REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Vendors jointly and severally represent and warrant to the Purchaser the following, and acknowledge that the Purchaser is entitled to rely on such representations and warranties notwithstanding any due diligence investigation done by the Purchaser prior to the closing: 3.1.1 the Corporation is a corporation duly incorporated, organized and subsisting under the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the corporate power to own its assets and to carry on the Business and has made all necessary filings under all applicable corporate, securities and taxation Laws or any other Laws to which the Corporation is subject and is qualified to own its properties and assets and to carry on the Business as presently carried on by it; 3.1.2 Schedule 2.1.1 sets out (i) the authorized capital of the Corporation and (ii) the number of Shares of the Corporation which are issued and outstanding, which shares have been validly issued as fully paid and non-assessable and registered in the names of the Vendors as set forth on Schedule 2.1.1; 3.1.3 the rights, privileges, restrictions and conditions attached to the Shares are as set out in Schedule 3.1.3 attached hereto; 3.1.4 the Purchased Shares constitute all of the issued and outstanding Shares in the capital stock of the Corporation; 3.1.5 each of the Vendors is the beneficial and registered owner of the number of Purchased Shares set opposite the name of such Vendor on Schedule 2.1.1, free and clear of all Liens, options and any other rights of others; 3.1.6 there is no contract, option or any other right of another binding upon or which at any time in the future may become binding upon: (i) any of the Vendors to sell, transfer, assign, or grant any Lien on or affecting, or in any other way dispose of or encumber any of the Purchased Shares other than pursuant to the provisions of this Agreement or any of its assets other than in the ordinary course of business, or (ii) the Corporation to allot or issue any of the unissued shares or securities of the Corporation or to create any additional class of shares or securities; 3.1.7 except as disclosed on Schedule 3.1.7, neither the entering into nor the delivery of this Agreement and the Ancillary Agreements nor the completion of the transactions contemplated hereby by each of the Vendors will result in the violation of or require the Consent of any third party pursuant to: (i) any of the provisions of the Memorandum or Articles, as amended, of the Corporation; (ii) any agreement or other instrument to which the Corporation or any of the Vendors is a party or by which the Corporation or any of the Vendors is bound, or (iii) any applicable Law; 3.1.8 the financial statements of the Corporation, consisting of the Balance Sheet and statements of income, retained earnings and changes in financial position for the period ended on the Balance Sheet Date, together with the review engagement report of Cinnamon Jang Xxxxxxxxxx & Xompany, chartered accountants, thereon and the notes thereto (hereinafter collectively referred to as the "Financial Statements"), a copy of which is attached hereto as Schedule 3.1.8: (i) are in accordance with the books and accounts of the Corporation as at the Balance Sheet Date, (ii) are true and correct and present fairly the financial position of the Corporation as at the Balance Sheet Date, (iii) have been prepared in accordance with GAAP consistently applied, and (iv) present fairly all of the assets and liabilities of the Corporation as at the Balance Sheet Date including, without limiting the generality of the foregoing, all contingent liabilities of the Corporation as at the Balance Sheet Date; 3.1.9 the interim financial statements of the Corporation, consisting of a balance sheet and statement of income, for the period ended on April 30, 1998 (hereinafter collectively referred to as the "Interim Financial Statements"), a copy of which is attached hereto as Schedule 3.1.9: (i) are in accordance with the books and accounts of the Corporation as at Aprix 00, 0000, (xx) xxx true and correct and present fairly the financial position of the Corporation as at April 30, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $15,000 and without provision for income or capital taxes; (iii) present fairly all of the assets and liabilities of the Corporation as at April 30, 1998, and (iv) have been prepared in accordance with accounting principles consistent with the principles of GAAP used in the preparation of the Balance Sheet; 3.1.10 since the Balance Sheet Date, the Business of the Corporation has been carried on in its usual and ordinary course and in a manner consistent with prior practices and, the Corporation has not, since the Balance Sheet Date, entered into any transaction out of the usual and ordinary course of business; 3.1.11 since the Balance Sheet Date, there has been no material change in the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise, whether arising as a result of any legislative or regulatory change, revocation of any Permit or right to do business, fire, explosion, accident, casualty, labour dispute, flood, drought, riot, storm, expropriation, condemnation, act of God, public force or otherwise, except changes occurring in the usual and ordinary course of business which have not adversely affected the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise; 3.1.12 the Corporation is the owner with a good and marketable title, free and clear of all Liens, options and any other rights of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected on the Balance Sheet, except only such of the assets of the Corporation as have been disposed of in the usual and ordinary course of business since the Balance Sheet Date, and of all assets acquired by the Corporation since the Balance Sheet Date; 3.1.13 all machinery, equipment and automotive equipment owned or used by the Corporation has been properly maintained and is in good working order for the purposes of ongoing operation, subject to ordinary wear and tear for machinery and equipment of comparable age; 3.1.14 Schedule 3.1.14 sets forth a true and complete list of all premises leased by the Corporation ("Leased Premises") and any lease in respect thereof to which the Corporation is a party ("Premises Leases") and: (i) each Premises Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of such Premises Lease in accordance with the terms thereof, (ii) each Premises Lease is in good standing, all rental and other payments payable by the Corporation under the leases have been duly paid, (iii) there is currently no outstanding default by the Corporation under the Premises Leases nor is there currently any outstanding default by any landlord thereunder or dispute between the Corporation and any landlord under any of the Premises Leases; (iv) the Corporation has not sublet, assigned or transferred any of its interests in such Premises Lease and (v) the Leased Premises are the only premises used by the Corporation; 3.1.15 Schedule 3.1.15 sets forth a true and complete list of all lease agreements concerning personal property leased by the Corporation ("Personal Property Leases") and: (i) each Personal Property Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of each Personal Property Lease in accordance with the terms thereof, (ii) each Personal Property Lease is in good standing, all rental and other payments payable by the Corporation under the Personal Property Leases have been duly paid, (iii) there is currently no outstanding default by the Corporation thereunder nor of the other parties thereunder nor dispute between the Corporation and any other party thereunder, and (iv) the Corporation has treated all Personal Property Leases as operating leases for Canadian income tax purposes; 3.1.16 except for the Premises Leases, the Corporation holds no ownership or other interest in or right affecting any real estate or real property; 3.1.17 the inventory of the Corporation consist of items saleable in the ordinary course of business reasonably fit for their usual purpose, except for obsolete and slow-moving items and materials below standard quality which have been written down on the books of account of the Business to net realizable value, or adequate reserves having been provided therefor, all in accordance with GAAP. Except as disclosed in Schedule 3.1.17, there is no recurring or ongoing high incidence of product failure or warranty claims against the Corporation related to the Business; 3.1.18 there are no outstanding orders, notices or similar requirements relating to the Corporation issued by any Governmental Authority, including building, environmental, fire, health, labour or police authorities, and there are no matters under discussion with any such Governmental Authority relating to orders, notices or similar requirements; 3.1.19 except as disclosed on Schedule 3.1.19, no single capital expenditure in excess of $25,000 or capital expenditures in the aggregate in excess of $50,000 have been made or authorized by the Corporation since the Balance Sheet Date; 3.1.20 except as disclosed on Schedule 3.1.20, no dividends have been declared or paid on or in respect of the Shares and no other distribution on any of its securities or shares has been made by the Corporation since the Balance Sheet Date and all dividends which to the date hereof have been declared or paid by the Corporation have been duly and validly declared and are fully paid; 3.1.21 the Corporation does not have any liability, obligation or commitment for the payment of Taxes of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed in the Financial Statements or such Taxes not yet due as have arisen since the Balance Sheet Date in the usual and ordinary course of business and for which adequate provision in the accounts of the Corporation has been made, and the Corporation is not in arrears with respect to any required withholdings or instalment payments or other payments of any Tax or duty of any kind or any penalty or interest thereon and has not filed any waiver for a taxation year of the Corporation under the Income Tax Act (Canada) or any other legislation imposing Tax on the Corporation; all obligations of the Corporation with respect to its employees for withholding Taxes, Canada Pension Plan contributions, unemployment insurance contributions and workers compensation remittances or contributions of any kind which are due as of the Closing Date will have been paid by the Corporation prior to the Closing Date; there are no outstanding disputes with or assessments from the Workmen's Compensation Board of British Columbia or the Employment Standards Branch; 3.1.22 the tax accounts of the Corporation as disclosed in Schedule 3.1.22 attached hereto are true and complete in all material respects; 3.1.23 except as disclosed on Schedule 3.1.23, there are no outstanding liabilities (whether absolute or contingent) against the Corporation except trade debts incurred in the usual and ordinary course of business; 3.1.24 set forth on Schedule 3.1.24 is a true and complete list of all contracts or agreements (except for the Premises Leases, the Personal Property Leases and the employment agreement with the Vendors listed on Schedule 3.
Appears in 1 contract
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Vendors jointly and severally represent and warrant to the Purchaser the following, and acknowledge that the Purchaser is entitled to rely on such representations and warranties notwithstanding any due diligence investigation done by the Purchaser prior to the closing:
3.1.1 the Corporation is a corporation duly incorporated, organized and subsisting under the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the corporate power to own its assets and to carry on the Business and has made all necessary filings under all applicable corporate, securities and taxation Laws or any other Laws to which the Corporation is subject and is qualified to own its properties and assets and to carry on the Business as presently carried on by it;
3.1.2 Schedule 2.1.1 sets out (i) the authorized capital of the Corporation and (ii) the number of Shares of the Corporation which are issued and outstanding, which shares have been validly issued as fully paid and non-assessable and registered in the names of the Vendors as set forth on Schedule 2.1.1;
3.1.3 a true and complete copy of the Memorandum and Articles of the Corporation, including the rights, privileges, restrictions and conditions attached to the Shares are attached hereto as set out in Schedule 3.1.3 attached hereto3.1.3;
3.1.4 the Purchased Shares constitute all of the issued and outstanding Shares in the capital stock of the Corporation;
3.1.5 each of the Vendors is the beneficial and registered owner of the number of Purchased Shares set opposite the name of such Vendor on Schedule 2.1.1, free and clear of all Liens, options and any other rights of others;
3.1.6 there is no contract, option or any other right of another binding upon or which at any time in the future may become binding upon:
(i) any of the Vendors to sell, transfer, assign, or grant any Lien on or affecting, or in any other way dispose of or encumber any of the Purchased Shares other than pursuant to the provisions of this Agreement or any of its assets other than in the ordinary course of business, or
(ii) the Corporation to allot or issue any of the unissued shares or securities of the Corporation or to create any additional class of shares or securities;
3.1.7 except as disclosed on Schedule 3.1.7, neither the entering into nor the delivery of this Agreement and the Ancillary Agreements nor the completion of the transactions contemplated hereby by each of the Vendors will result in the violation of or require the Consent of any third party pursuant to:
(i) any of the provisions of the Memorandum or Articles, as amended, of the Corporation;
(ii) any agreement or other instrument to which the Corporation or any of the Vendors is a party or by which the Corporation or any of the Vendors is bound, or
(iii) any applicable Law;
3.1.8 the financial statements of the Corporation, consisting of the Balance Sheet and statements of income, retained earnings and changes in financial position for the period ended on the Balance Sheet Date, together with the review engagement report of Cinnamon Jang Xxxxxxxxxx & Xompany, chartered accountants, thereon and the notes thereto (hereinafter collectively referred to as the "Financial Statements"), a copy of which is attached hereto as Schedule 3.1.8:
(i) are in accordance with the books and accounts of the Corporation as at the Balance Sheet Date,
(ii) are true and correct and present fairly the financial position of the Corporation as at the Balance Sheet Date,
(iii) have been prepared in accordance with GAAP consistently applied, and
(iv) present fairly all of the assets and liabilities of the Corporation as at the Balance Sheet Date including, without limiting the generality of the foregoing, all contingent liabilities of the Corporation as at the Balance Sheet Date;
3.1.9 the interim financial statements of the Corporation, consisting of a balance sheet and statement of income, for the period ended on April 30May 31, 1998 (hereinafter collectively referred to as the "Interim Financial Statements"), a copy of which is attached hereto as Schedule 3.1.9:
(i) are in accordance with the books and accounts of the Corporation as at Aprix 00May 31, 00001998,
(xxii) xxx are true and correct and present fairly the financial position of the Corporation as at April 30May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $15,000 30,000 and without provision for income or capital taxes, the disposition of a loan receivable from Midway Purnel Sanitary Supply (PG) Ltd. in the amount of $136,965 and the disposal or cancellation of life insurance policies and the associated cash surrender values;
(iiixxx) present xxxsent fairly all of the assets and liabilities of the Corporation as at April 30May 31, 1998, ; and
(iv) have been prepared in accordance with accounting principles consistent with the principles of GAAP used in the preparation of the Balance Sheet;
3.1.10 since the Balance Sheet Date, the Business of the Corporation has been carried on in its usual and ordinary course and in a manner consistent with prior practices and, the Corporation has not, since the Balance Sheet Date, entered into any transaction out of the usual and ordinary course of business;
3.1.11 since the Balance Sheet Date, there has been no material change in the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise, whether arising as a result of any legislative or regulatory change, revocation of any Permit or right to do business, fire, explosion, accident, casualty, labour dispute, flood, drought, riot, storm, expropriation, condemnation, act of God, public force or otherwise, except changes occurring in the usual and ordinary course of business which have not adversely affected the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise;
3.1.12 the Corporation is the owner with a good and marketable title, free and clear of all Liens, options and any other rights of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected on the Balance Sheet, except only such of the assets of the Corporation as have been disposed of in the usual and ordinary course of business since the Balance Sheet Date, and of all assets acquired by the Corporation since the Balance Sheet Date;
3.1.13 all machinery, equipment and automotive equipment owned or used by the Corporation has been properly maintained and is in good working order for the purposes of ongoing operation, subject to ordinary wear and tear for machinery and equipment of comparable age;
3.1.14 Schedule 3.1.14 sets forth a true and complete list of all premises leased by the Corporation ("Leased Premises") and any lease in respect thereof to which the Corporation is a party ("Premises Leases") and: :
(i) each Premises Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of such Premises Lease in accordance with the terms thereof, (ii) each Premises Lease is in good standing, all rental and other payments payable by the Corporation under the leases have been duly paid, (iii) there is currently no outstanding default by the Corporation under the Premises Leases nor is there currently any outstanding default by any landlord thereunder or dispute between the Corporation and any landlord under any of the Premises Leases; (iv) the Corporation has not sublet, assigned or transferred any of its interests in such Premises Lease and (v) the Leased Premises are the only premises used by the Corporation;
3.1.15 Schedule 3.1.15 sets forth a true and complete list of all lease agreements concerning personal property leased by the Corporation ("Personal Property Leases") and:
(i) each Personal Property Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of each Personal Property Lease in accordance with the terms thereof, (ii) each Personal Property Lease is in good standing, all rental and other payments payable by the Corporation under the Personal Property Leases have been duly paid, (iii) there is currently no outstanding default by the Corporation thereunder nor of the other parties thereunder nor dispute between the Corporation and any other party thereunder, and (iv) the Corporation has treated all Personal Property Leases as operating leases for Canadian income tax purposes;
3.1.16 except for the Premises Leases, the Corporation holds no ownership or other interest in or right affecting any real estate or real property;
3.1.17 the inventory of the Corporation consist of items saleable in the ordinary course of business reasonably fit for their usual purpose, except for obsolete and slow-moving items and materials below standard quality which have been written down on the books of account of the Business to net realizable value, or adequate reserves having been provided therefor, all in accordance with GAAP. Except as disclosed in Schedule 3.1.17, there is no recurring or ongoing high incidence of product failure or warranty claims against the Corporation related to the Business;
3.1.18 there are no outstanding orders, notices or similar requirements relating to the Corporation issued by any Governmental Authority, including building, environmental, fire, health, labour or police authorities, and there are no matters under discussion with any such Governmental Authority relating to orders, notices or similar requirements;
3.1.19 except as disclosed on Schedule 3.1.19, no single capital expenditure in excess of $25,000 or capital expenditures in the aggregate in excess of $50,000 have been made or authorized by the Corporation since the Balance Sheet Date;
3.1.20 except as disclosed on Schedule 3.1.20, no dividends have been declared or paid on or in respect of the Shares and no other distribution on any of its securities or shares has been made by the Corporation since the Balance Sheet Date and all dividends which to the date hereof have been declared or paid by the Corporation have been duly and validly declared and are fully paid;
3.1.21 the Corporation does not have any liability, obligation or commitment for the payment of Taxes of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed in the Financial Statements or such Taxes not yet due as have arisen since the Balance Sheet Date in the usual and ordinary course of business and for which adequate provision in the accounts of the Corporation has been made, and the Corporation is not in arrears with respect to any required withholdings or instalment payments or other payments of any Tax or duty of any kind or any penalty or interest thereon and has not filed any waiver for a taxation year of the Corporation under the Income Tax Act (Canada) or any other legislation imposing Tax on the Corporation; all obligations of the Corporation with respect to its employees for withholding Taxes, Canada Pension Plan contributions, unemployment insurance contributions and workers compensation remittances or contributions of any kind which are due as of the Closing Date will have been paid by the Corporation prior to the Closing Date; there are no outstanding disputes with or assessments from the Workmen's Compensation Board of British Columbia or the Employment Standards Branch;
3.1.22 the tax accounts of the Corporation as disclosed in Schedule 3.1.22 attached hereto are true and complete in all material respects;
3.1.23 except as disclosed on Schedule 3.1.23, there are no outstanding liabilities (whether absolute or contingent) against the Corporation except trade debts incurred in the usual and ordinary course of business;
3.1.24 set forth on Schedule 3.1.24 is a true and complete list of all contracts or agreements (except for the Premises Leases, the Personal Property Leases and the employment agreement with the Vendors listed on Schedule 3.
Appears in 1 contract
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Each of the Vendors severally represents and warrants (and not jointly and severally represent and warrant severally) to the Purchaser the followingXxxx, and acknowledge only as to such Vendor’s own separate beneficial interest in the 116 Common Shares as indicated in Schedule A, and hereby acknowledges that the Purchaser Xxxx is entitled to rely on relying upon such representations and warranties notwithstanding any due diligence investigation done by in connection with entering into this Agreement and agreeing to complete the Purchaser Share Exchange as follows:
(a) the Vendor is, as at the date hereof and prior to the closing:
3.1.1 completion of the Corporation is a corporation duly incorporatedCorporate Reorganization, organized the sole and subsisting under the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the corporate power to own its assets and to carry on the Business legal beneficial holder of, and has made all necessary filings under all applicable corporatecomplete and unrestricted right, securities power and taxation Laws or any other Laws authority to which the Corporation is subject transfer legal and is qualified to own its properties and assets and to carry on the Business as presently carried on by it;
3.1.2 Schedule 2.1.1 sets out (i) the authorized capital of the Corporation and (ii) the beneficial title that number of Shares securities of the Corporation which are issued and outstanding, which shares have been validly issued as fully paid and non-assessable and registered in the names of the Vendors as set forth on Schedule 2.1.1;
3.1.3 the rights, privileges, restrictions and conditions attached to the Shares are as a 116 SubCo set out opposite such Vendor’s name in Schedule 3.1.3 attached hereto;
3.1.4 the Purchased Shares constitute all of the issued and outstanding Shares in the capital stock of the Corporation;
3.1.5 each of the Vendors is the beneficial and registered owner of the number of Purchased Shares set opposite the name of such Vendor on Schedule 2.1.1A, free and clear of all LiensEncumbrances (other than those restrictions on transfer, options and any other rights if any, contained in the constating documents of othersthe applicable 116 SubCo);
3.1.6 there is (b) following the completion of the Corporate Reorganization, the Vendor shall be, at the Closing Time, the sole legal and beneficial holder of, and will have complete and unrestricted right, power and authority to transfer legal and beneficial title to Xxxx in the number of 116 Common Shares set out opposite such Vendor’s name in Schedule A, free and clear of all Encumbrances (other than those restrictions on transfer, if any, contained in the constating documents of 116) and has no contractright, title or interest in or to any additional shares or other securities of 116;
(c) the Vendor has the power and authority to enter into, deliver, and perform this Agreement on the terms and conditions set out in this Agreement and to transfer the legal and beneficial title and ownership of the securities of a 116 SubCo owned by it to 116 pursuant to the Corporate Reorganization;
(d) the Vendor has the power and authority to enter into, deliver, and perform this Agreement on the terms and conditions set out in this Agreement and to transfer the legal and beneficial title and ownership of the 116 Common Shares owned by the Vendor to Xxxx;
(e) except pursuant to the Corporate Reorganization, no Person has any agreement, option or a right capable of becoming an agreement for the purchase of any other securities of a 116 SubCo owned by the Vendor;
(f) except for this Agreement, no Person has any agreement, option or a right capable of another binding upon or which at any time in becoming an agreement for the future may become binding uponpurchase of the 116 Common Shares owned by the Vendor;
(g) if the Vendor is:
(i) any a corporation, it is a valid and subsisting corporation duly incorporated under the laws of the Vendors jurisdiction in which it is incorporated or formed and has taken all necessary corporate action to sellpermit and authorize the signing, transfer, assign, or grant any Lien on or affecting, or in any other way dispose of or encumber any of the Purchased Shares other than pursuant to the provisions delivery and performance of this Agreement or any of its assets other than in the ordinary course of businessAgreement, or
(ii) the Corporation to allot or issue any of the unissued shares or securities of the Corporation or to create any additional class of shares or securities;
3.1.7 except as disclosed on Schedule 3.1.7, neither the entering into nor the delivery of this Agreement and the Ancillary Agreements nor the completion of the transactions contemplated hereby by each this Agreement and the completion of the Vendors Corporate Reorganization; or
(ii) an individual, the Subscriber is of the full age of majority and is legally competent to execute this Agreement and to observe and perform his or her covenants and obligations hereunder;
(h) this Agreement constitutes a legal, valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms, except as may be limited by laws of general application affecting the rights of creditors;
(i) the entering into and performance of this Agreement and the transactions contemplated herein, including the Corporate Reorganization, by the Vendor do not and will result in the violation of or require the Consent of any third party pursuant tonot:
(i) any if the Vendor is a corporation, result in a violation, contravention or breach of the provisions of the Memorandum or Articles, as amended, of the Corporationconstitute a default under its constating documents;
(ii) will not result in the creation or imposition of any agreement Encumbrance or other instrument to which restriction of any nature whatsoever in favour of a third Person upon or against the Corporation 116 Common Shares owned by it or any securities of the Vendors is a party or 116 SubCo owned by which the Corporation or any of the Vendors is bound, it; or
(iii) any applicable LawLaws by which it is bound, except for such violations which would not have a Material Adverse Effect on the Vendor;
3.1.8 (j) the financial statements Vendor is resident in the jurisdiction indicated on Schedule A;
(k) the Vendor acknowledges and agrees to be bound by any restrictions on the resale of the Corporation, consisting of the Balance Sheet and statements of income, retained earnings and changes Resulting Issuer Shares issued to it in financial position for the period ended on the Balance Sheet Date, together connection with the review engagement report of Cinnamon Jang Xxxxxxxxxx & Xompany, chartered accountants, thereon and Share Exchange that may be imposed by applicable Laws and/or the notes thereto (hereinafter collectively referred to as the "Financial Statements"), a copy of which is attached hereto as Schedule 3.1.8:
(i) are in accordance with the books and accounts of the Corporation as at the Balance Sheet Date,
(ii) are true and correct and present fairly the financial position of the Corporation as at the Balance Sheet Date,
(iii) have been prepared in accordance with GAAP consistently applied, TSXV; and
(ivl) present fairly all of the assets Vendor has been advised and liabilities of the Corporation is responsible for obtaining such independent legal and tax advice as at the Balance Sheet Date including, without limiting the generality of the foregoing, all contingent liabilities of the Corporation as at the Balance Sheet Date;
3.1.9 the interim financial statements of the Corporation, consisting of a balance sheet and statement of income, for the period ended on April 30, 1998 (hereinafter collectively referred to as the "Interim Financial Statements"), a copy of which is attached hereto as Schedule 3.1.9:
(i) are it considers appropriate in accordance connection with the books execution, delivery and accounts performance of this Agreement and the Corporation as at Aprix 00, 0000,
(xx) xxx true and correct and present fairly the financial position of the Corporation as at April 30, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $15,000 and without provision for income or capital taxes;
(iii) present fairly all of the assets and liabilities of the Corporation as at April 30, 1998, and
(iv) have been prepared in accordance with accounting principles consistent with the principles of GAAP used in the preparation of the Balance Sheet;
3.1.10 since the Balance Sheet Date, the Business of the Corporation has been carried on in its usual and ordinary course and in a manner consistent with prior practices and, the Corporation has not, since the Balance Sheet Date, entered into any transaction out of the usual and ordinary course of business;
3.1.11 since the Balance Sheet Date, there has been no material change in the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise, whether arising as a result of any legislative or regulatory change, revocation of any Permit or right to do business, fire, explosion, accident, casualty, labour dispute, flood, drought, riot, storm, expropriation, condemnation, act of God, public force or otherwise, except changes occurring in the usual and ordinary course of business which have not adversely affected the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise;
3.1.12 the Corporation is the owner with a good and marketable title, free and clear of all Liens, options and any other rights of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected on the Balance Sheet, except only such of the assets of the Corporation as have been disposed of in the usual and ordinary course of business since the Balance Sheet Datetransactions contemplated under this Agreement, and of all assets acquired by the Corporation since the Balance Sheet Date;
3.1.13 all machinery, equipment and automotive equipment owned or used by the Corporation has been properly maintained and is in good working order for the purposes of ongoing operation, subject to ordinary wear and tear for machinery and equipment of comparable age;
3.1.14 Schedule 3.1.14 sets forth a true and complete list of all premises leased by the Corporation ("Leased Premises") and any lease in respect thereof to which the Corporation is a party ("Premises Leases") and: (i) each Premises Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of such Premises Lease in accordance with the terms thereof, (ii) each Premises Lease is in good standing, all rental and other payments payable by the Corporation under the leases have been duly paid, (iii) there is currently no outstanding default by the Corporation under the Premises Leases nor is there currently any outstanding default by any landlord thereunder or dispute between the Corporation and any landlord under any of the Premises Leases; (iv) the Corporation has not sublet, assigned or transferred any of its interests in such Premises Lease and (v) the Leased Premises are the only premises used by the Corporation;
3.1.15 Schedule 3.1.15 sets forth a true and complete list of all lease agreements concerning personal property leased by the Corporation ("Personal Property Leases") and:
(i) each Personal Property Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of each Personal Property Lease in accordance with the terms thereof, (ii) each Personal Property Lease is in good standing, all rental and other payments payable by the Corporation under the Personal Property Leases have been duly paid, (iii) there is currently no outstanding default by the Corporation thereunder nor of the other parties thereunder nor dispute between the Corporation and any other party thereunder, and (iv) the Corporation has treated all Personal Property Leases as operating leases for Canadian income tax purposes;
3.1.16 except for the Premises Leases, the Corporation holds no ownership or other interest in or right affecting any real estate or real property;
3.1.17 the inventory of the Corporation consist of items saleable in the ordinary course of business reasonably fit for their usual purpose, except for obsolete and slow-moving items and materials below standard quality which have been written down on the books of account of the Business to net realizable value, or adequate reserves having been provided therefor, all in accordance with GAAP. Except as disclosed in Schedule 3.1.17, there is no recurring or ongoing high incidence of product failure or warranty claims against the Corporation related to the Business;
3.1.18 there are no outstanding orders, notices or similar requirements relating to the Corporation issued by any Governmental Authority, including building, environmental, fire, health, labour or police authorities, and there are no matters under discussion with any such Governmental Authority relating to orders, notices or similar requirements;
3.1.19 except as disclosed on Schedule 3.1.19, no single capital expenditure in excess of $25,000 or capital expenditures in the aggregate in excess of $50,000 have been made or authorized by the Corporation since the Balance Sheet Date;
3.1.20 except as disclosed on Schedule 3.1.20, no dividends have been declared or paid on or in respect of the Shares and no other distribution on any of its securities or shares has been made by the Corporation since the Balance Sheet Date and all dividends which to the date hereof have been declared or paid by the Corporation have been duly and validly declared and are fully paid;
3.1.21 the Corporation does not have any liability, obligation or commitment for the payment of Taxes of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed in the Financial Statements or such Taxes not yet due as have arisen since the Balance Sheet Date in the usual and ordinary course of business and for which adequate provision in the accounts of the Corporation has been made, and the Corporation is not in arrears with respect to any required withholdings or instalment payments or other payments of any Tax or duty of any kind or any penalty or interest thereon and has not filed any waiver for a taxation year of the Corporation under the Income Tax Act (Canada) or any other legislation imposing Tax on the Corporation; all obligations of the Corporation with respect done so to its employees for withholding Taxes, Canada Pension Plan contributions, unemployment insurance contributions and workers compensation remittances or contributions of any kind which are due as of the Closing Date will have been paid by the Corporation prior to the Closing Date; there are no outstanding disputes with or assessments from the Workmen's Compensation Board of British Columbia or the Employment Standards Branch;
3.1.22 the tax accounts of the Corporation as disclosed in Schedule 3.1.22 attached hereto are true and complete in all material respects;
3.1.23 except as disclosed on Schedule 3.1.23, there are no outstanding liabilities (whether absolute or contingent) against the Corporation except trade debts incurred in the usual and ordinary course of business;
3.1.24 set forth on Schedule 3.1.24 is a true and complete list of all contracts or agreements (except for the Premises Leases, the Personal Property Leases and the employment agreement with the Vendors listed on Schedule 3satisfaction.
Appears in 1 contract
Samples: Share Exchange Agreement
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Vendors jointly 3.1 In order to induce the Purchaser to enter into and severally represent to consummate the transactions contemplated by this Agreement, Suave represents and warrant warrants to the Purchaser the following, and acknowledge that the Purchaser is entitled to rely on such representations and warranties notwithstanding any due diligence investigation done by the Purchaser prior to the closingas follows:
3.1.1 the Corporation (a) Westside is a corporation duly incorporated, organized validly existing, and subsisting in good standing with respect to the filing of annual reports under the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the Company Act, and has all necessary corporate power power, authority and capacity to own its assets Assets and to carry on the Business its business as presently conducted;
(b) Suave owns and has made good and marketable title to all necessary filings under the Westside Shares as the legal and beneficial owner thereof, free of all applicable corporate, securities Encumbrances and taxation Laws or any other Laws to which the Corporation is subject and is qualified to own its properties and assets and to carry on the Business as presently carried on by it;
3.1.2 Schedule 2.1.1 sets out (i) the authorized capital of the Corporation and (ii) the number of Shares of the Corporation which are issued and outstanding, which all such shares have been duly and validly issued and are outstanding as fully paid and non-non- assessable and registered shares in the names capital of the Vendors as set forth on Schedule 2.1.1Westside Software;
3.1.3 the rights, privileges, restrictions and conditions attached to the (c) The Westside Shares are as set out in Schedule 3.1.3 attached hereto;
3.1.4 the Purchased Shares constitute represent all of the issued and outstanding Shares shares in the capital stock of Westside and no Person has any agreement, right or option, present or future, contingent, absolute or capable of becoming an agreement, right or option or which with the passage of time or the occurrence of any event could become an agreement, right or option:
(i) to require Westside to issue any further or other shares in its capital or any other security convertible or exchangeable into shares in its capital or to convert or exchange any securities into or for shares in the capital of Westside Software;
(ii) for the issue or allotment of any unissued shares in Westside Software’s capital; or
(iii) to acquire the issued and outstanding shares in Westside or any of them;
(d) Suave has due and sufficient right and authority to enter into this Agreement on the terms and conditions set forth and to transfer the legal and beneficial title and ownership of the CorporationShares to the Purchaser;
3.1.5 each (e) Suave is not a “non-resident” of Canada within the meaning of s. 116 of the Vendors Income Tax Act; and
(f) This Agreement constitutes a valid and binding obligation of Suave. Suave is not a party to, bound by or subject to any indenture, mortgage, lease, agreement, instrument, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, or under which any default would occur as a result of, the beneficial execution and registered owner delivery by Suave of this Agreement or the performance by Suave of any of the number terms hereof.
(g) Westside has good and marketable title to all of Purchased Shares set opposite the name of such Vendor on Schedule 2.1.1, its Assets free and clear of all Liens, options Encumbrances and none of Westside’s Assets are in the possession of or under the control of any other rights of others;
3.1.6 there is no contract, option or any other right of another binding upon or which at any time in the future may become binding upon:
(i) any of the Vendors to sell, transfer, assign, or grant any Lien on or affecting, or in any other way dispose of or encumber any of the Purchased Shares other than pursuant to the provisions of this Agreement or any of its assets other than in the ordinary course of business, or
(ii) the Corporation to allot or issue any of the unissued shares or securities of the Corporation or to create any additional class of shares or securities;
3.1.7 except as disclosed on Schedule 3.1.7, neither the entering into nor the delivery of this Agreement and the Ancillary Agreements nor the completion of the transactions contemplated hereby by each of the Vendors will result in the violation of or require the Consent of any third party pursuant to:
(i) any of the provisions of the Memorandum or Articles, as amended, of the Corporationperson;
(iih) any agreement or other instrument to which the Corporation or any of the Vendors is a party or by which the Corporation or any of the Vendors is bound, or
(iii) any applicable Law;
3.1.8 the financial statements of the Corporation, consisting of the Balance Sheet and statements of income, retained earnings and changes in financial position for the period ended on the Balance Sheet Date, together with the review engagement report of Cinnamon Jang Xxxxxxxxxx & Xompany, chartered accountants, thereon and the notes thereto (hereinafter collectively referred to as the "Financial Statements"), a copy of which is attached hereto as Schedule 3.1.8:
(i) are in accordance with the books and accounts of the Corporation as at the Balance Sheet Date,
(ii) are true and correct and present fairly the financial position of the Corporation as at the Balance Sheet Date,
(iii) have been prepared in accordance with GAAP consistently applied, and
(iv) present fairly all of the assets and liabilities of the Corporation as at the Balance Sheet Date including, without limiting the generality of the foregoing, all contingent liabilities of the Corporation as at the Balance Sheet Date;
3.1.9 the interim financial statements of the Corporation, consisting of a balance sheet and statement of income, for the period ended on April 30, 1998 (hereinafter collectively referred to as the "Interim Financial Statements"), a copy of which is attached hereto as Schedule 3.1.9:
(i) are in accordance with the books and accounts of the Corporation as at Aprix 00, 0000,
(xx) xxx true and correct and present fairly the financial position of the Corporation as at April 30, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $15,000 and without provision for income or capital taxes;
(iii) present fairly all of the assets and liabilities of the Corporation as at April 30, 1998, and
(iv) have been prepared in accordance with accounting principles consistent with the principles of GAAP used in the preparation of the Balance Sheet;
3.1.10 since the Balance Sheet Date, the Business of the Corporation has been carried on in its usual and ordinary course and in a manner consistent with prior practices and, the Corporation has not, since the Balance Sheet Date, entered into any transaction out of the usual and ordinary course of business;
3.1.11 since the Balance Sheet Date, there has been no material change in the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise, whether arising as a result of any legislative or regulatory change, revocation of any Permit or right to do business, fire, explosion, accident, casualty, labour dispute, flood, drought, riot, storm, expropriation, condemnation, act of God, public force or otherwise, except changes occurring in the usual and ordinary course of business which have not adversely affected the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise;
3.1.12 the Corporation is the owner with a good and marketable title, free and clear of all Liens, options and any other rights of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected on the Balance Sheet, except only such of the assets of the Corporation as have been disposed of in the usual and ordinary course of business since the Balance Sheet Date, and of all assets acquired by the Corporation since the Balance Sheet Date;
3.1.13 all machinery, equipment and automotive equipment owned or used by the Corporation has been properly maintained and is in good working order for the purposes of ongoing operation, subject to ordinary wear and tear for machinery and equipment of comparable age;
3.1.14 Schedule 3.1.14 E sets forth a true and complete list of all premises leased equipment and other personal property owned by the Corporation ("Leased Premises") Westside and all such equipment and other personal property are owned free and clear of any lease in respect thereof to which the Corporation is a party ("Premises Leases") and: Encumbrances;
(i) each Premises Lease Except for the contracts and agreements listed in Schedule B, Westside is not party to or bound by any Material Contract, whether oral or written, and the contracts and agreements listed in Schedule B are all valid and subsisting, in full force and effecteffect and un-amended, unamended by oral or written agreementno material default exists in respect thereof on the part of Westside or, and the Corporation is entitled to the full benefit and advantage of such Premises Lease in accordance with the terms thereof, (ii) each Premises Lease is in good standing, all rental and other payments payable by the Corporation under the leases have been duly paid, (iii) there is currently no outstanding default by the Corporation under the Premises Leases nor is there currently any outstanding default by any landlord thereunder or dispute between the Corporation and any landlord under any best of the Premises Leases; (iv) knowledge of either of the Corporation has not subletVendors, assigned or transferred on the part of any of its interests in such Premises Lease and (v) the Leased Premises are the only premises used by the Corporation;
3.1.15 Schedule 3.1.15 sets forth a true and complete list of all lease agreements concerning personal property leased by the Corporation ("Personal Property Leases") and:
(i) each Personal Property Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of each Personal Property Lease in accordance with the terms thereof, (ii) each Personal Property Lease is in good standing, all rental and other payments payable by the Corporation under the Personal Property Leases have been duly paid, (iii) there is currently no outstanding default by the Corporation thereunder nor of the other parties thereunder nor dispute between thereto, the Corporation and Vendors are not aware of any intention on the part of any of the other party thereunderparties thereto to terminate or materially alter any such contracts or agreements, and (iv) Schedule B list all the Corporation has treated all Personal Property Leases as operating leases for Canadian income tax purposespresent outstanding Material Contracts entered into by Westside in the course of carrying on its business;
3.1.16 except (j) Westside is not party to, bound by or subject to any indenture, mortgage, lease, agreement, license, permit, authorization, certification, instrument, statute, regulation, order, judgment, decree or law that would be violated or breached by, or under which default would occur or which could be terminated, cancelled or accelerated, in whole or in part, as a result of the execution and delivery of this Agreement or the consummation of any of the transactions provided for the Premises Leases, the Corporation holds no ownership or other interest in or right affecting any real estate or real propertythis Agreement;
3.1.17 the inventory of the Corporation consist of items saleable in the ordinary course of business reasonably fit for their usual purpose, except for obsolete and slow-moving items and materials below standard quality which have been written down on the books of account of the Business to net realizable value, or adequate reserves having been provided therefor, all in accordance with GAAP. Except as disclosed in Schedule 3.1.17, (k) there is no recurring action, suit, litigation, arbitration proceeding, governmental proceeding, investigation or ongoing high incidence of product failure claim, including appeals and applications for review, in progress, threatened or warranty claims against the Corporation related to the Business;
3.1.18 there are no outstanding orderspending against, notices or similar requirements relating to Westside or affecting their Assets or business which might materially and adversely affect the Corporation issued by any Governmental AuthorityAssets, including buildingbusiness, environmental, fire, health, labour future prospects or police authoritiesfinancial condition of Westside, and there are is no matters under discussion with any such Governmental Authority relating to ordersjudgment, notices decree, injunction, rule or similar requirements;
3.1.19 except as disclosed on Schedule 3.1.19, no single capital expenditure in excess of $25,000 or capital expenditures in the aggregate in excess of $50,000 have been made or authorized by the Corporation since the Balance Sheet Date;
3.1.20 except as disclosed on Schedule 3.1.20, no dividends have been declared or paid on or in respect of the Shares and no other distribution on any of its securities or shares has been made by the Corporation since the Balance Sheet Date and all dividends which to the date hereof have been declared or paid by the Corporation have been duly and validly declared and are fully paid;
3.1.21 the Corporation does not have any liability, obligation or commitment for the payment of Taxes of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed in the Financial Statements or such Taxes not yet due as have arisen since the Balance Sheet Date in the usual and ordinary course of business and for which adequate provision in the accounts of the Corporation has been made, and the Corporation is not in arrears with respect to any required withholdings or instalment payments or other payments order of any Tax court, governmental department, commission, agency, instrumentality or duty of any kind or any penalty or interest thereon and has not filed any waiver for a taxation year of the Corporation under the Income Tax Act (Canada) or any other legislation imposing Tax on the Corporation; all obligations of the Corporation with respect to its employees for withholding Taxes, Canada Pension Plan contributions, unemployment insurance contributions and workers compensation remittances or contributions of any kind which are due as of the Closing Date will have been paid by the Corporation prior to the Closing Date; there are no arbitrator outstanding disputes with or assessments from the Workmen's Compensation Board of British Columbia or the Employment Standards Branchagainst Westside Software;
3.1.22 the tax accounts of the Corporation as disclosed in Schedule 3.1.22 attached hereto are true and complete in all material respects;
3.1.23 except as disclosed on Schedule 3.1.23, there are no outstanding liabilities (whether absolute or contingent) against the Corporation except trade debts incurred in the usual and ordinary course of business;
3.1.24 set forth on Schedule 3.1.24 is a true and complete list of all contracts or agreements (except for the Premises Leases, the Personal Property Leases and the employment agreement with the Vendors listed on Schedule 3.
Appears in 1 contract
Samples: Share Purchase Agreement (Technology Publishing, Inc.)
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The 3.1 In order to induce the Purchaser to enter into and to consummate the transactions contemplated by this Agreement, the Vendors jointly and severally represent and warrant to the Purchaser the following, and acknowledge that the Purchaser is entitled to rely on such representations and warranties notwithstanding any due diligence investigation done by the Purchaser prior to the closingas follows:
3.1.1 the Corporation (a) Audiyo is a corporation duly incorporated, organized validly existing, and subsisting in good standing with respect to the filing of annual reports under the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the Company Act, and has all necessary corporate power power, authority and capacity to own its assets Assets and to carry on the Business and has made all necessary filings under all applicable corporate, securities and taxation Laws or any other Laws to which the Corporation is subject and is qualified to own its properties and assets and to carry on the Business business as presently carried on by itconducted;
3.1.2 Schedule 2.1.1 sets out (ib) The Vendors own and have good and marketable title to all the authorized capital Audiyo Shares as the legal and beneficial owner thereof, free of the Corporation all Encumbrances and (ii) the number of Shares of the Corporation which are issued and outstanding, which all such shares have been duly and validly issued and are outstanding as fully paid and non-assessable and registered shares in the names capital of the Vendors as set forth on Schedule 2.1.1Audiyo;
3.1.3 the rights, privileges, restrictions and conditions attached to the (c) The Audiyo Shares are as set out in Schedule 3.1.3 attached hereto;
3.1.4 the Purchased Shares constitute represent all of the issued and outstanding Shares shares in the capital stock of Audiyo and no Person has any agreement, right or option, present or future, contingent, absolute or capable of becoming an agreement, right or option or which with the passage of time or the occurrence of any event could become an agreement, right or option:
(i) to require Audiyo to issue any further or other shares in its capital or any other security convertible or exchangeable into shares in its capital or to convert or exchange any securities into or for shares in the capital of Audiyo;
(ii) for the issue or allotment of any unissued shares in Audiyo's capital; or
(iii) to acquire the issued and outstanding shares in Audiyo or any of them;
(d) The Vendors have due and sufficient right and authority to enter into this Agreement on the terms and conditions set forth and to transfer the legal and beneficial title and ownership of the CorporationShares to the Purchaser;
3.1.5 each (e) The Vendors are not "non-residents" of Canada within the meaning of s. 116 of the Vendors is the beneficial Income Tax Act; and
(f) This Agreement constitutes a valid and registered owner binding obligation of the number Vendors. The Vendors are not a party to, bound by or subject to any indenture, mortgage, lease, agreement, instrument, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, or under which any default would occur as a result of, the execution and delivery by the Vendors of Purchased Shares set opposite this Agreement or the name performance by the Vendors of such Vendor on Schedule 2.1.1, any of the terms hereof.
(g) Audiyo has good and marketable title to all of its Assets free and clear of all Liens, options Encumbrances and none of Audiyo's Assets are in the possession of or under the control of any other rights of others;
3.1.6 there is no contract, option or any other right of another binding upon or which at any time in the future may become binding upon:
(i) any of the Vendors to sell, transfer, assign, or grant any Lien on or affecting, or in any other way dispose of or encumber any of the Purchased Shares other than pursuant to the provisions of this Agreement or any of its assets other than in the ordinary course of business, or
(ii) the Corporation to allot or issue any of the unissued shares or securities of the Corporation or to create any additional class of shares or securities;
3.1.7 except as disclosed on Schedule 3.1.7, neither the entering into nor the delivery of this Agreement and the Ancillary Agreements nor the completion of the transactions contemplated hereby by each of the Vendors will result in the violation of or require the Consent of any third party pursuant to:
(i) any of the provisions of the Memorandum or Articles, as amended, of the Corporationperson;
(iih) any agreement or other instrument to which the Corporation or any of the Vendors is a party or by which the Corporation or any of the Vendors is bound, or
(iii) any applicable Law;
3.1.8 the financial statements of the Corporation, consisting of the Balance Sheet and statements of income, retained earnings and changes in financial position for the period ended on the Balance Sheet Date, together with the review engagement report of Cinnamon Jang Xxxxxxxxxx & Xompany, chartered accountants, thereon and the notes thereto (hereinafter collectively referred to as the "Financial Statements"), a copy of which is attached hereto as Schedule 3.1.8:
(i) are in accordance with the books and accounts of the Corporation as at the Balance Sheet Date,
(ii) are true and correct and present fairly the financial position of the Corporation as at the Balance Sheet Date,
(iii) have been prepared in accordance with GAAP consistently applied, and
(iv) present fairly all of the assets and liabilities of the Corporation as at the Balance Sheet Date including, without limiting the generality of the foregoing, all contingent liabilities of the Corporation as at the Balance Sheet Date;
3.1.9 the interim financial statements of the Corporation, consisting of a balance sheet and statement of income, for the period ended on April 30, 1998 (hereinafter collectively referred to as the "Interim Financial Statements"), a copy of which is attached hereto as Schedule 3.1.9:
(i) are in accordance with the books and accounts of the Corporation as at Aprix 00, 0000,
(xx) xxx true and correct and present fairly the financial position of the Corporation as at April 30, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $15,000 and without provision for income or capital taxes;
(iii) present fairly all of the assets and liabilities of the Corporation as at April 30, 1998, and
(iv) have been prepared in accordance with accounting principles consistent with the principles of GAAP used in the preparation of the Balance Sheet;
3.1.10 since the Balance Sheet Date, the Business of the Corporation has been carried on in its usual and ordinary course and in a manner consistent with prior practices and, the Corporation has not, since the Balance Sheet Date, entered into any transaction out of the usual and ordinary course of business;
3.1.11 since the Balance Sheet Date, there has been no material change in the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise, whether arising as a result of any legislative or regulatory change, revocation of any Permit or right to do business, fire, explosion, accident, casualty, labour dispute, flood, drought, riot, storm, expropriation, condemnation, act of God, public force or otherwise, except changes occurring in the usual and ordinary course of business which have not adversely affected the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise;
3.1.12 the Corporation is the owner with a good and marketable title, free and clear of all Liens, options and any other rights of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected on the Balance Sheet, except only such of the assets of the Corporation as have been disposed of in the usual and ordinary course of business since the Balance Sheet Date, and of all assets acquired by the Corporation since the Balance Sheet Date;
3.1.13 all machinery, equipment and automotive equipment owned or used by the Corporation has been properly maintained and is in good working order for the purposes of ongoing operation, subject to ordinary wear and tear for machinery and equipment of comparable age;
3.1.14 Schedule 3.1.14 E sets forth a true and complete list of all premises leased equipment and other personal property owned by the Corporation ("Leased Premises") Audiyo and all such equipment and other personal property are owned free and clear of any lease in respect thereof to which the Corporation is a party ("Premises Leases") and: Encumbrances;
(i) each Premises Lease Except for the contracts and agreements listed in Schedule B, Audiyo is not party to or bound by any Material Contract, whether oral or written, and the contracts and agreements listed in Schedule B are all valid and subsisting, in full force and effecteffect and un-amended, unamended no material default exists in respect thereof on the part of Audiyo or, to the best of the knowledge of either of the Vendors, on the part of any of the other parties thereto, the Vendors are not aware of any intention on the part of any of the other parties thereto to terminate or materially alter any such contracts or agreements, and Schedule B list all the present outstanding Material Contracts entered into by oral Audiyo in the course of carrying on its business;
(j) Audiyo is not party to, bound by or written subject to any indenture, mortgage, lease, agreement, license, permit, authorization, certification, instrument, statute, regulation, order, judgment, decree or law that would be violated or breached by, or under which default would occur or which could be terminated, cancelled or accelerated, in whole or in part, as a result of the execution and delivery of this Agreement or the Corporation is entitled to consummation of any of the full benefit and advantage of such Premises Lease transactions provided for in accordance with the terms thereof, this Agreement;
(ii) each Premises Lease is in good standing, all rental and other payments payable by the Corporation under the leases have been duly paid, (iiik) there is currently no action, suit, litigation, arbitration proceeding, governmental proceeding, investigation or claim, including appeals and applications for review, in progress, threatened or pending against, or relating to Audiyo or affecting their Assets or business which might materially and adversely affect the Assets, business, future prospects or financial condition of Audiyo, and there is no judgment, decree, injunction, rule or order of any court, governmental department, commission, agency, instrumentality or arbitrator outstanding default by the Corporation under the Premises Leases nor is there currently any outstanding default by any landlord thereunder or dispute between the Corporation and any landlord under any of the Premises Leases; (iv) the Corporation has not sublet, assigned or transferred any of its interests in such Premises Lease and (v) the Leased Premises are the only premises used by the Corporationagainst Audiyo;
3.1.15 Schedule 3.1.15 sets forth a true and complete list of all lease agreements concerning personal property leased by the Corporation ("Personal Property Leases"l) andAudiyo:
(i) each Personal Property Lease is has duly filed in full force a timely manner:
A. all federal and effectprovincial income tax returns and election forms and the tax returns of any other jurisdiction required to be filed and all such returns and forms have been completed accurately and correctly in all respects; and
B. all Workers' Compensation Board returns, unamended by oral or written agreementcorporation capital tax returns, goods and services tax returns, provincial sales tax returns, and the Corporation is entitled other reports and information required to the full benefit and advantage of each Personal Property Lease in accordance be filed with the terms thereofall applicable government authorities, agencies or regulatory bodies;
(ii) each Personal Property Lease is has paid all taxes (including all federal, provincial and local taxes, assessments or other imposts in good standingrespect of its income, business, or Assets) and all rental interest and other payments payable by penalties thereon with respect to Audiyo, for all previous years and all required quarterly instalments due for the Corporation under the Personal Property Leases current fiscal year have been duly paid, ;
(iii) has provided adequate reserves for all taxes for the periods covered by, and such reserves are reflected in, the Year End Financial Statements; and there is currently no outstanding default agreement, waiver or other arrangement providing for an extension of time with respect to the filing of any tax return, or payment of any tax, governmental charge or deficiency by Audiyo, nor is there any action, suit, litigation, arbitration, proceeding, governmental proceeding, investigation or claim, including appeals and applications for review, in progress, threatened or pending against or relating to Audiyo or its Assets or business in respect of, or discussions underway with any governmental authority relating to, any such tax or governmental charge or deficiency;
(m) There are no contingent tax liabilities nor any grounds which could prompt a reassessment against Audiyo;
(n) With respect to the Corporation thereunder nor of goods and services tax under the other parties thereunder nor dispute between the Corporation and any other party thereunder, and Excise Tax Act (iv"GST"):
(i) the Corporation has treated all Personal Property Leases as operating leases Audiyo is registered for Canadian income tax GST purposes;
3.1.16 except for the Premises Leases, the Corporation holds no ownership or other interest in or right affecting any real estate or real property;
3.1.17 the inventory of the Corporation consist of items saleable in the ordinary course of business reasonably fit for their usual purpose, except for obsolete and slow-moving items and materials below standard quality which have been written down on the books of account of the Business to net realizable value, or adequate reserves having been provided therefor, all in accordance with GAAP. Except as disclosed in Schedule 3.1.17, there is no recurring or ongoing high incidence of product failure or warranty claims against the Corporation related to the Business;
3.1.18 there are no outstanding orders, notices or similar requirements relating to the Corporation issued by any Governmental Authority, including building, environmental, fire, health, labour or police authorities, and there are no matters under discussion with any such Governmental Authority relating to orders, notices or similar requirements;
3.1.19 except as disclosed on Schedule 3.1.19, no single capital expenditure in excess of $25,000 or capital expenditures in the aggregate in excess of $50,000 have been made or authorized by the Corporation since the Balance Sheet Date;
3.1.20 except as disclosed on Schedule 3.1.20, no dividends have been declared or paid on or in respect of the Shares and no other distribution on any of its securities or shares has been made by the Corporation since the Balance Sheet Date and all dividends which to the date hereof have been declared or paid by the Corporation have been duly and validly declared and are fully paid;
3.1.21 the Corporation (ii) Audiyo does not have any liability, obligation deferred obligations or commitment for the payment of Taxes of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed in the Financial Statements or such Taxes not yet due as have arisen since the Balance Sheet Date in the usual and ordinary course of business and for which adequate provision in the accounts liabilities under any section of the Corporation Excise Tax Act;
(iii) Audiyo has not made a supply of property or service to a Person with whom Audiyo was not dealing at arm's length for proceeds less than the fair market value thereof;
(iv) all GST required to be collected by Audiyo has been made, collected and all GST amounts required to be remitted to the Corporation is not in arrears with respect to any required withholdings or instalment payments or other payments of any Tax or duty of any kind or any penalty or interest thereon and has not filed any waiver Receiver General for a taxation year of the Corporation under the Income Tax Act (Canada) or any other legislation imposing Tax on the Corporation; all obligations of the Corporation with respect to its employees for withholding Taxes, Canada Pension Plan contributions, unemployment insurance contributions and workers compensation remittances or contributions of any kind which are due as of the Closing Date will have been paid remitted; and
(v) all GST returns and reports of Audiyo required by the Corporation prior law to the Closing Date; there be filed have been filed in a timely manner and are no outstanding disputes with or assessments from the Workmen's Compensation Board of British Columbia or the Employment Standards Branch;
3.1.22 the tax accounts of the Corporation as disclosed in Schedule 3.1.22 attached hereto are true true, complete and complete correct in all material respects;.
3.1.23 except as disclosed on Schedule 3.1.23(o) Audiyo does not have and does not use any service marks, there are no outstanding liabilities (whether absolute trade names, design marks or contingent) against the Corporation except trade debts incurred marks in the usual and ordinary course of connection with its business;
3.1.24 set forth on (p) Schedule 3.1.24 is D contains a true complete and complete accurate list of all contracts of the domain names owned by Audiyo and a complete and accurate list of all of the web sites operated by Audiyo;
(q) Schedule E contains a complete and accurate list of all of the computer systems software used by Audiyo in connection with its business;
3.2 All statements contained in any certificate or agreements (except for other instrument delivered by or on behalf of the Premises Leases, the Personal Property Leases and the employment agreement Vendors pursuant hereto or in connection with the transactions contemplated by this Agreement shall be deemed to be representations and warranties by the Vendors listed on Schedule 3hereunder.
Appears in 1 contract
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Vendors jointly 3.1 In order to induce the Purchaser to enter into and severally represent to consummate the transactions contemplated by this Agreement, Xxxx represents and warrant warrants to the Purchaser the following, and acknowledge that the Purchaser is entitled to rely on such representations and warranties notwithstanding any due diligence investigation done by the Purchaser prior to the closingas follows:
3.1.1 the Corporation (a) Metasun Software is a corporation duly incorporated, organized validly existing, and subsisting in good standing with respect to the filing of annual reports under the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the Company Act, and has all necessary corporate power power, authority and capacity to own its assets Assets and to carry on the Business its business as presently conducted;
(b) Xxxx owns and has made good and marketable title to all necessary filings under the Metasun Shares as the legal and beneficial owner thereof, free of all applicable corporate, securities Encumbrances and taxation Laws or any other Laws to which the Corporation is subject and is qualified to own its properties and assets and to carry on the Business as presently carried on by it;
3.1.2 Schedule 2.1.1 sets out (i) the authorized capital of the Corporation and (ii) the number of Shares of the Corporation which are issued and outstanding, which all such shares have been duly and validly issued and are outstanding as fully paid and non-assessable and registered shares in the names capital of the Vendors as set forth on Schedule 2.1.1Metasun Software;
3.1.3 the rights, privileges, restrictions and conditions attached to the (c) The Metasun Shares are as set out in Schedule 3.1.3 attached hereto;
3.1.4 the Purchased Shares constitute represent all of the issued and outstanding Shares shares in the capital stock of Metasun Software and no Person has any agreement, right or option, present or future, contingent, absolute or capable of becoming an agreement, right or option or which with the passage of time or the occurrence of any event could become an agreement, right or option:
(i) to require Metasun Software to issue any further or other shares in its capital or any other security convertible or exchangeable into shares in its capital or to convert or exchange any securities into or for shares in the capital of Metasun Software;
(ii) for the issue or allotment of any unissued shares in Metasun Software's capital; or
(iii) to acquire the issued and outstanding shares in Metasun Software or any of them;
(d) Xxxx has due and sufficient right and authority to enter into this Agreement on the terms and conditions set forth and to transfer the legal and beneficial title and ownership of the CorporationShares to the Purchaser;
3.1.5 each (e) Xxxx is not a "non-resident" of Canada within the meaning of s. 116 of the Vendors Income Tax Act; and
(f) This Agreement constitutes a valid and binding obligation of Xxxx. Xxxx is not a party to, bound by or subject to any indenture, mortgage, lease, agreement, instrument, statute, regulation, order, judgment, decree or law which would be violated, contravened or breached by, or under which any default would occur as a result of, the beneficial execution and registered owner delivery by Xxxx of this Agreement or the performance by Xxxx of any of the number terms hereof.
(g) Metasun Software has good and marketable title to all of Purchased Shares set opposite the name of such Vendor on Schedule 2.1.1, its Assets free and clear of all Liens, options Encumbrances and none of Metasun Software's Assets are in the possession of or under the control of any other rights of others;
3.1.6 there is no contract, option or any other right of another binding upon or which at any time in the future may become binding upon:
(i) any of the Vendors to sell, transfer, assign, or grant any Lien on or affecting, or in any other way dispose of or encumber any of the Purchased Shares other than pursuant to the provisions of this Agreement or any of its assets other than in the ordinary course of business, or
(ii) the Corporation to allot or issue any of the unissued shares or securities of the Corporation or to create any additional class of shares or securities;
3.1.7 except as disclosed on Schedule 3.1.7, neither the entering into nor the delivery of this Agreement and the Ancillary Agreements nor the completion of the transactions contemplated hereby by each of the Vendors will result in the violation of or require the Consent of any third party pursuant to:
(i) any of the provisions of the Memorandum or Articles, as amended, of the Corporationperson;
(iih) any agreement or other instrument to which the Corporation or any of the Vendors is a party or by which the Corporation or any of the Vendors is bound, or
(iii) any applicable Law;
3.1.8 the financial statements of the Corporation, consisting of the Balance Sheet and statements of income, retained earnings and changes in financial position for the period ended on the Balance Sheet Date, together with the review engagement report of Cinnamon Jang Xxxxxxxxxx & Xompany, chartered accountants, thereon and the notes thereto (hereinafter collectively referred to as the "Financial Statements"), a copy of which is attached hereto as Schedule 3.1.8:
(i) are in accordance with the books and accounts of the Corporation as at the Balance Sheet Date,
(ii) are true and correct and present fairly the financial position of the Corporation as at the Balance Sheet Date,
(iii) have been prepared in accordance with GAAP consistently applied, and
(iv) present fairly all of the assets and liabilities of the Corporation as at the Balance Sheet Date including, without limiting the generality of the foregoing, all contingent liabilities of the Corporation as at the Balance Sheet Date;
3.1.9 the interim financial statements of the Corporation, consisting of a balance sheet and statement of income, for the period ended on April 30, 1998 (hereinafter collectively referred to as the "Interim Financial Statements"), a copy of which is attached hereto as Schedule 3.1.9:
(i) are in accordance with the books and accounts of the Corporation as at Aprix 00, 0000,
(xx) xxx true and correct and present fairly the financial position of the Corporation as at April 30, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $15,000 and without provision for income or capital taxes;
(iii) present fairly all of the assets and liabilities of the Corporation as at April 30, 1998, and
(iv) have been prepared in accordance with accounting principles consistent with the principles of GAAP used in the preparation of the Balance Sheet;
3.1.10 since the Balance Sheet Date, the Business of the Corporation has been carried on in its usual and ordinary course and in a manner consistent with prior practices and, the Corporation has not, since the Balance Sheet Date, entered into any transaction out of the usual and ordinary course of business;
3.1.11 since the Balance Sheet Date, there has been no material change in the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise, whether arising as a result of any legislative or regulatory change, revocation of any Permit or right to do business, fire, explosion, accident, casualty, labour dispute, flood, drought, riot, storm, expropriation, condemnation, act of God, public force or otherwise, except changes occurring in the usual and ordinary course of business which have not adversely affected the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise;
3.1.12 the Corporation is the owner with a good and marketable title, free and clear of all Liens, options and any other rights of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected on the Balance Sheet, except only such of the assets of the Corporation as have been disposed of in the usual and ordinary course of business since the Balance Sheet Date, and of all assets acquired by the Corporation since the Balance Sheet Date;
3.1.13 all machinery, equipment and automotive equipment owned or used by the Corporation has been properly maintained and is in good working order for the purposes of ongoing operation, subject to ordinary wear and tear for machinery and equipment of comparable age;
3.1.14 Schedule 3.1.14 E sets forth a true and complete list of all premises leased equipment and other personal property owned by the Corporation ("Leased Premises") Metasun Software and all such equipment and other personal property are owned free and clear of any lease in respect thereof to which the Corporation is a party ("Premises Leases") and: Encumbrances;
(i) each Premises Lease Except for the contracts and agreements listed in Schedule B, Metasun Software is not party to or bound by any Material Contract, whether oral or written, and the contracts and agreements listed in Schedule B are all valid and subsisting, in full force and effecteffect and un-amended, unamended by oral or written agreementno material default exists in respect thereof on the part of Metasun Software or, and the Corporation is entitled to the full benefit and advantage of such Premises Lease in accordance with the terms thereof, (ii) each Premises Lease is in good standing, all rental and other payments payable by the Corporation under the leases have been duly paid, (iii) there is currently no outstanding default by the Corporation under the Premises Leases nor is there currently any outstanding default by any landlord thereunder or dispute between the Corporation and any landlord under any best of the Premises Leases; (iv) knowledge of either of the Corporation has not subletVendors, assigned or transferred on the part of any of its interests in such Premises Lease and (v) the Leased Premises are the only premises used by the Corporation;
3.1.15 Schedule 3.1.15 sets forth a true and complete list of all lease agreements concerning personal property leased by the Corporation ("Personal Property Leases") and:
(i) each Personal Property Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of each Personal Property Lease in accordance with the terms thereof, (ii) each Personal Property Lease is in good standing, all rental and other payments payable by the Corporation under the Personal Property Leases have been duly paid, (iii) there is currently no outstanding default by the Corporation thereunder nor of the other parties thereunder nor dispute between thereto, the Corporation and Vendors are not aware of any intention on the part of any of the other party thereunderparties thereto to terminate or materially alter any such contracts or agreements, and (iv) Schedule B list all the Corporation has treated all Personal Property Leases as operating leases for Canadian income tax purposespresent outstanding Material Contracts entered into by Metasun Software in the course of carrying on its business;
3.1.16 except (j) Metasun Software is not party to, bound by or subject to any indenture, mortgage, lease, agreement, license, permit, authorization, certification, instrument, statute, regulation, order, judgment, decree or law that would be violated or breached by, or under which default would occur or which could be terminated, cancelled or accelerated, in whole or in part, as a result of the execution and delivery of this Agreement or the consummation of any of the transactions provided for the Premises Leases, the Corporation holds no ownership or other interest in or right affecting any real estate or real propertythis Agreement;
3.1.17 the inventory of the Corporation consist of items saleable in the ordinary course of business reasonably fit for their usual purpose, except for obsolete and slow-moving items and materials below standard quality which have been written down on the books of account of the Business to net realizable value, or adequate reserves having been provided therefor, all in accordance with GAAP. Except as disclosed in Schedule 3.1.17, (k) there is no recurring action, suit, litigation, arbitration proceeding, governmental proceeding, investigation or ongoing high incidence of product failure claim, including appeals and applications for review, in progress, threatened or warranty claims against the Corporation related to the Business;
3.1.18 there are no outstanding orderspending against, notices or similar requirements relating to Metasun Software or affecting their Assets or business which might materially and adversely affect the Corporation issued by any Governmental AuthorityAssets, including buildingbusiness, environmental, fire, health, labour future prospects or police authoritiesfinancial condition of Metasun Software, and there are is no matters under discussion with any such Governmental Authority relating to ordersjudgment, notices decree, injunction, rule or similar requirements;
3.1.19 except as disclosed on Schedule 3.1.19, no single capital expenditure in excess of $25,000 or capital expenditures in the aggregate in excess of $50,000 have been made or authorized by the Corporation since the Balance Sheet Date;
3.1.20 except as disclosed on Schedule 3.1.20, no dividends have been declared or paid on or in respect of the Shares and no other distribution on any of its securities or shares has been made by the Corporation since the Balance Sheet Date and all dividends which to the date hereof have been declared or paid by the Corporation have been duly and validly declared and are fully paid;
3.1.21 the Corporation does not have any liability, obligation or commitment for the payment of Taxes of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed in the Financial Statements or such Taxes not yet due as have arisen since the Balance Sheet Date in the usual and ordinary course of business and for which adequate provision in the accounts of the Corporation has been made, and the Corporation is not in arrears with respect to any required withholdings or instalment payments or other payments order of any Tax court, governmental department, commission, agency, instrumentality or duty of any kind or any penalty or interest thereon and has not filed any waiver for a taxation year of the Corporation under the Income Tax Act (Canada) or any other legislation imposing Tax on the Corporation; all obligations of the Corporation with respect to its employees for withholding Taxes, Canada Pension Plan contributions, unemployment insurance contributions and workers compensation remittances or contributions of any kind which are due as of the Closing Date will have been paid by the Corporation prior to the Closing Date; there are no arbitrator outstanding disputes with or assessments from the Workmen's Compensation Board of British Columbia or the Employment Standards Branchagainst Metasun Software;
3.1.22 the tax accounts of the Corporation as disclosed in Schedule 3.1.22 attached hereto are true and complete in all material respects;
3.1.23 except as disclosed on Schedule 3.1.23, there are no outstanding liabilities (whether absolute or contingent) against the Corporation except trade debts incurred in the usual and ordinary course of business;
3.1.24 set forth on Schedule 3.1.24 is a true and complete list of all contracts or agreements (except for the Premises Leases, the Personal Property Leases and the employment agreement with the Vendors listed on Schedule 3.
Appears in 1 contract
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Vendors jointly and severally represent and warrant to the Purchaser the following, and acknowledge that the Purchaser is entitled to rely on such representations and warranties notwithstanding any due diligence investigation done by the Purchaser prior to the closing:
3.1.1 the Corporation is a corporation duly incorporated, organized and subsisting under the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the corporate power to own its assets and to carry on the Business and has made all necessary filings under all applicable corporate, securities and taxation Laws or any other Laws to which the Corporation is subject and is qualified to own its properties and assets and to carry on the Business as presently carried on by it;
3.1.2 Schedule 2.1.1 sets out (i) the authorized capital of the Corporation and (ii) the number of Shares of the Corporation which are issued and outstanding, which shares have been validly issued as fully paid and non-assessable and registered in the names of the Vendors as set forth on Schedule 2.1.1;
3.1.3 the rights, privileges, restrictions and conditions attached to the Shares are as set out in Schedule 3.1.3 attached hereto;
3.1.4 the Purchased Shares constitute all of the issued and outstanding Shares in the capital stock of the Corporation;
3.1.5 each of the Vendors is the beneficial and registered owner of the number of Purchased Shares set opposite the name of such Vendor on Schedule 2.1.1, free and clear of all Liens, options and any other rights of others;
3.1.6 there is no contract, option or any other right of another binding upon or which at any time in the future may become binding upon:
(i) any of the Vendors to sell, transfer, assign, or grant any Lien on or affecting, or in any other way dispose of or encumber any of the Purchased Shares other than pursuant to the provisions of this Agreement or any of its assets other than in the ordinary course of business, or
(ii) the Corporation to allot or issue any of the unissued shares or securities of the Corporation or to create any additional class of shares or securities;
3.1.7 except as disclosed on Schedule 3.1.7, neither the entering into nor the delivery of this Agreement and the Ancillary Agreements nor the completion of the transactions contemplated hereby by each of the Vendors will result in the violation of or require the Consent of any third party pursuant to:
(i) any of the provisions of the Memorandum or Articles, as amended, of the Corporation;
(ii) any agreement or other instrument to which the Corporation or any of the Vendors is a party or by which the Corporation or any of the Vendors is bound, or
(iii) any applicable Law;
3.1.8 the financial statements of the Corporation, consisting of the Balance Sheet and statements of income, retained earnings and changes in financial position for the period ended on the Balance Sheet Date, together with the review engagement report of Cinnamon Jang Xxxxxxxxxx Yule & XompanyAssociates, chartered accountants, thereon and the notes thereto (hereinafter collectively referred to as the "Financial Statements"), a copy of which is attached hereto as Schedule 3.1.8:
(i) are in accordance with the books and accounts of the Corporation as at the Balance Sheet Date,
(ii) are true and correct and present fairly the financial position of the Corporation as at the Balance Sheet Date,
(iii) have been prepared in accordance with GAAP consistently applied, and
(iv) present fairly all of the assets and liabilities of the Corporation as at the Balance Sheet Date including, without limiting the generality of the foregoing, all contingent liabilities of the Corporation as at the Balance Sheet Date;
3.1.9 the interim financial statements of the Corporation, consisting of a balance sheet and statement of income, for the period ended on April 30June 25, 1998 (hereinafter collectively referred to as the "Interim Financial Statements"), a copy of which is attached hereto as Schedule 3.1.9:
(i) are in accordance with the books and accounts of the Corporation as at Aprix 00June 25, 00001998,
(xxii) xxx are true and correct and present fairly the financial position of the Corporation as at April 30June 25, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $15,000 and without provision for income or capital taxes;, the disposition of a loan receivable from Midway Purnel Sanitary Supply (PG) Ltd. in the amount of $20,000,
(iii) present fairly all of the assets and liabilities of the Corporation as at April 30June 25, 1998, and
(iv) have been prepared in accordance with accounting principles GAAP consistent with the principles of GAAP used in the preparation of the Balance Sheet;
3.1.10 since the Balance Sheet Date, the Business of the Corporation has been carried on in its usual and ordinary course and in a manner consistent with prior practices and, the Corporation has not, since the Balance Sheet Date, entered into any transaction out of the usual and ordinary course of business;
3.1.11 since the Balance Sheet Date, there has been no material change in the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise, whether arising as a result of any legislative or regulatory change, revocation of any Permit or right to do business, fire, explosion, accident, casualty, labour dispute, flood, drought, riot, storm, expropriation, condemnation, act of God, public force or otherwise, except changes occurring in the usual and ordinary course of business which have not adversely affected the affairs, business, prospects, operations or condition of the Corporation, financial or otherwise;
3.1.12 the Corporation is the owner with a good and marketable title, free and clear of all Liens, options and any other rights of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected on the Balance Sheet, except only such of the assets of the Corporation as have been disposed of in the usual and ordinary course of business since the Balance Sheet Date, and of all assets acquired by the Corporation since the Balance Sheet Date;
3.1.13 all machinery, equipment and automotive equipment owned or used by the Corporation has been properly maintained and is in good working order for the purposes of ongoing operation, subject to ordinary wear and tear for machinery and equipment of comparable age;
3.1.14 Schedule 3.1.14 sets forth a true and complete list of all premises leased by the Corporation ("Leased Premises") and any lease in respect thereof to which the Corporation is a party ("Premises Leases") and: (i) each Premises Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of such Premises Lease in accordance with the terms thereof, (ii) each Premises Lease is in good standing, all rental and other payments payable by the Corporation under the leases have been duly paid, (iii) there is currently no outstanding default by the Corporation under the Premises Leases nor is there currently any outstanding default by any landlord thereunder or dispute between the Corporation and any landlord under any of the Premises Leases; (iv) the Corporation has not sublet, assigned or transferred any of its interests in such Premises Lease and (v) the Leased Premises are the only premises used by the Corporation;
3.1.15 Schedule 3.1.15 sets forth a true and complete list of all lease agreements concerning personal property leased by the Corporation ("Personal Property Leases") and:
(i) each Personal Property Lease is in full force and effect, unamended by oral or written agreement, and the Corporation is entitled to the full benefit and advantage of each Personal Property Lease in accordance with the terms thereof, (ii) each Personal Property Lease is in good standing, all rental and other payments payable by the Corporation under the Personal Property Leases have been duly paid, (iii) there is currently no outstanding default by the Corporation thereunder nor of the other parties thereunder nor dispute between the Corporation and any other party thereunder, and (iv) the Corporation has treated all Personal Property Leases as operating leases for Canadian income tax purposes;
3.1.16 except for the Premises Leases, the Corporation holds no ownership or other interest in or right affecting any real estate or real property;
3.1.17 the inventory of the Corporation consist of items saleable in the ordinary course of business reasonably fit for their usual purpose, except for obsolete and slow-moving items and materials below standard quality which have been written down on the books of account of the Business to net realizable value, or adequate reserves having been provided therefor, all in accordance with GAAP. Except as disclosed in Schedule 3.1.17, there is no recurring or ongoing high incidence of product failure or warranty claims against the Corporation related to the Business;
3.1.18 there are no outstanding orders, notices or similar requirements relating to the Corporation issued by any Governmental Authority, including building, environmental, fire, health, labour or police authorities, and there are no matters under discussion with any such Governmental Authority relating to orders, notices or similar requirements;
3.1.19 except as disclosed on Schedule 3.1.19, no single capital expenditure in excess of $25,000 or capital expenditures in the aggregate in excess of $50,000 have been made or authorized by the Corporation since the Balance Sheet Date;
3.1.20 except (i) as disclosed on Schedule 3.1.203.1.20 and (ii) a dividend in the amount of $30,500 paid to Lorexxx xx the date hereof, no dividends have been declared or paid on or in respect of the Shares and no other distribution on any of its securities or shares has been made by the Corporation since the Balance Sheet Date and all dividends which to the date hereof have been declared or paid by the Corporation have been duly and validly declared and are fully paid;
3.1.21 the Corporation does not have any liability, obligation or commitment for the payment of Taxes of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed in the Financial Statements or such Taxes not yet due as have arisen since the Balance Sheet Date in the usual and ordinary course of business and for which adequate provision in the accounts of the Corporation has been made, and the Corporation is not in arrears with respect to any required withholdings or instalment payments or other payments of any Tax or duty of any kind or any penalty or interest thereon and has not filed any waiver for a taxation year of the Corporation under the Income Tax Act (Canada) or any other legislation imposing Tax on the Corporation; all obligations of the Corporation with respect to its employees for withholding Taxes, Canada Pension Plan contributions, unemployment insurance contributions and workers compensation remittances or contributions of any kind which are due as of the Closing Date will have been paid by the Corporation prior to the Closing Date; there are no outstanding disputes with or assessments from the Workmen's Compensation Board of British Columbia or the Employment Standards Branch;
3.1.22 the tax accounts of the Corporation as disclosed in Schedule 3.1.22 attached hereto are true and complete in all material respects;
3.1.23 except as disclosed on Schedule 3.1.23, there are no outstanding liabilities (whether absolute or contingent) against the Corporation except trade debts incurred in the usual and ordinary course of business;
3.1.24 set forth on Schedule 3.1.24 is a true and complete list of all contracts or agreements (except for the Premises Leases, the Personal Property Leases and the employment agreement with the Vendors listed on Schedule 3.
Appears in 1 contract
