importing the use of either gender shall include both genders and neuter.

1.4 Date for any Action

If the date on which any action is required to be taken hereunder by any party hereto is not a Business Day, such action shall be required to be taken on the next succeeding day that is a Business Day.

1.5 Statutory References

Any reference in this Agreement to a statute includes all regulations and rules made thereunder, all amendments to such statute or regulation in force from time to time and any statute or regulation that supplements or supersedes such statute or regulation.


- 10 -

1.6 Currency

Unless otherwise expressly stated, all references in this Agreement to dollar amounts are expressed in United States dollars.

1.7 Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable Laws, the parties hereto waive any provision of Law that renders any provision of this Agreement or any part thereof invalid or unenforceable in any respect. The parties hereto will engage in good faith negotiations to replace any provision hereof or any part thereof that is declared invalid or unenforceable with a valid and enforceable provision or part thereof, the economic effect of which approximates as much as possible the invalid or unenforceable provision or part thereof that it replaces.

1.8 Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement shall have the meanings attributable thereto under, and all determinations of an accounting nature required to be made hereunder shall be made in a manner consistent with GAAP.

1.9 Knowledge

Where the phrases “to the knowledge of Nava” or “to the knowledge of Eco Endeavors” are used in respect of Nava or Eco Endeavors, such phrase shall mean, in respect of each representation and warranty or other statement which is qualified by such phrase, that such representation and warranty or other statement is being made based upon:

  (a) in the case of Nava, the actual knowledge of management of Nava after appropriate inquiries and investigations; and

  (b) in the case of Eco Endeavors, the actual knowledge of management of Eco Endeavors after appropriate inquiries and investigations.

1.10 Meaning of Certain Phrase

In this Agreement the phrase “in the ordinary and regular course of business” shall mean and refer to those activities that are normally conducted by corporations engaged in the business of the generation of electricity from biogas.

1.11 Schedules

The following schedules are attached to, and are deemed to be incorporated into and form part of, this Agreement:

  Schedule A -Form of Eco Endeavors Resolution
Schedule B -Form of Newco Resolution
Schedule C – Form of Amalgamation Application
Schedule D – Form of Articles of Amalco
Schedule E – List of Intellectual Property
Schedule F – Waratah Royalties
Schedule G – Eco Endeavors Disclosure Statement


- 11 -

ARTICLE 2
THE AMALGAMATION

2.1 Terms of Amalgamation

Eco Endeavors, Newco and Nava hereby covenant and agree to implement the Amalgamation in accordance with the terms and subject to the conditions of this Agreement, as follows:

  (a) at the Effective Time, Newco and Eco Endeavors shall amalgamate and continue as one company, being Amalco, pursuant to the provisions of Section 269 of the BCBCA;

  (b) at the Effective Time:

  (i) all of the Eco Endeavors Common Shares outstanding immediately prior to the Effective Time shall be cancelled, and holders of Eco Endeavors Common Shares outstanding immediately prior to the Effective Time, other than Nava and Newco, shall receive in exchange for their Eco Endeavors Common Shares so cancelled, 60,000,000 Nava Units on a pro-rata basis at a deemed value of $0.05 per Nava Unit and neither Nava nor Newco shall receive any repayment of capital in respect of any Eco Endeavors Common Shares held by them that are cancelled pursuant to this subsection 2.1(b)(i);

  (ii) all of the common shares of Newco outstanding immediately prior to the Effective Time shall be cancelled and replaced with an equal number of common shares of Amalco issued by Amalco; and

  (iii) as consideration for the issuance of Nava Units pursuant to the Amalgamation, Amalco shall issue to Nava one common share of Amalco for each Nava Unit issued;

  (c) as a result of the foregoing:

  (i) in accordance with section 282 of the BCBCA, among other things, the property, rights and interests of each of Eco Endeavors and Newco will continue to be the property, rights and interests of Amalco, and Amalco will continue to be liable for the obligations of each of Eco Endeavors and Newco; and

  (ii) Amalco will be a wholly-owned subsidiary of Nava.

2.2 Effective Date

The Amalgamation shall be completed on the Effective Date and shall be effective at the Effective Time.

2.3 Closing

Unless this Agreement is terminated pursuant to the provisions hereof, Nava, Newco and Eco Endeavors shall meet at the offices of Clark Wilson LLP, Suite 900 – 885 West Georgia Street, Vancouver, British Columbia at 10:00 a.m., Vancouver time, on the Business Day prior to the Effective Date, or at such other time, date or place as they may mutually agree upon, and each of them shall deliver to the other Parties and Newco, as the case may be:


- 12 -

  (a) the documents required or contemplated to be delivered by it hereunder in order to complete, or necessary or reasonably requested to be delivered by it by the other Parties in order to effect the Amalgamation, provided that each such document required to be dated the Effective Date shall be dated as of, or become effective on, the Effective Date and shall be held in escrow to be released upon the Amalgamation becoming effective; and

  (b) written confirmation as to the satisfaction or waiver of all of the conditions in its favour contained in Article 5 hereof.

2.4 Amalgamation Application

Subject to the rights of termination contained in Article 6 hereof, upon obtaining the Eco Endeavors Shareholder Approval and the other conditions contained in Article 5 hereof being satisfied or waived, Eco Endeavors and Newco shall jointly file the Amalgamation Application, which shall be substantially in the form attached hereto as Schedule D, together with such other documents as may be required under the BCBCA, with the Registrar in accordance with the BCBCA in order to effect the Amalgamation. To the extent appropriate, the Amalgamation Application may be filed with the Registrar on a date agreed upon by the Parties in advance of the Effective Date, subject to the right of any Party to withdraw the Amalgamation Application by filing with the registrar a notice of withdrawal pursuant to section 280 of BCBCA.

Unless otherwise agreed to by Nava and Eco Endeavors, the name of Amalco shall be “Nava Holdings Inc.”.

2.5 Registered Office of Amalco

The address of the registered and records office of Amalco shall be Suite 900 – 885 West Georgia Street, Vancouver, British Columbia V6C 3H1.

2.6 Authorized Capital of Amalco

Amalco shall be authorized to issue an unlimited number of common shares (being the Amalco Shares) and an unlimited number of preferred shares. At the Effective Time, the capital account in the records of Amalco for the Amalco Shares shall be equal to the capital attributed to the Eco Endeavors Common Shares (other than any Eco Endeavors Common Shares held by Nava or Newco) and the Newco Shares.

2.7 Initial Directors of Amalco

The first directors of Amalco shall be the persons whose names and business addresses appear below: 


- 13 -

2.8 Articles of Amalco

The Articles of Amalco, which shall be substantially in the form attached as Schedule D shall be signed by one or more of the directors of Amalco referred to in section 2.7 hereof.

2.9 Securities Laws

  (a) The issuance and sale of the Nava Units to the Canadian Eco Endeavors Shareholders will be made in reliance on an exemption from the prospectus filing requirements contained in section 2.16 of NI 45-106 and the exemption from the registration requirements contained in Regulation S promulgated under the 1933 Act. Nava reserves the right to request from the Canadian Eco Endeavors Shareholders any additional certificates or representations required to establish an exemption from Applicable Securities Legislation prior to the issuance of any Nava Units.

  (b) For Canadian Eco Endeavors Shareholders, the certificates representing Nava Common Shares and the Nava Warrants to be issued to such shareholders on the Effective Date will be affixed with the following legends describing such restrictions:

  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

  THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY IN OR FROM A JURISDICTION OF CANADA UNLESS THE CONDITIONS OF SECTION 13 OF MULTILATERAL INSTRUMENT 51-105 ISSUERS QUOTED IN THE U.S. OVER-THE­COUNTER MARKETS ARE MET.

  (c) The issuance and sale of the Nava Units to Non-Canadian Eco Endeavors Shareholders will be made in reliance on an exemption from the prospectus filing requirements contained in Regulation S. The Non-Canadian Eco Endeavors Shareholders acknowledge and understand that any Nava Units that they receive pursuant to this Agreement will be subject to resale restrictions in accordance with Applicable Securities Legislation and that as a result the certificates representing such Nava Common Shares and Nava Warrants will be affixed with the following legend in accordance with Regulation S of the 1933 Act:


- 14 -

  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

  (d) Pursuant to MI 51-105, a subsequent trade in the Nava Common Shares in or from any province in Canada will be a distribution subject to the prospectus requirements of applicable Canadian securities legislation (including the Securities Act (British Columbia)) unless certain conditions are met, which conditions include, among others, a requirement that any certificate representing the Nava Common Shares (or ownership statement issued under a direct registration system or other book entry system) bear the restrictive legend (the “ 51-105 Legend ”) specified in MI 51-105.

  (e) The Parties acknowledge that on or prior to the Effective Date, the Non-Canadian Eco Endeavors Shareholders and Canadian Eco Endeavors Shareholders who are not subject to MI 51-105 (together the “ Non-51-105 Vendors ”) may be required to provide Nava with a certificate dated as of the Effective Date, whereby each such person represents and warrants that they are not residents of the provinces subject to MI 51-105 and further undertakes not to trade or resell any of the Nava Common Shares received by them pursuant to this Agreement in or from any provinces subject to MI 51-105 and further still that the Non-51-105 Vendors understand and agree that Nava and others will rely upon the truth and accuracy of these representations and warranties and agree that if such representations and warranties are no longer accurate or have been breached, the Non-51­105 Vendor will immediately notify Nava. Such certificate may further require that by executing and delivering this Agreement and as a consequence of the representations and warranties made by the Non-51-105 Vendors in this section, the Non-51-105 Vendors will have directed Nava not to include the 51-105 Legend on any certificates representing the Nava Common Shares or Nava Warrants to be issued to the Non-51-105 Vendors. As a consequence, the Non-51-105 Vendors will not be able to rely on the resale provisions of MI 51-105, and any subsequent trade in any of the Nava Common Shares in or from the provinces subject to MI 51-105 will be a distribution subject to the prospectus and registration requirements of the MI 51-105. As set out in such certificate, if the Non-51­105 Vendor wishes to trade or resell any of the Nava Common Shares in or from a province subject to MI 51-105, the Non-51-105 Vendor will agree and undertake to return, prior to any such trade or resale, any certificate representing the Nava Common Shares or Nava Warrants, as applicable, to Nava’s transfer agent to have the 51-105 Legend imprinted on such certificate or to instruct Nava’s transfer agent to include the 51-105 Legend on any ownership statement issued under a direct registration system or other book entry system.


- 15 -

2.10 Consultation

Nava and Eco Endeavors will consult with each other in issuing any press release or otherwise making any public statement with respect to this Agreement or the Amalgamation and in making any filing with any Governmental Entity, Securities Authority or stock exchange with respect thereto. Each of Nava and Eco Endeavors shall use its commercially reasonable efforts to enable the other of them to review and comment on all such press releases and filings prior to the release or filing, respectively, thereof, provided, however, that the obligations herein will not prevent a Party from making, after consultation with the other Party, such disclosure as is required by applicable Laws or the rules and policies of any applicable stock exchange.

2.11 Effecting the Amalgamation

Subject to the rights of termination contained in Article 6, upon the Eco Endeavors Shareholder Approval being obtained and the other conditions contained in Article 5 being complied with or waived, Eco Endeavors and Newco shall file with the Registrar the Amalgamation Application and such other documents as may be required in order to effect the Amalgamation.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of Eco Endeavors, Kenderesh and Kenderes Biogaz

Each of Eco Endeavors, Kenderesh and Kenderes Biogaz hereby jointly and severally represents and warrants to Nava and hereby acknowledges that Nava is relying upon such representations and warranties in connection with entering into this Agreement and agreeing to complete the Amalgamation, as follows:

  (a) Organization . Each of Eco Endeavors and its Subsidiaries has been incorporated and, validly exists under the laws of the jurisdiction of its incorporation and is in good standing under applicable corporate laws and has full corporate and legal power and authority to own its property and assets and to conduct its business as currently owned and conducted. Each of Eco Endeavors and its Subsidiaries is registered, licensed or otherwise qualified as a foreign corporation in each jurisdiction where the nature of the business or the location or character of the property and assets owned or leased by it requires it to be so registered, licensed or otherwise qualified, other than those jurisdictions where the failure to be so registered, licensed or otherwise qualified would not have a Material Adverse Effect on Eco Endeavors. All of the outstanding shares of each Subsidiary of Eco Endeavors are validly issued, and are fully paid and non-assessable to the extent such a concept exists under applicable Laws. All of the outstanding shares of each Subsidiary of Eco Endeavors are owned directly or indirectly by Eco Endeavors. Except for the proposed conversion of the Waratah Loan, there are no outstanding options, rights, entitlements, understandings or commitments (contingent or otherwise) regarding the right to acquire any issued or unissued securities of, or interest in, any Subsidiary of Eco Endeavors.

  (b) Capitalization . Eco Endeavors is authorized to issue an unlimited number of Eco Endeavors Common Shares and an unlimited number of preferred shares. As of the date of this Agreement, there were outstanding:

  (i) 15,892,062 Eco Endeavors Common Shares; and

  (ii) no Eco Endeavors Preferred Shares.


- 16 -

  Except for the proposed conversion of the Waratah Loan and except pursuant to this Agreement and the transactions contemplated hereby, as of the date hereof, there are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating Eco Endeavors to issue or sell any shares of Eco Endeavors or any securities or obligations of any kind convertible into or exchangeable for any shares of Eco Endeavors. All outstanding Eco Endeavors Common Shares have been authorized and are validly issued and outstanding as fully paid and non-assessable shares, free of pre-emptive rights. As of the date hereof, and except as set out in Schedule G, there are no outstanding bonds, debentures or other evidences of indebtedness of Eco Endeavors. Except for any Eco Endeavors Common Shares that are subject to dissent rights at the Effective Time in accordance with the provisions of the BCBCA, there are no outstanding contractual obligations of Eco Endeavors to repurchase, redeem or otherwise acquire any outstanding Eco Endeavors Common Shares or with respect to the voting or disposition of any outstanding Eco Endeavors Common Shares.

  (c) Authority . Eco Endeavors has all necessary corporate power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by Eco Endeavors as contemplated by this Agreement, and to perform its obligations hereunder and under such other agreements and instruments. The execution and delivery of this Agreement by Eco Endeavors and the completion by Eco Endeavors of the transactions contemplated by this Agreement have been authorized by the Eco Endeavors Board and, subject to obtaining the Eco Endeavors Shareholder Approval in the manner contemplated herein, no other corporate proceedings on the part of Eco Endeavors are necessary to authorize this Agreement or the completion by Eco Endeavors of the transactions contemplated hereby other than the filing of the Amalgamation Application with the Registrar. This Agreement has been executed and delivered by Eco Endeavors and constitutes a legal, valid and binding obligation of Eco Endeavors, enforceable against Eco Endeavors in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other applicable Laws relating to or affecting creditors’ rights generally, and to general principles of equity. The execution and delivery by Eco Endeavors of this Agreement and the performance by Eco Endeavors of its obligations hereunder and the completion of the transactions contemplated hereby, do not and will not:

  (i) result in a violation, contravention or breach or constitute a default under, or entitle any party to terminate, accelerate, modify or call any obligations or rights under, require any consent to be obtained under or give rise to any termination rights under any provision of:

  (A) the articles or notice of articles of Eco Endeavors or any Subsidiary of Eco Endeavors;

  (B) any applicable Law, or

  (C) any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise, concession, easement, contract, agreement, licence, permit or other instrument to which Eco Endeavors or any Subsidiary of Eco Endeavors is bound or is subject to or of which Eco Endeavors or any Subsidiary of Eco Endeavors is the beneficiary,


- 17 -

  in each case, which would, individually or in the aggregate, have a Material Adverse Effect on Eco Endeavors;

  (ii) cause any indebtedness owing by Eco Endeavors or any Subsidiary of Eco Endeavors to come due before its stated maturity or cause any available credit to cease to be available which would, individually or in the aggregate, have a Material Adverse Effect on Eco Endeavors;

  (iii) result in the imposition of any Encumbrance upon any of the property or assets of Eco Endeavors or any Subsidiary of Eco Endeavors or give any Person the right to acquire any of Eco Endeavors’ assets, or restrict, hinder, impair or limit the ability of Eco Endeavors or any Subsidiary of Eco Endeavors to conduct the business of Eco Endeavors or any Subsidiary of Eco Endeavors as and where it is now being conducted which would, individually or in the aggregate, have a Material Adverse Effect on Eco Endeavors;

  (iv) result in or accelerate the time for payment or vesting of, or increase the amount of any severance, unemployment compensation, “golden parachute”, change of control provision, bonus, termination payments, retention bonus or otherwise, becoming due to any director or officer of Eco Endeavors or any Subsidiary of Eco Endeavors or increase any benefits otherwise payable under any pension or benefits plan of Eco Endeavors or any Subsidiary of Eco Endeavors or result in the acceleration of the time of payment or vesting of any such benefits; or

  (v) result in the revocation, suspension, cancellation, variation or non-renewal of any permits, licenses, leases or other instruments, conferring rights in respect of the property interests in which Eco Endeavors or any Subsidiary of Eco Endeavors has an interest.

  No consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity or other Person is required to be obtained by Eco Endeavors or any Subsidiary of Eco Endeavors in connection with the execution and delivery of this Agreement or the consummation by Eco Endeavors of the transactions contemplated hereby other than:

  (i) filings required under the BCBCA;

  (ii) filings with and approvals by the Securities Authorities; and

  (iii) any other consents, approvals, orders, authorizations, declarations or filings which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect on Eco Endeavors.

  (d) Directors’ Approvals . The Eco Endeavors Board has unanimously:

  (i) determined that the Amalgamation is in the best interests of Eco Endeavors;

  (ii) determined to recommend that the Eco Endeavors Shareholders vote in favour of the Eco Endeavors Resolution; and


- 18 -

  (iii) authorized the entering into of this Agreement, and the performance of Eco Endeavors’ obligations hereunder.

  (e) Contracts . Except for the Deed of Undertaking, each of the Material Contracts to which Eco Endeavors or any Subsidiary of Eco Endeavors is a party constitutes a valid and legally binding obligation of Eco Endeavors, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

  (f) Waivers, Consents . There are no waivers, consents, notices or approvals required to complete the transactions contemplated under this Agreement from other parties to the Material Contracts of Eco Endeavors.

  (g) No Defaults . Except as set out in Schedule G, none of Eco Endeavors or any Subsidiary of Eco Endeavors is in default under, and, there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute a default by Eco Endeavors or any Subsidiary of Eco Endeavors under any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise, concession, easement, Contract of Eco Endeavors or any Subsidiary of Eco Endeavors, agreement, licence, permit or other instrument that is material to the conduct of the business of Eco Endeavors or any Subsidiary of Eco Endeavors to which any of them is a party or by which any of them is bound or subject to that would, individually or in the aggregate, have a Material Adverse Effect on Eco Endeavors. No party to any Contract of Eco Endeavors or any Subsidiary of Eco Endeavors has given written notice to Eco Endeavors or any Subsidiary of Eco Endeavors of or made a claim against Eco Endeavors or any Subsidiary of Eco Endeavors with respect to any breach or default thereunder, in any such case in which such breach or default constitutes a Material Adverse Effect on Eco Endeavors.

  (h) Absence of Changes . Except as disclosed to Nava in writing prior to the date hereof, since January 1, 2013:

  (i) Eco Endeavors and each Subsidiary of Eco Endeavors has conducted its business only in the ordinary and regular course of business consistent with past practice;

  (ii) none of Eco Endeavors or any Subsidiary of Eco Endeavors has incurred or suffered a Material Adverse Change;

  (iii) there has not been any acquisition or sale by Eco Endeavors or any Subsidiary of Eco Endeavors of any material property or assets thereof;

  (iv) other than in the ordinary and regular course of business consistent with past practice, there has not been any incurrence, assumption or guarantee by Eco Endeavors or any Subsidiary of Eco Endeavors of any debt for borrowed money, any creation or assumption by Eco Endeavors or any Subsidiary of Eco Endeavors of any Encumbrance, any making by Eco Endeavors or any Subsidiary of Eco Endeavors of any loan, advance or capital contribution to or investment in any other Person or any entering into, amendment of, relinquishment, termination or non-renewal by Eco Endeavors or any Subsidiary of Eco Endeavors of any contract, agreement, licence, lease transaction,


- 19 -

  commitment or other right or obligation that would, individually or in theaggregate, have a Material Adverse Effect on Eco Endeavors;

  (v) Eco Endeavors has not declared or paid any dividends or made any other distribution in respect of any of the Eco Endeavors Common Shares;

  (vi) Eco Endeavors has not effected or passed any resolution to approve a split, consolidation or reclassification of any of the outstanding Eco Endeavors Common Shares;

  (vii) other than in the ordinary and regular course of business consistent with past practice, there has not been any material increase in or modification of the compensation payable by Eco Endeavors or any Subsidiary of Eco Endeavors to any of their respective directors, officers, employees or consultants or any grant to any such director, officer, employee or consultant of any increase in severance or termination pay or any increase or modification of any bonus, pension, insurance or benefit arrangement made to, for or with any of such directors, officers, employees or consultants;

  (viii) Eco Endeavors has not effected any material change in its accounting methods, principles or practices, other than as disclosed to Nava; and

  (ix) Eco Endeavors has not adopted any, or amended any, collective bargaining agreement, bonus, pension, profit sharing, stock purchase, stock option or other benefit plan or shareholder rights plan.

  (i) Employment Agreements . Neither Eco Endeavors nor any Subsidiary of Eco Endeavors:

  (i) is a party to any written or oral policy, agreement, obligation or understanding providing for retention bonuses, severance or termination payments to, or any employment or consulting agreement with, any director or officer of Eco Endeavors or any Subsidiary of Eco Endeavors that would be triggered by Eco Endeavors’ entering into this Agreement or the completion of the Amalgamation;

  (ii) has any employee or consultant whose employment or contract with Eco Endeavors or any Subsidiary of Eco Endeavors cannot be terminated by Eco Endeavors or any Subsidiary of Eco Endeavors in accordance with the provisions of such employment or consultant contract following the completion of the Amalgamation; and

  (iii) (A)       is a party to any collective bargaining agreement;

  (B) is, to the knowledge of Eco Endeavors, subject to any application for certification or threatened or apparent union-organizing campaigns for employees not covered under a collective bargaining agreement; or

  (C) is subject to any current, or, to the knowledge of Eco Endeavors, pending or threatened strike or lockout.

  (j) Books and Records . The corporate records and minute books of Eco Endeavors and each Subsidiary of Eco Endeavors have been maintained in accordance with all applicable


- 20 -

  Laws and are complete and accurate in all material respects, except where such incompleteness or inaccuracy would not have a Material Adverse Effect on Eco Endeavors, financial books and records and accounts of Eco Endeavors and each Subsidiary of Eco Endeavors in all material respects:

  (i) have been maintained in accordance with good business practices on a basis consistent with prior years and past practice; and

  (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and acquisitions and dispositions of assets of Eco Endeavors and each Subsidiary of Eco Endeavors.

  (k) Financial Information. When prepared and delivered, the audited annual consolidated financial statements of Eco Endeavors for the fiscal years ended March 31, 2013 and 2012 and the notes thereto (the “ Eco Endeavors Financial Statements ”) will be prepared in accordance with GAAP consistently applied, and will fairly present in all material respects the financial condition of Eco Endeavors at the respective dates indicated and the results of operations of Eco Endeavors for the periods covered. Except as disclosed in the Eco Endeavors Financial Statements, as of the Closing Date Eco Endeavors will not have any liability or obligation (including, without limitation, liabilities or obligations to fund any operations or work or exploration program, to give any guarantees or for Taxes), whether accrued, absolute, contingent or otherwise, or any related party transactions or off-balance sheet transactions not reflected in the Eco Endeavors Financial Statements, except liabilities and obligations incurred in the normal course of business (including the business of operating and developing Eco Endeavors assets) since March 31, 2013, which liabilities or obligations would not reasonably be expected to have a Material Adverse Effect on Eco Endeavors.

  (l) Litigation . There is no claim, action, proceeding or investigation pending or in progress or, to the knowledge of Eco Endeavors, threatened against or relating to Eco Endeavors, any Subsidiary of Eco Endeavors or affecting any of their respective properties or assets before any Governmental Entity which individually or in the aggregate has, or could reasonably be expected to have, a Material Adverse Effect on Eco Endeavors and Eco Endeavors is not aware of any existing ground on which any such claim, action, proceeding or investigation might be commenced with any reasonable likelihood of success. There is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress, or, to the knowledge of Eco Endeavors, threatened against or relating to Eco Endeavors or any Subsidiary of Eco Endeavors before any Governmental Entity. Neither Eco Endeavors or any Subsidiary of Eco Endeavors nor any of their respective properties or assets are subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may restrict the right or ability of Eco Endeavors or each Subsidiary of Eco Endeavors, as the case may be, to conduct their respective business in all material respects as it has been carried on prior to the date hereof, or that would materially impede the consummation of the transactions contemplated by this Agreement, except to the extent any such matter would not, individually or in the aggregate, have a Material Adverse Effect on Eco Endeavors.

  (m) Title to Assets and Operational Matters . Eco Endeavors and each Subsidiary of Eco Endeavors is the legal and beneficial owner of and has good title to the respective assets thereof in which Eco Endeavors or any such Subsidiary has an interest (collectively, for the purposes of this Section 3.1(m), the “ Eco Endeavors Assets ”). All agreements 


- 21 -

  by which Eco Endeavors or any Subsidiary of Eco Endeavors holds an interest in the Eco Endeavors Assets are in good standing according to their respective terms. Eco Endeavors has conducted and is conducting its business in material compliance with all applicable Laws, including all applicable Laws and all Governmental Entity authorizations and instructions, whether in writing or oral, relating to the Eco Endeavors Assets. Eco Endeavors has not received any notice of the revocation or cancellation of, or any intention to revoke or cancel, any of the permits, licenses, leases or other instruments conferring rights in respect of the Eco Endeavors Assets that would, individually or in the aggregate, result in a Material Adverse Effect on Eco Endeavors. Without limiting the generality of the foregoing, Eco Endeavors has obtained all material licences and permits necessary for the operation of the business of Eco Endeavors and any Subsidiary of Eco Endeavors as presently conducted, and has not taken any action which would impair the ability of Eco Endeavors or any Subsidiary of Eco Endeavors to obtain necessary licences or permits in the future for the continued operation of such business, in accordance with applicable Laws and requirements of all Governmental Entities.

  (n) Royalty. Except as set out in Schedule G or as contemplated herein, there are no landowner’s royalties, overriding royalties, net profit interests or similar interests or any other rights or interests whatsoever of third parties by which Eco Endeavors or a Subsidiary thereof is bound or in relation to the Eco Endeavor Assets.

  (o) Assets . Except as set out in Schedule G, Eco Endeavors and each Subsidiary of Eco Endeavors has good and marketable title to its assets free and clear of any security interests, liens, charges, mortgages, pledges, Encumbrances, adverse claims and demands of any nature or kind whatsoever recorded or unrecorded, except as disclosed to Nava in writing prior to the date hereof.

  (p) Condition and Sufficiency of Assets. All of the Eco Endeavor Assets are: (i) in reasonable operating condition and repair, ordinary wear and tear excepted; (ii) not in need of material maintenance or repairs (ordinary or routine maintenance or repairs excepted); and (iii) adequate and sufficient for the continuing of the business as now conducted.

  (q) Intellectual Property. Schedule E sets forth a true and complete list of all Intellectual Property held, owned or licensed by Eco Endeavors or a Subsidiary of Eco Endeavors, whether registered or unregistered, and all applications therefor. Except as set forth in Schedule E: (i) Eco Endeavors or a Subsidiary of Eco Endeavors owns, possesses or has the right to use all Intellectual Property rights; (ii) no royalties, honorariums or fees are payable by Eco Endeavors or a Subsidiary of Eco Endeavors to other Persons by reason of ownership, sale, or use of the Intellectual Property, other than with respect to Intellectual Property identified in Schedule E as licensed to Eco Endeavors or a Subsidiary of Eco Endeavors; and (iii) no product or service manufactured, marketed or sold by Eco Endeavors or a Subsidiary of Eco Endeavors violates any licenses or infringes any intellectual property rights of another.

  (r) Insurance . Eco Endeavors maintains policies of insurance in amounts and in respect of such risks as are normal and usual for companies of a similar size and business and such policies are in full force and effect as of the date hereof.

  (s) Environmental . To the knowledge of Eco Endeavors:


- 22 -

  (i) Eco Endeavors and each Subsidiary of Eco Endeavors are in compliance in all material respects with Environmental Laws;

  (ii) Eco Endeavors and each Subsidiary of Eco Endeavors have operated their respective businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws;

  (iii) there is no material claim or judicial or administrative proceeding which may affect either Eco Endeavors or any Subsidiary of Eco Endeavors or any of the properties or assets of Eco Endeavors or any Subsidiary of Eco Endeavors relating to or alleging any violation of Environmental Laws; and

  (iv) Eco Endeavors and each Subsidiary of Eco Endeavors hold all licences, permits and approvals required under any Environmental Laws in connection with the operation of their respective businesses as presently conducted and the ownership and use of their respective assets, other than those which the failure to hold would not reasonably be expected to have a Material Adverse Effect on Eco Endeavors, and neither Eco Endeavors nor any Subsidiary of Eco Endeavors nor any of their respective assets is the subject of any investigation, evaluation, audit or review not in the ordinary and regular course of business by any Governmental Entity to determine whether any violation of Environmental Laws has occurred or is occurring, and neither Eco Endeavors nor any Subsidiary of Eco Endeavors is subject to any known environmental liabilities.

  (t) Tax Matters . Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Eco Endeavors and except as set out in Schedule G:

  (i) Eco Endeavors and each Subsidiary of Eco Endeavors has duly and timely made or prepared all Tax Returns required to be made or prepared by it, has duly and timely filed all Tax Returns required to be filed by it with the appropriate Governmental Entity and has, in all material respects, completely and correctly reported all income and all other amounts or information required to be reported thereon;

  (ii) Eco Endeavors and each Subsidiary of Eco Endeavors has:

  (A) duly and timely paid all Taxes due and payable by it;

  (B) duly and timely withheld all Taxes and other amounts required by applicable Laws to be withheld by it and has duly and timely remitted to the appropriate Governmental Entity such Taxes and other amounts required by applicable Laws to be remitted by it; and

  (C) duly and timely collected all amounts on account of sales or transfer taxes, including goods and services, harmonized sales and provincial or territorial sales taxes, required by applicable Laws to be collected by it and has duly and timely remitted to the appropriate Governmental Entity any such amounts required by applicable Laws to be remitted by it;


- 23 -

  (iii) the charges, accruals and reserves for Taxes reflected in the financial records of Eco Endeavors (whether or not due and whether or not shown on any Tax Return but excluding any provision for deferred income taxes) are, in the opinion of Eco Endeavors, adequate under GAAP to cover Taxes with respect to Eco Endeavors and any Subsidiary of Eco Endeavors accruing through the date hereof;

  (iv) there are no proceedings, investigations, audits, assessments, reassessments or claims now pending or, to the knowledge of Eco Endeavors, threatened against Eco Endeavors or any Subsidiary of Eco Endeavors that propose to assess Taxes in addition to those reported in the Tax Returns; and

  (v) no waiver of any statutory limitation period with respect to Taxes has been given or requested with respect to Eco Endeavors or any Subsidiary of Eco Endeavors.

  (u) Pension and Employee Benefits . Eco Endeavors and each Subsidiary of Eco Endeavors has complied, in all material respects, with all of the terms of the pension and other employee compensation and benefit obligations of Eco Endeavors and each Subsidiary of Eco Endeavors, as the case may be, including the provisions of any collective agreements, funding and investment contracts or obligations applicable thereto, arising under or relating to each of the pension or retirement income plans or other employee compensation or benefit plans, agreements, policies, programs, arrangements or practices, whether written or oral, which are maintained by or binding upon Eco Endeavors or any Subsidiary of Eco Endeavors, as the case may be, other than such non-compliance that would not reasonably be expected to have a Material Adverse Effect on Eco Endeavors.

  (v) Compliance with Laws . Except with respect to matters relating to the environment or Environmental Laws (which are addressed in Section 3.1(s)), Eco Endeavors and each Subsidiary of Eco Endeavors has complied with and are not in violation of any applicable Laws other than such non-compliance or violations that would not, individually or in the aggregate, have a Material Adverse Effect on Eco Endeavors.

  (w) No Option on Assets . Except as disclosed to Nava in writing prior to the date hereof or as disclosed in Schedule G, no Person has any agreement or option or any right or privilege capable of becoming an agreement or option for the purchase from Eco Endeavors or any Subsidiary of Eco Endeavors any of the material assets of Eco Endeavors or any Subsidiary of Eco Endeavors.

  (x) Certain Contracts . Neither Eco Endeavors nor any Subsidiary of Eco Endeavors is a party to or bound by any non-competition agreement or, except as disclosed to Nava in writing prior to the date hereof, any other agreement, obligation, judgment, injunction, order or decree that purports to:

  (i) limit the manner or the localities in which all or any material portion of the business of Eco Endeavors or any Subsidiary of Eco Endeavors are conducted;

  (ii) limit any business practice of Eco Endeavors or any Subsidiary of Eco Endeavors in any material respect; or

  (iii) restrict any acquisition or disposition of any property by Eco Endeavors or any Subsidiary of Eco Endeavors in any material respect.


- 24 -

  (y) No Broker’s Commission . Neither Eco Endeavors, nor any Subsidiary of Eco Endeavors has entered into any agreement that would entitle any Person to any valid claim against them for a broker’s commission, finder’s fee or any like payment in respect of the Amalgamation or any other matter contemplated by this Agreement.

  (z) Vote Required . The only votes of the holders of any class or series of securities of Eco Endeavors necessary to approve this Agreement, the Amalgamation and the transactions contemplated hereby or thereby is the Eco Endeavors Shareholders Approval.

  (aa) U.S. Securities Law Matters . None of Eco Endeavors, any of its affiliates or any person acting on its or their behalf has made or will make any Directed Selling Efforts in the United States with respect to the Nava Common Shares or has engaged or will engage in any form of general solicitation or general advertising (as those terms are used in Regulation D), including advertisements, articles, notices or other communications published in any newspaper, magazine, or similar media or broadcast over radio or television, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising in connection with the offer or exchange of the Nava Common Shares in the United States.

  (bb) Restrictions on Business Activities . There is no agreement, judgment, injunction, order or decree binding upon Eco Endeavors or to its knowledge any Subsidiary of Eco Endeavors that has or could be reasonably expected to have the effect of prohibiting, restricting or materially impairing: (i) any business practice of Eco Endeavors or any Subsidiary of Eco Endeavors, (ii) except as disclosed to Nava in writing prior to the date hereof, any acquisition of property by Eco Endeavors or any Subsidiary of Eco Endeavors, or (iii) the conduct of business by Eco Endeavors or any Subsidiary of Eco Endeavors as currently conducted.

  (cc) Creditors of Eco Endeavors . Eco Endeavors has reasonable grounds for believing that no creditor of Eco Endeavors will be materially prejudiced by the Amalgamation.

  (dd) Expropriation . No property or asset of Eco Endeavors has been taken or expropriated by any Governmental Entity and no notice or proceeding in respect of any such expropriation has been given or commenced or, to the knowledge of Eco Endeavors, is there any intent or proposal to give any such notice or commence any such proceeding.

  (ee) Right to Use Personal Information . All personal information in the possession of Eco Endeavors has been collected, used and disclosed in compliance with all applicable privacy Laws in those jurisdictions in which Eco Endeavors, or Eco Endeavors is deemed by operation of law in those jurisdictions, to conduct its business. Eco Endeavors has disclosed to Nava all contracts and facts concerning the collection, use, retention, destruction and disclosure of personal information, and there are no other contracts, or facts which, on completion of the transactions contemplated by this Agreement, would restrict or interfere with the use of any personal information by Nava in the operation of its business as conducted by Eco Endeavors before the Closing. There are no claims pending or, to the knowledge of Eco Endeavors, threatened, with respect to Eco Endeavors’ collection, use or disclosure of personal information.

  (ff) No Material Misstatments or Omissions. To the knowledge of Eco Endeavors, no representations, warranties or certifications by Eco Endeavors and each Subsidiary of Eco Endeavors in this Agreement or in any agreement or document executed by Eco Endeavors or a Subsidiary of Eco Endeavors pursuant hereto or in connection herewith, or in any schedule hereto or thereto, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements or facts contained therein not misleading. Except as otherwise disclosed in Schedule G, Eco Endeavors has furnished or caused to be furnished to Nava, or its representative for review copies that are complete and correct, in all material respects, of all material agreements and documents executed by Eco Endeavors or a Subsidiary of Eco Endeavors.


 

- 25 -

3.2 Representations and Warranties of Nava and Newco

Nava and Newco each hereby represents and warrants to Eco Endeavors, and hereby acknowledges that Eco Endeavors is relying upon such representations and warranties in connection with entering into this Agreement and agreeing to complete the Amalgamation, as follows:

  (a) Organization . Each of Nava and Newco has been incorporated and validly exists under the laws of the jurisdiction of its incorporation and is in good standing under applicable corporate laws and has full corporate and legal power and authority to own its property and assets and to conduct its business as currently owned and conducted. Each of Nava and Newco is registered, licensed or otherwise qualified in each jurisdiction where the nature of the business or the location or character of the property and assets owned or leased by it requires it to be so registered, licensed or otherwise qualified, other than those jurisdictions where the failure to be so registered, licensed or otherwise qualified would not have a Material Adverse Effect on Nava or Newco, as applicable. All of the outstanding shares of Newco are validly issued, and are fully paid and non-assessable to the extent such a concept exists under applicable Laws. All of the outstanding shares of Newco are owned directly by Nava. There are no outstanding options, rights, entitlements, understandings or commitments (contingent or otherwise) regarding the right to acquire any issued or unissued securities of, or interest in, Newco.

  (b) Capitalization . Nava is authorized to issue 400,000,000 Nava Common Shares and Newco is authorized to issue an unlimited number of Newco Shares. As of the date of this Agreement, there were outstanding:

  (i) 12,338,604 Nava Common Shares;

  (ii) Nava Options to acquire an aggregate of up to 275,000 Nava Common Shares; and

  (iii) 1 Newco Share.

  Except for the Nava Options, and except pursuant to this Agreement and the transactions contemplated hereby, as of the date hereof, there are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating Nava or Newco to issue or sell any shares of Nava or Newco or any securities or obligations of any kind convertible into or exchangeable for any shares of Nava or Newco. All outstanding Nava Common Shares and Newco Shares have been authorized and are validly issued and outstanding as fully paid and non-assessable shares, free of pre-emptive rights. As of the date hereof, there are no outstanding bonds, debentures or other evidences of indebtedness of Nava or Newco. There are no outstanding contractual obligations of Nava or Newco to repurchase, redeem or otherwise acquire any outstanding Nava Common Shares or Newco Shares or with respect to the voting or disposition of any outstanding Nava Common Shares or Newco Shares.


 

- 26 -

  (c) Authority . Nava and Newco has all necessary corporate power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by Nava as contemplated by this Agreement, and to perform its obligations hereunder and under such other agreements and instruments. The execution and delivery of this Agreement by Nava and the completion by Nava of the transactions contemplated by this Agreement have been authorized by the Nava Board, and subject to obtaining the Nava Shareholder Approval in the manner contemplated herein, no other corporate proceedings on the part of Nava are necessary to authorize this Agreement or the completion by Nava of the transactions contemplated hereby other than the filing of the Amalgamation Application with the Registrar. This Agreement has been executed and delivered by Nava and constitutes a legal, valid and binding obligation of Nava, enforceable against Nava in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and other applicable Laws relating to or affecting creditors’ rights generally, and to general principles of equity. The execution and delivery by Nava of this Agreement and the performance by it of its obligations hereunder and the completion of the transactions contemplated hereby, do not and will not:

  (i) result in a violation, contravention or breach or constitute a default under, or entitle any party to terminate, accelerate, modify or call any obligations or rights under, require any consent to be obtained under or give rise to any termination rights under any provision of:

  (A) the articles or bylaws of Nava;

  (B) any applicable Law; or

  (C) any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise, concession, easement, contract, agreement, licence, permit or other instrument to which Nava is bound or is subject to or of which Nava is the beneficiary;

  in each case, which would, individually or in the aggregate, have a Material Adverse Effect on Nava;

  (ii) cause any indebtedness owing by Nava or Newco to come due before its stated maturity or cause any available credit to cease to be available which would, individually or in the aggregate, have a Material Adverse Effect on Nava;

  (iii) result in the imposition of any Encumbrance upon any of the property or assets of Nava or Newco or give any Person the right to acquire any of Nava’s assets, or restrict, hinder, impair or limit the ability of Nava or Newco to conduct the business of Nava or Newco as and where it is now being conducted which would, individually or in the aggregate, have a Material Adverse Effect on Nava;

  (iv) result in or accelerate the time for payment or vesting of, or increase the amount of any severance, unemployment compensation, “golden parachute”, change of control provision, bonus, termination payments, retention bonus or otherwise, becoming due to any director or officer of Nava or Newco or increase any benefits otherwise payable under any pension or benefits plan of Nava or Newco or result in the acceleration of the time of payment or vesting of any such benefits; or


 

- 27 -

  (v) result in the revocation, suspension, cancellation, variation or non-renewal of any mining claims, concessions, licenses, leases or other instruments, conferring mineral rights in respect of the material properties in which Nava or Newco has an interest.

  No consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity or other Person is required to be obtained by Nava or Newco in connection with the execution and delivery of this Agreement or the consummation by Nava of the transactions contemplated hereby other than:

  (i) filings required under the BCBCA with respect to Newco;

  (ii) filings with and approvals required by the Securities Authorities and stock exchanges; and

  (iii) any other consents, approvals, orders, authorizations, declarations or filings which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect on Nava.

  (d) Directors’ Approvals . The Nava Board has unanimously:

  (i) determined that the Amalgamation is in the best interests of Nava; and

  (ii) authorized the entering into of this Agreement, and the performance of Nava’ obligations hereunder.

  (e) Contracts . Each of the Material Contracts to which Nava or Newco is a party constitutes a valid and legally binding obligation of Nava, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).

  (f) Waivers, Consents . There are no waivers, consents, notices or approvals required to complete the transactions contemplated under this Agreement from other parties to the Material Contracts of Nava.

  (g) No Defaults . Neither Nava nor Newco is in default under, and, there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute a default by Nava or Newco, under any credit arrangement, note, bond, mortgage, indenture, deed of trust, lease, franchise, concession, easement, Contract of Nava or Newco, agreement, licence, permit or other instrument that is material to the conduct of the business of Nava or Newco to which it is a party or by which it is bound or subject to that would, individually or in the aggregate, have a Material Adverse Effect on Nava. No party to any Contract of Nava or Newco has given written notice to Nava or Newco of or made a claim against Nava or Newco with respect to any breach or default thereunder, in any such case in which such breach or default constitutes a Material Adverse Effect on Nava.


 

- 28 -

  (h) Absence of Changes . Except as disclosed in the Nava Public Documents, since December 31, 2012:

  (i) Nava has conducted its business only in the ordinary and regular course of business consistent with past practice;

  (ii) neither Nava nor Newco has incurred or suffered a Material Adverse Change;

  (iii) there has not been any acquisition or sale by Nava and Newco of any material property or assets thereof;

  (iv) other than in the ordinary and regular course of business consistent with past practice, there has not been any incurrence, assumption or guarantee by Nava or Newco of any debt for borrowed money, any creation or assumption by Nava or Newco of any Encumbrance, any making by Nava or Newco of any loan, advance or capital contribution to or investment in any other Person or any entering into, amendment of, relinquishment, termination or non-renewal by Nava or Newco, of any contract, agreement, licence, lease transaction, commitment or other right or obligation that would, individually or in the aggregate, have a Material Adverse Effect on Nava;

  (v) Nava has not declared or paid any dividends or made any other distribution in respect of any of the Nava Common Shares;

  (vi) Nava has not effected or passed any resolution to approve a split, consolidation or reclassification of any of the outstanding Nava Common Shares;

  (vii) other than in the ordinary and regular course of business consistent with past practice, there has not been any material increase in or modification of the compensation payable by Nava or Newco to any of its directors, officers, employees or consultants or any grant to any such director, officer, employee or consultant of any increase in severance or termination pay or any increase or modification of any bonus, pension, insurance or benefit arrangement (including, without limitation, the granting of Nava Options) made to, for or with any of such directors, officers, employees or consultants;

  (viii) Nava has not effected any material change in its accounting methods, principles or practices, other than as disclosed in the Nava Financial Statements; and

  (ix) Nava has not adopted any, or amended any, collective bargaining agreement, bonus, pension, profit-sharing, stock purchase, stock option or other benefit plan or shareholder rights plan.

  (i) Employment Agreements . Neither Nava nor Newco:

  (i) is a party to any written or oral policy, agreement, obligation or understanding providing for retention bonuses, severance or termination payments to, or any employment or consulting agreement with any director or officer of Nava or


 

- 29 -

  Newco that would be triggered by Nava’ entering into this Agreement or thecompletion of the Amalgamation;

  (ii) has any employee or consultant whose employment or contract with Nava or Newco cannot be terminated by Nava or Newco in accordance with the provisions of such employment or consultant contract following the completion of the Amalgamation; and

  (iii) (A)       is a party to any collective bargaining agreement;

  (B) is, to the knowledge of Nava, subject to any application for certification or threatened or apparent union-organizing campaigns for employees not covered under a collective bargaining agreement; or

  (C) is subject to any current, or to the knowledge of Nava, pending or threatened strike or lockout.

  (j) Financial Matters . Each of the audited financial statements of Nava for the year ended June 30, 2012, the unaudited financial statements of Nava for the three and nine month periods ended March 31, 2013 and the respective notes thereto (collectively, the “ Nava Financial Statements ”) were prepared in accordance with GAAP consistently applied, and fairly present in all material respects the financial condition of Nava at the respective dates indicated and the results of operations of Nava for the periods covered. Except as disclosed in the Nava Financial Statements, as of the date hereof Nava does not have any liability or obligation (including, without limitation, liabilities or obligations to fund any operations or work or exploration program, to give any guarantees or for Taxes), whether accrued, absolute, contingent or otherwise, or any related party transactions or off-balance sheet transactions not reflected in the Nava Financial Statements, except liabilities and obligations incurred in the ordinary and regular course of business (including the business of operating, developing, constructing and exploring Nava’ projects) since March 31, 2013, which liabilities or obligations would not reasonably be expected to have a Material Adverse Effect on Nava.

  (k) Books and Records . The corporate records and minute books of Nava and Newco have been maintained in accordance with all applicable Laws and are complete and accurate in all material respects, except where such incompleteness or inaccuracy would not have a Material Adverse Effect on Nava. Financial books and records and accounts of Nava, in all material respects:

  (i) have been maintained in accordance with good business practices on a basis consistent with prior years and past practice;

  (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and acquisitions and dispositions of assets of Nava and Newco; and

  (iii) accurately and fairly reflect the basis for the Nava Financial Statements.

  (l) Litigation . There is no claim, action, proceeding or investigation pending or in progress or, to the knowledge of Nava threatened against or relating to Nava or Newco or affecting any of their respective properties or assets before any Governmental Entity which individually or in the aggregate has, or could reasonably be expected to have, a Material Adverse Effect on Nava, and Nava is not aware of any existing ground on which any such claim, action, proceeding or investigation might be commenced with any reasonable likelihood of success. There is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress, or, to the knowledge of Nava, threatened against or relating to Nava or Newco before any Governmental Entity. Neither Nava nor Newco nor any of their respective properties or assets are subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may restrict the right or ability of Nava or Newco, as the case may be, to conduct their respective business in all material respects as it has been carried on prior to the date hereof, or that would materially impede the consummation of the transactions contemplated by this Agreement, except to the extent any such matter would not, individually or in the aggregate, have a Material Adverse Effect on Nava.


 

- 30 -

  (m) Title to Properties and Operational Matters . Nava or Newco, as applicable, is the legal and beneficial owner of and has good title to the exploitation permits, mining claims, concessions, licenses, leases, options or other instruments conferring mineral rights to Nava or Newco in respect of the properties in which Nava or Newco has an interest (collectively, for the purposes of this Section 3.2(m), the “ Nava Properties and Assets ”). All agreements by which Nava or Newco holds an interest in the Nava Properties and Assets are in good standing according to their respective terms and, to the knowledge of Nava, the Nava Properties and Assets are in good standing under applicable Laws and all filings and work commitments required by Nava to maintain the Nava Properties and Assets in good standing have been properly recorded and filed in a timely manner with the appropriate Governmental Entity and there are no material Encumbrances or any other material interests in or on such Nava Properties and Assets except as disclosed by Nava in the Nava Public Documents. To Nava’ knowledge, there are no material adverse claims against or challenges to the title or ownership of any of the Nava Properties and Assets. Nava has conducted and is conducting its business in material compliance with all applicable Laws, including all applicable Laws and all Governmental Entity authorizations and instructions, whether in writing or oral, relating to the Nava Properties and Assets. Nava has not received any notice of the revocation or cancellation of, or any intention to revoke or cancel, any of the exploitation permits, mining claims, concessions, licenses, leases or other instruments conferring mineral rights in respect of the Nava Properties and Assets that would, individually or in the aggregate, result in a Material Adverse Effect on Nava. Without limiting the generality of the foregoing, Nava has obtained all material licences and permits necessary for the operation of the business of Nava or Newco as presently conducted, and has not taken any action which would impair the ability of Nava or Newco to obtain necessary licences or permits in the future for the continued operation of such business, in accordance with applicable Laws and requirements of all Governmental Entities.

  (n) Royalty Payments . Except as disclosed in the Nava Public Documents, there are no landowner’s royalties, overriding royalties, net profits interests or similar interests or any other rights or interests whatsoever of third parties by which Nava or Newco is bound on or in relation to the Nava Properties and Assets.

  (o) Assets . Nava has good and marketable title to its assets free and clear of any security interests, liens, charges, mortgages, pledges, Encumbrances, adverse claims and demands of any nature or kind whatsoever recorded or unrecorded, except as disclosed in the Nava Public Documents.


 

- 31 -

  (p) Insurance . Nava maintains policies of insurance in amounts and in respect of such risks as are normal and usual for companies of a similar size and business and such policies are in full force and effect as of the date hereof.

  (q) Environmental . To the knowledge of Nava:

  (i) Nava and Newco are in compliance in all material respects with Environmental Laws;

  (ii) Nava and Newco have operated their respective businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws;

  (iii) there is no material claim or judicial or administrative proceeding which may affect either Nava or Newco or any of the properties or assets of Nava or Newco relating to or alleging any violation of Environmental Laws; and

  (iv) Nava and Newco hold all licences, permits and approvals required under any Environmental Laws in connection with the operation of their respective businesses as presently conducted and the ownership and use of their respective assets, other than those which the failure to hold would not reasonably be expected to have a Material Adverse Effect on Nava, and neither Nava or Newco nor any of their respective assets is the subject of any investigation, evaluation, audit or review not in the ordinary and regular course of business by any Governmental Entity to determine whether any violation of Environmental Laws has occurred or is occurring, and neither Nava nor Newco is subject to any known environmental liabilities.

  (r) Tax Matters . Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Nava:

  (i) Nava and Newco has duly and timely made or prepared all Tax Returns required to be made or prepared by it, has duly and timely filed all Tax Returns required to be filed by it with the appropriate Governmental Entity and has, in all material respects, completely and correctly reported all income and all other amounts or information required to be reported thereon;

  (ii) Nava and Newco has:

  (A) duly and timely paid all Taxes due and payable by it;

  (B) duly and timely withheld all Taxes and other amounts required by applicable Laws to be withheld by it and has duly and timely remitted to the appropriate Governmental Entity such Taxes and other amounts required by applicable Laws to be remitted by it; and

  (C) duly and timely collected all amounts on account of sales or transfer taxes, including goods and services, harmonized sales and provincial or territorial sales taxes, required by applicable Laws to be collected by it and has duly and timely remitted to the appropriate Governmental Entity any such amounts required by applicable Laws to be remitted by it;


 

- 32 -

  (iii) the charges, accruals and reserves for Taxes reflected on the Nava Financial Statements (whether or not due and whether or not shown on any Tax Return but excluding any provision for deferred income taxes) are, in the opinion of Nava, adequate under GAAP, as applicable, to cover Taxes with respect to Nava accruing through the date hereof;

  (iv) there are no proceedings, investigations, audits, assessments, reassessments or claims now pending or to the knowledge of Nava, threatened against Nava that propose to assess Taxes in addition to those reported in the Tax Returns; and

  (v) no waiver of any statutory limitation period with respect to Taxes has been given or requested with respect to Nava.

  (s) Pension and Employee Benefits . Each of Nava and Newco has complied, in all material respects with all of the terms of the pension and other employee compensation and benefit obligations of Nava and Newco, as the case may be, including the provisions of any collective agreements, funding and investment contracts or obligations applicable thereto, arising under or relating to each of the pension or retirement income plans or other employee compensation or benefit plans, agreements, policies, programs, arrangements or practices, whether written or oral, which are maintained by or binding upon Nava or Newco, as the case may be, other than such non-compliance that would not reasonably be expected to have a Material Adverse Effect on Nava.

  (t) Reporting Status . Nava is a reporting issuer in good standing in the province of British Columbia. The Nava Common Shares are quoted on the OTC Bulletin Board and Nava is in material compliance with the rules and regulations of the OTC Bulletin Board and FINRA and has not received any “strikes” issued against it by the OTC Bulletin Board or FINRA during the past two year period.

  (u) Reports . To the knowledge of Nava, since January 1, 2013, Nava has filed with the Securities Authorities, all applicable self-regulatory authorities and the OTC Bulletin Board, a true and complete copy of all forms, reports, schedules, statements, certifications, material change reports and other documents required to be filed by it, including the Nava Public Documents. The Nava Public Documents, at the time filed or, if amended, as of the date of such amendment:

  (i) did not contain any misrepresentation (as defined in the Securities Act (British Columbia)) and did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and

  (ii) complied in all material respects with the requirements of applicable securities Laws and the rules, policies and instruments of all Securities Authorities or stock exchange or other self-regulatory authority having jurisdiction over Nava except where such non-compliance has not had or would not reasonably be expected to have a Material Adverse Effect on Nava.

  Nava has not filed any confidential material change or other report or other document with any Securities Authorities or stock exchange or other self-regulatory authority which at the date hereof remains confidential.


 

- 33 -

  (v) Compliance with Laws . Except with respect to matters relating to the environment or Environmental Laws, which are addressed in Section 3.2(q)(iv), each of Nava and Newco has complied with and is not in violation of any applicable Laws other than such non­compliance or violations that would not, individually or in the aggregate, have a Material Adverse Effect on Nava.

  (w) No Cease Trade . Nava is not subject to any cease trade or other order of any applicable stock exchange or Securities Authority and, to the knowledge of Nava, no investigation or other proceedings involving Nava that may operate to prevent or restrict trading of any securities of Nava are currently in progress or pending before any applicable stock exchange or Securities Authority.

  (x) No Option on Assets . No Person has any agreement or option or any right or privilege capable of becoming an agreement or option for the purchase from Nava or Newco of any of the material assets of Nava or Newco.

  (y) Certain Contracts . Neither Nava nor Newco is a party to or bound by any non-competition agreement or any other agreement, obligation, judgment, injunction, order or decree that purports to:

  (i) limit the manner or the localities in which all or any material portion of the business of Nava or Newco is conducted;

  (ii) limit any business practice of Nava or Newco in any material respect; or

  (iii) restrict any acquisition or disposition of any property by Nava or Newco in any material respect.

  (z) No Broker’s Commission . Nava has not entered into any agreement that would entitle any Person to any valid claim against Nava for a broker’s commission, finder’s fee or any like payment in respect of the Amalgamation or any other matter contemplated by this Agreement.

  (aa) Shares . The Nava Common Shares to be issued pursuant to the Amalgamation will, upon issue, be issued as fully paid and non-assessable shares and quoted for trading on the OTC Bulletin Board.

  (bb) U.S. Securities Law Matters .

  (i) Nava is not now, and is not registered, or required to be registered, as an “investment company” as defined in the 1940 Act.

  (ii) Neither Nava nor any of its affiliates, nor any person acting on its or their behalf, has made or will make:

  (A) any offer to sell, or any solicitation of an offer to buy, any Nava Common Shares to any person in the United States; or

  (B) any sale of Nava Common Shares unless, at the time the buy order was or will have been originated, the purchaser is (i) outside the United States


 

- 34 -

  or (ii) Nava, its affiliates, and any person acting on their behalf reasonably believe that the purchaser is outside the United States.

  (iii) None of Nava, any of its affiliates or any person acting on its or their behalf has made or will make any Directed Selling Efforts in the United States with respect to the Nava Common Shares or has engaged or will engage in any form of general solicitation or general advertising (as those terms are used in Regulation D), including advertisements, articles, notices or other communications published in any newspaper, magazine, or similar media or broadcast over radio or television, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising in connection with the offer or exchange of the Nava Common Shares in the United States.

  (iv) Except with respect to the offer of the Nava Common Shares contemplated herein, Nava has not, for a period of six months prior to the date hereof, sold, offered for sale or solicited any offer to buy any of its securities in the United States.

  (cc) Restrictions on Business Activities . There is no agreement, judgment, injunction, order or decree binding upon Nava or Newco or that has or could be reasonably expected to have the effect of prohibiting, restricting or materially impairing any business practice of Nava or Newco, any acquisition of property by Nava or Newco, or the conduct of business by Nava or Newco as currently conducted.

  (dd) Expropriation . No property or asset of Nava has been taken or expropriated by any Governmental Entity and no notice or proceeding in respect of any such expropriation has been given or commenced or, to the knowledge of Nava, is there any intent or proposal to give any such notice or commence any such proceeding.

  (ee) Right to Use Personal Information . All personal information in the possession of Nava has been collected, used and disclosed in compliance with all applicable privacy Laws in those jurisdictions in which Nava, or Nava is deemed by operation of law in those jurisdictions, to conduct its business. Nava has disclosed to Eco Endeavors all contracts and facts concerning the collection, use, retention, destruction and disclosure of personal information, and there are no other contracts, or facts which, on completion of the transactions contemplated by this Agreement, would restrict or interfere with the use of any personal information by Nava in the operation of its business as conducted by Nava before the Closing. There are no claims pending or, to the knowledge of Nava, threatened, with respect to Nava’ collection, use or disclosure of personal information.

  (ff) No Material Misstatments or Omissions. To the knowledge of Nava, no representations, warranties or certifications by Nava in this Agreement or in any agreement or document executed by Nava pursuant hereto or in connection herewith, or in any schedule hereto or thereto, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements or facts contained therein not misleading. Nava has furnished or caused to be furnished to Eco Endeavors, or its representative for review copies that are complete and correct, in all material respects, of all material agreements and documents executed by Nava.


 

- 35 -

  (gg) Newco Business. Except for the capitalization of Newco, the approval and adoption of standard post-incorporation matters in accordance with the BCBCA and the matters contemplated herein, Newco has not carried on any business from incorporation to date.

3.3 Survival of Representations and Warranties

The representations and warranties contained in this Agreement shall survive the execution and delivery of this Agreement and shall expire and be terminated and extinguished upon completion of the Amalgamation.

ARTICLE 4
COVENANTS

4.1 Covenants of Eco Endeavors

Eco Endeavors hereby covenants and agrees with Nava as follows:

  (a) Eco Endeavors Shareholder Approval . Eco Endeavors shall use its commercially reasonable efforts to obtain, in a timely manner prior to the Closing Date, all necessary shareholder approvals required to complete the transactions contemplated hereunder.

  (b) Copy of Documents . Eco Endeavors shall furnish promptly to Nava a copy of any dealings or communications with any Governmental Entity or Securities Authority in connection with, or in any way affecting, the transactions contemplated by this Agreement.

  (c) Certain Actions Prohibited . Other than in contemplation of or as required to give effect to the transactions contemplated by this Agreement or as otherwise permitted pursuant to this Agreement, Eco Endeavors shall not, without the prior written consent of Nava, which consent shall not be unreasonably withheld or delayed, directly or indirectly do or permit to occur any of the following prior to the Effective Date:

  (i) issue, sell, grant, pledge, lease, dispose of, encumber or create any Encumbrance on or agree to issue, sell, grant, pledge, lease, dispose of, or encumber or create any Encumbrance on any shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares of Eco Endeavors;

  (ii) incur or commit to incur in any debt, except in the ordinary and regular course of business, or to finance its working capital requirements, or as otherwise contemplated in connection with the transactions contemplated in this Agreement;

  (iii) declare or pay any dividends or distribute any of its property or assets to shareholders with respect to the Eco Endeavors Common Shares;

  (iv) enter into any material contracts, other than in the ordinary and regular course of business, in connection with the Amalgamation or as otherwise contemplated herein;


 

- 36 -

  (v) alter or amend its notice of articles or articles, other than as may be required in connection with the transactions contemplated herein;

  (vi) engage in any business enterprise or other activity different from that carried on or contemplated as of the date hereof;

  (vii) sell, pledge, lease, dispose of, grant any interest in, encumber or agree to sell, pledge, lease, dispose of, grant any interest in or encumber any of its assets, except where to do so would not have a Material Adverse Effect on Eco Endeavors;

  (viii) redeem, purchase or offer to purchase any of Eco Endeavors Common Shares or other securities; or

  (ix) acquire, directly or indirectly, any assets, including but not limited to securities of other companies, other than in the ordinary and regular course of business.

  (d) Certain Actions . Eco Endeavors shall

  (i) not take any action, or refrain from taking any action or permit any action to be taken or not taken (subject to a commercially reasonable efforts qualification), inconsistent with the provisions of this Agreement or that would reasonably be expected to materially impede the completion of the transactions contemplated hereby or would render, or that could reasonably be expected to render, any representation or warranty made by Eco Endeavors in this Agreement untrue or inaccurate in any material respect at any time on or before the Effective Date if then made or that would or could have a Material Adverse Effect on Eco Endeavors; and

  (ii) promptly notify Nava of:

  (A) any Material Adverse Change or Material Adverse Effect, or any change, event, occurrence or state of facts that could reasonably be expected to become a Material Adverse Change or to have a Material Adverse Effect, in respect of the business or in the conduct of the business of Eco Endeavors;

  (B) any material Governmental Entity or third person complaints, investigations or hearings (or communications indicating that the same may be contemplated);

  (C) any breach by Eco Endeavors of any covenant or agreement contained in this Agreement; and

  (D) any event occurring subsequent to the date hereof that would render any representation or warranty of Eco Endeavors contained in this Agreement, if made on or as of the date of such event or the Effective Date, to be untrue or inaccurate in any material respect.

  (e) Satisfaction of Conditions . Eco Endeavors shall use all commercially reasonable efforts to satisfy, or cause to be satisfied, all conditions precedent to its obligations to the extent that the same is within its control and to take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under all


 

- 37 -

  applicable Laws to complete the transactions contemplated by this Agreement, includingusing its commercially reasonable efforts to:

  (i) obtain the Eco Endeavors Shareholder Approval in accordance with the provisions of the BCBCA and the requirements of any applicable regulatory authority;

  (ii) obtain all other consents, approvals and authorizations as are required to be obtained by Eco Endeavors or any Subsidiary of Eco Endeavors under any applicable Laws or from any Governmental Entity that would, if not obtained, materially impede the completion of the transactions contemplated by this Agreement or have a Material Adverse Effect on Eco Endeavors;

  (iii) effect all necessary registrations, filings and submissions of information requested by Governmental Entities required to be effected by it in connection with the transactions contemplated by this Agreement and participate and appear in any proceedings of any Party hereto before any Governmental Entity;

  (iv) oppose, lift or rescind any injunction or restraining order or other order or action challenging or affecting this Agreement, the transactions contemplated hereby or seeking to enjoin or delay, or otherwise adversely affecting the ability of the parties hereto to consummate, the transactions contemplated hereby, subject to the Eco Endeavors Board determining in good faith after receiving advice from outside legal counsel (which may include written opinions or advice) that taking such action would be inconsistent with the fiduciary duties of such directors under applicable Laws, and provided that, immediately upon receipt of such advice, Eco Endeavors advises Nava in writing that it has received such advice and provides written details thereof to Nava;

  (v) fulfill all conditions and satisfy all provisions of this Agreement and the Amalgamation required to be fulfilled or satisfied by Eco Endeavors; and

  (vi) co-operate with Nava in connection with the performance by it of its obligations hereunder, provided however that the foregoing shall not be construed to obligate Eco Endeavors to pay or cause to be paid any monies to cause such performance to occur, other than as contemplated in this Agreement.

  (f) Keep Fully Informed . Subject to applicable Laws, Eco Endeavors shall use commercially reasonable efforts to conduct itself so as to keep Nava fully informed as to the material decisions or actions required or required to be made with respect to the operation of its business.

  (g) Co-operation . Eco Endeavors shall make, or cooperate as necessary in the making of, all necessary filings and applications under all applicable Laws required in connection with the transactions contemplated hereby and take all reasonable action necessary to be in compliance with such Laws.

  (h) Representations . Eco Endeavors shall use its commercially reasonable efforts to conduct its affairs so that all of the representations and warranties of Eco Endeavors contained herein shall be true and correct on and as of the Effective Date as if made on and as of such date.


 

- 38 -

  (i) Closing Documents . Eco Endeavors shall execute and deliver, or cause to be executed and delivered, at the closing of the transactions contemplated hereby such customary agreements, certificates, resolutions, opinions and other closing documents as may be required by Nava, all in form satisfactory to Nava, acting reasonably.

  (j) Due Diligence. Eco Endeavors shall provide in a timely manner all information reasonably required by Nava in connection with its due diligence investigation of Eco Endeavors, Kenderesh and Kenderes Biogaz, including access to documents, personnel, staff, consultants and advisors.

  (k) Legal Opinion. Kenderes Biogaz shall provide an opinion of qualified counsel to Nava opining as to the validity and enforceability of this Agreement, that the transactions contemplated herein do not violate any laws of Hungry or any material contract to which Kenderes Biogaz is a party to, that Kenderes Biogaz is duly incorporated and in good standing under the laws of Hungary, that the assets held by Kenderes Biogaz are lawfully so held and any registrable interests are in good standing with applicable government authorities in Hungary and that such counsel is not aware of any actual pending or threatened litigation, and other matters reasonably requested by counsel to Nava.

4.2 Covenants of Nava

Nava hereby covenants and agrees with Eco Endeavors as follows:

  (a) Newco Shareholder Approval . Nava shall use its commercially reasonable efforts to obtain, in a timely manner prior to the Closing Date, Newco shareholder approval required to complete the transactions contemplated hereunder.

  (b) Super 8-K . Nava shall, in a timely and expeditious manner, but in no event later than four Business Days following September 30, 2013, prepare, with the assistance of Eco Endeavors, and file with the SEC a Super 8-K (which shall be in a form satisfactory to each of the Parties, acting reasonably), together with any other documents required by applicable Laws in accordance with all applicable Laws on the date of filing thereof, in the form and containing the information required by all applicable Laws and not containing any misrepresentation (as defined under applicable securities Laws and requirements) with respect thereto, other than with respect to any information relating to and provided by Eco Endeavors. Nava shall, with the assistance of Eco Endeavors, promptly prepare and file with the SEC such amendments or supplements to the Super 8­K, if any, as may be required by the SEC or under applicable Laws.

  (c) Copy of Documents . Nava shall furnish promptly to Eco Endeavors a copy of any filing under any applicable Laws and any dealings or communications with any Governmental Entity, Securities Authority or stock exchange in connection with, or in any way affecting, the transactions contemplated by this Agreement.

  (d) Certain Actions Prohibited . Other than in contemplation of or as required to give effect to the transactions contemplated by this Agreement or as otherwise permitted pursuant to this Agreement, Nava shall not, without the prior written consent of Eco Endeavors, which consent shall not be unreasonably withheld or delayed, directly or indirectly do or permit to occur any of the following prior to the Effective Date:


 

- 39 -

  (i) issue, sell, grant, pledge, lease, dispose of, encumber or create any Encumbrance on or agree to issue, sell, grant, pledge, lease, dispose of, or encumber or create any Encumbrance on any shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares of Nava, other than the issue of Nava Common Shares upon the exercise of Nava Options;

  (ii) incur or commit to incur any debt, except in the ordinary and regular course of business, or to finance its working capital requirements, or as otherwise contemplated herein in connection with the transactions contemplated by this Agreement;

  (iii) declare or pay any dividends or distribute any of its properties or assets to shareholders with respect to the Nava Common Shares;

  (iv) enter into material contracts, other than in the ordinary and regular course of business, in connection with the Amalgamation or as otherwise contemplated herein;

  (v) alter or amend its bylaws or articles;

  (vi) engage in any business enterprise or other activity different from that carried on or contemplated as of the date hereof;

  (vii) sell, pledge, lease, dispose of, grant any interest in, encumber or agree to sell, pledge, lease, dispose of, grant any interest in or encumber any of its assets except where to do so would not have a Material Adverse Effect on Nava;

  (viii) redeem, purchase or offer to purchase any of the Nava Common Shares, Nava Options, or other securities;

  (ix) acquire, directly or indirectly, any assets, including but not limited to securities of other companies, other than in the ordinary and regular course of business.

  (e) Certain Actions . Nava shall:

  (i) not take any action, or refrain from taking any action or permit any action to be taken or not taken (subject to a commercially reasonable efforts qualification), inconsistent with the provisions of this Agreement or that would reasonably be expected to materially impede the completion of the transactions contemplated hereby or would render, or that could reasonably be expected to render, any representation or warranty made by Nava in this Agreement untrue or inaccurate in any material respect at any time on or before the Effective Date if then made or that would or could have a Material Adverse Effect on Nava; and

  (ii) promptly notify Eco Endeavors of:

  (A) any Material Adverse Change or Material Adverse Effect, or any change, event, occurrence or state of facts that could reasonably be expected to become a Material Adverse Change or to have a Material Adverse Effect, in respect of the business or in the conduct of the business of Nava;


 

- 40 -

  (B) any material Governmental Entity or third person complaints, investigations or hearings (or communications indicating that the same may be contemplated);

  (C) any breach by Nava of any covenant or agreement contained in this Agreement; and

  (D) any event occurring subsequent to the date hereof that would render any representation or warranty of Nava contained in this Agreement, if made on or as of the date of such event or the Effective Date, to be untrue or inaccurate in any material respect.

  (f) Satisfaction of Conditions . Nava shall use all commercially reasonable efforts to satisfy, or cause to be satisfied, all of the conditions precedent to its obligations to the extent the same is within its control and to take, or cause to be taken, all other actions and to do, or cause to be done, all other things necessary, proper or advisable under all applicable Laws to complete the transactions contemplated by this Agreement, including using its commercially reasonable efforts to:

  (i) obtain shareholder approval from Newco in accordance with the policies of the BCBCA;

  (ii) obtain all other consents, approvals and authorizations as are required to be obtained by Nava or Newco under any applicable Laws or from any Governmental Entity that would, if not obtained, materially impede the completion of the transactions contemplated by this Agreement or have a Material Adverse Effect on Nava;

  (iii) effect all necessary registrations, filings and submissions of information requested by Governmental Entities required to be effected by it in connection with the transactions contemplated by this Agreement and participate, and appear in any proceedings of, any Party hereto before any Governmental Entity;

  (iv) oppose, lift or rescind any injunction or restraining order or other order or action challenging or affecting this Agreement, the transactions contemplated hereby or seeking to enjoin or delay, or otherwise adversely affecting the ability of the parties hereto to consummate, the transactions contemplated hereby, subject to the Nava Board determining in good faith after receiving advice from outside legal counsel (which may include written opinions or advice) that taking such action would be inconsistent with the fiduciary duties of such directors under applicable Laws, and provided that, immediately upon receipt of such advice, Nava advises Eco Endeavors in writing that it has received such advice and provides written details thereof to Eco Endeavors;

  (v) fulfill all conditions and satisfy all provisions of this Agreement and the Amalgamation required to be fulfilled or satisfied by Nava; and

  (vi) co-operate with Eco Endeavors in connection with the performance by Eco Endeavors of its obligations hereunder, provided however that the foregoing shall not be construed to obligate Nava to pay or cause to be paid any monies to cause such performance to occur, other than as contemplated in this Agreement.


 

- 41 -

  (g) Keep Fully Informed . Subject to applicable Laws, Nava shall use commercially reasonable efforts to conduct itself so as to keep Eco Endeavors fully informed as to the material decisions or actions required or required to be made with respect to the operation of its business.

  (h) Co-operation . Nava shall make, or cooperate as necessary in the making of, all necessary filings and applications under all applicable Laws required in connection with the transactions contemplated hereby and take all reasonable action necessary to be in compliance with such Laws.

  (i) Representations . Nava shall use its commercially reasonable efforts to conduct its affairs so that all of the representations and warranties of Nava contained herein shall be true and correct on and as of the Effective Date as if made on and as of such date.

  (j) Closing Documents . Nava shall execute and deliver, or cause to be executed and delivered, at the closing of the transactions contemplated hereby such customary agreements, certificates, opinions, resolutions and other closing documents as may be required by Eco Endeavors, all in form satisfactory to Eco Endeavors, acting reasonably.

  (k) Newco . In its capacity as the sole shareholder of Newco, Nava shall:

  (i) take all such action as is necessary or desirable to cause Newco to satisfy its obligations hereunder, including without limitation, passing a resolution in the form attached hereto as Schedule B, on or prior to the Effective Date, or such other date as may be agreed to by Eco Endeavors and Nava, acting reasonably;

  (ii) prior to the Effective Date, not cause or permit Newco to issue any securities or enter into any agreements to issue or grant options, warrants or rights to purchase any of its securities except for the issuance of a nominal number of Newco Shares to Nava, or carry on any business, enter into any transaction or effect any corporate act whatsoever, other than as contemplated herein or as reasonably necessary to carry out the Amalgamation, unless previously consented to in writing by Eco Endeavors; and

  (iii) after the Effective Date, cause Amalco to satisfy any obligations which Amalco may have to a Eco Endeavors Shareholder who exercises Dissent Rights.

  (l) Shares . Nava will issue, at the Effective Time, Nava Units, in accordance with the terms hereof, to those Eco Endeavors Shareholders who are entitled to receive Nava Units pursuant to the Amalgamation.

  (m) Listing of Shares . Until the earlier of:

  (i) the Effective Time; and

  (ii) the termination of this Agreement in accordance with Section 6.2,

  Nava shall use its commercially reasonable efforts to ensure that the Nava Common Shares, are continuously quoted on the OTC Bulletin Board.


 

- 42 -

  (n) Nava Board . Upon entry into this Agreement, the Nava Board shall procure a duly executed resignation and release in favour of Nava from Don Blackadar in the form and substance reasonably satisfactory to Eco Endeavors. Upon the Effective Date, the Nava Board and officers will have been re-organized to consist of:

4.3 Mutual Covenants of Nava and Eco Endeavors

  (a) Completion of Amalgamation . Each of the Parties agrees that, it shall complete the Amalgamation on such date as the parties may mutually agree to and prior to the Completion Deadline.

  At the Effective Time, the Nava Board shall approve resolutions to:

  (i) accept the resignations from the directors and officers of Nava that will no longer be serving in such capacity following the completion of the Amalgamation;

  (ii) change the composition of the Nava Board such that it will be comprised of the individuals listed in Section 4.2(n); and

  (iii) appoint the officers listed in Section 4.2(n).

  (b) Confidential Information . Each of the Parties agrees that any information as to the other Party’s financial condition, business, properties, title, assets and affairs (including any material contracts) received from the other Party as part of its due diligence investigations in connection with the transactions contemplated in this Agreement, including information which, at the time of receipt had not become generally available to the public, was not available to a Party or its representatives on a non-confidential basis before the date of the Letter Agreement or does not become available to a Party or its representatives on a non-confidential basis from a person who is not, to the knowledge of the Party or its representatives, otherwise bound by confidentiality obligations to the provider of such information or otherwise prohibited from transmitting the information to the Party or its representatives (“ confidential information ”) will be kept confidential by such Party for a period of two (2) years from the date hereof. Prior to releasing any confidential information, Nava or Eco Endeavors, as applicable, may require the recipient of the confidential information to enter into a mutually acceptable confidentiality agreement. No confidential information may be released to third parties without the consent of the provider thereof, except that the parties hereto agree that they will not unreasonably withhold such consent to the extent that such confidential information is compelled to be released by legal process or must be released to regulatory bodies and/or included in public documents. The provisions of this Section 4.3(b) shall survive the termination of this Agreement.

  (c) Public Statements . Each of the Parties will advise the other Party, in advance of any public statement which they propose to make in respect of the Amalgamation, provided that no Party shall be prevented from making any disclosure statement which is required


 

- 43 -

  to be made by law or any rule of a stock exchange or a similar organization to which it is bound.

  (d) Information for Super 8-K . In a timely and expeditious manner, Eco Endeavors shall provide to Nava all information as may be reasonably requested by Nava or as required by applicable Laws with respect to Eco Endeavors and its businesses and properties for inclusion in the Super 8-K and in any amendment or supplement thereto that complies in all material respects with all applicable Laws and containing all material facts relating to it required to be disclosed in the Super 8-K, and not containing any misrepresentation (as defined under applicable securities Laws) with respect thereto. Eco Endeavors shall fully cooperate with Nava in the preparation of the Super 8-K and shall provide such assistance as Nava may reasonably request in connection therewith.

  (e) Amendments . In a timely and expeditious manner, Eco Endeavors shall provide Nava with information as requested by Nava, acting reasonably, in order to prepare any amendments or supplements to the Super 8-K (which amendments or supplements shall be in a form satisfactory to each of the Parties, acting reasonably).

  (f) Exclusive Dealing . Each Party covenants and agrees with the other Party that, until the termination of this Agreement in accordance with Section 6.2, it will not, without prior written consent of the other Party, directly or indirectly:

  (i) initiate, solicit, cause, facilitate or participate in any (confidential or otherwise) offer or expression of interest to sell any of its securities or assets to a third party;

  (ii) except with regard to the Amalgamation, pursue any other material amalgamation, merger, arrangement, business combination or sale of assets or make any other material change to its business, capital or affairs; or

  (iii) conduct any activity otherwise materially detrimental to the Amalgamation.

  Notwithstanding the foregoing, nothing herein will restrict the Parties from taking such actions as may be required in order to discharge their obligations pursuant to applicable corporate laws.

ARTICLE 5
CONDITIONS

5.1 Mutual Conditions in Favour of Nava and Eco Endeavors

The respective obligations of Eco Endeavors and Nava to complete the transactions contemplated herein are subject to the fulfillment of the following conditions at or before the Effective Time or such other time as is specified below:

  (a) the Eco Endeavors Shareholder Approval shall have been obtained in accordance with the provisions of the BCBCA and the requirements of any applicable regulatory authority;

  (b) each of the Eco Endeavors Board and the Nava Board shall have adopted all necessary resolutions and all other necessary corporate action shall have been taken by Eco Endeavors and Nava to permit the consummation of the Amalgamation and all other matters contemplated in this Agreement;


 

- 44 -

  (c) Newco shall not have engaged in any business enterprise or other activity or had any assets or liabilities;

  (d) the Nava Units to be issued to the Eco Endeavors Shareholders pursuant to the Amalgamation shall be exempt from registration requirements under the 1933 Act pursuant to Regulation S under the 1933 Act;

  (e) the distribution of the Nava Units pursuant to the Amalgamation shall be exempt from prospectus requirements under applicable securities Laws of Canada;

  (f) the Waratah Royalty will have been terminated on or prior to the Effective Date and on or prior to the Effective Time, Kenderes Biogaz will have granted a royalty to Waratah calculated at 3% of all revenues generated from the Kenderes Biogas Plant and an additional royalty to Waratah calculated at 1.5% of all revenues generated from all other assets of Kenderes Biogaz other than the Kenderes Biogas Plant;

  (g) the Deed of Undertaking will have been terminated on or prior to the Effective Date and all amounts advanced by Waratah to Eco Endeavors shall have been converted into Eco Endeavors Common Shares at a price of $0.02 per Eco Endeavor Common Share; and

  (h) Nava shall have closed the Private Placement. For greater certainty, Nava’s obligation to complete the Private Placement is in addition to any financing obligation contemplated in any agreement entered into or that may be entered into between the Nava and Quivira Gold Ltd. regarding the acquisition of Quivira Gold Ltd.

The foregoing conditions are for the mutual benefit of the Parties and may be waived by mutual consent of Nava and Eco Endeavors in writing at any time. No such waiver shall be of any effect unless it is in writing signed by both Parties. If any of such conditions shall not be complied with or waived as aforesaid on or before the Completion Deadline or, if earlier, the date required for the performance thereof, then, subject to Section 5.4, any Party may terminate this Agreement by written notice to the other Party in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of a breach of this Agreement by such terminating Party.

5.2 Eco Endeavors Conditions

The obligation of Eco Endeavors to complete the transactions contemplated herein is subject to the fulfillment of the following additional conditions at or before the Effective Time or such other time as is specified below:

  (a) the Nava Board shall have procured duly executed resignations and releases in favour of Nava effective at the Effective Time from each director and executive officer of Nava who will no longer be serving in such capacity or capacities following completion of the Amalgamation;

  (b) the representations and warranties made by Nava in this Agreement that are qualified by the expression “ Material Adverse Change ” or “ Material Adverse Effect ” shall be true and correct as of the Effective Date as if made on and as of such date (except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date), and all other representations and warranties made by Nava in this Agreement shall be true and correct in all material respects as of the Effective Date as if made on and as of such date (except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date), in either case, except where any failures or breaches of representations and warranties would not either individually or in the aggregate, in the reasonable judgment of Eco Endeavors, have a Material Adverse Effect on Nava, and Nava shall have provided to Eco Endeavors a certificate of two officers thereof certifying such accuracy or lack of Material Adverse Effect on the Effective Date. No representation or warranty made by Nava hereunder shall be deemed not to be true and correct if the facts or circumstances which make such representation or warranty untrue or incorrect are disclosed or referred to, or provided for, or stated to be exceptions under this Agreement;


 

- 45 -

  (c) from the date of this Agreement to the Effective Date, there shall not have occurred a Material Adverse Change in respect of Nava;

  (d) Nava shall have complied in all material respects with its covenants herein and Nava shall have provided to Eco Endeavors a certificate of two officers thereof, certifying that, as of the Effective Date, it has so complied with their covenants herein;

  (e) Nava shall obtain and provide reasonable evidence to Eco Endeavors on or prior to the Effective Time that it has obtained director and officer insurance with a policy of up to $1,000,000; and

  (f) the Nava Board shall have adopted all necessary resolutions and all other necessary corporate action shall have been taken by Nava and Eco Endeavors to permit the consummation of the Amalgamation and the transactions to be completed by Nava pursuant to the terms of this Agreement.

The foregoing conditions are for the benefit of Eco Endeavors and may be waived, in whole or in part, by Eco Endeavors in writing at any time. No such waiver shall be of any effect unless it is in writing signed by Eco Endeavors. If any of such conditions shall not be complied with or waived by Eco Endeavors on or before the Completion Deadline or, if earlier, the date required for the performance thereof, then, subject to Section 5.4, Eco Endeavors may terminate this Agreement by written notice to Nava in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of a breach of this Agreement by Eco Endeavors.

5.3 Nava Conditions

The obligation of Nava to complete the transactions contemplated herein is subject to the fulfillment of the following additional conditions at or before the Effective Time or such other time as is specified below:

  (a) the representations and warranties made by Eco Endeavors in this Agreement that are qualified by the expression “ Material Adverse Change ” or “ Material Adverse Effect ” shall be true and correct as of the Effective Date as if made on and as of such date (except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date), and all other representations and warranties made by Eco Endeavors in this Agreement that are not so qualified shall be true and correct in all material respects as of the Effective Date as if made on and as of such date (except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date), in either case, except where any failures or breaches of representations and warranties would not either, individually or in the aggregate, in the reasonable judgment of Nava, have a Material Adverse Effect on Eco Endeavors, and Eco Endeavors shall have provided to Nava a certificate of two officers thereof certifying such accuracy or lack of Material Adverse Effect on the Effective Date. No representation or warranty made by Eco Endeavors hereunder shall be deemed not to be true and correct if the facts or circumstances that make such representation or warranty untrue or incorrect are disclosed or referred to, or provided for, or stated to be exceptions under this Agreement;


 

- 46 -

  (b) from the date of this Agreement to the Effective Date, there shall not have occurred a Material Adverse Change in respect of Eco Endeavors;

  (c) Eco Endeavors shall have provided the Eco Endeavors Financial Statements;

  (d) Eco Endeavors shall have complied in all material respects with its covenants herein and Eco Endeavors shall have provided to Nava a certificate of two officers thereof certifying that, as of the Effective Date, Eco Endeavors has so complied with its covenants herein;

  (e) the Eco Endeavors Board shall have adopted all necessary resolutions and all other necessary corporate action shall have been taken by Eco Endeavors to permit the consummation of the Amalgamation and the transactions to be completed by Eco Endeavors pursuant to the terms of this Agreement;

  (f) Nava shall have completed its due diligence investigation of Eco Endeavors and all matters arising therefrom shall have been addressed to the satisfaction of Nava, acting reasonably; and

  (g) Eco Endeavors shall have provided a response to a due diligence questionnaire from Nava and an officer of Eco Endeavors shall have certified such questionnaire to be true, accurate and complete in all material respects as of the date given therein.

The foregoing conditions are for the benefit of Nava and may be waived, in whole or in part, by Nava in writing at any time. No such waiver shall be of any effect unless it is in writing signed by Nava. If any of such conditions shall not be complied with or waived by Nava on or before the Completion Deadline or, if earlier, the date required for the performance thereof, then, subject to Section 5.4, Nava may terminate this Agreement by written notice to Eco Endeavors in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of a breach of this Agreement by Nava.

5.4 Notice and Cure Provisions

Each Party hereto shall give prompt notice to the other Party of the occurrence, or failure to occur, at any time from the date hereof until the Effective Date, of any event or state of facts which occurrence or failure would, would be likely to or could:

  (a) cause any of the representations or warranties of such Party contained herein to be untrue or inaccurate in any respect on the date hereof or on the Effective Date;

  (b) result in the failure to comply with or satisfy any covenant or agreement to be complied with or satisfied by such Party on or before the Effective Date; or

  (c) result in the failure to satisfy any of the conditions precedent in favour of the other Party contained in Section 5.1, 5.2 or 5.3, as the case may be.


 

- 47 -

Subject as herein provided, a Party may:

  (a) elect not to complete the transactions contemplated hereby by virtue of any of the conditions for its benefit contained in Section 5.1, 5.2 or 5.3 not being satisfied or waived; or

  (b) exercise any termination right arising therefrom; provided, however, that:

  (i) promptly and in any event prior to the Effective Date, the Party hereto intending to rely thereon has delivered a written notice to the other Party specifying in reasonable detail the breaches of covenants or untruthfulness or inaccuracy of representations and warranties or other matters that the Party delivering such notice is asserting as the basis for the exercise of the termination right, as the case may be; and

  (ii) if any such notice is delivered, and a Party proceeds diligently, at its own expense, to cure such matter, if such matter is susceptible to being cured, the Party that has delivered such notice may not terminate this Agreement until the lesser of ten (10) days from the date of delivery of such notice and the number of days remaining before the earlier of the Effective Date and the Completion Deadline.

5.5 Merger of Conditions

If no notice has been sent by either Party pursuant to Section 5.4 prior to the Effective Date, the conditions set out in Section 5.1, 5.2 or 5.3 shall be conclusively deemed to have been satisfied, fulfilled or waived as of the Effective Time.

ARTICLE 6
AMENDMENT AND TERMINATION

6.1 Amendment

This Agreement may, at any time and from time to time before or after the receipt of the Eco Endeavors Shareholder Approval be amended by mutual written agreement of the Parties without, subject to applicable Laws, further notice to or authorization on the part of the Eco Endeavors Shareholders and any such amendment may, without limitation:

  (a) change the time for the performance of any of the obligations or acts of any of the parties hereto;

  (b) waive any inaccuracies in or modify any representation or warranty contained herein or in any document delivered pursuant hereto;

  (c) waive compliance with or modify any of the covenants herein contained and waive or modify the performance of any of the obligations of any of the parties hereto; and

  (d) waive compliance with or modify any condition herein contained;

provided, however, that notwithstanding the foregoing, following the receipt of the Eco Endeavors Shareholder Approval, the number of Nava Units issuable at the Effective Time shall not be amended without the approval of the Eco Endeavors Shareholders given in the same manner as required for the approval of the Amalgamation.


 

- 48 -

6.2 Termination

This Agreement may be terminated at any time prior to the Effective Time:

  (a) by mutual written agreement by Eco Endeavors, Nava and Newco;

  (b) subject to Section 5.4:

  (i) by Eco Endeavors, if any condition in Section 5.2 is not satisfied or waived in accordance with such section;

  (ii) by Nava, if any condition in Section 5.3 is not satisfied or waived in accordance with such section;

  (iii) by Eco Endeavors or by Nava, if any of the conditions in Section 5.1 for the benefit of the terminating party is not satisfied or waived in accordance with such Section 5.1; or

  (iv) by Nava if, as a result of its due diligence inquiry of Eco Endeavors, Kenderesh or Kenderes Biogaz, any material deficiency arises therefrom and Nava notifies Eco Endeavors of such material deficiency in writing and Eco Endeavors has not remedied or caused to be remedied such material deficiency within 20 calendar days of such notification, other than a material deficiency that by its nature cannot be cured, to the satisfaction of Nava, acting reasonably.

  (c) by Nava if there is an intentional breach of the covenants of Eco Endeavors contained herein by Eco Endeavors or any of its directors, officers, employees, agents, consultants or other representatives, in each case, on or before the Effective Date;

  (d) by Eco Endeavors if there is an intentional breach of the covenants of Nava contained herein by Nava or any of its directors, officers, employees, agents, consultants or other representatives, in each case, on or before the Effective Date; or

  (e) by Nava or by Eco Endeavors if the Amalgamation shall not have been completed by the Completion Deadline,

provided that any termination by a Party in accordance with the paragraphs above shall be made by such Party delivering written notice thereof to the other Party or parties hereto prior to the earlier of the Effective Date and the Completion Deadline and specifying therein in reasonable detail the matter or matters giving rise to such termination right.

ARTICLE 7
GENERAL

7.1 Notices

Any notice, consent, waiver, direction or other communication required or permitted to be given under this Agreement by a party hereto shall be in writing and shall be delivered by hand to the party hereto to which the notice is to be given at the following address or sent by facsimile to the following numbers or to such other address or facsimile number as shall be specified by a party hereto by like notice. Any notice, consent, waiver, direction or other communication aforesaid shall, if delivered, be deemed to have been given and received on the date on which it was delivered to the address provided herein (if a Business Day or, if not, then the next succeeding Business Day) and if sent by facsimile be deemed to have been given and received at the time of receipt (if a Business Day or, if not, then the next succeeding Business Day) unless actually received after 5:00 p.m. (local time) at the point of delivery in which case it shall be deemed to have been given and received on the next Business Day.


 

- 49 -

The address for service of each of the parties hereto shall be as follows:

  (a) if to Eco Endeavors:

  International Eco Endeavors Corp.
101 – 161 West Georgia Street
Vancouver, British Columbia
Canada
V6B 0K9

  Attention: Robert Abenante, CEO
Fax: (604) 687-6314

  (b) if to Nava or Newco:

  Nava Resources Inc.
Suite 206 – 595 Howe Street
Vancouver, British Columbia

  Attention: Jag Sandhu, CEO
Fax:

7.2 Remedies

The parties hereto acknowledge and agree that an award of money damages may be inadequate for any breach of this Agreement by any party hereto or its representatives and advisors and that such breach may cause the non-breaching party hereto irreparable harm. Accordingly, the parties hereto agree that, in the event of any such breach or threatened breach of this Agreement by one of the parties hereto, Eco Endeavors (if Nava is the breaching party) or Nava (if Eco Endeavors is the breaching party) will be entitled, without the requirement of posting a bond or other security, to seek equitable relief, including injunctive relief and specific performance. Subject to any other provision hereof, such remedies will not be the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available hereunder or at law or in equity to each of the parties hereto.

7.3 Expenses

The parties agree that each party shall pay for its costs incurred in connection with this Agreement and the transactions contemplated hereby, the preparation of the Super 8-K, including legal and accounting fees, printing costs, financial advisor fees and all disbursements by advisors, shall be paid by the party hereto incurring such expense and that nothing in this Agreement shall be construed so as to prevent the payment of such expenses, whether or not the Amalgamation is completed. The provisions of this Section 7.3 shall survive the termination of this Agreement.


 

- 50 -

7.4 Time of the Essence

Time shall be of the essence in this Agreement.

7.5 Entire Agreement

This Agreement, together with the agreements and other documents herein or therein referred to, constitute the entire agreement between the parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, between the parties with respect to the subject matter hereof, including the Letter Agreement. There are no representations, warranties, covenants or conditions with respect to the subject matter hereof except as contained herein.

7.6 Further Assurances

Each Party shall, from time to time, and at all times hereafter, at the request of the other of them, but without further consideration, do, or cause to be done, all such other acts and execute and deliver, or cause to be executed and delivered, all such further agreements, transfers, assurances, instruments or documents as shall be reasonably required in order to fully perform and carry out the terms and intent hereof including, without limitation, the Amalgamation.

7.7 Governing Law

This Agreement shall be governed by, and be construed in accordance with, the laws of the Province of British Columbia and the laws of Canada applicable therein but the reference to such laws shall not, by conflict of laws rules or otherwise, require the application of the law of any jurisdiction other than the Province of British Columbia. The parties hereto irrevocably attorn to the non-exclusive jurisdiction of the courts of the Province of British Columbia.

7.8 Execution in Counterparts

This Agreement may be executed in one or more counterparts, each of which shall conclusively be deemed to be an original and all such counterparts collectively shall be conclusively deemed to be one and the same. Delivery of an executed counterpart of the signature page to this Agreement by facsimile, email or other functionally equivalent electronic means of transmission shall be effective as delivery of a manually executed counterpart of this Agreement, and any party hereto delivering an executed counterpart of the signature page to this Agreement by facsimile, email or other functionally equivalent electronic means of transmission to any other party hereto shall thereafter also promptly deliver a manually executed original counterpart of this Agreement to such other party, but the failure to deliver such manually executed original counterpart shall not affect the validity, enforceability or binding effect of this Agreement.

7.9 Waiver

No waiver or release by any party hereto shall be effective unless in writing and executed by the party granting such waiver or release and any waiver or release shall affect only the matter, and the occurrence thereof, specifically identified and shall not extend to any other matter or occurrence. Waivers may only be granted upon compliance with the provisions governing amendments set forth in Section 6.1.

7.10 No Personal Liability

  (a) No director or officer of Eco Endeavors shall have any personal liability whatsoever (other than in the case of fraud, negligence or wilful misconduct) to Nava under this Agreement or any other document delivered in connection with this Agreement or the Amalgamation by or on behalf of Eco Endeavors.


 

- 51 -

  (b) No director or officer of Nava shall have any personal liability whatsoever (other than in the case of fraud, negligence or wilful misconduct) to Eco Endeavors under this Agreement or any other document delivered in connection with this Agreement or the Amalgamation by or on behalf of Nava.

7.11 Enurement and Assignment

This Agreement shall enure to the benefit of the parties hereto and their respective successors and permitted assigns and shall be binding upon the parties hereto and their respective successors. This Agreement may not be assigned by any party hereto without the prior written consent of the other parties hereto.

[EXECUTION PAGE FOLLOWS]


 

- 52 -

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.

  NAVA RESOURCES, INC.

  Per: ____________________________
  Authorized Signatory

  ____________________________
Name

  ____________________________
Title

  INTERNATIONAL ECO ENDEAVOURS CORP.

  Per: ____________________________
  Authorized Signatory

  ____________________________
Name

  ____________________________
Title

  OURCO CAPITAL LTD.

  Per: ____________________________
  Authorized Signatory

  ____________________________
Name

  ____________________________
Title


 

- 53 -

  KENDERESH ENDEAVORS CORP.

  Per: ____________________________
  Authorized Signatory

  ____________________________
Name

  ____________________________
Title

  KENDERES BIOGAZ TERMELO
KORLATOLT FELE LOSSEGU
TARSASAG

  Per: ____________________________
  Authorized Signatory

  ____________________________
Name

  ____________________________
Title


 

SCHEDULE A 

FORM OF ECO ENDEAVORS RESOLUTION

BE IT RESOLVED as a special resolution that:

1. The amalgamation (the “ Amalgamation ”) under the Business Corporations Act (British Columbia) (the “ BCBCA ”) involving International Eco Endeavors Corp. (the “ Company ”), Nava Resources, Inc. (“ Nava ”) and Ourco Capital Ltd., a wholly owned subsidiary of Nava, pursuant to the terms and conditions contained in the amalgamation agreement (the “ Amalgamation Agreement ”) dated June 19, 2013 (as the same may be or has been modified or amended), in substantially the form attached hereto as Schedule A is hereby authorized and approved.

2. The execution and delivery by the Company of the Amalgamation Agreement, substantially in the form attached hereto as Schedule A, is hereby authorized and approved, and the Amalgamation is hereby adopted.

3. Any officer or director of the Company is hereby authorized and directed, on behalf of the Company, to execute and deliver an amalgamation application to the registrar appointed under Section 400 of the BCBCA with respect to the Amalgamation.

4. Notwithstanding that this special resolution has been passed (and the Amalgamation Agreement adopted) by the shareholders of the Company, the directors of the Company are hereby authorized and empowered without further approval of the shareholders of the Company at any time prior to the issuance by the registrar under the BCBCA of a certificate of amalgamation in respect of the Amalgamation (i) to amend the Amalgamation Agreement to the extent permitted by the Amalgamation Agreement, and (ii) not to proceed with Amalgamation to the extent permitted by the Amalgamation Agreement or otherwise give effect to these resolutions.

5. Any officer or director of the Company is hereby authorized and directed for and on behalf of and in the name of the Company to execute, under the seal of the Company or otherwise, and to deliver, all documents, agreements and instruments and to do all such other acts and things, including delivering such documents as are necessary or desirable to the registrar appointed under Section 400 of the BCBCA for filing in accordance with the Amalgamation Agreement, as such officer or director, in his absolute discretion, determines to be necessary or desirable to give full effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of any such documents, agreements or instruments or doing of any such act or thing.


SCHEDULE B 

FORM OF NEWCO RESOLUTION

BE IT RESOLVED as a special resolution that:

1. The amalgamation (the “ Amalgamation ”) under the Business Corporations Act (British Columbia) (the “ BCBCA ”) involving International Eco Endeavors Corp., Nava Resources, Inc. (“ Nava ”) and Ourco Capital Ltd. (the “ Company ”), a wholly owned subsidiary of Nava, pursuant to the terms and conditions contained in the amalgamation agreement (the “ Amalgamation Agreement ”) dated June 19, 2013 (as the same may be or has been modified or amended), in substantially the form attached hereto as Schedule A is hereby authorized and approved.

2. The execution and delivery by the Company of the Amalgamation Agreement, substantially in the form attached hereto as Schedule A, is hereby authorized and approved, and the Amalgamation is hereby adopted.

3. Any officer or director of the Company is hereby authorized and directed, on behalf of the Company, to execute and deliver an amalgamation application to the registrar appointed under Section 400 of the BCBCA with respect to the Amalgamation.

4. Notwithstanding that this special resolution has been passed (and the Amalgamation Agreement adopted) by the shareholders of the Company, the directors of the Company are hereby authorized and empowered without further approval of the shareholders of the Company at any time prior to the issuance by the registrar under the BCBCA of a certificate of amalgamation in respect of the Amalgamation (i) to amend the Amalgamation Agreement to the extent permitted by the Amalgamation Agreement, and (ii) not to proceed with Amalgamation to the extent permitted by the Amalgamation Agreement or otherwise give effect to these resolutions.

5. Any officer or director of the Company is hereby authorized and directed for and on behalf of and in the name of the Company to execute, under the seal of the Company or otherwise, and to deliver all documents, agreements and instruments and to do all such other acts and things, including delivering such documents as are necessary or desirable to the registrar appointed under Section 400 of the BCBCA for filing in accordance with the Amalgamation Agreement, as such officer or director, in his absolute discretion, determines to be necessary or desirable to give full effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of any such documents, agreements or instruments or doing of any such act or thing.


SCHEDULE C 

FORM OF AMALGAMATION APPLICATION

See Attached Document






SCHEDULE D

FORM OF ARTICLES OF AMALCO

See Attached

FORM 13/WEB Rev. 2004 / 3/ 10 NOA Page 1
[ CW #: CW6165551.8]  


Incorporation No. BC0960926

BUSINESS CORPORATIONS ACT

ARTICLES

OF

<>

Table of Contents

Part 1 - Interpretation. 1
Part 2 - Shares and Share certificates. 2
Part 3 - Issue of Shares. 3
Part 4 - Share Transfers. 3
Part 5 - Acquisition of Shares. 4
Part 6 - Borrowing Powers. 4
Part 7 - General Meetings. 4
Part 8 - Proceedings at Meetings of Shareholders. 6
Part 9 - Alterations. 9
Part 10 - Votes of Shareholders. 9
Part 11 - Directors. 12
Part 12 - Election and Removal of Directors. 13
Part 13 - Proceedings of Directors. 17
Part 14 - Committees of Directors. 19
Part 15 - Officers. 20
Part 16 - Certain Permitted Activities of Directors. 20
Part 17 - Indemnification. 21
Part 18 - Auditor. 21
Part 19 - Dividends. 21
Part 20 - Accounting Records. 22
Part 21 - Execution of Instruments. 22
Part 22 - Notices. 23
Part 23 - Restriction on Share Transfer. 24
Part 24 -Special Rights and Restrictions. 24


 

Incorporation No. <>

BUSINESS CORPORATIONS ACT

ARTICLES

OF

<>

PART 1 – INTERPRETATION

1.1 Definitions

  Without limiting Article 1.2, in these Articles, unless the context requires otherwise:

  (a) “adjourned meeting” means the meeting to which a meeting is adjourned under Article 8.6 or 8.9;

  (b) “board” and “directors” mean the board of directors of the Company for the time being;

  (c) Business Corporations Act means the Business Corporations Act , S.B.C. 2002, c.57, and includes its regulations;

  (d) “Company” means .;

  (e) Interpretation Act means the Interpretation Act , R.S.B.C. 1996, c. 238; and

  (f) “trustee”, in relation to a shareholder, means the personal or other legal representative of the shareholder, and includes a trustee in bankruptcy of the shareholder.

1.2 Business Corporations Act definitions apply

  The definitions in the Business Corporations Act apply to these Articles.

1.3 Interpretation Act applies

  The Interpretation Act applies to the interpretation of these Articles as if these Articles were an enactment.

1.4 Conflict in definitions

  If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles.

1.5 Conflict between Articles and legislation

  If there is a conflict between these Articles and the Business Corporations Act , the Business Corporations Act will prevail.


 

- 2 -

PART 2 – SHARES AND SHARE CERTIFICATES

2.1 Form of share certificate

  Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act .

2.2 Shareholder Entitled to Certificate or Acknowledgement

  Unless the shares are uncertificated shares, each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgement of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.

2.3 Sending of share certificate

  Any share certificate to which a shareholder is entitled may be sent to the shareholder by mail and neither the Company nor any agent is liable for any loss to the shareholder because the certificate sent is lost in the mail or stolen.

2.4 Replacement of worn out or defaced certificate

  If the directors are satisfied that a share certificate is worn out or defaced, they must, on production to them of the certificate and on such other terms, if any, as they think fit:

  (a) order the certificate to be cancelled; and

  (b) issue a replacement share certificate.

2.5 Replacement of lost, stolen or destroyed certificate

  If a share certificate is lost, stolen or destroyed, a replacement share certificate must be issued to the person entitled to that certificate if the directors receive:

  (a) proof satisfactory to them that the certificate is lost, stolen or destroyed; and

  (b) any indemnity the directors consider adequate.

2.6 Splitting share certificates

  If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name 2 or more certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the certificate so surrendered, the Company must cancel the surrendered certificate and issue replacement share certificates in accordance with that request.

2.7 Shares may be uncertificated

  Notwithstanding any other provisions of this Part, the directors may, by resolution, provide that:

  (a) the shares of any or all of the classes and series of the Company’s shares may be uncertificated shares; or

  (b) any specified shares may be uncertificated shares.


 

- 3 -

PART 3 – ISSUE OF SHARES

3.1 Directors authorized to issue shares

  The directors may, subject to the rights of the holders of the issued shares of the Company, issue, allot, sell, grant options on or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices that the directors, in their absolute discretion, may determine.

3.2 Company need not recognize unregistered interests

  Except as required by law or these Articles, the Company need not recognize or provide for any person’s interests in or rights to a share unless that person is the shareholder of the share.

PART 4 – SHARE TRANSFERS

4.1 Recording or registering transfer

  A transfer of a share of the Company must not be registered

  (a) unless a duly signed instrument of transfer in respect of the share has been received by the Company and the certificate (or acceptable documents pursuant to Article 2.5 hereof) representing the share to be transferred has been surrendered and cancelled; or

  (b) if no certificate has been issued by the Company in respect of the share, unless a duly signed instrument of transfer in respect of the share has been received by the Company.

4.2 Form of instrument of transfer

  The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in any other form that may be approved by the directors from time to time.

4.3 Signing of instrument of transfer

  If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer, or, if no number is specified, all the shares represented by share certificates deposited with the instrument of transfer:

  (a) in the name of the person named as transferee in that instrument of transfer; or

  (b) if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the share certificate is deposited for the purpose of having the transfer registered.

4.4 Enquiry as to title not required

  Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.


 

- 4 -

4.5 Transfer fee

  There must be paid to the Company, in relation to the registration of any transfer, the amount determined by the directors from time to time.

PART 5 – ACQUISITION OF SHARES

5.1 Company authorized to purchase shares

  Subject to the special rights and restrictions attached to any class or series of shares, the Company may, if it is authorized to do so by the directors, purchase or otherwise acquire any of its shares.

5.2 Company authorized to accept surrender of shares

  The Company may, if it is authorized to do so by the directors, accept a surrender of any of its shares.

5.3 Company authorized to convert fractional shares into whole shares

  The Company may, if it is authorized to do so by the directors, convert any of its fractional shares into whole shares in accordance with, and subject to the limitations contained in, the Business Corporations Act .

PART 6 – BORROWING POWERS

6.1 Powers of directors

  The directors may from time to time on behalf of the Company:

  (a) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

  (b) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person, and at any discount or premium and on such other terms as they consider appropriate;

  (c) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

  (d) mortgage or charge, whether by way of specific or floating charge, or give other security on the whole or any part of the present and future assets and undertaking of the Company.

PART 7 – GENERAL MEETINGS

7.1 Annual general meetings

  Unless an annual general meeting is deferred or waived in accordance with section 182(2)(a) or (c) of the Business Corporations Act , the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual general meeting.

7.2 When annual general meeting is deemed to have been held

  If all of the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 7.2, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.


 

- 5 -

7.3 Calling of shareholder meetings

  The directors may, whenever they think fit, call a meeting of shareholders.

7.4 Notice for meetings of shareholders

  The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting and to each director, unless these Articles otherwise provide, at least the following number of days before the meeting:

  (a) if and for so long as the Company is a public company, 21 days;

  (b) otherwise, 10 days.

7.5 Record date for notice

  The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act , by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

  (a) if and for so long as the Company is a public company, 21 days;

  (b) otherwise, 10 days.

  If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

7.6 Record date for voting

  The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act , by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

7.7 Failure to give notice and waiver of notice

  The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

7.8 Notice of special business at meetings of shareholders

  If a meeting of shareholders is to consider special business within the meaning of Article 8.1, the notice of meeting must:

  (a) state the general nature of the special business; and

  (b) if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:


 

- 6 -

  (i) at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice, and

  (ii) during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

PART 8 – PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

8.1 Special business

  At a meeting of shareholders, the following business is special business:

  (a) at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting or the election or appointment of directors;

  (b) at an annual general meeting, all business is special business except for the following:

  (i) business relating to the conduct of or voting at the meeting,

  (ii) consideration of any financial statements of the Company presented to the meeting,

  (iii) consideration of any reports of the directors or auditor,

  (iv) the setting or changing of the number of directors,

  (v) the election or appointment of directors,

  (vi) the appointment of an auditor,

  (vii) the setting of the remuneration of an auditor,

  (viii) business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution, and

  (ix) any other business which, under these Articles or the Business Corporations Act , may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

8.2 Special resolution

  The votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

8.3 Quorum

  Subject to the special rights and restrictions attached to the shares of any affected class or series of shares, the quorum for the transaction of business at a meeting of shareholders is one or more persons, present in person or by proxy.

8.4 Other persons may attend

  The directors, the president, if any, the secretary, if any, and any lawyer or auditor for the Company are entitled to attend any meeting of shareholders, but if any of those persons do attend a meeting of shareholders, that person is not to be counted in the quorum, and is not entitled to vote at the meeting, unless that person is a shareholder or proxy holder entitled to vote at the meeting.


 

- 7 -

8.5 Requirement of quorum

  No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote at the meeting is present at the commencement of the meeting.

8.6 Lack of quorum

  If, within 1/2 hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

  (a) in the case of a general meeting convened by requisition of shareholders, the meeting is dissolved; and

  (b) in the case of any other meeting of shareholders, the shareholders entitled to vote at the meeting who are present, in person or by proxy, at the meeting may adjourn the meeting to a set time and place.

8.7 Chair

  The following individual is entitled to preside as chair at a meeting of shareholders:

  (a) the chair of the board, if any;

  (b) if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

8.8 Alternate chair

  At any meeting of shareholders, the directors present must choose one of their number to be chair of the meeting if: (a) there is no chair of the board or president present within 15 minutes after the time set for holding the meeting; (b) the chair of the board and the president are unwilling to act as chair of the meeting; or (c) if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting. If, in any of the foregoing circumstances, all of the directors present decline to accept the position of chair or fail to choose one of their number to be chair of the meeting, or if no director is present, the shareholders present in person or by proxy must choose any person present at the meeting to chair the meeting.

8.9 Adjournments

  The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

8.10 Notice of adjourned meeting

  It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

8.11 Motion need not be seconded

  No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

8.12 Manner of taking a poll

  Subject to Article 8.13, if a poll is duly demanded at a meeting of shareholders:

  (a) the poll must be taken


 

- 8 -

  (i) at the meeting, or within 7 days after the date of the meeting, as the chair of the meeting directs, and

  (ii) in the manner, at the time and at the place that the chair of the meeting directs;

  (b) the result of the poll is deemed to be a resolution of, and passed at, the meeting at which the poll is demanded; and

  (c) the demand for the poll may be withdrawn.

8.13 Demand for a poll on adjournment

  A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

8.14 Demand for a poll not to prevent continuation of meeting

  The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

8.15 Poll not available in respect of election of chair

  No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

8.16 Casting of votes on poll

  On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

8.17 Chair must resolve dispute

  In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the same, and his or her determination made in good faith is final and conclusive.

8.18 Chair has no second vote

  In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a casting or second vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

8.19 Declaration of result

  The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting.

8.20 Meetings by telephone or other communications medium

  A shareholder or proxy holder who is entitled to participate in a meeting of shareholders may do so in person, or by telephone or other communications medium, if all shareholders and proxy holders participating in the meeting are able to communicate with each other; provided, however, that nothing in this Section shall obligate the Company to take any action or provide any facility to permit or facilitate the use of any communications medium at a meeting of shareholders. If one or more shareholders or proxy holders participate in a meeting of shareholders in a manner contemplated by this Section 8.20:

  (a) each such shareholder or proxy holder shall be deemed to be present at the meeting; and

  (b) the meeting shall be deemed to be held at the location specified in the notice of the meeting.


 

- 9 -

PART 9 – ALTERATIONS

9.1 Alteration of Authorized Share Structure

  Subject to Article 9.2 and the Business Corporations Act , the Company may by resolution of the directors:

  (a) create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

  (b) increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;

  (c) if the Company is authorized to issue shares of a class of shares with par value:

  (i) decrease the par value of those shares,

  (ii) if none of the shares of that class of shares are allotted or issued, increase the par value of those shares,

  (iii) subdivide all or any of its unissued or fully paid issued shares with par value into shares of smaller par value, or

  (iv) consolidate all or any of its unissued or fully paid issued shares with par value into shares of larger par value;

  (d) subdivide all or any of its unissued or fully paid issued shares without par value;

  (e) change all or any of its unissued or fully paid issued shares with par value into shares without par value or all or any of its unissued shares without par value into shares with par value;

  (f) alter the identifying name of any of its shares;

  (g) consolidate all or any of its unissued or fully paid issued shares without par value; or

  (h) otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act .

9.2 Change of Name

  The Company may by resolution of the directors authorize an alteration to its Notice of Articles in order to change its name or adopt or change any translation of that name.

9.3 Other Alterations

  If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by resolution of the directors authorize an alteration of these Articles.

PART 10 – VOTES OF SHAREHOLDERS

10.1 Voting rights

  Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint registered holders of shares under Article 10.3:

  (a) on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote at the meeting has one vote; and


 

- 10 -

  (b) on a poll, every shareholder entitled to vote has one vote in respect of each share held by that shareholder that carries the right to vote on that poll and may exercise that vote either in person or by proxy.

10.2 Trustee of shareholder may vote

  A person who is not a shareholder may vote on a resolution at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting in relation to that resolution, if, before doing so, the person satisfies the chair of the meeting at which the resolution is to be considered, or satisfies all of the directors present at the meeting, that the person is a trustee for a shareholder who is entitled to vote on the resolution.

10.3 Votes by joint shareholders

  If there are joint shareholders registered in respect of any share:

  (a) any one of the joint shareholders, but not both or all, may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

  (b) if more than one of the joint shareholders is present at any meeting, personally or by proxy, the joint shareholder present whose name stands first on the central securities register in respect of the share is alone entitled to vote in respect of that share.

10.4 Trustees as joint shareholders

  Two or more trustees of a shareholder in whose sole name any share is registered are, for the purposes of Article 10.3, deemed to be joint shareholders.

10.5 Representative of a corporate shareholder

  If a corporation that is not a subsidiary of the Company is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

  (a) for that purpose, the instrument appointing a representative must

  (i) be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least 2 business days before the day set for the holding of the meeting, or

  (ii) unless the notice of the meeting provides otherwise, be provided, at the meeting, to the chair of the meeting; and

  (b) if a representative is appointed under this Article 10.5,

  (i) the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder, and

  (ii) the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

10.6 When proxy provisions do not apply

  Articles 10.7 to 10.13 do not apply to the Company if and for so long as it is a public company.


 

- 11 -

10.7 Appointment of proxy holder

  Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint a proxy holder to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

10.8 Alternate proxy holders

  A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

10.9 When proxy holder need not be shareholder

  A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

  (a) the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 10.5;

  (b) the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or

  (c) the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

10.10 Form of proxy

  A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

(Name of Company)

  The undersigned, being a shareholder of the above named Company, hereby appoints ....................................... or, failing that person, ......................................., as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders to be held on the day of and at any adjournment of that meeting.

  Signed this .......... day of .............................................., .................

  ...............................................................
Signature of shareholder

10.11 Provision of proxies

  A proxy for a meeting of shareholders must:

  (a) be received at the registered office of the Company or at any other place specified in the notice calling the meeting for the receipt of proxies, at least the number of business days specified in the notice or, if no number of days is specified, 2 business days before the day set for the holding of the meeting; or

  (b) unless the notice of the meeting provides otherwise, be provided at the meeting to the chair of the meeting.


 

- 12 -

10.12 Revocation of proxies

  Subject to Article 10.13, every proxy may be revoked by an instrument in writing that is:

  (a) received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

  (b) provided at the meeting to the chair of the meeting.

10.13 Revocation of proxies must be signed

  An instrument referred to in Article 10.12 must be signed as follows:

  (a) if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her trustee; or

  (b) if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 10.5.

10.14 Validity of proxy votes

  A vote given in accordance with the terms of a proxy is valid despite the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

  (a) at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

  (b) by the chair of the meeting, before the vote is taken.

10.15 Production of evidence of authority to vote

  The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

PART 11 – DIRECTORS

11.1 First directors; number of directors

  The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act . The number of directors, excluding additional directors appointed under Article 12.7, is set at:

  (a) subject to paragraphs (b) and (c), the number of directors that is equal to the number of the Company’s first directors;

  (b) if the Company is a public company, the greater of three and the number most recently elected by ordinary resolution (whether or not previous notice of the resolution was given); and

  (c) if the Company is not a public company, the number most recently elected by ordinary resolution (whether or not previous notice of the resolution was given).

11.2 Change in number of directors

  If the number of directors is set under Articles 11.1(b) or 11.1(c):

  (a) the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;


 

- 13 -

  (b) if, contemporaneously with setting that number, the shareholders do not elect or appoint the directors needed to fill vacancies in the board of directors up to that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

11.3 Directors’ acts valid despite vacancy

  An act or proceeding of the directors is not invalid merely because fewer directors have been appointed or elected than the number of directors set or otherwise required under these Articles.

11.4 Qualifications of directors

  A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

11.5 Remuneration of directors

  The directors are entitled to the remuneration, if any, for acting as directors as the directors may from time to time determine. If the directors so decide, the remuneration of the directors will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to a director in such director’s capacity as an officer or employee of the Company.

11.6 Reimbursement of expenses of directors

  The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

11.7 Special remuneration for directors

  If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

11.8 Gratuity, pension or allowance on retirement of director

  Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

PART 12 – ELECTION AND REMOVAL OF DIRECTORS

12.1 Election at annual general meeting

  At every annual general meeting and in every unanimous resolution contemplated by Article 7.2:

  (a) the shareholders entitled to vote at the annual general meeting for the election of directors may elect, or in the unanimous resolution appoint, a board of directors consisting of up to the number of directors for the time being set under these Articles; and

  (b) all the directors cease to hold office immediately before the election or appointment of directors under paragraph (a), but are eligible for re-election or re-appointment.

12.2 Consent to be a director

  No election, appointment or designation of an individual as a director is valid unless:


 

- 14 -

  (a) that individual consents to be a director in the manner provided for in the Business Corporations Act ;

  (b) that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or

  (c) with respect to first directors, the designation is otherwise valid under the Business Corporations Act .

12.3 Failure to elect or appoint directors

  If:

  (a) the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 7.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act ; or

  (b) the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 7.2, to elect or appoint any directors;

  then each director in office at such time continues to hold office until the earlier of:

  (c) the date on which his or her successor is elected or appointed; and

  (d) the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

12.4 Directors may fill casual vacancies

  Any casual vacancy occurring in the board of directors may be filled by the remaining directors.

12.5 Remaining directors’ power to act

  The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or for the purpose of summoning a meeting of shareholders to fill any vacancies on the board of directors or for any other purpose permitted by the Business Corporations Act .

12.6 Shareholders may fill vacancies

  If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, and the directors have not filled the vacancies pursuant to Article 12.5 above, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

12.7 Additional directors

  Notwithstanding Articles 11.1 and 11.2, between annual general meetings or unanimous resolutions contemplated by Article 7.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 12.7 must not at any time exceed:

  (a) one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or

  (b) in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 12.7.


 

- 15 -

  Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 12.1(a), but is eligible for re-election or re-appointment.

12.8 Ceasing to be a director

  A director ceases to be a director when:

  (a) the term of office of the director expires;

  (b) the director dies;

  (c) the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or

  (d) the director is removed from office pursuant to Articles 12.9 or 12.10.

12.9 Removal of director by shareholders

  The Shareholders may, by special resolution, remove any director before the expiration of his or her term of office, and may, by ordinary resolution, elect or appoint a director to fill the resulting vacancy. If the shareholders do not contemporaneously elect or appoint a director to fill the vacancy created by the removal of a director, then the directors may appoint, or the shareholders may elect or appoint by ordinary resolution, a director to fill that vacancy.

12.10 Removal of director by directors

  The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

12.11 Nominations of directors

  (a) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the board may be made at any annual meeting of shareholders or at any special meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors:

  (i) by or at the direction of the board, including pursuant to a notice of meeting;

  (ii) by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Business Corporations Act , or a requisition of the shareholders made in accordance with the provisions of the Business Corporations Act ; or

  (iii) by any person (a “ Nominating Shareholder ”): (A) who, at the close of business on the date of the giving of the notice provided for below in this Section 12.11 and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth below in this Section 12.11.

  (b) In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given timely notice thereof in proper written form to the Secretary of the Company at the principal executive offices of the Company.

  (c) To be timely, a Nominating Shareholder’s notice to the Secretary of the Company must be made:

  (i) in the case of an annual meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is to be held on a date that is less than 50 days after


 

- 16 -

  the date (the “ Notice Date” ) on which the first public announcement (as defined below) of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the tenth (10th) day after the Notice Date in respect of such meeting; and

  (ii) in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the fifteenth (15th) day following the day on which the first public announcement of the date of the special meeting of shareholders was made. In no event shall any adjournment or postponement of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a Nominating Shareholder’s notice as described above.

  (d) To be in proper written form, a Nominating Shareholder’s notice to the Secretary of the Company must set forth:

  (i) as to each person whom the Nominating Shareholder proposes to nominate for election as a director: (A) the name, age, business address and residential address of the person; (B) the principal occupation or employment of the person; (C) the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; and (D) any other information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws (as defined below); and

  (ii) as to the Nominating Shareholder giving the notice, any proxy, contract, arrangement, understanding or relationship pursuant to which such Nominating Shareholder has a right to vote any shares of the Company and any other information relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws (as defined below).

  (e) The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such proposed nominee.

  (f) No person shall be eligible for election as a director of the Company unless nominated in accordance with the provisions of this Section 12.11; provided, however, that nothing in this Section 12.11 shall be deemed to preclude discussion by a shareholder (as distinct from the nomination of directors) at a meeting of shareholders of any matter in respect of which it would have been entitled to submit a proposal pursuant to the provisions of the Business Corporations Act . The Chairman of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.

  (g) For purposes of this Section 12.11:

  (i) “public announcement” shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com; and

  (ii) “Applicable Securities Laws” means the applicable securities legislation of each relevant province and territory of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments,


 

- 17 -

  multilateral instruments, policies, bulletins and notices of the securities commission andsimilar regulatory authority of each province and territory of Canada.

  (h) Notwithstanding any other provision of this Section 12.11, notice given to the Secretary of the Company pursuant to this Section 12.11 may only be given by personal delivery, facsimile transmission or by email (at such email address as stipulated from time to time by the Secretary of the Company for purposes of this notice), and shall be deemed to have been given and made only at the time it is served by personal delivery, email (at the address as aforesaid) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received) to the Secretary at the address of the principal executive offices of the Company; provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.

  (i) Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this Section 12.11.

PART 13– PROCEEDINGS OF DIRECTORS

13.1 Meetings of directors

  The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the board held at regular intervals may be held at the place and at the time that the board may by resolution from time to time determine.

13.2 Chair of meetings

  Meetings of directors are to be chaired by:

  (a) the chair of the board, if any;

  (b) in the absence of the chair of the board, the president, if any, if the president is a director; or

  (c) any other director chosen by the directors if:

  (i) neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting,

  (ii) neither the chair of the board nor the president, if a director, is willing to chair the meeting, or

  (iii) the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

13.3 Voting at meetings

  Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

13.4 Meetings by telephone or other communications medium

  A director may participate in a meeting of the directors or of any committee of the directors in person, or by telephone or other communications medium, if all directors participating in the meeting are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 13.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner .


 

- 18 -

13.5 Who may call extraordinary meetings

  A director may call a meeting of the board at any time. The secretary, if any, must on request of a director, call a meeting of the board.

13.6 Notice of extraordinary meetings

  Subject to Articles 13.7 and 13.8, if a meeting of the board is called under Article 13.4, reasonable notice of that meeting, specifying the place, date and time of that meeting, must be given to each of the directors:

  (a) by mail addressed to the director’s address as it appears on the books of the Company or to any other address provided to the Company by the director for this purpose;

  (b) by leaving it at the director’s prescribed address or at any other address provided to the Company by the director for this purpose; or

  (c) orally, by delivery of written notice or by telephone, voice mail, e-mail, fax or any other method of legibly transmitting messages.

13.7 When notice not required

  It is not necessary to give notice of a meeting of the directors to a director if:

  (a) the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed or is the meeting of the directors at which that director is appointed;

  (b) the director has filed a waiver under Article 13.9; or

  (c) the director attends such meeting.

13.8 Meeting valid despite failure to give notice

  The accidental omission to give notice of any meeting of directors to any director, or the non-receipt of any notice by any director, does not invalidate any proceedings at that meeting.

13.9 Waiver of notice of meetings

  Any director may file with the Company a notice waiving notice of any past, present or future meeting of the directors and may at any time withdraw that waiver with respect to meetings of the directors held after that withdrawal.

13.10 Effect of waiver

  After a director files a waiver under Article 13.9 with respect to future meetings of the directors, and until that waiver is withdrawn, notice of any meeting of the directors need not be given to that director unless the director otherwise requires in writing to the Company.

13.11 Quorum

  The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is a majority of the directors.

13.12 If only one director

  If, in accordance with Article 11.1, the number of directors is one, the quorum necessary for the transaction of the business of the directors is one director, and that director may constitute a meeting.


 

- 19 -

PART 14 – COMMITTEES OF DIRECTORS

14.1 Appointment of committees

  The directors may, by resolution:

  (a) appoint one or more committees consisting of the director or directors that they consider appropriate;

  (b) delegate to a committee appointed under paragraph (a) any of the directors’ powers, except:

  (i) the power to fill vacancies in the board,

  (ii) the power to change the membership of, or fill vacancies in, any committee of the board, and

  (iii) the power to appoint or remove officers appointed by the board; and

  (c) make any delegation referred to in paragraph (b) subject to the conditions set out in the resolution.

14.2 Obligations of committee

  Any committee formed under Article 14.1, in the exercise of the powers delegated to it, must:

  (a) conform to any rules that may from time to time be imposed on it by the directors; and

  (b) report every act or thing done in exercise of those powers to the earliest meeting of the directors to be held after the act or thing has been done.

14.3 Powers of board

  The board may, at any time:

  (a) revoke the authority given to a committee, or override a decision made by a committee, except as to acts done before such revocation or overriding;

  (b) terminate the appointment of, or change the membership of, a committee; and

  (c) fill vacancies in a committee.

14.4 Committee meetings

  Subject to Article 14.2(a):

  (a) the members of a directors’ committee may meet and adjourn as they think proper;

  (b) a directors’ committee may elect a chair of its meetings but, if no chair of the meeting is elected, or if at any meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

  (c) a majority of the members of a directors’ committee constitutes a quorum of the committee; and

  (d) questions arising at any meeting of a directors’ committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting has no second or casting vote.


 

- 20 -

PART 15 – OFFICERS

15.1 Appointment of officers

  The board may, from time to time, appoint a president, secretary or any other officers that it considers necessary or desirable, and none of the individuals appointed as officers need be a member of the board.

15.2 Functions, duties and powers of officers

  The board may, for each officer:

  (a) determine the functions and duties the officer is to perform;

  (b) entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and

  (c) from time to time revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

15.3 Remuneration

  All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the board thinks fit and are subject to termination at the pleasure of the board.

PART 16 – CERTAIN PERMITTED ACTIVITIES OF DIRECTORS

16.1 Other office of director

  A director may hold any office or place of profit with the Company (other than the office of auditor of the Company) in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

16.2 No disqualification

  No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise.

16.3 Professional services by director or officer

  Subject to compliance with the provisions of the Business Corporations Act , a director or officer of the Company, or any corporation or firm in which that individual has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such corporation or firm is entitled to remuneration for professional services as if that individual were not a director or officer.

16.4 Remuneration and benefits received from certain entities

  A director or officer may be or become a director, officer or employee of, or may otherwise be or become interested in, any corporation, firm or entity in which the Company may be interested as a shareholder or otherwise, and, subject to compliance with the provisions of the Business Corporations Act , the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other corporation, firm or entity.


 

- 21 -

PART 17 – INDEMNIFICATION

17.1 Indemnification of directors

  The directors must cause the Company to indemnify its directors and former directors, and their respective heirs and personal or other legal representatives to the greatest extent permitted by Division 5 of Part 5 of the Business Corporations Act .

17.2 Deemed contract

  Each director is deemed to have contracted with the Company on the terms of the indemnity referred to in Article 17.1.

PART 18 – AUDITOR

18.1 Remuneration of an auditor

  The directors may set the remuneration of the auditor of the Company.

18.2 Waiver of appointment of an auditor

  The Company shall not be required to appoint an auditor if all of the shareholders of the Company, whether or not their shares otherwise carry the right to vote, resolve by a unanimous resolution to waive the appointment of an auditor. Such waiver may be given before, on or after the date on which an auditor is required to be appointed under the Business Corporations Act , and is effective for one financial year only.

PART 19 – DIVIDENDS

19.1 Declaration of dividends

  Subject to the rights, if any, of shareholders holding shares with special rights as to dividends, the directors may from time to time declare and authorize payment of any dividends the directors consider appropriate.

19.2 No notice required

  The directors need not give notice to any shareholder of any declaration under Article 19.1.

19.3 Directors may determine when dividend payable

  Any dividend declared by the directors may be made payable on such date as is fixed by the directors.

19.4 Dividends to be paid in accordance with number of shares

  Subject to the rights of shareholders, if any, holding shares with special rights as to dividends, all dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

19.5 Manner of paying dividend

  A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of paid up shares or fractional shares, bonds, debentures or other debt obligations of the Company, or in any one or more of those ways, and, if any difficulty arises in regard to the distribution, the directors may settle the difficulty as they consider expedient, and, in particular, may set the value for distribution of specific assets.

19.6 Dividend bears no interest

  No dividend bears interest against the Company.


 

- 22 -

19.7 Fractional dividends

  If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

19.8 Payment of dividends

  Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed:

  (a) subject to paragraphs (b) and (c), to the address of the shareholder;

  (b) subject to paragraph (c), in the case of joint shareholders, to the address of the joint shareholder whose name stands first on the central securities register in respect of the shares; or

  (c) to the person and to the address as the shareholder or joint shareholders may direct in writing.

19.9 Receipt by joint shareholders

  If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

PART 20 – ACCOUNTING RECORDS

20.1 Recording of financial affairs

  The board must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the provisions of the Business Corporations Act .

PART 21 – EXECUTION OF INSTRUMENTS

21.1 Who may attest seal

  The Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signature or signatures of:

  (a) any 2 directors;

  (b) any officer, together with any director;

  (c) if the Company has only one director, that director; or

  (d) any one or more directors or officers or persons as may be determined by resolution of the directors.

21.2 Sealing copies

  For the purpose of certifying under seal a true copy of any resolution or other document, the seal must be impressed on that copy and, despite Article 21.1, may be attested by the signature of any director or officer.

21.3 Execution of documents not under seal

  Any instrument, document or agreement for which the seal need not be affixed may be executed for and on behalf of and in the name of the Company by any one director or officer of the Company, or by any other person appointed by the directors for such purpose.


 

- 23 -

PART 22 – NOTICES

22. Method of giving notice

  Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

  (a) mail addressed to the person at the applicable address for that person as follows:

  (i) for a record mailed to a shareholder, the shareholder’s registered address,

  (ii) for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class, or

  (iii) in any other case, the mailing address of the intended recipient;

  (b) delivery at the applicable address for that person as follows, addressed to the person:

  (i) for a record delivered to a shareholder, the shareholder’s registered address,

  (ii) for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class,

  (iii) in any other case, the delivery address of the intended recipient;

  (c) sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;

  (d) sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;

  (e) physical delivery to the intended recipient; or

  (f) such other manner of delivery as is permitted by applicable legislation governing electronic delivery.

22. Deemed receipt of mailing

  A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 22.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

22. Certificate of sending

  A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 22.1, prepaid and mailed or otherwise sent as permitted by Article 22.1 is conclusive evidence of that fact.

22. Notice to joint shareholders

  A notice, statement, report or other record may be provided by the Company to the joint registered shareholders of a share by providing the notice to the joint registered shareholder first named in the central securities register in respect of the share.


 

- 24 -

22.5 Notice to trustees

  A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

  (a) mailing the record, addressed to them:

  (i) by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description, and

  (ii) at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

  (b) if an address referred to in Article 22.5(a)(ii) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

PART 23 – RESTRICTION ON SHARE TRANSFER

23.1 Application

  Article 23.2 does not apply to the Company if and for so long as it is a public company.

23.2 2 Consent required for transfer

  No shares may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.

PART 24 - SPECIAL RIGHTS AND RESTRICTIONS

24.1 Preferred shares issuable in series

  The Preferred shares may include one or more series and, subject to the Business Corporations Act , the directors may, by resolution, if none of the shares of any particular series are issued, alter the Articles of the Company and authorize the alteration of the Notice of Articles of the Company, as the case may be, to do one or more of the following:

  (a) determine the maximum number of shares of that series that the Company is authorized to issue, determine that there is no such maximum number, or alter any such determination;

  (b) create an identifying name for the shares of that series, or alter any such identifying name; and

  (c) attach special rights or restrictions to the shares of that series, or alter any such special rights or restrictions.

   
   
Full Name and signature of incorporator Date of Signing
   
      <>
   
   
   
   
_________________________________________  
<>  


 

- 25 -






 

- 26 -


SCHEDULE E

LIST OF INTELLECTUAL PROPERTY

1. Website domains;

2. Logo branding; and

3. Plant diagrams and schematics.


 

- 27 -

SCHEDULE F

WARATAH ROYALTIES

Eco Endeavors and Waratah Capital Ltd. (“ WCL ”) entered into a Royalty Deed dated June 1, 2012, whereby Eco Endeavors agreed to pay WCL a royalty calculated as 3% of all revenue determined and calculated on a quarterly basis each year. Royalties are calculated by including in such revenues all revenues receivable by any of Eco Endeavors subsidiaries.


 

- 28 -

SCHEDULE G 

DISCLOSURE STATEMENT

Section 3.1(b)

Eco Endeavors owes Palladio Projects Kft 75,000 Euros pursuant to the terms of a consulting agreement. Payment is overdue pursuant to the closing of the sale of Kenderes Biogaz to Kenderesh (the “ Palladio Agreement ”).

Kenderes Biogaz owes Palladio Projects Kft certain sums pursuant to the terms of the Kenderes Biogaz Royalty.

Kenderes Biogaz owes Középtiszai Mez Kenderes Biogaz owes Középtiszai Mez gazdasági Zártkör en M köd Részvénytársaság (“ Középtiszai ”) 13,333,333 Hungarian Forints pursuant to the terms of a Biowaste utilization contract (Biohulladék Hasznosítási Szerz dés) and an operating agreement (Együttm ködési Szerz dés).

Eco Endeavors owes Waratah certain sums pursuant to the terms of the Deed of Undertaking, which, for greater certainty, is anticipated to increase until the Effective Date as Waratah continues to fund Eco Endeavors until such date.

General indebtedness occurred in the normal course of business. 

Section 3.1(g) 

Payments required pursuant to Palladio Agreement. 

Payments required to Középtiszai pursuant to the Biowaste utilization contract and the operating agreement. 

Section 3.1(n) 

Waratah Royalty Kenderes Biogaz Royalty 

Section 3.1(o) 

See Section 3.1(n) disclosure of royalties set out in this Schedule above which information is incorporated into this section by reference. 

Section 3.1(t)

Eco Endeavors has not filed tax returns for its fiscal years ended March 31, 2012 or 2013. 

Section 3.1(w) 

Monthly payments of 2,222,223 Hungarian Forints are due to Középtiszai on the 10 th day of each month. If the payments are not made, Kenderes Biogaz will be in breach of the contract and run the risk of Középtiszai confiscating the Sorghum, which is used to run the biogas plant. In this case, the plant would likely not be able to run in a profitable fashion.


 

- 29 -

Section 3.1(bb)

See Section 3.1(w) set out in this Schedule above which information is incorporated into this section by reference.

Section 3.1(ff)

Supply has been secured through to August 2013. Following this date, raw material supply is uncertain and significant investment will be required to secure supply for the coming year. If sufficient funding is not received, Kenderes Biogaz will not have adequate supply and it will have a material adverse effect on the revenues and operations of Kenderes Biogaz.

Kenderes Biogaz has an arrangement with Középtiszai whereby they remove all fertilizer produced by the plant and spread it over their farms. This arrangement will terminate in October of 2013, although the farmer has refused to remove the fertilizer thus far in 2013. Kenderes Biogaz will need to make significant investment in heat exchange infrastructure and fertilizer certification to appropriately dispose of or sell the fertilizer. Kenderes Biogaz has started the fertilizer certification, but requires further funding for this endeavor and if sufficient funds are not received it will have a material negative effect on the profitability of the plant.


 
 

Exhibit 31

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Jag Sandhu certify that:

1. I have reviewed this annual report on Form 10-K of Blox, Inc.(the “Company”) for the year ended June 30, 2013;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting got be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

  c. Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

  d. Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: September 11, 2013

By: /s/ Jag Sandhu
Name: Jag Sandhu
Title: President and Chief Executive Officer
(Principal Executive Officer, Principal Financial & Accounting Officer)


 
 

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Jag Sandhu, Chief Executive Officer and President of Blox, Inc. (the “Company”), certify, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge, the Annual Report on Form 10-K of the Company for the year ended June 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-K fairly presents, in all material respects, the financial condition and  results of operations of the Company.

Dated:  September 11, 2013

By: /s/ Jag Sandhu
Name: Jag Sandhu
Title: President and Chief Executive Officer
(Principal Executive, Financial & Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.