Document:

f8k080813ex10i_jbi.htm

Exhibit 10.1

 

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

	
 

HOWARD L. HOWELL, Lead Plaintiff, 

ELLISA PANCOE, Individually and on 

Behalf of All Others Similarly Situated,

 

Plaintiffs,

 

v.

 

JBI, INC., f/k/a 310 HOLDINGS, INC., 

JOHN BORDYNUIK, and RONALD 

BALDWIN, JR.,

 

Defendants.

	
 

Case No. 3:11-CV-00545-RCJ-WGC

 

 

 

 

STIPULATION OF SETTLEMENT

 

 

  

1

Stipulation of Settlement

 

 

This Stipulation of Settlement dated as of August 8, 2013 (the “Stipulation”), is made and entered into by and among the following Settling Parties to the above-entitled Litigation: (i) Lead Plaintiff Howard L. Howell and Plaintiff Ellisa Pancoe (collectively “Plaintiffs”) (on behalf of themselves and each of the Class Members), by and through their counsel of record in the Litigation; and (ii) Defendants JBI, Inc., formerly 310 HOLDINGS, Inc. (“JBI” or the “Company”), John Bordynuik, and Ronald Baldwin, Jr. (collectively, “Defendants”), by and through their counsel of record in the Litigation.  Subject to the approval of the Court, the Stipulation is intended by the Settling Parties to fully, finally, and forever resolve, discharge, and settle the Litigation and Released Claims as defined below, upon and subject to the terms and conditions hereof (the “Settlement”).

 

I.             THE LITIGATION

 

On July 28, 2011, a purported class action was filed in this Court alleging claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder (“Federal Securities Laws”) against Defendants on behalf of all those who purchased JBI’s securities between August 28, 2009 and July 20, 2011, inclusive, and who were damaged thereby.  On January 16, 2012, Defendants answered the Complaint.  On May 11, 2012, the Court appointed Howard L. Howell to serve as Lead Plaintiff and designated Glancy Binkow & Goldberg LLP as Lead Counsel.

 

On July 10, 2012, Plaintiffs filed an Amended Class Action Complaint for Violations of the Federal Securities Laws seeking an unspecified amount of damages on behalf of all those who purchased JBI’s securities between August 28, 2009 and January 4, 2012, inclusive, and who were damaged thereby.  Thereafter, the Settling Parties conferred regarding the possibility of settlement and agreed to mediate a possible resolution of the case.  Prior to mediation, the Settling Parties submitted confidential mediation statements to the mediator, David Rotman, Esq.  On August 3, 2012, and September 7, 2012, the Settling Parties attended two mediation sessions under the direction of David Rotman, Esq.  The Settling Parties were unable to reach a settlement as a result of those mediation sessions.

 

  

2

Stipulation of Settlement

  

 

On November 5, 2012, Defendants answered the complaint filed on July 10, 2012.  Thereafter, the Court ordered Plaintiffs to re-file the complaint with the Lead Plaintiff included in the caption.

 

On January 3, 2013, Plaintiffs filed the Revised Amended Class Action Complaint for Violations of The Federal Securities Laws (the “Complaint”) on behalf of all those who purchased JBI’s securities between August 28, 2009 and January 4, 2012, inclusive, and who were damaged thereby, against Defendants.  The Complaint seeks an unspecified amount of damages and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Securities and Exchange Commission Rule 105-b promulgated thereunder.

 

Thereafter, the Settling Parties again conferred regarding the possibility of settlement and agreed to mediate a possible resolution of the case.  Prior to mediation, the Settling Parties submitted confidential mediation statements to the mediator, Jed D. Melnick, Esq.  On March 20, 2013, the Settling Parties attended a mediation under the direction of Jed D. Melnick, Esq. in Los Angeles, California.  The Settling Parties were able to reach a basic framework for a potential settlement at the mediation.  Following the mediation, the Settling Parties negotiated and agreed to the material terms of a settlement of this Litigation.

 

II.            DEFENDANTS’ DENIALS OF WRONGDOING AND LIABILITY

 

Each Defendant has expressly denied and continues to deny all charges of wrongdoing or liability arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Complaint.  Specifically, Defendants have denied, and continue to deny, inter alia, the allegations that Plaintiffs or the Class have suffered damages or that any Defendant made or caused any alleged misrepresentation or omission.  Pursuant to the terms set forth below, this Stipulation shall in no event be construed as, or deemed to be, evidence of an admission or concession by Defendants with respect to any claim of fault, liability, wrongdoing, or damage whatsoever.

 

  

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Stipulation of Settlement

  

 

Nonetheless, Defendants have concluded that further Litigation could be protracted and expensive, and that it is desirable that the Litigation be fully and finally settled in the manner and upon the terms and conditions set forth in this Stipulation.  Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like this Litigation.  Defendants have, therefore, determined that it is desirable and beneficial that the Litigation be settled in the manner and upon the terms and conditions set forth in this Stipulation.

 

III.           CLAIMS OF PLAINTIFFS AND BENEFITS OF SETTLEMENT

 

Plaintiffs believe that the claims asserted in the Litigation have merit and that the evidence developed to date supports the claims asserted.  However, counsel for Plaintiffs recognizes and acknowledges the expense and length of continued proceedings necessary to prosecute the Litigation against Defendants through trial and through appeals.  Plaintiffs also have taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as this Litigation, and the difficulties and delays inherent in such litigation.  Additionally, Plaintiffs have considered that it is uncertain whether and to what extent there is and/or will be insurance coverage available to contribute to the satisfaction of any judgment that might be obtained, and uncertain whether defendants will be able to respond to any such future judgment. Plaintiffs also are mindful of the inherent problems of proof under, and possible defenses to, the claims of securities law violations asserted in the Litigation.  Plaintiffs believe that the Settlement set forth in the Stipulation confers substantial benefits upon the Class.  Based on their evaluation, Plaintiffs and counsel for Plaintiffs have determined that the Settlement set forth in the Stipulation is in the best interests of Plaintiffs and the Class and, therefore, determined that it is desirable and beneficial to Plaintiffs and the Class that the Litigation be settled upon the terms and conditions set forth in this Stipulation.

 

  

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Stipulation of Settlement

  

 

IV.           TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT

 

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among Plaintiffs (for themselves and the Class Members) and Defendants, by and through their respective counsel or attorneys of record, that, subject to the approval of the Court, the Litigation and the Released Claims shall be finally and fully compromised, settled and released, and the Litigation shall be dismissed with prejudice, upon and subject to the terms and conditions of the Stipulation, as follows.

 

1.             Definitions

 

As used in the Stipulation, the following terms have the meanings specified below.  In the event of any inconsistency between any definition set forth below and any definition set forth in any document attached as an exhibit to this Stipulation, the definition set forth below shall control.

 

1.1           “Authorized Claimant” means any Class Member who, in accordance with the terms of this Stipulation, is entitled to a distribution from the Settlement Fund pursuant to any Plan of Allocation or any order of the Court.

 

1.2           “JBI,” “310 Holdings” or the “Company” means JBI, INC., formerly 310 HOLDINGS, INC.

 

1.3           “Claims Administrator” means Gilardi & Co, LLC.

 

1.4           “Class” means all persons or entities who purchased or otherwise acquired JBI’s securities between August 28, 2009 and January 4, 2012, inclusive, and who were damaged thereby.  Excluded from the Class are Defendants, the officers and directors of the Company, at all relevant times, members of their immediate families, any entity in which any Defendant has or had a legal controlling interest, and the legal representatives, heirs, successors, or assigns of any Defendant.

 

  

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Stipulation of Settlement

  

 

1.5           “Class Member” or “Member of the Class” means a Person who falls within the definition of the Class as set forth in ¶1.4 above.

 

1.6           “Class Period” means the period commencing on and between August 28, 2009 and January 4, 2012, inclusive.

 

1.7           “Complaint” means the Revised Amended Class Action Complaint for Violations of the Federal Securities Laws filed on January 3, 2013.

 

1.8           “Court” means the United States District Court for the District of Nevada.

 

1.9           “Defendants” means JBI, John Bordynuik, and Ronald Baldwin, Jr.

 

1.10         “Effective Date” means the first date by which all of the events and conditions specified in ¶7.1 of this Stipulation have been met and have occurred.

 

1.11         “Escrow Agent” means Gilardi & Co, LLC and/or Glancy Binkow & Goldberg LLP, or their successors, or such other person or entity designated by the Court.

 

1.12         “Final” means, with respect to any order of the Court, including, without limitation, the Judgment, that such order represents a final and binding determination of all issues within its scope and is not subject to further review on appeal or otherwise.  Without limitation, an order becomes “Final” when: (a) no appeal has been filed and the prescribed time for commencing any appeal has expired; or (b) an appeal has been filed and either (i) the appeal has been dismissed and the prescribed time, if any, for commencing any further appeal has expired, or (ii) the order has been affirmed in its entirety and the prescribed time, if any, for commencing any further appeal has expired.  For purposes of this paragraph, an “appeal” includes appeals as of right, discretionary appeals, interlocutory appeals, proceedings involving writs of certiorari or mandamus, and any other proceedings of like kind.  Any appeal or other proceeding pertaining to any order adopting or approving a Plan of Allocation, or to any order issued in respect of an application for attorneys’ fees and expenses, or to an order issued in respect to an application for reimbursement of Plaintiffs’ expenses, pursuant to ¶¶ 6.1 and 6.2 below, shall not in any way delay or preclude the Judgment from becoming Final.

 

  

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Stipulation of Settlement

  

 

1.13         “Individual Defendants” means John Bordynuik and Ronald Baldwin, Jr.

 

1.14         “Judgment” means the judgment to be rendered by the Court, in the form attached as Exhibit B (“Final Judgment and Order of Dismissal with Prejudice”) hereto.

 

1.14A      “Judgment Date” means the date the Court enters the Judgment..

 

1.15         “Lead Plaintiff” means Howard L. Howell.

 

1.16         “Litigation” means Howell v. JBI, Inc. et al., Case No. 3:11-cv-00545-RCJ-WGC.

 

1.17         “Person” means an individual, corporation, limited liability company, professional corporation, partnership, limited partnership, limited liability partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal entity together with their spouses, heirs, predecessors, successors, representatives, or assignees of any of the foregoing.

 

1.18         “Plaintiffs” means Howard L. Howell and Ellisa Pancoe.

 

1.19         “Lead Counsel” or “Class Counsel” refers to the law firm of Glancy Binkow & Goldberg LLP.

 

1.20         “Plan of Allocation” means a plan or formula of allocation of the Settlement Fund, to be approved by the Court, whereby the Settlement Fund shall be distributed to Authorized Claimants after payment of or provision for expenses of notice and administration of the Settlement, Taxes and Tax Expenses, and such attorneys’ fees, costs, expenses, and interest as may be awarded by the Court.  Any Plan of Allocation is not part of the Stipulation and the Released Persons shall not have any responsibility or liability with respect thereto.

 

  

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Stipulation of Settlement

  

 

1.21         “Preliminary Approval Order” means the order entered by the Court in substantially the form and content as Exhibit A (“Order Preliminarily Approving Settlement and Providing for Notice of Proposed Settlement”).

 

1.21A     “Proof of Claim and Release” means the form to be sent to Class Members, in the form attached as Exhibit A-2 hereto, upon further order(s) of the Court, by which any Class Member may make claims against the Settlement Fund for damages allegedly incurred by reason of their investment(s) in JBI securities.

 

1.22         “Released Claims” means any and all claims (including  Unknown Claims), demands, losses, rights, causes of action, liabilities, obligations, judgments, suits, matters and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, concealed or hidden, asserted or unasserted that have been or could have been asserted in this Litigation or in any court, tribunal, forum or proceeding (including, but not limited to, any claims arising under federal, state or foreign law, common law, statute, rule, or regulation relating to alleged fraud, breach of any duty, negligence, violations of the federal or state securities laws, or otherwise, and including all claims within the exclusive jurisdiction of the federal courts), whether individual, class, direct, derivative, representative, legal, equitable or any other type or in any other capacity, which Plaintiff or any Member of the Class ever had, now has, or hereafter can, shall, or may have by reason of, arising out of, relating to or in connection with the allegations, conduct, facts, events, transactions, acts, occurrences, statements, representations, misrepresentations, omissions, or any other matter, thing or cause whatsoever, or any series thereof, embraced, involved, or set forth or otherwise related, directly or indirectly, to the Litigation, or to the purchase or acquisition of stock in JBI, including without limitation, any disclosures made in connection with any of the foregoing, except claims to enforce the Settlement.

 

  

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Stipulation of Settlement

  

 

1.23         “Released Persons” means each and all of Defendants, including any “Related Parties” of the Defendants.  As used herein, “Related Parties” is defined to include the Individual Defendants’ families, and the Company’s parent entities, associates, affiliates or subsidiaries, and each and all of the Defendants’ past, present, or future officers, directors, stockholders, employees, attorneys, financial or investment advisors, consultants, accountants, investment bankers, commercial bankers, underwriters, insurers, engineers, advisors, principals or agents, heirs, executors, trustees, general or limited partners or partnerships, personal representatives, estates, administrators, and each of their respective predecessors, successors, and assigns, and any trust of which any Defendant is the settlor or which is for the benefit of any Defendant and/or member(s) of his or her family.

 

1.24         “Settlement Fund” means the shares of JBI common stock that JBI will issue in accordance with the provisions set forth in Section 2(a).

 

1.25         “Settling Parties” means, collectively, Defendants and Plaintiffs on behalf of themselves and the Members of the Class.

 

1.26         “Unknown Claims” means any and all Released Claims which Plaintiffs or any Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Persons which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Persons, or might have affected his, her or its decision(s) with respect to this Settlement.  Unknown Claims include those claims in which some or all of the facts comprising the claim may be suspected, or even undisclosed, concealed, or hidden.  With respect to any and all Released Claims, the Settling Parties stipulate and agree that, upon the Effective Date, Plaintiffs shall expressly waive, and each of the Class Members shall be deemed to have, and by operation of the Judgment shall have, expressly waived the provisions, rights, and benefits of California Civil Code § 1542, which provides:

 

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

 

  

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Stipulation of Settlement

  

 

Plaintiffs shall expressly waive, and each of the Class Members shall be deemed to have, and by operation of the Judgment shall have, expressly waived any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States, or principle of common law or foreign law, which is similar, comparable or equivalent in effect to California Civil Code § 1542.  Plaintiffs and Class Members may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the subject matter of the Released Claims, but Plaintiffs shall expressly and each Class Member, upon the Effective Date, shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing, heretofore have existed, or coming into existence in the future, including, but not limited to, conduct which is negligent, reckless, intentional, with or without malice, or a breach of any duty, law, rule or regulation, without regard to the subsequent discovery or existence of such different or additional facts.  Plaintiffs acknowledge, and the Class Members shall be deemed by operation of the Judgment to have acknowledged, that the foregoing waiver and inclusion of “Unknown Claims” in the definition of Released Claims was separately bargained for and a key element of the Settlement of which this release is a part.

 

2.             The Settlement

 

	
  

	
a.

	
The Settlement Fund

 

2.1           JBI shall issue shares of its authorized but unissued common stock to fund the Settlement (“JBI Settlement Shares”)  The number of shares will be dependent on the price of JBI shares as of the Judgment Date.  If the price of JBI’s common stock is less than $0.50 per share (based upon the average closing price for the 90 trading days preceding the Judgment Date) on the date of the Judgment, the Company will issue three (3) million shares of common stock which will comprise the Settlement Fund.   If the price of JBI’s common stock falls between $0.50 and $0.70 per share, inclusive (based upon the average closing price for the 90 trading days preceding the Judgment Date), the Company will issue two and one-half (2.5) million shares of common stock which will comprise the Settlement Fund.   If the price of JBI’s common stock is more than $0.70 per share (based upon the average closing price for the 90 trading days preceding the Judgment Date) on the date of the Judgment, the Company will issue one and three-quarters (1.75) million shares of common stock which will comprise the Settlement Fund.

 

  

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Stipulation of Settlement

  

 

JBI will electronically transfer the shares within ten (10) calendar days of the entry of the Judgment approving the terms of the Settlement set forth herein. The transfer of the stock shall be pursuant to Section 3(a)(10) of the Securities Act of 1933. The stock shall not constitute “restricted securities” pursuant to the Securities Act of 1933, and may be sold or transferred by recipients thereof who are not affiliates of JBI (as that term is defined in Rule 144 of the Securities Act of 1933) or recipients deemed to be underwriters under the Securities Act of 1933 without registration under § 5 of the Securities Act of 1933 or compliance with Rule 144.

 

The shares issued hereunder and constituting the Settlement Fund shall not be distributed in kind to Class Members.  At any time after final approval  Lead Counsel shall have the option, at their sole discretion but consistent with their fiduciary duties to Class Members, of selling all or any portion of such shares for the benefit of Class Members subject to the limitations noted herein;  The proceeds of any such sale shall be placed in the Settlement Fund.  Lead Counsel will ensure that any sales of the stock on any trading day will not exceed the greater of: (1) 12,500 shares; or (2) 10% of the average daily trading volume for JBI’s common stock for the 90 trading days preceding the Judgment Day.   Lead Counsel will provide a monthly report to counsel for JBI 10 days after the beginning of each month showing the sales of the shares of stock in the Settlement Fund that occurred in the prior month.

 

  

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Stipulation of Settlement

  

 

2.2           Defendant JBI shall pay or cause to be paid all expenses incurred by the Claims Administrator in administering the Settlement, including all expenses related to providing notice to the class, such as the printing and mailing of the Notice and Proof of Claim forms, the publication of the Summary Notice, and preparing the Settlement Fund for distribution (“Administrator Expenses”).  Additionally, Defendant JBI shall reimburse Plaintiffs for all mediation expenses incurred, which expenses total $38,848.34 (“Mediation Expenses”).  In no event shall Defendant JBI  be obligated to pay more than $200,000 in total for these two types of expenses.  Defendant JBI will wire reimbursement for the Mediation Expenses into the Escrow Account within fourteen (14) calendar days following the Judgment Date.  Defendant JBI will wire funds into the Escrow Account to pay the Administrator Expenses as incurred and within ten (10) days of receipt of an invoice detailing those expenses.

 

	
  

	
b.

	
The Escrow Agent

 

2.3           The Escrow Agent shall invest all cash components of the Settlement Fund,  in instruments either fully insured or backed by the full faith and credit of the United States Government or an agency thereof and shall reinvest the proceeds of these instruments as they mature in similar instruments at their then-current market rates.

 

2.4           The Escrow Agent shall permit Lead Counsel to withdraw up to two hundred thousand dollars ($200,000.00) from the Escrow Account (as provided by Defendants in ¶2.2) to be used to pay all Administrator Expenses and to reimburse Lead Counsel for Mediation Expenses (as provided in ¶2.2).

 

2.5           Subject to further order(s) and/or direction(s) as may be made by the Court, or as provided in this Stipulation, the Escrow Agent is authorized to execute such transactions as are consistent with the terms of this Stipulation.

 

2.6           All funds and shares held by the Escrow Agent shall be deemed and considered to be in custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such time as such funds shall be distributed pursuant to this Stipulation and/or further order(s) of the Court.

 

  

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Stipulation of Settlement

  

 

2.7           The Escrow Agent shall not be responsible for the payment of any sums due to Authorized Claimants or other Persons, except to the extent of maintaining account of and appropriately paying sums as required by this Stipulation, but only to the limited extent that such sums have been delivered into the Escrow Account as required by this Stipulation.  The Escrow Agent shall be liable only for acts of gross negligence or willful misconduct.  The assumption of duties as Escrow Agent shall not preclude Lead Counsel from continuing to represent, as the case may be, Plaintiffs or Class Members.

 

	
  

	
c.

	
Taxes

 

2.8           (a)           The Settling Parties and the Escrow Agent shall treat the escrow account as a “qualified settlement fund” for purposes of §468B of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.  The Escrow Agent and the Settling Parties shall timely make such elections as are necessary or advisable to carry out the provision of this ¶ 2.8, including, without limitation, the “relation-back election” described in Treas. Reg. §1.468B-1 back to the earliest permitted date.  Such elections shall be made in compliance with the procedures and requirements contained in such regulations.  It shall be the responsibility of the Escrow Agent to prepare and deliver timely and properly the necessary documentation for signature by all necessary parties, and thereafter to cause the appropriate filing to occur.

 

(b)           The Escrow Agent shall be the escrow account’s “administrator” as that term is used in Treas. Reg. §1.468B-2.  As administrator, the Escrow Agent shall satisfy the administrative requirements imposed by Treas. Reg. §1.468B-2 by, e.g., (i) obtaining a taxpayer identification number, (ii) satisfying any information reporting or withholding requirements imposed on distributions from the Settlement Fund, and (iii) timely and properly filing applicable federal, state or local tax returns necessary or advisable with respect to the Settlement Fund (including, without limitation, the returns described in Treas. Reg. §1.468B-2(k)) and paying any taxes reported thereon.  Such returns (as well as the election described in this ¶ 2.8) shall be consistent with this ¶ 2.7 and in all events shall reflect that all Taxes, as defined in subsection (c) below, on the income earned by the Settlement Fund shall be paid out of the Settlement Fund as provided in ¶ 2.8(c) hereof.

 

  

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Stipulation of Settlement

  

 

(c)           All (i) taxes (including any estimated taxes, interest, or penalties) arising with respect to the income earned by the Settlement Fund, including, without limitation, any taxes or tax detriments that may be imposed upon Defendants or their counsel with respect to any income earned by the Settlement Fund for any period during which the Settlement Fund does not qualify as a “qualified settlement fund” for federal or state income tax purposes (collectively, “Taxes”), and (ii) expenses and costs incurred in connection with the operation and implementation of this ¶ 2.8, including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) the returns described in this ¶ 2.8 (collectively, “Tax Expenses”), shall be paid out of the Settlement Fund; in all events neither Defendants nor their counsel shall have any liability or responsibility for the Taxes or the Tax Expenses.  With funds from the Settlement Fund, the Escrow Agent shall indemnify and hold harmless Defendants and their counsel for Taxes and Tax Expenses (including, without limitation, Taxes payable by reason of any such indemnification).  Further, Taxes and Tax Expenses shall be treated as, and considered to be, a cost of administration of the Settlement Fund and shall timely be paid by the Escrow Agent out of the Settlement Fund without prior order from the Court and the Escrow Agent shall be obligated (notwithstanding anything herein to the contrary) to withhold from distribution to Authorized Claimants any funds necessary to pay such amounts, including the establishment of adequate reserves for any Taxes and Tax Expenses (as well as any amounts that may be required to be withheld under Treas. Reg. §1.468B-2(1)(2)); neither Defendants nor their counsel are responsible therefor, nor shall they have any liability therefor.  The Settling Parties agree to cooperate with the Escrow Agent, each other, and their tax attorneys and accountants to the extent reasonably necessary to carry out the provisions of this ¶ 2.8.

 

  

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Stipulation of Settlement

  

 

	
  

	
3.

	
Preliminary Approval Order and Settlement Hearing

 

3.1           Promptly after execution of this Stipulation, Lead Counsel shall submit the Stipulation to the Court and shall apply for entry of an order (“Preliminary Order”) substantially in the form and content of Exhibit A hereto, requesting, inter alia, the preliminary approval of the Settlement set forth in this Stipulation, approval for the mailing of a settlement notice (the “Notice”) in the form attached as Exhibit A-1 hereto, and publication of a summary notice (the “Summary Notice”) in the form attached as Exhibit A-3 hereto.  The Notice shall include the general terms of the Settlement set forth in this Stipulation, the proposed Plan of Allocation, the general terms of the Fee Application, and the date of the Settlement Hearing as defined below.  Defendants do not take any position as to the proposed Plan of Allocation at this time.

 

3.2           Lead Counsel shall request that the Court hold a hearing (the “Settlement Hearing”) at which time Lead Counsel shall request that the Court finally approve the Settlement of the Litigation as set forth herein.

 

3.3           At the Settlement Hearing, the Settling Parties shall jointly request entry of a Judgment in the form attached hereto as Exhibit B:

 

(a)           finally approving the Settlement as fair, reasonable, and adequate, within the meaning of Rule 23 of the Federal Rules of Civil Procedure, and directing its consummation pursuant to its terms;

 

(b)           directing that the Litigation be dismissed with prejudice; directing that the Settling Parties are to bear their own costs, except as otherwise provided in this Stipulation; and releasing the Released Claims;

 

  

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Stipulation of Settlement

  

 

(c)           permanently barring and enjoining the institution and prosecution, by Plaintiffs and the Class Members, of any other action against the Released Persons in any court or other tribunal, forum, or proceeding, asserting any Released Claims;

 

(d)           reserving jurisdiction over the Litigation, including all future proceedings concerning the administration, consummation, and enforcement of this Stipulation;

 

(e)           finding that the Complaint in the Litigation was filed on a good faith basis in accordance with the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) and Rule 11 of the Federal Rules of Civil Procedure;

 

(f)           finding, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, that there is no just reason for delaying and directing entry of a final judgment; and

 

(g)           containing such other and further provisions consistent with the terms of this Stipulation to which the Settling Parties expressly consent in writing.

 

3.4           At or after the Settlement Hearing, Lead Counsel also will request that the Court approve the proposed Plan of Allocation, the Fee Application, and the request for payment of Plaintiffs’ expenses.

 

	
  

	
4.

	
Releases and Bar Order

 

4.1           Upon the Effective Date, Plaintiffs and each of the Class Members, for themselves and for each of their respective officers, directors, shareholders, employees, agents, spouses, subsidiaries, heirs at law, successors and assigns, and any other Person claiming (now or in the future) through or on behalf of them, and regardless of whether any such Plaintiffs or Class Member ever seeks or obtains by any means, including, without limitation, by submitting a Proof of Claim and Release, any distribution from the Settlement Fund, shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged all Released Claims against the Released Persons and shall have covenanted not to sue the Released Persons with respect to all such Released Claims, and shall be permanently barred and enjoined from instituting, commencing, or prosecuting any Released Claims against the Released Persons except to enforce the releases and other terms and conditions contained in this Stipulation or the Judgment entered pursuant thereto.

 

  

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Stipulation of Settlement

  

 

4.2           Upon the Effective Date, each of Defendants shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged the Class (except any Class Member who opts out of the Settlement), Plaintiffs and Plaintiffs’ counsel from all claims (including Unknown Claims) arising out of, relating to, or in connection with, the institution, prosecution, assertion, settlement, or resolution of the Litigation or the Released Claims except to enforce the releases and other terms and conditions contained in this Stipulation or any Court order (including, but not limited to, the Judgment) entered pursuant thereto.

	
  

	
5.

	
Administration and Calculation of Claims, Final Awards and Supervision and Distribution of the Settlement Fund

 

5.1           The Claims Administrator, subject to such supervision and direction of the Court as may be necessary or as circumstances may require, shall administer and calculate the claims submitted by Class Members and shall oversee distribution of the Net Settlement Fund (defined below) to Authorized Claimants pursuant to the Plan of Allocation.

 

5.2           The Settlement Fund shall be applied as follows:

 

(a)         to pay counsel’s attorneys’ fees with interest thereon and the expenses of Plaintiffs (the “Fee Award”), if and to the extent allowed by the Court;

 

(b)         to pay the Taxes and Tax Expenses described in ¶ 2.8 hereof; and

 

(c)         to distribute the balance of the Settlement Fund (the “Net Settlement Fund”) to Authorized Claimants as allowed by the Stipulation, the Plan of Allocation, or order of the Court.

 

  

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Stipulation of Settlement

  

 

5.3           Upon the Effective Date and thereafter, and in accordance with the terms of the Stipulation, the Plan of Allocation, or such further approval and further order(s) of the Court as may be necessary or as circumstances may require, the Net Settlement Fund shall be distributed to Authorized Claimants, subject to and in accordance with the following.

 

5.4           Within ninety (90) calendar days after the mailing of the Notice or such other time as may be set by the Court, each Person claiming to be an Authorized Claimant shall be required to submit to the Claims Administrator a completed Proof of Claim and Release, substantially in the form agreed to by the Settling Parties, signed under penalty of perjury, and supported by such documents as are specified in the Proof of Claim and Release and as are reasonably available to such Person.

 

5.5           Except as otherwise ordered by the Court, any and all Class Members who fail to timely submit a Proof of Claim and Release within the period described in ¶ 5.4, or such other period as may be ordered by the Court, or otherwise allowed, shall be forever barred from receiving any payments pursuant to the Stipulation and the Settlement set forth herein, but will in all other respects be subject to and bound by the provisions of the Stipulation, the releases contained herein, and the Judgment.

 

5.6           The Net Settlement Fund shall be distributed to Authorized Claimants substantially in accordance with the Plan of Allocation set forth in the Notice and approved by the Court.  Any such Plan of Allocation is not a part of this Stipulation.  No funds or shares from the Net Settlement Fund shall be distributed to Authorized Claimants until the Effective Date.  If there are any funds or shares remaining in the Net Settlement Fund after six (6) months from the date of distribution of the Net Settlement Fund (whether by reason of tax refunds, uncashed checks, or otherwise), Lead Counsel shall, if feasible, reallocate such balance among Authorized Claimants in an equitable and economic fashion.  Thereafter, any balance which still remains in the Net Settlement Fund shall be donated to one or more secular §501(c)(3) organization(s) selected by Lead Counsel.

 

  

18

Stipulation of Settlement

  

 

5.7           Neither the Released Persons nor their counsel shall have any responsibility for, interest in, or liability whatsoever with respect to the investment or distribution of the Settlement Fund or Net Settlement Fund, the Plan of Allocation, the determination, administration, or calculation of claims, the payment or withholding of Taxes, or any losses incurred in connection with any such matters.  Plaintiffs and each Class Member hereby fully, finally, and forever release, relinquish, and discharge the Released Persons and their counsel from any and all such liability.

 

5.8           No Person shall have any claim against Plaintiffs, Lead Counsel, the Claims Administrator, or their counsel based on the distributions made substantially in accordance with the Stipulation and the Settlement contained herein, the Plan of Allocation, or further order(s) of the Court.  No Person shall have any claim against the Released Persons or their counsel arising from or relating to the management of, distributions from, or the disposition of the Settlement Fund or the Net Settlement Fund, and Plaintiffs and each Class Member hereby fully, finally, and forever release, relinquish, and discharge the Released Persons and their counsel from any and all such liability.

 

5.9           It is understood and agreed by the Settling Parties that any proposed Plan of Allocation of the Net Settlement Fund including, but not limited to, any adjustments to an Authorized Claimant’s claim set forth therein, is not a part of the Stipulation and is to be considered by the Court separately from the Court’s consideration of the fairness, reasonableness, and adequacy of the Settlement set forth in the Stipulation, and any order or proceeding relating to the Plan of Allocation shall not operate to terminate or cancel the Stipulation or affect the finality of the Court’s Judgment approving the Stipulation and the Settlement set forth therein, or any other orders entered pursuant to the Stipulation.

 

  

19

Stipulation of Settlement

  

 

5.10         All Persons who fall within the definition of Class Members shall be subject to and bound by the provisions of this Stipulation, the releases contained herein, and the Judgment with respect to all Released Claims, regardless of whether such Persons seek or obtain by any means, including, without limitation, by submitting a Proof of Claim and Release or any similar document, any distribution from the Settlement Fund or the Net Settlement Fund.

 

	
  

	
6.

	
Lead Counsel’s Attorneys’ Fees

 

6.1           Lead Counsel may submit an application or applications (the “Fee Application”) for distributions to Plaintiffs’ counsel from the Settlement Fund for an award of attorneys’ fees, plus any interest on such attorneys’ fees and expenses at the same rate and for the same periods as earned by the Settlement Fund (until paid) as may be awarded by the Court, and for reimbursement of Plaintiffs’ reasonable costs and expenses (including lost wages) directly related to their representation of the Class in this Litigation.  Defendant JBI has agreed to pay for Plaintiffs’ Mediation Expenses and Plaintiffs have agreed to not move the Court for reimbursement of  any expenses unrelated to mediations in this action.  Lead Counsel reserves the right to make additional applications to the Court for fees and expenses incurred.

 

6.2           The fees and expenses, as awarded by the Court, shall be paid to Lead Counsel from the Settlement Fund as provided in ¶ 2.4.  Lead Counsel may thereafter allocate the attorneys’ fees among other Plaintiffs’ counsel in a manner in which they in good faith believe reflects the contributions of such counsel to the initiation, prosecution, and resolution of the Litigation.  If, and when, as a result of any appeal and/or further proceedings on remand, or successful collateral attack, the Fee Award is overturned, modified, or lowered, or if the Effective Date does not occur, then, within five (5) business days from the event specified in subparts (a) through (d) of Paragraph 7.1, which prevents the Effective Date from occurring, Lead Counsel shall refund to the Settlement Fund such fees and expenses previously paid to them from the Settlement Fund plus interest thereon at the same rate as earned on the Settlement Fund in an amount consistent with such reversal or modification.  Each such Plaintiffs’ counsel’s law firm receiving fees and expenses, as a condition of receiving such fees and expenses, on behalf of itself and each partner and/or shareholder of it, agrees that the law firm and its partners and/or shareholders are subject to the jurisdiction of the Court for the purpose of enforcing the provisions of this paragraph.

 

  

20

Stipulation of Settlement

  

 

6.3           The procedure for and the allowance or disallowance by the Court of any applications by Lead Counsel for attorneys’ fees or the expenses of Plaintiffs, to be paid out of the Settlement Fund are not part of the Settlement set forth in the Stipulation, and are to be considered by the Court separately from the Court’s consideration of the fairness, reasonableness, and adequacy of the Settlement set forth in the Stipulation; and any order or proceeding relating to the Fee and Expense Application or any appeal from any order relating thereto or reversal or modification thereof, shall not operate to terminate or cancel the Stipulation, or affect or delay the finality of the Judgment and the Settlement of the Litigation set forth therein.

 

6.4           The Released Persons shall have no responsibility for, and no liability whatsoever with respect to, any payment of any type or nature whatsoever, including attorneys’ fees and expenses to Plaintiffs’ counsel.  The Released Persons do not take any position as to Lead Counsel’s request for attorneys’ fees and expenses and/or Lead Counsel’s request for the reimbursement of Plaintiffs’ reasonable costs and expenses (including lost wages) directly related to their representation of the Class in this Litigation.

 

6.5           The Released Persons shall have no responsibility for, and no liability whatsoever with respect to,  the allocation among Plaintiffs’ counsel, and/or any other Person who may assert some claim thereto, of any Fee Award that the Court may make in the Litigation.

 

  

21

Stipulation of Settlement

  

 

	
  

	
7.

	
Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination

 

7.1           The Effective Date of the Stipulation shall be conditioned on the occurrence of all of the following events:

 

(a)         the Court has entered the Notice Order, as required by ¶ 3.1 hereof;

 

(b)         the Court has entered the Final Judgment and Order of Dismissal With Prejudice substantially similar to attached Exhibit B or a judgment in a form otherwise acceptable to all Settling Parties (“Alternate Judgment”);

 

(c)         the Judgment has become Final; and

 

(d)         Neither Settling Party has terminated the Stipulation (including, but not limited to JBI’s option to terminate under the Supplemental Agreement).

 

7.2           Upon the Effective Date, any and all remaining interest or right of Defendants in or to the Settlement Fund, if any, shall be absolutely and forever extinguished.  .

 

7.3           If the Effective Date does not occur, then Defendants or Plaintiffs’ Lead Counsel shall have the option to terminate by providing written notice of their election to do so (“Termination Notice”) to Defendants or Plaintiffs’ Lead Counsel. The Termination Notice shall be delivered within 30 court days of the event, specified in subparts (a) through (d) of Paragraph 7.1, which prevents the Effective Date from occurring. 

 

	
7.4  

	
     Upon receipt of a Termination Notice:

 

	
(a)  

	
The Settling Parties may mutually agree in writing to proceed with the Stipulation; however, no Settling Party shall have any obligation whatsoever to proceed under any terms other than substantially in the form provided and agreed to herein; or

 

	
(b)  

	
The Settling Parties may move the Court to set aside the settlement or render any judgment or order entered by the Court in accordance with the terms of the Stipulation to be treated nunc pro tunc; or otherwise take whatever action necessary to render the terms and provisions of the Stipulation null and void, with no further force and effect with respect to the Settling Parties.

 

  

22

Stipulation of Settlement

  

 

	
(c)  

	
The Settling Parties shall be restored to their respective positions in the Litigation as of one court day prior to the execution of the Stipulation;

 

	
(d)  

	
Neither the existence nor the terms of this Stipulation (nor any negotiations preceding this Stipulation nor any acts performed pursuant to, or in furtherance of, this Stipulation) shall be used in this Litigation or in any other proceeding for any purpose.

 

	
  

	
8.

	
Miscellaneous Provisions

 

8.1           The Settling Parties (a) acknowledge that it is their intent to consummate this agreement; and (b) agree to cooperate to the extent reasonably necessary to effectuate and implement all terms and conditions of the Stipulation and to exercise their best efforts to accomplish the foregoing terms and conditions of the Stipulation.

 

8.2           The Settling Parties intend this Settlement to be a final and complete resolution of all disputes between them.  The Settlement compromises claims which are contested and shall not be deemed an admission by any Settling Party as to the merits of any claim or defense.

 

8.3           While Defendants deny that the claims advanced in the Litigation were meritorious, they will not assert in any public statement that the Litigation was not filed in good faith and/or is not being settled voluntarily after consultation with competent legal counsel.  The Judgment will contain a finding that, during the course of the Litigation, the parties and their respective counsel at all times complied with the requirements of Federal Rule of Civil Procedure 11.  The Settling Parties agree that the amount paid to the Settlement Fund and the other terms of the Settlement were negotiated in good faith by the Settling Parties and reflect a settlement that was reached voluntarily after consultation with competent legal counsel and with the assistance of David Rotman, Esq. and Jed D. Melnick, Esq.  The Settling Parties reserve their right to rebut, in a manner that such party determines to be appropriate, any contention made in any public forum that the Litigation was brought or defended in bad faith or without a reasonable basis.

 

  

23

Stipulation of Settlement

  

 

8.4           The parties intend this Settlement to be a final and complete resolution of all disputes between them with respect to the Litigation.  The Settlement compromises claims which are contested.  Neither this Stipulation nor the Settlement contained herein, nor any act performed or document executed pursuant to or in furtherance of this Stipulation or the Settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, any allegation made in the Litigation, or any wrongdoing or liability of Defendants; or (b) is or may be deemed to be or may be used as an admission of, or evidence of, any liability, fault, or omission of any of Defendants in any civil, criminal, or administrative proceeding in any court, administrative agency, or other tribunal.  Neither this Stipulation nor the Settlement, nor any act performed or document executed pursuant to or in furtherance of this Stipulation or the Settlement shall be admissible in any proceeding for any purpose, except to enforce the terms of the Settlement, and except that Defendants may file the Stipulation and/or the Judgment in any action that may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of claim preclusion or issue preclusion or similar defense or counterclaim.

 

8.5           The Stipulation may be amended or modified only by a written instrument signed by or on behalf of all Settling Parties or their respective successors-in-interest.

 

8.6           The Stipulation constitutes the entire agreement among the parties hereto and no representations, warranties, or inducements have been made to any party concerning the Stipulation other than the representations, warranties, and covenants contained and memorialized in such documents.  It is understood by the Settling Parties that, except for the matters expressly represented herein, the facts or law with respect to which this Stipulation is entered into may turn out to be other than or different from the facts now known to each party or believed by such party to be true; each party therefore expressly assumes the risk of the facts or law turning out to be so different, and agrees that this Stipulation shall be in all respects effective and not subject to termination by reason of any such different facts or law.  Except as otherwise provided herein, each party shall bear her, his, or its own costs.

 

  

24

Stipulation of Settlement

  

 

8.7           Lead Counsel, on behalf of the Class, is expressly authorized by Plaintiffs to take all appropriate action required or permitted to be taken by the Class pursuant to the Stipulation to effectuate its terms and also are expressly authorized to enter into any modifications or amendments to the Stipulation on behalf of the Class which they deem appropriate.  Plaintiffs and Lead Counsel represent and warrant that none of Plaintiffs’ claims or causes of action referred to herein or that could have been alleged in the Litigation have been assigned, encumbered or in any manner transferred in whole or in part.

 

8.8           Each counsel or other Person executing the Stipulation and any documents prepared in furtherance of the Stipulation on behalf of any party hereto hereby represents and  warrants that such Person has the full authority to do so and has the authority to bind the party on whose behalf they are executing this Stipulation.  The performance by any Class Member and the Settling Parties of their obligations under this Stipulation have been duly authorized and any necessary third-party consents, if any, have been obtained.

 

8.9           The Stipulation may be executed in one or more counterparts.  All executed counterparts and each of them shall be deemed to be one and the same instrument, each of which shall be deemed an original notwithstanding that all of the parties hereto are not signatories to the same counterpart.  A complete set of executed counterparts shall be filed with the Court.  The Settling Parties agree that facsimile or scanned signatures shall have the same force and effect as original signatures.

 

  

25

Stipulation of Settlement

  

 

8.10         The Stipulation shall be binding upon, and inure to the benefit of, the successors and assigns of the parties hereto, including any corporation or other entity into or with which any party merges, consolidates, or reorganizes or has merged, consolidated, or reorganized.

 

8.11         The Court shall retain jurisdiction with respect to implementation and enforcement of the terms of the Stipulation, and all parties and counsel for the parties hereto submit to the jurisdiction of the Court for purposes of implementing and enforcing the Settlement embodied in the Stipulation.

 

8.12         This Stipulation shall be considered to have been negotiated, executed and delivered, and to be wholly performed, in the State of California, and the rights and obligations of the parties to the Stipulation shall be construed and enforced in accordance with, and governed by, the internal, substantive laws of the State of California without giving effect to that State’s choice-of-law principles.

 

8.13         All of the Exhibits to this Stipulation are material and integral parts hereof and are fully incorporated herein by this reference.

8.14         If any notice is required to be given by the parties, such notice shall be given by electronically mailing such notice: if to Plaintiffs, to: ExKano Sams, GLANCY BINKOW & GOLDBERG LLP, 1925 Century Park East, Suite 2100, Los Angeles, CA 90067; if to Defendants, to: (1) Michael R. MacPhail, FAEGRE BAKER DANIELS, LLP, 1700 Lincoln Street, Suite 3200, Denver CO 8020; and (2) Steven W. Bacon, General Counsel, JBI, Inc., 20 Iroquois Street, Niagara Falls, NY 14303.

(the remainder of this page has been intentionally left blank)

 

  

26

Stipulation of Settlement

  

 

IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to be executed, by their duly authorized attorneys, dated as of August 8, 2013.

 

	Dated: 	 	
GLANCY BINKOW & GOLDBERG LLP

By:  /s/ Ex Kano S. Sams II

Lionel Z. Glancy

Michael Goldberg

Ex Kano S. Sams II

Robert V. Prongay

1925 Century Park East, Suite 2100

Los Angeles, California 90067

Telephone: (310) 201-9150

Facsimile: (310) 201-9160

Lead Counsel for Plaintiffs

THE O’MARA LAW FIRM, P.C.

David C. O’Mara, Esq.

Nevada State Bar No. 8599

311 E. Liberty Street

Reno, Nevada 89051

Telephone: (775) 323-1321

Facsimile: (775) 323-4082

Liaison Counsel for Plaintiffs

LAW OFFICES OF HOWARD G. SMITH

Howard G. Smith

3070 Bristol Pike, Suite 112

Bensalem, PA 19020

Telephone: (215) 638-4847

Facsimile: (215) 638-4867

Additional Counsel for Plaintiffs

	 

 

  

27

Stipulation of Settlement

  

 

	Dated:           August 8, 2013	 	
FAEGRE BAKER DANIELS, LLP

By:  /s/ Michael R. MacPhail Michael R. MacPhail 

Katherine W. Wittenberg

3200 Wells Fargo Center

1700 Lincoln Street

Denver, CO 80203-4532

Telephone: 303-607-3500

Fax: 303-607-3600

Email: Michael.MacPhail@FaegreBD.com

Katherine.Wittenberg@ FaegreBD.com

ARMSTRONG TEASDALE, LLP

Richard G. Campbell, Jr.

Bret Meich

Nevada Bar No.: 1832

Bret F. Meich

Nevada Bar No.: 11208

50 West Liberty Street, Suite 950

Reno, Nevada 89501

Telephone No.: (775) 322-7400

Richard.campbell@armstrongteasdale.com

Email: bret.meich@armstrongteasdale.com

Attorneys for Defendants

	 

 

 

28

Stipulation of Settlementf8k080613ex10i_pacificgreen.htm

Exhibit 10.1

 

SHARE EXCHANGE AGREEMENT

 

THIS AGREEMENT is made effective as of the ___ day of ________, 2012

 

AMONG:

 

PACIFIC GREEN TECHNOLOGIES INC., a Delaware corporation of 5205 Prospect Road, Suite 135-226, San Jose, CA 95129

 

(“PGT”)

 

AND:

 

THE UNDERSIGNED SHAREHOLDERS OF ENVIROTECHNOLOGIES INC. AS LISTED ON SCHEDULE 1 ATTACHED HERETO

 

(the “Selling Shareholders”)

 

WHEREAS:

 

	
A.

	
The Selling Shareholders are the registered and beneficial owners of certain issued and outstanding shares in the capital of EnviroTechnologies, Inc. (“Enviro”);

 

	
B.

	
PGT has agreed to issue common shares in the capital of PGT as of the Closing Date, as defined herein, to the Selling Shareholders as consideration for the purchase by PGT of the issued and outstanding common shares of Enviro held by the Selling Shareholders; and

 

	
C.

	
Upon the terms and subject to the conditions set forth in this Agreement, the Selling Shareholders have agreed to sell all of the issued and outstanding common shares of Enviro held by the Selling Shareholders to PGT in exchange for common shares of PGT.

 

THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree as follows:

 

	
1.

	
DEFINITIONS

 

	
1.1

	
Definitions

 

The following terms have the following meanings, unless the context indicates otherwise:

 

	
  

	
(a)

	
“Agreement” shall mean this Agreement, and all the exhibits, schedules and other documents attached to or referred to in this Agreement, and all amendments and supplements, if any, to this Agreement;

 

	
  

	
(b)

	
“Closing” shall mean the completion of the Transaction, in accordance with Section 6 hereof, at which the Closing Documents shall be exchanged by the parties, except for those documents or other items specifically required to be exchanged at a later time;

 

  

 

  

 

	
  

	
(c)

	
“Closing Date” shall mean a date mutually agreed upon by the parties hereto in writing and in accordance with Section 9.6 following the satisfaction or waiver by PGT and Enviro of the conditions precedent set out in Sections 5.1 and 5.2 respectively;

 

	
  

	
(d)

	
“Closing Documents” shall mean the papers, instruments and documents required to be executed and delivered at the Closing pursuant to this Agreement;

 

	
  

	
(e)

	
“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended;

 

	
  

	
(f)

	
“GAAP” shall mean United States generally accepted accounting principles applied in a manner consistent with prior periods;

 

	
  

	
(g)

	
“Liabilities” shall include any direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, asserted choate or inchoate, liquidated or unliquidated, secured or unsecured;

 

	
  

	
(h)

	
“Enviro Shares” shall mean the certain common shares of Enviro held by the Selling Shareholders, consisting of the issued and outstanding common shares of Enviro beneficially held, either directly or indirectly, by the Selling Shareholders;

 

	
  

	
(i)

	
“PGT Shares” shall mean the fully paid and non-assessable common shares of PGT, to be issued to the Selling Shareholders by PGT on the Closing Date;

 

	
  

	
(j)

	
“SEC” shall mean the Securities and Exchange Commission;

 

	
  

	
(k)

	
“Securities Act” shall mean the United States Securities Act of 1933, as amended;

 

	
  

	
(l)

	
“Taxes” shall include international, federal, state, provincial and local income taxes, capital gains tax, value-added taxes, franchise, personal property and real property taxes, levies, assessments, tariffs, duties (including any customs duty), business license or other fees, sales, use and any other taxes relating to the assets of the designated party or the business of the designated party for all periods up to and including the Closing Date, together with any related charge or amount, including interest, fines, penalties and additions to tax, if any, arising out of tax assessments; and

 

	
  

	
(m)

	
“Transaction” shall mean the purchase of the Enviro Shares by PGT from the Selling Shareholders in consideration for the issuance of the PGT Shares.

 

	
1.2

	
Schedules

 

The following schedules are attached to and form part of this Agreement:

 

	
Schedule 1

	
–

	
Selling Shareholders

	
Schedule 1A

	
–

	
Execution Page of Selling Shareholders

	
Schedule 2A

	
–

	
Certificate of Non-U.S. Shareholder

	
Schedule 2B

	
–

	
Certificate of U.S Shareholder

 

	
1.3

	
Currency

 

All references to currency referred to in this Agreement are in United States Dollars (US$), unless expressly stated otherwise.

 

  

- 2 -

  

 

	
2.

	
THE OFFER, PURCHASE AND SALE OF SHARES

 

	
2.1

	
Offer, Purchase and Sale of Shares

 

Subject to the terms and conditions of this Agreement, the Selling Shareholders hereby covenant and agree to sell, assign and transfer to PGT, and PGT hereby covenants and agrees to purchase from the Selling Shareholders all of the Enviro Shares held by the Selling Shareholders.

 

	
2.2

	
Consideration

 

As consideration for the sale of the Enviro Shares by the Selling Shareholders to PGT, PGT shall allot and issue the PGT Shares to the Selling Shareholders in the amount set out opposite each Selling Shareholder’s name in Schedule 1.  The Selling Shareholders acknowledge and agree that the PGT Shares are being issued pursuant to an exemption from the prospectus and registration requirements of the Securities Act.  As required by applicable securities law, the Selling Shareholders agree to abide by all applicable resale restrictions and hold periods imposed by all applicable securities legislation.  All certificates representing the PGT Shares issued on Closing will be endorsed with one of the following legends pursuant to the Securities Act in order to reflect the fact that the PGT Shares will be issued to the Selling Shareholders pursuant to an exemption from the registration requirements of the Securities Act:

 

For Selling Shareholders not resident in the United States:

 

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).

 

NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.  “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.”

 

  

- 3 -

  

 

For Selling Shareholders resident in the United States:

 

“NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.  “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.”

 

	
2.3

	
Share Exchange Procedure

 

Each Selling Shareholder may exchange his, her or its certificate representing the Enviro Shares by delivering such certificate to PGT duly executed and endorsed in blank (or accompanied by duly executed stock powers duly endorsed in blank), in each case in proper form for transfer, with signatures guaranteed, and, if applicable, with all stock transfer and any other required documentary stamps affixed thereto and with appropriate instructions to allow the transfer agent to issue certificates for the PGT Shares to the holder thereof, together with:

 

	
  

	
(a)

	
if the Selling Shareholder is not resident in the United States, a Certificate of Non-U.S. Shareholder (the “Regulation S Certificate”), a copy of which is set out in Schedule 2A; and

 

	
  

	
(b)

	
if the Selling Shareholder is resident in the United States, a Certificate of U.S. Shareholder (the “Rule 506 Certificate”), a copy of which is set out in Schedule 2B.

 

(collectively, the “Questionnaires”)

 

	
2.4

	
Fractional Shares

 

Notwithstanding any other provision of this Agreement, no certificate for fractional shares of the PGT Shares will be issued in the Transaction.  In lieu of any such fractional shares, if any of the Selling Shareholders would otherwise be entitled to receive a fraction of a share of the PGT Shares upon surrender of certificates representing the Enviro Shares for exchange pursuant to this Agreement, the Selling Shareholders will be entitled to have such fraction rounded up to the nearest whole number of PGT Shares and will receive from PGT a stock certificate representing same.

 

	
2.5

	
Closing Date

 

The Closing will take place, subject to the terms and conditions of this Agreement, on the Closing Date.

 

  

- 4 -

  

 

	
2.6

	
Restricted Shares

 

The Selling Shareholders acknowledge that the PGT Shares issued pursuant to the terms and conditions set forth in this Agreement will have such hold periods as are required under applicable securities laws and as a result may not be sold, transferred or otherwise disposed, except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in each case only in accordance with all applicable securities laws.  In addition to the foregoing, the Selling Shareholders agree that they will not sell, assign or transfer any of the PGT Shares for a period of 12 months form the Closing Date, and that PGT may place appropriate legends on the PGT Share certificates to reflect this restriction.

 

	
2.7

	
Exemptions

 

The Selling Shareholders acknowledge that PGT has advised such Selling Shareholders that PGT is relying upon the representations and warranties of the Selling Shareholders set out in the Questionnaires to issue the PGT Shares under an exemption from the registration requirements of the Securities Act.

 

	
3.

	
REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS

 

As of the Closing, the Selling Shareholders, represent and warrant to PGT, and acknowledge that PGT is relying upon such representations and warranties, in connection with the execution, delivery and performance of this Agreement, notwithstanding any investigation made by or on behalf of PGT, as follows:

 

	
3.1

	
Title and Authority of Selling Shareholders.

 

Each of the Selling Shareholders is and will be as of the Closing, the registered and beneficial owner of and will have good and marketable title to all of the Enviro Common Stock held by it and will hold such free and clear of all liens, charges and encumbrances whatsoever; and such Enviro Common Stock held by such Selling Shareholders have been duly and validly issued and are outstanding as fully paid and non-assesable common shares in the capital of Enviro.  Each of the Selling Shareholders has due and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth and to transfer the registered, legal and beneficial title and ownership of the Enviro Common Stock held by it.

 

Notwithstanding section 9.1 hereof, the representations and warranties contained in this section shall survive Closing indefinitely.

 

	
4.

	
REPRESENTATIONS AND WARRANTIES OF PGT

 

As of the Closing, PGT represents and warrants to Enviro and the Selling Shareholders and acknowledges that Enviro and the Selling Shareholders are relying upon such representations and warranties in connection with the execution, delivery and performance of this Agreement, notwithstanding any investigation made by or on behalf of Enviro or the Selling Shareholders, as follows:

 

  

- 5 -

  

 

	
4.1

	
Organization and Good Standing

 

PGT is duly incorporated, organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and to carry on its business as now being conducted.  PGT is qualified to do business and is in good standing as a foreign corporation in each of the jurisdictions in which it owns property, leases property, does business, or is otherwise required to do so, where the failure to be so qualified would have a material adverse effect on the businesses, operations, or financial condition of PGT.

 

	
4.2

	
Authority

 

PGT has all requisite corporate power and authority to execute and deliver this Agreement and any other document contemplated by this Agreement (collectively, the “PGT Documents”) to be signed by PGT and to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery of each of the PGT Documents by PGT and the consummation by PGT of the transactions contemplated hereby have been duly authorized by its board of directors and no other corporate or shareholder proceedings on the part of PGT is necessary to authorize such documents or to consummate the transactions contemplated hereby.  This Agreement has been, and the other PGT Documents when executed and delivered by PGT as contemplated by this Agreement will be, duly executed and delivered by PGT and this Agreement is, and the other PGT Documents when executed and delivered by PGT, as contemplated hereby will be, valid and binding obligations of PGT enforceable in accordance with their respective terms, except:

 

	
  

	
(a)

	
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally;

 

	
  

	
(b)

	
as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies; and

 

	
  

	
(c)

	
as limited by public policy.

 

	
4.3

	
Capitalization of PGT

 

The entire authorized capital stock and other equity securities of PGT consists of shares of common stock with a par value of $0.001 (the “PGT Common Stock”).  As of the date of this Agreement, there are  shares of PGT Common Stock issued and outstanding.

 

	
4.4

	
Non-Contravention

 

Neither the execution, delivery and performance of this Agreement, nor the consummation of the Transaction, will:

 

	
  

	
(a)

	
conflict with, result in a violation of, cause a default under (with or without notice, lapse of time or both) or give rise to a right of termination, amendment, cancellation or acceleration of any obligation contained in or the loss of any material benefit under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the material properties or assets of PGT under any term, condition or provision of any loan or credit agreement, note, debenture, bond, mortgage, indenture, lease or other agreement, instrument, permit, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to PGT or any of its material property or assets;

 

	
  

	
(b)

	
violate any provision of the applicable incorporation or charter documents of PGT; or

 

  

- 6 -

  

 

	
  

	
(c)

	
violate any order, writ, injunction, decree, statute, rule, or regulation of any court or governmental or regulatory authority applicable to PGT or any of its material property or assets.

 

	
4.5

	
Validity of PGT Common Stock Issuable upon the Transaction

 

The PGT Shares to be issued to the Selling Shareholders upon consummation of the Transaction in accordance with this Agreement will, upon issuance, have been duly and validly authorized and, when so issued in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable.

 

	
4.6

	
Compliance

 

	
  

	
(a)

	
To the best knowledge of PGT, PGT is in compliance with, is not in default or violation in any material respect under, and has not been charged with or received any notice at any time of any material violation of any statute, law, ordinance, regulation, rule, decree or other applicable regulation to the business or operations of PGT;

 

	
  

	
(b)

	
To the best knowledge of PGT, PGT is not subject to any judgment, order or decree entered in any lawsuit or proceeding applicable to its business and operations that would constitute a PGT Material Adverse Effect;

 

	
  

	
(c)

	
PGT has duly filed all reports and returns required to be filed by it with governmental authorities and has obtained all governmental permits and other governmental consents, except as may be required after the execution of this Agreement.  All of such permits and consents are in full force and effect, and no proceedings for the suspension or cancellation of any of them, and no investigation relating to any of them, is pending or to the best knowledge of PGT, threatened, and none of them will be affected in a material adverse manner by the consummation of the Transaction; and

 

	
  

	
(d)

	
PGT has operated in material compliance with all laws, rules, statutes, ordinances, orders and regulations applicable to its business.  PGT has not received any notice of any violation thereof, nor is PGT aware of any valid basis therefore.

 

	
4.7

	
Filings, Consents and Approvals

 

No filing or registration with, no notice to and no permit, authorization, consent, or approval of any public or governmental body or authority or other person or entity is necessary for the consummation by PGT of the Transaction contemplated by this Agreement to continue to conduct its business after the Closing Date in a manner which is consistent with that in which it is presently conducted.

 

	
4.8

	
SEC Filings

 

PGT has furnished or made available to Enviro and the Selling Shareholders a true and complete copy of each report, schedule, registration statement and proxy statement filed by PGT with the SEC (collectively, and as such documents have since the time of their filing been amended, the “PGT SEC Documents”). As of their respective dates, the PGT SEC Documents complied in all material respects with the requirements of the Securities Act, or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such PGT SEC Documents.  The PGT SEC Documents constitute all of the documents and reports that PGT was required to file with the SEC pursuant to the Exchange Act and the rules and regulations promulgated thereunder by the SEC.

 

  

- 7 -

  

 

	
4.9

	
Listing and Maintenance Requirements

 

PGT is not currently quoted on the OTC Bulletin Board and has not, in the 12 months preceding the date hereof, received any notice from the OTC Bulletin Board or the FINRA or any trading market to the effect that PGT would not be eligible to list or be quoted on any such trading market.

 

	
5.

	
CLOSING CONDITIONS

 

	
5.1

	
Conditions Precedent to Closing by PGT

 

The obligation of PGT to consummate the Transaction is subject to the satisfaction or written waiver of the conditions set forth below by a date mutually agreed upon by the parties hereto in writing and in accordance with Section 9.6.  The Closing of the Transaction contemplated by this Agreement will be deemed to mean a waiver of all conditions to Closing.  These conditions precedent are for the benefit of PGT and may be waived by PGT in its sole discretion.

 

	
  

	
(a)

	
Representations and Warranties

 

The representations and warranties of the Selling Shareholders set forth in this Agreement will be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date.

 

	
  

	
(b)

	
Performance

 

All of the covenants and obligations that the Selling Shareholders are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.

 

	
  

	
(c)

	
No Action

 

No suit, action, or proceeding will be pending or threatened which would:

 

	
  

	
(i)

	
prevent the consummation of any of the transactions contemplated by this Agreement; or

 

	
  

	
(ii)

	
cause the Transaction to be rescinded following consummation.

 

	
  

	
(d)

	
Outstanding Shares

 

Enviro will have no more than_________________  shares of Enviro Common Stock issued and outstanding on the Closing Date.

 

	
  

	
(e)

	
Due Diligence Generally

 

PGT and its solicitors will be reasonably satisfied with their due diligence investigation of Enviro that is reasonable and customary in a transaction of a similar nature to that contemplated by the Transaction, including:

 

	
  

	
(i)

	
materials, documents and information in the possession and control of Enviro and the Selling Shareholders which are reasonably germane to the Transaction;

 

  

- 8 -

  

 

	
  

	
(ii)

	
a physical inspection of the assets of Enviro by PGT or its representatives; and

 

	
  

	
(iii)

	
title to the material assets of Enviro.

 

	
  

	
(f)

	
Compliance with Securities Laws

 

PGT will have received evidence satisfactory to PGT that the PGT Shares issuable in the Transaction will be issuable without registration pursuant to the Securities Act in reliance on an exemption from the registration requirements of the Securities Act provided by Regulation S and/or Regulation D.

 

In order to establish the availability of the safe harbor from the registration requirements of the Securities Act for the issuance of PGT Shares to each Selling Shareholder, Enviro will deliver to PGT on Closing, a Regulation S Certificate or Rule 506 Certificate, as applicable, and a Questionnaire duly executed by each Selling Shareholder.

 

	
5.2

	
Conditions Precedent to Closing by the Selling Shareholders

 

The obligation of the Selling Shareholders to consummate the Transaction is subject to the satisfaction or written waiver of the conditions set forth below by a date mutually agreed upon by the parties hereto in writing and in accordance with Section 9.6.  The Closing of the Transaction will be deemed to mean a waiver of all conditions to Closing.  These conditions precedent are for the benefit of the Selling Shareholders and may be waived by the Selling Shareholders in their discretion.

 

	
  

	
(a)

	
Representations and Warranties

 

The representations and warranties of PGT set forth in this Agreement will be true, correct and complete in all respects as of the Closing Date, as though made on and as of the Closing Date and PGT will have delivered to Enviro a certificate dated the Closing Date, to the effect that the representations and warranties made by PGT in this Agreement are true and correct.

 

	
  

	
(b)

	
Performance

 

All of the covenants and obligations that PGT are required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been performed and complied with in all material respects.  PGT must have delivered each of the documents required to be delivered by it pursuant to this Agreement.

 

	
  

	
(c)

	
Transaction Documents

 

This Agreement, and all other documents necessary or reasonably required to consummate the Transaction, all in form and substance reasonably satisfactory to Enviro, will have been executed and delivered by PGT.

 

  

- 9 -

  

 

	
  

	
(d)

	
No Action

 

No suit, action, or proceeding will be pending or threatened before any governmental or regulatory authority wherein an unfavorable judgment, order, decree, stipulation, injunction or charge would result in and/or:

 

	
  

	
(i)

	
prevent the consummation of any of the transactions contemplated by this Agreement; or

 

	
  

	
(ii)

	
cause the Transaction to be rescinded following consummation.

 

	
  

	
(e)

	
Outstanding Shares

 

On the Closing Date, excluding any shares issuable pursuant to this Agreement, PGT will have no more than 5,027,002 common shares issued and outstanding in the capital of PGT.

 

	
  

	
(f)

	
Public Market

 

On the Closing Date, the shares of PGT Common Stock will be quoted on the OTCQB operated by OTCMarkets.

 

	
  

	
(g)

	
Due Diligence Generally

 

A Selling Shareholder will be reasonably satisfied with their respective due diligence investigation of PGT that is reasonable and customary in a transaction of a similar nature to that contemplated by the Transaction.

 

	
6.

	
CLOSING

 

	
6.1

	
Closing

 

The Closing shall take place on the Closing Date at the offices of the lawyers for PGT or at such other location as agreed to by the parties.  Notwithstanding the location of the Closing, each party agrees that the Closing may be completed by the exchange of undertakings between the respective legal counsels provided such undertakings are satisfactory to each party’s respective legal counsel.

 

	
6.2

	
Closing Deliveries of Enviro and the Selling Shareholders

 

At Closing, the Selling Shareholders will deliver or cause to be delivered the following, fully executed and in the form and substance reasonably satisfactory to PGT:

 

	
  

	
(a)

	
if any of the Selling Shareholders appoint any person, by power of attorney or equivalent, to execute this Agreement or any other agreement, document, instrument or certificate contemplated by this agreement, on behalf of the Selling Shareholder, a valid and binding power of attorney or equivalent from such Selling Shareholder;

 

	
  

	
(b)

	
share certificates representing the Enviro Shares as required by Section 2.3 of this Agreement;

 

	
  

	
(c)

	
certificates and other documents required by Sections 2.3 and 5.1 of this Agreement;

 

	
  

	
(d)

	
any other necessary documents, each duly executed by Enviro, as required to give effect to the Transaction;

 

  

- 10 -

  

 

	
6.3

	
Closing Deliveries of PGT

 

At Closing, PGT will deliver or cause to be delivered the following, fully executed and in the form and substance reasonably satisfactory to Enviro:

 

	
  

	
(a)

	
copies of all resolutions and/or consent actions adopted by or on behalf of the board of directors of PGT evidencing approval of this Agreement and the Transaction;

 

	
  

	
(b)

	
all confirmations and other documents required by Section 5.2 of this Agreement;

 

	
6.4

	
Additional Post Closing Delivery of PGT

 

As soon as practicable following Closing, PGT will deliver or cause to be delivered the share certificates representing the PGT Shares.

 

	
7.

	
TERMINATION

 

	
7.1

	
Termination

 

This Agreement may be terminated at any time prior to the Closing Date contemplated hereby by:

 

	
  

	
(a)

	
mutual agreement of PGT and a Selling Shareholder;

 

	
  

	
(b)

	
PGT, if there has been a material breach by a Selling Shareholder or any of the Selling Shareholders of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of a Selling Shareholder or the Selling Shareholders that is not cured, to the reasonable satisfaction of PGT, within ten business days after notice of such breach is given by PGT (except that no cure period will be provided for a breach by a Selling Shareholder or the Selling Shareholders that by its nature cannot be cured);

 

	
  

	
(c)

	
A Selling Shareholder, if there has been a material breach by PGT of any material representation, warranty, covenant or agreement set forth in this Agreement on the part of PGT that is not cured by the breaching party, to the reasonable satisfaction of a Selling Shareholder, within ten business days after notice of such breach is given by a Selling Shareholder (except that no cure period will be provided for a breach by PGT that by its nature cannot be cured);

 

or

 

	
  

	
(d)

	
PGT or a Selling Shareholder if any permanent injunction or other order of a governmental entity of competent authority preventing the consummation of the Transaction contemplated by this Agreement has become final and non-appealable.

 

	
7.2

	
Effect of Termination

 

In the event of the termination of this Agreement as provided in Section 7.1, this Agreement will be of no further force or effect, provided, however, that no termination of this Agreement will relieve any party of liability for any breaches of this Agreement that are based on a wrongful refusal or failure to perform any obligations.

 

  

- 11 -

  

 

	
8.

	
INDEMNIFICATION, REMEDIES, SURVIVAL

 

	
8.1

	
Certain Definitions

 

For the purposes of this Article 8 the terms “Loss” and “Losses” mean any and all demands, claims, actions or causes of action, assessments, losses, damages, Liabilities, costs, and expenses, including without limitation, interest, penalties, fines and reasonable attorneys, accountants and other professional fees and expenses, but excluding any indirect, consequential or punitive damages suffered by PGT or Enviro including damages for lost profits or lost business opportunities.

 

	
8.2

	
Agreement of the Selling Shareholders to Indemnify

 

The Selling Shareholders will indemnify, defend, and hold harmless, to the full extent of the law, PGT and its shareholders from, against, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred by PGT and its shareholders by reason of, resulting from, based upon or arising out of:

 

	
  

	
(a)

	
any breach by the Selling Shareholders of Section 2.2 of this Agreement; or

 

	
  

	
(b)

	
any misstatement, misrepresentation or breach of the representations and warranties made by the Selling Shareholders contained in or made pursuant to the Regulation S Certificate, Rule 506 Certificate or the Questionnaire executed by each Selling Shareholder as part of the share exchange procedure detailed in Section 2.3 of this Agreement.

 

	
8.3

	
Agreement of PGT to Indemnify

 

PGT will indemnify, defend, and hold harmless, to the full extent of the law, the Selling Shareholders from, against, for, and in respect of any and all Losses asserted against, relating to, imposed upon, or incurred by the Selling Shareholders by reason of, resulting from, based upon or arising out of:

 

	
  

	
(a)

	
the breach by PGT of any representation or warranty of PGT contained in or made pursuant to this Agreement, any PGT Document or any certificate or other instrument delivered pursuant to this Agreement; or

 

	
  

	
(b)

	
the breach or partial breach by PGT of any covenant or agreement of PGT made in or pursuant to this Agreement, any PGT Document or any certificate or other instrument delivered pursuant to this Agreement.

 

	
9.

	
MISCELLANEOUS PROVISIONS

 

	
9.1

	
Effectiveness of Representations; Survival

 

Each party is entitled to rely on the representations, warranties and agreements of each of the other parties and all such representation, warranties and agreement will be effective regardless of any investigation that any party has undertaken or failed to undertake.  Unless otherwise stated in this Agreement, and except for instances of fraud, the representations, warranties and agreements will survive the Closing Date and continue in full force and effect until one (1) year after the Closing Date.

 

  

- 12 -

  

 

	
9.2

	
Further Assurances

 

Each of the parties hereto will co-operate with the others and execute and deliver to the other parties hereto such other instruments and documents and take such other actions as may be reasonably requested from time to time by any other party hereto as necessary to carry out, evidence, and confirm the intended purposes of this Agreement.

 

	
9.3

	
Amendment

 

This Agreement may not be amended except by an instrument in writing signed by each of the parties.

 

	
9.4

	
Expenses

 

PGT will bear all costs incurred in connection with the preparation, execution and performance of this Agreement and the Transaction contemplated hereby, including all fees and expenses of agents, representatives and accountants; provided that PGT and Enviro will bear its respective legal costs incurred in connection with the preparation, execution and performance of this Agreement and the Transaction contemplated hereby.

 

	
9.5

	
Entire Agreement

 

This Agreement, the schedules attached hereto and the other documents in connection with this transaction contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior arrangements and understandings, both written and oral, expressed or implied, with respect thereto.  Any preceding correspondence or offers are expressly superseded and terminated by this Agreement.

 

	
9.6

	
Notices

 

All notices and other communications required or permitted under this Agreement must be in writing and will be deemed given if sent by personal delivery, faxed with electronic confirmation of delivery, internationally-recognized express courier or registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a party as will be specified by like notice):

 

If to any of the Selling Shareholders:

 

	 
	  
	  
	  

 

Attention:            u

Telephone:          u

 

  

- 13 -

  

 

If to PGT:

 

c/o Macdonald Tuskey, Corporate and Securities Lawyers

Barristers & Solicitors

Suite 400 – 570 Granville Street

Vancouver, British Columbia

Canada  V6C 3P1

 

Attention:                     Bill Macdonald

Telephone:                    (604) 648-1670

Facsimile:                      (604) 681-4760

 

All such notices and other communications will be deemed to have been received:

 

	
  

	
(a)

	
in the case of personal delivery, on the date of such delivery;

 

	
  

	
(b)

	
in the case of a fax, when the party sending such fax has received electronic confirmation of its delivery;

 

	
  

	
(c)

	
in the case of delivery by internationally-recognized express courier, on the business day following dispatch; and

 

	
  

	
(d)

	
in the case of mailing, on the fifth business day following mailing.

 

	
9.7

	
Independent Legal Advice.

 

Each Selling Shareholder acknowledges that:

 

	
  

	
(a)

	
this Agreement was prepared by counsel for PGT;

 

	
  

	
(b)

	
counsel received instructions from PGT and does not represent the Selling Shareholder;

 

	
  

	
(c)

	
the Selling Shareholder has been requested to obtain his own independent legal advice on this Agreement prior to signing this Agreement;

 

	
  

	
(d)

	
the Selling Shareholder has been given adequate time to obtain independent legal advice;

 

	
  

	
(e)

	
by signing this Agreement, the Selling Shareholder confirms that he fully understands this Agreement; and

 

	
  

	
(f)

	
by signing this Agreement without first obtaining independent legal advice, the Selling Shareholder waives his right to obtain independent legal advice.

 

	
9.8

	
Headings

 

The headings contained in this Agreement are for convenience purposes only and will not affect in any way the meaning or interpretation of this Agreement.

 

	
9.9

	
Benefits

 

This Agreement is and will only be construed as for the benefit of or enforceable by those persons party to this Agreement.

 

  

- 14 -

  

 

	
9.10

	
Assignment

 

This Agreement may not be assigned (except by operation of law) by any party without the consent of the other parties.

 

	
9.11

	
Governing Law

 

This Agreement will be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed therein.

 

	
9.12

	
Construction

 

The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

 

	
9.13

	
Gender

 

All references to any party will be read with such changes in number and gender as the context or reference requires.

 

	
9.14

	
Business Days

 

If the last or appointed day for the taking of any action required or the expiration of any rights granted herein shall be a Saturday, Sunday or a legal holiday in the State of Delaware, then such action may be taken or right may be exercised on the next succeeding day which is not a Saturday, Sunday or such a legal holiday.

 

	
9.15

	
Counterparts

 

This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

	
9.16

	
Fax Execution

 

This Agreement may be executed by delivery of executed signature pages by fax and such fax execution will be effective for all purposes.

 

	
9.17

	
Schedules and Exhibits

 

The schedules and exhibits are attached to this Agreement and incorporated herein.

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.

 

PACIFIC GREEN TECHNOLOGIES INC.

 

	

Per: 

	 	 
	 	Authorized Signatory	 
	 	Name:	 	 
	 	Title:	 	 

         

  

- 15 -

  

 

SCHEDULE 1

TO THE SHARE EXCHANGE AGREEMENT

AMONG PACIFIC GREEN TECHNOLOGIES INC. AND THE SELLING SHAREHOLDERS AS SET OUT 

IN THE SHARE EXCHANGE AGREEMENT

 

THE SELLING SHAREHOLDERS

 

	
  Ref

  No.

	
Shareholder’s Name

	
Address

	
Number of

Enviro Shares

Held before

Closing

	
Total Number of

PGT Shares

to be issued by

PGT on Closing

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

 

  

- 16 -

  

 

SCHEDULE 1A

TO THE SHARE EXCHANGE AGREEMENT

AMONG PACIFIC GREEN TECHNOLOGIES AND THE SELLING SHAREHOLDERS AS SET OUT 

IN THE SHARE EXCHANGE AGREEMENT

 

ACKNOWLEDGED AND AGREED TO THIS _______ day of __________________, 2012, BY:

 

	 	 
	
(Name of Subscriber – Please type or print)

	 
	  	 
	
Per:

	 
	  	 
	 	 
	
(Signature of Authorized Signatory)

	 
	  	 
	  	 
	
(Name of Authorized Signatory)

	 
	  	 
	  	 
	
(Office of Authorized Signatory)

	 
	  	 
	  	 
	
(Address of Subscriber)

	 
	  	 
	  	 
	
(City, State or Province, Postal Code of Subscriber)

	 
	  	 
	 	 
	
(Country of Subscriber)

	 
	  	 
	 	 
	
(Telephone number of Subscriber)

	 
	 	 
	 	 

 

  

- 17 -

  

 

SCHEDULE 2A

TO THE SHARE EXCHANGE AGREEMENT

AMONG PACIFIC GREEN TECHNOLOGIES INC., AND THE SELLING SHAREHOLDERS AS SET OUT 

IN THE SHARE EXCHANGE AGREEMENT

 

CERTIFICATE OF NON-U.S. SHAREHOLDER

 

In connection with the issuance of common stock (the “PGT Shares”) of PACIFIC GREEN TECHNOLOGIES INC., a Delaware corporation (“PGT”), to the undersigned, pursuant to that certain Share Exchange Agreement dated _____________, 2012 (the “Agreement”), among PGT, and the shareholders of Enviro as set out in the Agreement (each, a “Selling Shareholder”), the undersigned Selling Shareholder hereby agrees, acknowledges, represents and warrants that:

 

1.             the undersigned is not a “U.S. Person” as such term is defined by Rule 902 of Regulation S under the United States Securities Act of 1933, as amended (“U.S. Securities Act”) (the definition of which includes, but is not limited to, an individual resident in the U.S. and an estate or trust of which any executor or administrator or trust, respectively is a U.S. Person and any partnership or corporation organized or incorporated under the laws of the U.S.);

 

2.             none of the PGT Shares have been or will be registered under the U.S. Securities Act, or under any state securities or “blue sky” laws of any state of the United States, and may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S, except in accordance with the provisions of Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state and foreign securities laws;

 

3.             the Selling Shareholder understands and agrees that offers and sales of any of the PGT Shares prior to the expiration of a period of one year after the date of original issuance of the PGT Shares (the one year period hereinafter referred to as the “Distribution Compliance Period”) shall only be made in compliance with the safe harbor provisions set forth in Regulation S, pursuant to the registration provisions of the U.S. Securities Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the U.S. Securities Act or an exemption therefrom and in each case only in accordance with applicable state and foreign securities laws;

 

4.             the Selling Shareholder understands and agrees not to engage in any hedging transactions involving any of the PGT Shares unless such transactions are in compliance with the provisions of the U.S. Securities Act and in each case only in accordance with applicable state and provincial securities laws;

 

5.             the Selling Shareholder is acquiring the PGT Shares for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the PGT Shares in the United States or to U.S. Persons;

 

6.             the Selling Shareholder has not acquired the PGT Shares as a result of, and will not itself engage in, any directed selling efforts (as defined in Regulation S under the U.S. Securities Act) in the United States in respect of the PGT Shares which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the PGT Shares; provided, however, that the Selling Shareholder may sell or otherwise dispose of the PGT Shares pursuant to registration thereof under the U.S. Securities Act and any applicable state and provincial securities laws or under an exemption from such registration requirements;

 

  

- 18 -

  

 

7.             the statutory and regulatory basis for the exemption claimed for the sale of the PGT Shares, although in technical compliance with Regulation S, would not be available if the offering is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act or any applicable state and provincial securities laws;

 

8.             PGT has not undertaken, and will have no obligation, to register any of the PGT Shares under the U.S. Securities Act;

 

9.             PGT is entitled to rely on the acknowledgements, agreements, representations and warranties and the statements and answers of the Selling Shareholder contained in the Agreement and this Certificate, and the Selling Shareholder will hold harmless PGT from any loss or damage either one may suffer as a result of any such acknowledgements, agreements, representations and/or warranties made by the Selling Shareholder not being true and correct;

 

10.           the undersigned has been advised to consult their own respective legal, tax and other advisors with respect to the merits and risks of an investment in the PGT Shares and, with respect to applicable resale restrictions, is solely responsible (and PGT is not in any way responsible) for compliance with applicable resale restrictions;

 

11.           the undersigned and the undersigned’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from PGT in connection with the acquisition of the PGT Shares under the Agreement, and to obtain additional information, to the extent possessed or obtainable by PGT without unreasonable effort or expense;

 

12.           the books and records of PGT were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the undersigned during reasonable business hours at its principal place of business and that all documents, records and books in connection with the acquisition of the PGT Shares under the Agreement have been made available for inspection by the undersigned, the undersigned’s attorney and/or advisor(s);

 

13.           the undersigned:

 

	
  

	
(a)

	
is knowledgeable of, or has been independently advised as to, the applicable securities laws of the securities regulators having application in the jurisdiction in which the undersigned is resident (the “International Jurisdiction”) which would apply to the acquisition of the PGT Shares;

 

	
  

	
(b)

	
the undersigned is acquiring the PGT Shares pursuant to exemptions from prospectus or equivalent requirements under applicable securities laws or, if such is not applicable, the undersigned is permitted to acquire the PGT Shares under the applicable securities laws of the securities regulators in the International Jurisdiction without the need to rely on any exemptions;

 

	
  

	
(c)

	
the applicable securities laws of the authorities in the International Jurisdiction do not require PGT to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the PGT Shares; and

 

  

- 19 -

  

 

	
  

	
(d)

	
the acquisition of the PGT Shares by the undersigned does not trigger:

 

	
  

	
(i)

	
any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction; or

 

	
  

	
(ii)

	
any continuous disclosure reporting obligation of PGT in the International Jurisdiction; and

 

the undersigned will, if requested by PGT, deliver to PGT a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in Sections 13(c) and 13(d) above to the satisfaction of PGT, acting reasonably;

 

14.           the undersigned (i) is able to fend for itself in connection with the acquisition of the PGT Shares; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the PGT Shares; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;

 

15.           the undersigned is not aware of any advertisement of any of the PGT Shares and is not acquiring the PGT Shares as a result of any form of general solicitation or general advertising 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 have been invited by general solicitation or general advertising;

 

16.           no person has made to the undersigned any written or oral representations:

 

	
  

	
(a)

	
that any person will resell or repurchase any of the PGT Shares;

 

	
  

	
(b)

	
that any person will refund the purchase price of any of the PGT Shares;

 

	
  

	
(c)

	
as to the future price or value of any of the PGT Shares; or

 

	
  

	
(d)

	
that any of the PGT Shares will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the PGT Shares on any stock exchange or automated dealer quotation system, except that currently certain market makers make market in the common shares of PGT on the OTCQB;

 

17.           the undersigned is outside the United States when receiving and executing this Agreement and is acquiring the PGT Shares as principal for their own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in the PGT Shares;

 

18.           neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of the PGT Shares;

 

19.           the PGT Shares are not being acquired, directly or indirectly, for the account or benefit of a U.S. Person or a person in the United States;

 

20.           the undersigned acknowledges and agrees that PGT shall refuse to register any transfer of PGT Shares not made in accordance with the provisions of Regulation S, pursuant to registration under the U.S. Securities Act, or pursuant to an available exemption from registration under the U.S. Securities Act;

 

  

- 20 -

  

 

21.           the undersigned understands and agrees that the PGT Shares will bear the following legend:

 

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”).

 

NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.  “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.”

 

22.           the address of the undersigned included herein is the sole address of the undersigned as of the date of this certificate.

 

IN WITNESS WHEREOF, I have executed this Certificate of Non-U.S. Shareholder.

 

	  	 	

Date: ___________________________________________________, 2012

	
Signature

	 	 
	  	 	 
	  	 	 
	
Print Name

	 	 
	  	 	 
	  	 	 
	
Title (if applicable)

	 	 
	  	 	 
	  	 	 
	
Address

	 	 
	 	 	 

 

  

- 21 -

  

 

SCHEDULE 2B

TO THE SHARE EXCHANGE AGREEMENT

AMONG PACIFIC GREEN TECHNOLOGIES INC., AND THE SELLING SHAREHOLDERS AS SET OUT 

IN THE SHARE EXCHANGE AGREEMENT

 

CERTIFICATE OF U.S. SHAREHOLDER

 

In connection with the issuance of common stock (the “PGT Shares”) of PACIFIC GREEN TECHNOLOGIES INC., a Delaware corporation (“PGT”), to the undersigned, pursuant to that certain Share Exchange Agreement dated _____________, 2012 (the “Agreement”), among PGT, and the shareholders of Enviro as set out in the Agreement (each, a “Selling Shareholder”), the undersigned Selling Shareholder hereby agrees, acknowledges, represents and warrants that:

 

1.           the undersigned satisfies one or more of the categories of "Accredited Investors", as defined by Regulation D promulgated under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), as indicated below:  (Please initial in the space provide those categories, if any, of an "Accredited Investor" which the undersigned satisfies.)

 

	
_______

	
  Category 1

	
An organization described in Section 501(c)(3) of the United States Internal Revenue Code, a corporation, a Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of US $5,000,000.

 

	

_______

	
  Category 2

	
A natural person whose individual net worth, or joint net worth with that person's spouse, on the date of purchase exceeds US $1,000,000, excluding the value of such person’s primary residence.

 

	

_______

	
  Category 3

	
A natural person who had an individual income in excess of US $200,000 in each of the two most recent years or joint income with that person's spouse in excess of US $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

 

	

_______

	
  Category 4

	
A "bank" as defined under Section (3)(a)(2) of the 1933 Act or savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act acting in its individual or fiduciary capacity; a broker dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934 (United States); an insurance company as defined in Section 2(13) of the 1933 Act; an investment company registered under the Investment Company Act of 1940 (United States) or a business development company as defined in Section 2(a)(48) of such Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958 (United States); a plan with total assets in excess of $5,000,000 established and maintained by a state, a political subdivision thereof, or an agency or instrumentality of a state or a political subdivision thereof, for the benefit of its employees; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (United States) whose investment decisions are made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000, or, if a self-directed plan, whose investment decisions are made solely by persons that are accredited investors.

 

  

- 22 -

  

 

	

_______

	
  Category 5

	
A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940 (United States).

 

	

_______

	
  Category 6

	
A director or executive officer of the Company.

 

	

_______

	
  Category 7

	
A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under the 1933 Act.

 

	

_______

	
  Category 8

	
An entity in which all of the equity owners satisfy the requirements of one or more of the foregoing categories.

 

Note that for any of the Selling Shareholders claiming to satisfy one of the above categories of Accredited Investor may be required to supply the Company with a balance sheet, prior years' federal income tax returns or other appropriate documentation to verify and substantiate the Subscriber's status as an Accredited Investor.

 

If the Selling Shareholder is an entity which initialled Category 8 in reliance upon the Accredited Investor categories above, state the name, address, total personal income from all sources for the previous calendar year, and the net worth (exclusive of home, home furnishings and personal automobiles) for each equity owner of the said entity:

 

 

2.           none of the PGT Shares have been or will be registered under the U.S. Securities Act, or under any state securities or “blue sky” laws of any state of the United States, and may not be offered or sold in the United States or, directly or indirectly, to U.S. Persons, as that term is defined in Regulation S, except in accordance with the provisions of Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state and foreign securities laws;

 

3.           the Selling Shareholder understands and agrees that offers and sales of any of the PGT Shares shall be made only in compliance with the registration provisions of the U.S. Securities Act or an exemption therefrom and in each case only in accordance with applicable state and foreign securities laws;

 

4.           the Selling Shareholder understands and agrees not to engage in any hedging transactions involving any of the PGT Shares unless such transactions are in compliance with the provisions of the U.S. Securities Act and in each case only in accordance with applicable state and provincial securities laws;

 

5.           the Selling Shareholder is acquiring the PGT Shares for investment only and not with a view to resale or distribution and, in particular, it has no intention to distribute either directly or indirectly any of the PGT Shares in the United States or to U.S. Persons;

 

6.           PGT has not undertaken, and will have no obligation, to register any of the PGT Shares under the U.S. Securities Act;

 

7.           PGT is entitled to rely on the acknowledgements, agreements, representations and warranties and the statements and answers of the Selling Shareholder contained in the Agreement and this Certificate, and the Selling Shareholder will hold harmless PGT from any loss or damage either one may suffer as a result of any such acknowledgements, agreements, representations and/or warranties made by the Selling Shareholder not being true and correct;

 

  

- 23 -

  

 

8.           the undersigned has been advised to consult their own respective legal, tax and other advisors with respect to the merits and risks of an investment in the PGT Shares and, with respect to applicable resale restrictions, is solely responsible (and PGT is not in any way responsible) for compliance with applicable resale restrictions;

 

9.           the undersigned and the undersigned’s advisor(s) have had a reasonable opportunity to ask questions of and receive answers from PGT in connection with the acquisition of the PGT Shares under the Agreement, and to obtain additional information, to the extent possessed or obtainable by PGT without unreasonable effort or expense;

 

10.           the books and records of PGT were available upon reasonable notice for inspection, subject to certain confidentiality restrictions, by the undersigned during reasonable business hours at its principal place of business and that all documents, records and books in connection with the acquisition of the PGT Shares under the Agreement have been made available for inspection by the undersigned, the undersigned’s attorney and/or advisor(s);

 

11.           the undersigned:

 

	
  

	
(a)

	
is knowledgeable of, or has been independently advised as to, the applicable securities laws of the securities regulators having application in the jurisdiction in which the undersigned is resident (the “International Jurisdiction”) which would apply to the acquisition of the PGT Shares;

 

	
  

	
(b)

	
the undersigned is acquiring the PGT Shares pursuant to exemptions from prospectus or equivalent requirements under applicable securities laws or, if such is not applicable, the undersigned is permitted to acquire the PGT Shares under the applicable securities laws of the securities regulators in the International Jurisdiction without the need to rely on any exemptions;

 

	
  

	
(c)

	
the applicable securities laws of the authorities in the International Jurisdiction do not require PGT to make any filings or seek any approvals of any kind whatsoever from any securities regulator of any kind whatsoever in the International Jurisdiction in connection with the issue and sale or resale of the PGT Shares; and

 

	
  

	
(d)

	
the acquisition of the PGT Shares by the undersigned does not trigger:

 

	
  

	
(i)

	
any obligation to prepare and file a prospectus or similar document, or any other report with respect to such purchase in the International Jurisdiction; or

 

	
  

	
(ii)

	
any continuous disclosure reporting obligation of PGT in the International Jurisdiction; and

 

the undersigned will, if requested by PGT, deliver to PGT a certificate or opinion of local counsel from the International Jurisdiction which will confirm the matters referred to in Sections 11(c) and 11(d) above to the satisfaction of PGT, acting reasonably;

 

12.           the undersigned (i) is able to fend for itself in connection with the acquisition of the PGT Shares; (ii) has such knowledge and experience in business matters as to be capable of evaluating the merits and risks of its prospective investment in the PGT Shares; and (iii) has the ability to bear the economic risks of its prospective investment and can afford the complete loss of such investment;

 

  

- 24 -

  

 

13.           the undersigned is not aware of any advertisement of any of the PGT Shares and is not acquiring the PGT Shares as a result of any form of general solicitation or general advertising 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 have been invited by general solicitation or general advertising;

 

14.           no person has made to the undersigned any written or oral representations:

 

	
  

	
(a)

	
that any person will resell or repurchase any of the PGT Shares;

 

	
  

	
(b)

	
that any person will refund the purchase price of any of the PGT Shares;

 

	
  

	
(c)

	
as to the future price or value of any of the PGT Shares; or

 

	
  

	
(d)

	
that any of the PGT Shares will be listed and posted for trading on any stock exchange or automated dealer quotation system or that application has been made to list and post any of the PGT Shares on any stock exchange or automated dealer quotation system, except that currently certain market makers make market in the common shares of PGT on the OTCQB;

 

15.           the undersigned is acquiring the PGT Shares as principal for their own account, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in the PGT Shares;

 

16.           neither the SEC nor any other securities commission or similar regulatory authority has reviewed or passed on the merits of the PGT Shares;

 

17.           the undersigned acknowledges and agrees that PGT shall refuse to register any transfer of PGT Shares not made in accordance with the provisions of Regulation S, pursuant to registration under the U.S. Securities Act, or pursuant to an available exemption from registration under the U.S. Securities Act;

 

18.           the undersigned understands and agrees that the PGT Shares will bear the following legend:

 

“NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.  “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.”

 

  

- 25 -

  

 

19.           the address of the undersigned included herein is the sole address of the undersigned as of the date of this certificate.

 

IN WITNESS WHEREOF, I have executed this Certificate of U.S. Shareholder.

 

	  	 	

 
Date: ___________________________________________________, 2012

	
Signature

	 	 
	  	 	 
	  	 	 
	
Print Name

	 	 
	  	 	 
	  	 	 
	
Title (if applicable)

	 	 
	  	 	 
	  	 	 
	
Address

	 	 
	 	 	 
	

SSN/Tax ID

	 	 

 

 

- 26 -

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