Representations and Warranties of TargetCo. TargetCo represents and warrants to the Purchaser as follows, except as Disclosed, and acknowledges that the Purchaser is relying on such representations and warranties in connection with the transactions contemplated herein: (a) TargetCo is a corporation incorporated and validly existing under the laws of the State of Nevada and has all requisite corporate power and corporate authority and is duly qualified and holds all material permits, licences, registrations, permits, qualifications, consents and authorizations necessary or required to carry on its business as now conducted and to own, lease and/or operate the TargetCo Assets, and to carry on its business as now being conducted, and neither TargetCo nor, to the knowledge of TargetCo, any other person, has taken any steps or proceedings, voluntary or otherwise, requiring or authorizing the dissolution or winding up of TargetCo, and TargetCo has all requisite corporate power and corporate authority to enter into this Agreement and each additional agreement or instrument delivered pursuant to this Agreement and to carry out its obligations hereunder and thereunder; (b) this Agreement has been, and the Support Agreement and each additional agreement or instrument to be delivered pursuant to this Agreement will be prior to the Time of Closing, duly authorized, executed and delivered by TargetCo and each is, or will be at the Time of Closing, a legal, valid and binding obligation of TargetCo, enforceable against TargetCo in accordance with its terms; (c) the execution and delivery of this Agreement and the Support Agreement does not, and the consummation of the Transaction will not, (i) result in a breach or violation of any shareholders’ agreement, including any resolutions of the TargetCo Securityholders, (ii) conflict with, result in a breach of, constitute a default under or accelerate the performance required by or result in the suspension, cancellation, material alteration or creation of an encumbrance upon any material agreement (including any TargetCo Material Contract), license or permit to which TargetCo is a party or by which TargetCo is bound or to which any material assets or property of TargetCo is subject, or (iii) violate any provision of any applicable law or regulation or any judicial or administrative order, award, judgment or decree applicable to TargetCo; (d) the authorized share capital of TargetCo, as of the date of this Agreement consists of 245,000,000 TargetCo Shares, and 5,000,000 shares of preferred stock of which 39,364,854 TargetCo Shares and two (2) shares of Series Z Preferred Stock are issued and outstanding as fully paid and non-assessable; (e) the only outstanding securities convertible, exchangeable, redeemable or exercisable into TargetCo Shares are the TargetCo Warrants issued pursuant to the Pre-RTO Financing; (f) other than as stated in Sections 5.02(d) and (e) above and except for the TargetCo Warrants to be issued pursuant to the Pre-RTO Financing, no person (other than the Purchaser pursuant to this Agreement) has any agreement, option, right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, options, warrants or convertible obligations of any nature, for the purchase, subscription, allotment, exchange or issuance of any TargetCo Shares or other securities of TargetCo; (g) other than its interest in CRC, TargetCo does not own and does not have any agreements of any nature to acquire, directly or indirectly, any shares in the capital of or other equity or proprietary interests in any person; (h) to the best of its knowledge, no consent, approval, order or authorization of, or registration or declaration with, any applicable Governmental Authority with jurisdiction over TargetCo is required to be obtained by TargetCo in connection with the execution and delivery of this Agreement, except for those consents, orders, authorizations, declarations, registrations or approvals which are contemplated by this Agreement or those consents, orders, authorizations, declarations, registrations or approvals that, if not obtained, would not prevent or materially delay the consummation of the Transaction or otherwise prevent or materially delay TargetCo from performing its obligations under this Agreement and could not reasonably be expected to have a Material Adverse Effect on TargetCo; (i) there is no suit, action or proceeding or, to the knowledge of TargetCo, pending or threatened against TargetCo that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on TargetCo, and there is no judgment, decree, injunction, rule or Order of any Governmental Authority outstanding against TargetCo causing, or which could reasonably be expected to cause, a Material Adverse Effect on TargetCo; (j) no bankruptcy, insolvency or receivership proceedings have been instituted by TargetCo or, to the knowledge of TargetCo, are pending against TargetCo; (k) TargetCo has not been notified by any Governmental Authority of any investigation with respect to it that is pending or threatened, nor has any Governmental Authority notified TargetCo of such Governmental Authority’s intention to commence or to conduct any investigation that could be reasonably likely to have a Material Adverse Effect on TargetCo; (l) no current or former employee, officer or director of TargetCo is entitled to a severance, termination or other similar payment as a result of the Transaction; (m) the Corporate Records of TargetCo are complete and accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all Applicable Laws; (n) all Books and Records of TargetCo have been fully, properly and accurately kept and, where required, completed in accordance with generally accepted accounting principles, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein; (o) TargetCo is not a ‘reporting issuer’ or equivalent in any jurisdiction nor are any shares of TargetCo listed or quoted on any stock exchange or electronic quotation system; (p) other than pursuant to U.S federal laws with respect to the cultivation, manufacturing, sale, distribution and use of cannabis, the execution and delivery of this Agreement does not, and the consummation of the Transaction will not violate any provision of any Applicable Law or regulation or any judicial or administrative order, award, judgment or decree applicable to any of the TargetCo Securityholders; (q) the TargetCo Securityholders are the registered and beneficial owners of that number of TargetCo Securities held or beneficially owned by such TargetCo Securityholders (such TargetCo Securities comprising the Exchanged TargetCo Securities), free and clear of all Liens, charges, mortgages, security interests, pledges, demands, claims and other encumbrances of any nature whatsoever; (r) the Consideration Securities held by Non-Resident TargetCo Securityholders and issuable hereunder have not been and will not be registered under the securities laws of any foreign jurisdiction and that the issuance of the Consideration Securities pursuant to the terms of this Agreement is being made in reliance on applicable exemptions; (s) If a TargetCo Securityholder is a U.S. Person or was in the United States at the time the Consideration Securities were offered or at the time of execution and delivery of this Agreement, then TargetCo has made commercially reasonable efforts to certify that each U.S. TargetCo Securityholder qualifies as an “accredited investor” as that term is defined under Rule 501(a) of Regulation D promulgated under the U.S. Securities Act or is not an “accredited investor” but has a pre-existing substantive relationship with the Purchaser of which there can be no more than 35 U.S. TargetCo Securityholders that are not “accredited investors”, and each U.S. TargetCo Securityholder has completed, executed and delivered a “U.S. Representation Letter for U.S. TargetCo Securityholders” in the form required by the Purchaser attached hereto as Schedule “C”; (t) Unless the TargetCo Securityholder has completed, executed and delivered a “ U.S. Representation Letter for U.S. TargetCo Securityholders” in the form required by the Purchaser, attached hereto as Schedule “C”, TargetCo represents and warrants that the TargetCo Securityholder is not in the United States, is not a U.S. Person and is not acquiring the Consideration Securities on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States, was not offered the Consideration Securities in the United States and was outside the United States at the time of execution and delivery of this Agreement, and TargetCo will make commercially reasonable efforts to confirm and provide the Purchaser with proof of the same; (u) the receipt of the Consideration Securities by Non-Resident TargetCo Securityholders does not contravene any of the applicable securities legislation in the jurisdiction in which it is resident and does not trigger: (i) any obligation to prepare and file a prospectus or similar document, or any other report with respect to such transfer; and (ii) any registration or other obligation on the part of Purchaser; and (v) to the knowledge of TargetCo, no representation or warranty of TargetCo contained in this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading.
Appears in 2 contracts
Samples: Securities Exchange Agreement, Securities Exchange Agreement
Representations and Warranties of TargetCo. TargetCo represents and warrants to the Purchaser as follows, except as Disclosed, follows and acknowledges that the Purchaser is relying on such representations and warranties in connection with the transactions contemplated herein:
(a) TargetCo is a corporation incorporated and validly existing under the laws of the State of Nevada Colorado and has all requisite corporate power and corporate authority and is duly qualified and holds all material permits, licences, registrations, permits, qualifications, consents and authorizations necessary or required to carry on its business as now conducted and to own, lease and/or operate the TargetCo Assets, and to carry on its business as now being conducted, and neither TargetCo nor, to the knowledge of TargetCo, any other person, has taken any steps or proceedings, voluntary or otherwise, requiring or authorizing the dissolution or winding up of TargetCo, and TargetCo has all requisite corporate power and corporate authority to enter into this Agreement and each additional agreement or instrument delivered pursuant to this Agreement and to carry out its obligations hereunder and thereunder;
(b) this Agreement has been, and the Support Agreement and each additional agreement or instrument to be delivered pursuant to this Agreement will be prior to the Time of Closing, duly authorized, executed and delivered by TargetCo and each is, or will be at the Time of Closing, a legal, valid and binding obligation of TargetCo, enforceable against TargetCo in accordance with its terms;
(c) the execution and delivery of this Agreement and the Support Agreement does not, and the consummation of the Transaction will not, (i) result in a breach or violation of any shareholders’ agreement, including or of any resolutions of the TargetCo SecurityholdersShareholders, (ii) conflict with, result in a breach of, constitute a default under or accelerate the performance required by or result in the suspension, cancellation, material alteration or creation of an encumbrance upon any material agreement (including any TargetCo Material Contract), license or permit to which TargetCo is a party or by which TargetCo is bound or to which any material assets or property of TargetCo is subject, or (iii) violate any provision of any applicable law or regulation or any judicial or administrative order, award, judgment or decree applicable to TargetCo;
(d) the authorized share capital of TargetCo, as of the date of this Agreement Agreement, consists of 245,000,000 100,000,000 TargetCo Shares, and 5,000,000 shares of preferred stock Shares of which 39,364,854 743,253.58 TargetCo Shares and two (2) shares of Series Z Preferred Stock are issued and outstanding as fully paid and non-assessable;
(e) the only outstanding securities convertible, exchangeable, redeemable exchangeable or exercisable into TargetCo Shares Shares, are (i) an aggregate of US$999,990.20 principal amount of Series I Secured Convertible Notes and (ii) an aggregate of US$295,000 principal amount of Series II Secured Convertible Notes, which are collectively the TargetCo Warrants issued pursuant to the Pre-RTO FinancingConvertible Notes;
(f) other than as stated set out in Sections 5.02(d) and (e) above and except for above, there are no other TargetCo Shares or securities convertible, exercisable or exchangeable into TargetCo Shares issued or outstanding;
(g) other than as set out in Schedule 5.02(g) of the TargetCo Warrants to be issued pursuant to the Pre-RTO FinancingDisclosure Letter, no person (other than the Purchaser pursuant to this Agreement) has any agreement, option, right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, options, warrants or convertible obligations of any nature, for the purchase, subscription, allotment, exchange allotment or issuance of any TargetCo Shares Securities or other securities of TargetCo;
(gh) other than its interest in CRCTotal Blending Solutions, Ltd. and Gluten Free Baking Solutions, LLC, TargetCo does not own and does not have any agreements of any nature to acquire, directly or indirectly, any shares in the capital of or other equity or proprietary interests in any person;
(hi) to the best of its knowledge, no consent, approval, order or authorization of, or registration or declaration with, any applicable Governmental Authority with jurisdiction over TargetCo is required to be obtained by TargetCo in connection with the execution and delivery of this Agreement, except for those consents, orders, authorizations, declarations, registrations or approvals which are contemplated by this Agreement or those consents, orders, authorizations, declarations, registrations or approvals that, if not obtained, would not prevent or materially delay the consummation of the Transaction or otherwise prevent or materially delay TargetCo from performing its obligations under this Agreement and could not reasonably be expected to have a Material Adverse Effect on TargetCo;
(ij) there is no suit, action or proceeding or, to the knowledge of TargetCo, pending or threatened against TargetCo that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on TargetCo, and there is no judgment, decree, injunction, rule or Order order of any Governmental Authority outstanding against TargetCo causing, or which could reasonably be expected to cause, a Material Adverse Effect on TargetCo;
(jk) no bankruptcy, insolvency or receivership proceedings have been instituted by TargetCo or, to the knowledge of TargetCo, are pending against TargetCo;
(kl) TargetCo has not been notified by any Governmental Authority of any investigation with respect to it that is pending or threatened, nor has any Governmental Authority notified TargetCo of such Governmental Authority’s intention to commence or to conduct any investigation that could be reasonably likely to have a Material Adverse Effect on TargetCo;
(lm) no current or former employee, officer or director of TargetCo is entitled to a severance, termination or other similar payment as a result of the Transaction;
(mn) the Corporate Records of TargetCo are complete and accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all Applicable Laws;
(no) all Books and Records of TargetCo have been fully, properly and accurately kept and, where required, completed in accordance with generally accepted accounting principles, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein;
(op) TargetCo is not a ‘reporting issuer’ or equivalent in any jurisdiction nor are any shares of TargetCo listed or quoted on any stock exchange or electronic quotation system;
(pq) other than pursuant to U.S federal laws with respect to the cultivation, manufacturing, sale, distribution and use of cannabis, the execution and delivery of this Agreement does not, and the consummation of the Transaction will not violate any provision of any Applicable Law applicable law or regulation or any judicial or administrative order, award, judgment or decree applicable to any of the TargetCo Securityholders;
(qr) the TargetCo Securityholders Shareholders are the registered and beneficial owners of that number of TargetCo Securities Shares held or beneficially owned by such TargetCo Securityholders Shareholders (such TargetCo Securities Shares comprising the Exchanged TargetCo SecuritiesShares), free and clear of all Liens, charges, mortgages, security interests, pledges, demands, claims and other encumbrances of any nature whatsoever;
(rs) the Consideration Securities held by Non-Resident TargetCo Securityholders and Shares issuable hereunder have not been and will not be registered under the securities laws of any foreign jurisdiction and that the issuance of the Consideration Securities Shares pursuant to the terms of this Agreement is being made in reliance on applicable exemptions;
(st) If if a TargetCo Securityholder Shareholder is a U.S. Person or was in the United States at the time the Consideration Securities Shares were offered or at the time of execution and delivery of this Agreement, then TargetCo has made commercially reasonable efforts to certify that each U.S. TargetCo Securityholder qualifies as an “accredited investor” as that term is defined under Rule 501(a) of Regulation D promulgated under the U.S. Securities Act or is not an “accredited investor” but has a pre-existing substantive relationship with Purchaser and has such knowledge and experience in financial and business matters that he is capable of evaluating the Purchaser merits and risks of the prospective investment under this Agreement, of which there can be no more than 35 U.S. TargetCo Securityholders that are not “accredited investors”, and each U.S. TargetCo Securityholder has completed, executed and delivered a “the U.S. Representation Letter for U.S. TargetCo Securityholders” in the form required by the Purchaser attached hereto as Schedule “C”Letter;
(tu) Unless unless the TargetCo Securityholder has completed, executed and delivered a “ the U.S. Representation Letter for U.S. TargetCo Securityholders” in the form required by the Purchaser, attached hereto as Schedule “C”Letter, TargetCo represents and warrants that the TargetCo Securityholder is not in the United States, is not a U.S. Person and is not acquiring the Consideration Securities Shares on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States, was not offered the Consideration Securities Shares in the United States and was outside the United States at the time of execution and delivery of this Agreement, and TargetCo will make commercially reasonable efforts to confirm and provide the Purchaser with proof of the same;
(uv) the receipt of the Consideration Securities Shares by Non-Resident TargetCo Securityholders does not contravene any of the applicable securities legislation in the jurisdiction in which it is resident and does not trigger: (i) any obligation to prepare and file a prospectus or similar document, or any other report with respect to such transfer; and (ii) any registration or other obligation on the part of Purchaser; and
(vw) to the knowledge of TargetCo, no representation or warranty of TargetCo contained in this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading.
Appears in 1 contract
Samples: Share Exchange Agreement
Representations and Warranties of TargetCo. TargetCo represents and warrants to the Purchaser as follows, except as Disclosed, and acknowledges that the Purchaser is relying on such representations and warranties in connection with the transactions contemplated herein:
(a) TargetCo is a corporation incorporated and validly existing under the laws of the State of Nevada and has all requisite corporate power and corporate authority and is duly qualified and holds all material permits, licences, registrations, permits, qualifications, consents and authorizations necessary or required to carry on its business as now conducted and to own, lease and/or operate the TargetCo Assets, and to carry on its business as now being conducted, and neither TargetCo nor, to the knowledge of TargetCo, any other person, has taken any steps or proceedings, voluntary or otherwise, requiring or authorizing the dissolution or winding up of TargetCo, and TargetCo has all requisite corporate power and corporate authority to enter into this Agreement and each additional agreement or instrument delivered pursuant to this Agreement and to carry out its obligations hereunder and thereunder;
(b) this Agreement has been, and the Support Agreement and each additional agreement or instrument to be delivered pursuant to this Agreement will be prior to the Time of Closing, duly authorized, executed and delivered by TargetCo and each is, or will be at the Time of Closing, a legal, valid and binding obligation of TargetCo, enforceable against TargetCo in accordance with its terms;
(c) the execution and delivery of this Agreement and the Support Agreement does not, and the consummation of the Transaction will not, (i) result in a breach or violation of any shareholders’ agreement, including the TargetCo Investor Rights Agreement, or of any resolutions of the TargetCo SecurityholdersSecurityholders of TargetCo, (ii) conflict with, result in a breach of, constitute a default under or accelerate the performance required by or result in the suspension, cancellation, material alteration or creation of an encumbrance upon any material agreement (including any TargetCo Material Contract), license or permit to which TargetCo is a party or by which TargetCo is bound or to which any material assets or property of TargetCo is subject, or (iii) violate any provision of any applicable law or regulation or any judicial or administrative order, award, judgment or decree applicable to TargetCo;
(d) the authorized share capital of TargetCo, as of the date of this Agreement consists of 245,000,000 TargetCo SharesAgreement, and 5,000,000 is as follows:
(i) 45,000,000 shares of preferred stock Common Stock of which 39,364,854 TargetCo Shares and two (2) 14,191,761 shares of Series Z Preferred Common Stock are issued and outstanding as fully paid and non-assessable;
(ii) 4,000,000 shares of Seed Stock of which 2,598,813 shares of Seed Stock are issued and outstanding as fully paid and non-assessable;
(iii) 2,173,913 shares of Seed-1 Stock of which 2,173,913 shares of Seed-1 Stock are issued and outstanding as fully paid and non-assessable;
(iv) 3,500,000 shares of A Stock of which 2,435,951 shares of A Stock are issued and outstanding as fully paid and non-assessable;
(v) 6,000,000 shares of B-1 Stock of which 3,994,174 shares of B-1 Stock are issued and outstanding as fully paid and non-assessable; and
(vi) 1,500,000 shares of B-2 Stock of which 995,843 shares of B-2 Stock are issued and outstanding as fully paid and non-assessable.
(e) the only outstanding securities convertible, exchangeable, redeemable exchangeable or exercisable into TargetCo Shares Common Stock or Preferred Stock of TargetCo, are the TargetCo (i) 1,299,405 Seed Warrants issued pursuant to the Pre-RTO Financingacquire up to 1,299,405 shares of Seed Stock; (ii) 1,997,065 B-1 Warrants to acquire up to 1,997,065 shares of B-1 Stock; and (iii) 497,921 B-2 Warrants to acquire up to 497,921 shares of B- 2 Stock;
(f) other than as stated set out in Sections 5.02(d) and (e) above and except for the TargetCo Warrants to be above, there are no other shares of Common Stock, Preferred Stock or securities convertible, exercisable or exchangeable into Common Stock or Preferred Stock issued pursuant to the Pre-RTO Financing, or outstanding;
(g) no person (other than the Purchaser pursuant to this Agreement) has any agreement, option, right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, options, warrants or convertible obligations of any nature, for the purchase, subscription, allotment, exchange allotment or issuance of any TargetCo Shares Common Stock or Preferred Stock or other securities of TargetCo;
(gh) other than its interest in CRCXxxxxxxx, TargetCo does not own and does not have any agreements of any nature to acquire, directly or indirectly, any shares in the capital of or other equity or proprietary interests in any person;
(hi) to the best of its knowledge, no consent, approval, order or authorization of, or registration or declaration with, any applicable Governmental Authority with jurisdiction over TargetCo is required to be obtained by TargetCo in connection with the execution and delivery of this Agreement, except for those consents, orders, authorizations, declarations, registrations or approvals which are contemplated by this Agreement or those consents, orders, authorizations, declarations, registrations or approvals that, if not obtained, would not prevent or materially delay the consummation of the Transaction or otherwise prevent or materially delay TargetCo from performing its obligations under this Agreement and could not reasonably be expected to have a Material Adverse Effect on TargetCo;
(ij) there is no suit, action or proceeding or, to the knowledge of TargetCo, pending or threatened against TargetCo that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on TargetCo, and there is no judgment, decree, injunction, rule or Order order of any Governmental Authority outstanding against TargetCo causing, or which could reasonably be expected to cause, a Material Adverse Effect on TargetCo;
(jk) no bankruptcy, insolvency or receivership proceedings have been instituted by TargetCo or, to the knowledge of TargetCo, are pending against TargetCo;
(kl) TargetCo has not been notified by any Governmental Authority of any investigation with respect to it that is pending or threatened, nor has any Governmental Authority notified TargetCo of such Governmental Authority’s intention to commence or to conduct any investigation that could be reasonably likely to have a Material Adverse Effect on TargetCo;
(lm) no current or former employee, officer or director of TargetCo is entitled to a severance, termination or other similar payment as a result of the Transaction;
(mn) the Corporate Records of TargetCo are complete and accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all Applicable Laws;
(no) all Books and Records of TargetCo have been fully, properly and accurately kept and, where required, completed in accordance with generally accepted accounting principles, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein;
(op) TargetCo is not a ‘reporting issuer’ or equivalent in any jurisdiction nor are any shares of TargetCo listed or quoted on any stock exchange or electronic quotation system;
(pq) other than pursuant to U.S federal laws with respect to the cultivation, manufacturing, sale, distribution sale and use of cannabis, the execution and delivery of this Agreement does not, and the consummation of the Transaction will not violate any provision of any Applicable Law applicable law or regulation or any judicial or administrative order, award, judgment or decree applicable to any of the TargetCo Securityholders;
(qr) the TargetCo Securityholders are the registered and beneficial owners of that number of TargetCo Securities held or beneficially owned by such TargetCo Securityholders (such TargetCo Securities comprising the Exchanged TargetCo Securities), free and clear of all Liens, charges, mortgages, security interests, pledges, demands, claims and other encumbrances of any nature whatsoever;
(rs) the Consideration Securities held by Non-Resident TargetCo Securityholders and issuable hereunder have not been and will not be registered under the securities laws of any foreign jurisdiction and that the issuance of the Consideration Securities pursuant to the terms of this Agreement is being made in reliance on applicable exemptions;
(st) If a TargetCo Securityholder is a U.S. Person or was in the United States at the time the Consideration Securities were offered or at the time of execution and delivery of this Agreement, then TargetCo has made commercially reasonable efforts to certify that each U.S. TargetCo Securityholder Secuirtyholder qualifies as an “accredited investor” as that term is defined under Rule 501(a) of Regulation D promulgated under the U.S. Securities Act or is not an “accredited investor” but has a pre-existing substantive relationship with the Purchaser of which there can be no more than 35 U.S. TargetCo Securityholders that are not “accredited investors”, and each U.S. TargetCo Securityholder has completed, executed and delivered a “U.S. Representation Letter for U.S. TargetCo Securityholders” in the form required by the Purchaser attached hereto as Schedule “CD”;
(tu) Unless the TargetCo Securityholder has completed, executed and delivered a “ U.S. Representation Letter for U.S. TargetCo Securityholders” in the form required by the Purchaser, attached hereto as Schedule “CD”, TargetCo represents and warrants that the TargetCo Securityholder is not in the United States, is not a U.S. Person and is not acquiring the Consideration Securities on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States, was not offered the Consideration Securities in the United States and was outside the United States at the time of execution and delivery of this Agreement, and TargetCo will make commercially reasonable efforts to confirm and provide the Purchaser with proof of the same;
(uv) the receipt of the Consideration Securities by Non-Resident TargetCo Securityholders does not contravene any of the applicable securities legislation in the jurisdiction in which it is resident and does not trigger: (i) any obligation to prepare and file a prospectus or similar document, or any other report with respect to such transfer; and (ii) any registration or other obligation on the part of Purchaser; and
(vw) to the knowledge of TargetCo, no representation or warranty of TargetCo contained in this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading.
Appears in 1 contract
Samples: Securities Exchange Agreement
Representations and Warranties of TargetCo. TargetCo represents and warrants to the Purchaser as follows, except as Disclosed, follows and acknowledges that the Purchaser is relying on such representations and warranties in connection with the transactions contemplated herein:
(a) Each of TargetCo and its Subsidiaries is a corporation duly incorporated or organized, as applicable, and validly existing under the laws of the State of Nevada and has all requisite corporate power and corporate authority and is duly qualified and holds all material permits, licences, registrations, permits, qualifications, consents and authorizations necessary or required to carry on its business as now conducted and to own, lease and/or operate the TargetCo Assets, and to carry on its business as now being conducted, and neither TargetCo nor, to the knowledge of TargetCo, any other person, has taken any steps or proceedings, voluntary or otherwise, requiring or authorizing the dissolution or winding up of TargetCoTargetCo or its Subsidiaries, and TargetCo has all requisite corporate power and corporate authority to enter into this Agreement and each additional agreement or instrument delivered pursuant to this Agreement and to carry out its obligations hereunder and thereunder. Schedule 5.02(b) – Subsidiaries contains a correct and complete list, as of the date hereof, of each Subsidiary of TargetCo, together with the jurisdiction of organization of each such Subsidiary, the issued equity interests of each such Subsidiary and the name of each holder thereof. TargetCo has made available to the Purchaser complete and correct copies of the certificate of incorporation and bylaws (or similar organization or charter documents) of TargetCo and each of its Subsidiaries, each as amended to the date of this Agreement, and each as so made available is in full force and effect;
(b) this The outstanding equity interest of each TargetCo’s Subsidiaries is duly authorized, validly issued, fully paid, nonassessable and owned by TargetCo, free and clear of any Liens;
(c) This Agreement has been, and the Support Agreement and each additional agreement or instrument to be delivered pursuant to this Agreement will be prior to the Time of Closing, duly authorized, executed and delivered by TargetCo and each is, or will be at the Time of Closing, a legal, valid and binding obligation of TargetCo, enforceable against TargetCo in accordance with its terms;
(cd) the The execution and delivery of this Agreement and the Support Agreement does not, and the consummation of the Transaction will not, (i) result in a breach or violation of any shareholders’ agreement, including agreement or of any resolutions of the TargetCo SecurityholdersShareholders of TargetCo, (ii) conflict with, result in a breach of, constitute a default under or accelerate the performance required by or result in the suspension, cancellation, material alteration or creation of an encumbrance upon any material agreement (including any TargetCo Material Contract), license or permit to which TargetCo is a party or by which TargetCo is bound or to which any material assets or property of TargetCo is subject, or (iii) violate any provision of any applicable law or regulation or any judicial or administrative order, award, judgment or decree applicable to TargetCo;
(de) the The authorized share capital of TargetCoTargetCo is 10,000 share of common stock, of which as of the date of this Agreement consists of 245,000,000 TargetCo SharesAgreement, and 5,000,000 4,878 shares of preferred common stock of which 39,364,854 TargetCo Shares and two (2) shares of Series Z Preferred Stock are issued and outstanding outstanding; provided, however, that TargetCo shall amend its Articles of Incorporation and Bylaws prior to the share exchange contemplated hereunder in order to authorize and issue such number of shares as fully paid and non-assessable;
(e) the only outstanding securities convertible, exchangeable, redeemable or exercisable into TargetCo Shares are required to accommodate the TargetCo Warrants Financings and any stock options issued pursuant to the Pre-RTO FinancingTargetCo Stock Option Plan;
(f) Except as otherwise set forth in Schedule 5.02 – Pending Litigation, other than the securities issued pursuant to the TargetCo Financings, there are no outstanding securities convertible, exchangeable or exercisable into TargetCo Shares;
(g) Other than as stated set out in Sections 5.02(d) and (e) above and except for the and/or as otherwise set forth in Schedule 5.02 – Pending Litigation, there are no other shares or securities convertible, exercisable or exchangeable into TargetCo Warrants Shares issued or outstanding;
(h) Except as otherwise set forth in Schedule 5.02 – Pending Litigation, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate TargetCo or any of its Subsidiaries to be issued pursuant to the Pre-RTO Financingissue or sell any TargetCo Shares, no person other equity securities of TargetCo or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving a Person (other than the Purchaser pursuant to this Agreement) has a right to subscribe for or acquire, any agreement, option, right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement, including convertible securities, options, warrants or convertible obligations of any nature, for the purchase, subscription, allotment, exchange or issuance of any TargetCo Shares or other equity securities of TargetCoTargetCo or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding;
(gi) other than its interest in CRC, TargetCo does not own and does not have any agreements of any nature to acquire, directly or indirectly, any shares in the capital of or other equity or proprietary interests in any person;
(hj) to To the best of its knowledge, no consent, approval, order or authorization of, or registration or declaration with, any applicable Governmental Authority with jurisdiction over TargetCo is required to be obtained by TargetCo in connection with the execution and delivery of this Agreement, except for those consents, orders, authorizations, declarations, registrations or approvals which are contemplated by this Agreement or those consents, orders, authorizations, declarations, registrations or approvals that, if not obtained, would not prevent or materially delay the consummation of the Transaction or otherwise prevent or materially delay TargetCo from performing its obligations under this Agreement and could not reasonably be expected to have a Material Adverse Effect on TargetCo;
(ik) Except as otherwise set forth in Schedule 5.02 – Pending Litigation, there is no suit, action or proceeding or, to the knowledge of TargetCo, pending or threatened against TargetCo that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect on TargetCo, and there is no judgment, decree, injunction, rule or Order order of any Governmental Authority outstanding against TargetCo causing, or which could reasonably be expected to cause, a Material Adverse Effect on TargetCo;
(jl) no No bankruptcy, insolvency or receivership proceedings have been instituted by TargetCo or, to the knowledge of TargetCo, are pending against TargetCo;
(km) Other than pursuant to U.S federal laws with respect to the cultivation, sale and use of cannabis, TargetCo and each of its Subsidiaries are in compliance with and are not in violation of any laws;
(n) TargetCo has not been notified by any Governmental Authority of any investigation with respect to it that is pending or threatened, nor has any Governmental Authority notified TargetCo of such Governmental Authority’s intention to commence or to conduct any investigation that could be reasonably likely to have a Material Adverse Effect on TargetCo;
(lo) TargetCo have filed any required tax returns as of the date hereof and adequate provision has been made for taxes payable for the current period for which tax returns are not yet required to be filed. There are no actions, suits, or claims asserted or assessed against TargetCo in respect of taxes, governmental charges or assessments, nor are any matters under discussion with any Governmental Authority relating to taxes, governmental charges or assessments asserted by such Governmental Authority. TargetCo have withheld from each payment made by it to any person and remitted to the proper tax and other receiving offices within the time required all income tax and other deductions required to be withheld from such payments;
(p) No current or former employee, officer or director of TargetCo is entitled to a severance, termination or other similar payment as a result of the Transaction;
(mq) the The Corporate Records of TargetCo are complete and accurate in all material respects and all corporate proceedings and actions reflected therein have been conducted or taken in compliance with all Applicable Laws;
(nr) all All Books and Records of TargetCo have been fully, properly and accurately kept and, where required, completed in accordance with generally accepted accounting principles, and there are no material inaccuracies or discrepancies of any kind contained or reflected therein;
(os) TargetCo is not a ‘reporting issuer’ or equivalent in any jurisdiction nor are any shares of TargetCo listed or quoted on any stock exchange or electronic quotation system;
(pt) other Other than pursuant to U.S federal laws with respect to the cultivation, manufacturing, sale, distribution sale and use of cannabis, the execution and delivery of this Agreement does not, and the consummation of the Transaction will not violate any provision of any Applicable Law applicable law or regulation or any judicial or administrative order, award, judgment or decree applicable to any of the TargetCo SecurityholdersShareholders;
(qu) the The TargetCo Securityholders Shareholders are the registered and beneficial owners of that number of TargetCo Securities Shares held or beneficially owned by such TargetCo Securityholders Shareholders (such TargetCo Securities Shares comprising the Exchanged TargetCo SecuritiesShares), free and clear of all Liens, charges, mortgages, security interests, pledges, demands, claims and other encumbrances of any nature whatsoever;
(rv) the The Consideration Securities Shares held by Non-Resident TargetCo Securityholders Shareholders and issuable hereunder have not been and will not be registered under the securities laws of any foreign jurisdiction and that the issuance of the Consideration Securities Shares pursuant to the terms of this Agreement is being made in reliance on applicable exemptions;
(sw) If a TargetCo Securityholder Shareholder is a U.S. Person or was in the United States at the time the Consideration Securities Shares were offered or at the time of execution and delivery of this Agreement, then TargetCo has made commercially reasonable efforts to certify that each U.S. TargetCo Securityholder Secuirtyholder qualifies as an “accredited investor” as that term is defined under Rule 501(a) of Regulation D promulgated under the U.S. Securities Act or is not an “accredited investor” but has a pre-existing substantive relationship with the Purchaser of which there can be no more than 35 U.S. TargetCo Securityholders Shareholders that are not “accredited investors”, and each U.S. TargetCo Securityholder Shareholder has completed, executed and delivered a “U.S. Representation Letter for U.S. TargetCo SecurityholdersShareholders” in the form required by the Purchaser attached hereto as Schedule “CD”;
(tx) Unless the TargetCo Securityholder Shareholder has completed, executed and delivered a “ U.S. Representation Letter for U.S. TargetCo SecurityholdersShareholders” in the form required by the Purchaser, attached hereto as Schedule “CD”, TargetCo represents and warrants that the TargetCo Securityholder Shareholder is not in the United States, is not a U.S. Person and is not acquiring the Consideration Securities Shares on behalf of, or for the account or benefit of, a U.S. Person or a person in the United States, was not offered the Consideration Securities Shares in the United States and was outside the United States at the time of execution and delivery of this Agreement, and TargetCo will make commercially reasonable efforts to confirm and provide the Purchaser with proof of the same;
(uy) the The receipt of the Consideration Securities Shares by Non-Resident TargetCo Securityholders Shareholders does not contravene any of the applicable securities legislation in the jurisdiction in which it is resident and does not trigger: (i) any obligation to prepare and file a prospectus or similar document, or any other report with respect to such transfer; and (ii) any registration or other obligation on the part of Purchaser; and
(vz) to To the knowledge of TargetCo, no representation or warranty of TargetCo contained in this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading.
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