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 Schedule 3.1.3; 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 ▇▇▇▇▇▇▇▇▇▇ & ▇ompany, 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 May 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 May 31, 1998, (ii) are true and correct and present fairly the financial position of the Corporation as at May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $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; (▇▇▇) ▇▇▇sent fairly all of the assets and liabilities of the Corporation as at May 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 3.01 In order to induce the Purchaser to enter into and to complete the transactions contemplated by this Agreement, the Vendors jointly represents and severally represent 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 closingthat:
3.1.1 a) The Vendor is the Corporation is a corporation duly incorporatedrecorded and beneficial owner of 100% of the Properties described in Schedule A to this Agreement and, organized and subsisting under has the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the corporate power right to own its assets enter into this Agreement and to carry on sell and assign 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 Schedule 3.1.3;
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, Properties free and clear of all Liens, options and any other rights of othersliens or encumbrances;
3.1.6 there is no contract, option or any other b) The Vendor has the 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 enter into this Agreement or any of its assets other than in to sell and assign 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 ▇▇▇▇▇▇▇▇▇▇ & ▇ompany, 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 May 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 May 31, 1998,
(ii) are true and correct and present fairly the financial position of the Corporation as at May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $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;
(▇▇▇) ▇▇▇sent fairly all of the assets and liabilities of the Corporation as at May 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, Properties free and clear of any liens and encumbrances and to become the recipient of the consideration to be paid for Properties;
c) The Mineral Claim comprising the Properties have been property staked and recorded in compliance with all Lienslaws and regulations of the Province of British Columbia and there are no disputes over the title, options and any other rights the staking or recording of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected mineral prospects on the Balance SheetProperties, except only such or outstanding agreements or options to acquire or purchase the Properties or any portion thereof, and no person has any royal or other interest whatsoever in production from any of the assets of crown grant claims which comprise 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 DateProperties;
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"d) 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 The Properties are in good standing, and all rental necessary filings, permits and other payments payable by the Corporation under the leases have necessary documentation has 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 made 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 received from 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 agreementregulatory authorities, and the Corporation is entitled to the full benefit properties are free and advantage clear of each Personal Property Lease in accordance with the terms thereofany liens, (ii) each Personal Property Lease is in good standing, all rental and other payments payable charges or encumbrances or claims 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 thereunderof any nature or kind whatsoever;
e) Neither the Vendor, nor any predecessor in interest or title, has done anything whereby the Properties may become encumbered; and
f) There are no pending or threatened actions, suits, claims or proceedings regarding the Properties.
3.02 The Vendor shall indemnify and save the Purchaser harmless from all loss, damage, costs, actions, and (iv) the Corporation has treated all Personal Property Leases as operating leases for Canadian income tax purposes;suits arising out of or in connection with any breach of any representation, warranty, covenant, agreement or condition made by it and contained in this Agreement.
3.1.16 except 3.03 The representations and warranties contained in this paragraph are provided 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 exclusive benefit 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 authoritiesPurchaser, and there are no matters under discussion with a breach of any such Governmental Authority relating to orders, notices one 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 more thereof may be waived by the Corporation since the Balance Sheet Date;
3.1.20 except as disclosed on Schedule 3.1.20, no dividends have been declared Purchaser in whole or paid on or in part at any time without prejudice to its rights in respect of the Shares and no any 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 breach 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) same or any other legislation imposing Tax on representation or warranty.
3.04 The representations and warranties contained in this Paragraph shall survive the Corporation; execution hereof.
3.05 On Closing, the Vendor shall deliver duly executed transfer forms to the Purchaser so that The Purchaser can make all obligations required filings to record the transfer 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 title to the Closing Date; there are no outstanding disputes with or assessments from Properties to 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 3Purchaser.
Appears in 1 contract
Sources: Mining Contract (Ugods, Inc.)
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Vendors jointly Each Vendor hereby represents and severally represent 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 closingDeclan that:
3.1.1 (a) the Corporation is a corporation duly incorporated, organized Vendor has the legal capacity 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 good and full right and authority to own its assets and to carry on the Business enter into this Agreement and has made all necessary filings under all applicable corporate, securities the capacity and taxation Laws or any other Laws full right and authority to which transfer the Corporation is subject legal and is qualified to own its properties beneficial title 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 ownership of the Corporation Talos Shares and (ii) the number stock options of Shares of the Corporation which are issued and outstandingTalos, which shares have been validly issued as fully paid and non-assessable and applicable, registered in the names of Vendor's name to Declan in accordance with 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 Schedule 3.1.3;
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 2.1.1provisions hereof, free and clear of all Liens, options encumbrances and any to perform all other rights of othersobligations to be performed by him hereunder;
3.1.6 there (b) the Vendor is not under any obligation, contractual or otherwise, to request or obtain the consent of any Person, and no contractpermits, option licenses, certifications, authorizations 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, assignapprovals of, or grant notifications to, any Lien on Person are required to be obtained by the Vendor in connection with the execution, delivery or affecting, or in any other way dispose of or encumber any of performance by 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 Vendor of this Agreement and the Ancillary Agreements nor completion of any of the transactions contemplated herein;
(c) this Agreement has been duly executed and delivered by the Vendor and this Agreement constitutes a legal, valid and binding obligation of the Vendor enforceable against him in accordance with its terms, subject only to any limitation under applicable laws relating to: (i) bankruptcy, winding-up, insolvency, arrangement and other laws of general application affecting the enforcement of creditors' rights; and (ii) the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction;
(d) the Vendor is the registered and beneficial owner of the Talos Shares and the stock options of Talos, as applicable, registered in the Vendor's name, free and clear of all liens, charges, pledges, security interests, demands, adverse claims, rights or any other encumbrances whatsoever and, other than pursuant to this Agreement, no Person has any right, option, agreement or arrangement capable of becoming an agreement for the acquisition of any of the Talos Shares or stock options of Talos registered in the Vendor's name or any interest therein;
(e) there are no shareholders' agreements, pooling agreements, voting trusts or other similar agreements to which the Vendor is party, or otherwise with respect to the ownership or voting of any of the Talos Shares registered in the Vendor's name;
(f) the execution, delivery and performance of this Agreement and the completion of the transactions contemplated hereby by each will not constitute or result in a violation of, breach of or default under, or cause the acceleration of any obligations of the Vendors will result in the violation of or require the Consent of any third party pursuant toVendor under:
(i) any the terms of the provisions of the Memorandum or Articles, as amended, of the Corporation;
(ii) any agreement (written or oral), indenture, instrument or understanding or other instrument obligation or restriction to which the Corporation or any of the Vendors Vendor is a party or by which the Corporation or any of the Vendors he 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 ▇▇▇▇▇▇▇▇▇▇ & ▇ompany, 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 any term or provision of any order, approval or judgment of any governmental authority or regulatory body or any laws applicable to 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 May 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 May 31, 1998,
(ii) are true and correct and present fairly the financial position of the Corporation as at May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $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 valuesVendor;
(▇▇▇g) ▇▇▇sent fairly all the Vendor is not a non-resident of Canada within the meaning of the assets and liabilities of the Corporation as at May 31, 1998Tax Act; and
(ivh) 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 representation 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 Vendor in this Agreement, and all dividends which to the date hereof have been declared no statement made in any schedule, exhibit, certificate or paid other document furnished by the Corporation have been duly and validly declared and are fully paid;
3.1.21 the Corporation does not have any liabilityVendor pursuant to this Agreement, obligation or commitment for the payment of Taxes of whatever nature or kindcontains, or interest shall contain, any untrue statement of a Material Fact or penalties with respect theretoomits, except or shall omit, to state any Material Fact necessary to make such as are disclosed in the Financial Statements representation 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 warranty or any penalty or interest thereon and has such statement 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 3misleading.
Appears in 1 contract
Sources: Share Purchase Agreement
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Vendors jointly Each Vendor separately represents and severally represent and warrant warrants to Purchaser as follows as of the Purchaser date hereof with respect to himself or itself only, as the followingcase may be, and acknowledge acknowledges and agrees that the Purchaser is entitled to rely on relying upon 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) connection 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 purchase by it;
3.1.2 Schedule 2.1.1 sets out (i) the authorized capital Purchaser 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 Schedule 3.1.3;
3.1.4 the Purchased Shares constitute notwithstanding any investigation by or on behalf of Purchaser:
(1) the Vendor has taken all of the issued necessary actions and outstanding Shares has all requisite power and authority to enter into and perform this Agreement in the capital stock of the Corporationaccordance with its terms;
3.1.5 each of (2) this Agreement constitutes valid, legal and binding obligations on 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 othersin accordance with its terms;
3.1.6 there is no contract(3) the execution and delivery by the Vendor of this Agreement, option and compliance with its terms shall not breach or any other right of another binding upon or which at any time in the future may become binding uponconstitute a default:
(i) under any provision 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, Vendor’s constitutional documents; 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) under any agreement or other instrument to which the Corporation or any of the Vendors Vendor is a party or by which the Corporation or any of the Vendors Vendor is bound, ; or
(iii) of any order, judgment, decree or other restriction applicable Lawto the Vendor;
3.1.8 (4) the financial statements Purchased Shares set out against the Vendor’s name at Section 2.1 of the Corporation, consisting Disclosure Letter constitute all of the Balance Sheet allotted 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 ▇▇▇▇▇▇▇▇▇▇ & ▇ompany, 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 issued share capital of the Corporation held by the Vendor as at the Balance Sheet Date,
(ii) are true and correct and present fairly the financial position date 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 May 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 May 31, 1998,
(ii) are true and correct and present fairly the financial position of the Corporation as at May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $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;
(▇▇▇) ▇▇▇sent fairly all of the assets and liabilities of the Corporation as at May 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 DateClosing, 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 Purchased 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 (5) the Corporation does Vendor is the sole legal and beneficial owner of the Purchased Shares set out against its name at Section 2.1 of the Disclosure Letter and has the right to and is entitled to transfer the legal and beneficial title to the Purchased Shares in its name at Closing to the Purchaser free from all Encumbrances, without the consent of any other person on the terms set out in this Agreement;
(6) no commitment to create any Encumbrance has been given by any Vendor, nor has any person claimed any right to an Encumbrance over the Purchased Shares of such Vendor;
(7) such Vendor acknowledges that an investment in the Purchaser Shares is not without risk and such Vendor may lose his, her or its entire investment;
(8) such Vendor acknowledges that Purchaser may complete additional financings in the future in order to develop the business of the Purchaser and fund its ongoing development, and such future financings may have a dilutive effect on securityholders of the Purchaser, including such Vendor;
(9) such Vendor acknowledges that the issuance of the Purchaser Shares is exempt from the prospectus requirements of Canadian Securities Laws and, as a result: (i) such Vendor may not receive information that would otherwise be required under Canadian Securities Laws or be contained in a prospectus prepared in accordance with Canadian Securities Laws, and (ii) such Vendor is restricted from using most of the protections, rights and remedies available under Canadian Securities Laws, including statutory rights of rescission or damages;
(10) such Vendor acknowledges that the Purchaser Shares to be issued to such Vendor under this Agreement have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any liabilitystate securities laws and the Purchaser Shares may not be offered or sold in the United States or to a U.S. person except in compliance with the requirements of an exemption from registration under the U.S. Securities Act and any applicable state securities laws;
(11) such Vendor acknowledges that Purchaser is required to file a report of exempt distribution with the Canadian Securities Regulators containing personal information about such Vendor; and that this report of exempt distribution will include the full legal name, obligation residential address, telephone number and email address of such Vendor, the number of Purchaser Shares acquired under this Agreement, the date of the Closing and specific details of the prospectus exemption relied upon under Canadian Securities Laws to complete such purchase, including how such Vendor qualifies for such exemption. By completing this Agreement, such Vendor authorizes the indirect collection of the information described in this Section 3.2(11) by all applicable Canadian Securities Regulators and consents to the disclosure of such information to the public through (i) the filing of a report of trade with all applicable Canadian Securities Regulators and (ii) the filing of this Agreement on SEDAR (including such redactions as permitted under applicable Canadian Securities Regulators as may be agreed by the Purchaser and the Vendors’ Representative);
(12) such Vendor acknowledges that the Purchaser Shares are being offered on a “private placement” basis and will be subject to resale restrictions under Canadian Securities Laws and the rules of the Exchange, and Purchaser may make a notation on its records or commitment give instructions to any transfer agent of the Purchaser Shares in order to implement such resale restrictions;
(13) such Vendor acknowledges that the certificates or DRS statements representing the Purchaser Shares (and any replacement certificate or DRS statement issued prior to the expiration of the applicable hold periods), if any, will bear the following legend in accordance with Canadian Securities Laws: “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [DATE THAT IS 4 MONTHS AND A DAY AFTER THE CLOSING DATE].”
(14) either (i) such Vendor is receiving the Purchaser Shares as principal and is not a resident of the province of British Columbia; or (ii) if such Vendor is a resident of the Province of British Columbia, such Vendor is an “accredited investor” (other than (j), (k) or (l) of that definition) as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions (“NI 45-106”), eligible to purchase the Purchaser Shares pursuant to an exemption from the prospectus requirements of Canada Securities Laws and:
(a) confirms that it complies with the criteria for reliance on the prospectus exemption and confirms the truth and accuracy of all statements made in such certificate as of the date of this supplement
(b) understands that the Purchaser is required to verify that such Vendor satisfies the relevant criteria to qualify for the payment prospectus exemption; and
(c) may be required to provide additional information or documentation to evidence compliance with the prospectus exemptions;
(15) such Vendor has knowledge in financial and business affairs, is capable of Taxes evaluating the merits and risks of whatever nature or kind, or interest or penalties with respect thereto, except such as are disclosed an investment in the Financial Statements or Purchaser Shares, and is able to bear the economic risk of such Taxes not yet due investment even if the entire investment is lost;
(16) such Vendor has been independently advised as have arisen since the Balance Sheet Date in the usual to and ordinary course of business and for which adequate provision in the accounts is aware of the Corporation has been made, and the Corporation is not in arrears resale restrictions under Canadian Securities Laws with respect to the Purchaser Shares;
(17) no Person has made any required withholdings oral or instalment payments written representations to such Vendor: (i) that any Person will resell or other payments repurchase the Purchaser Shares; (ii) that any Person will refund the purchase price of the Purchaser Shares; (iii) as to the future value or price of any Tax of the Purchaser Shares; or duty (iv) as to the liquidity of any kind the Purchaser Shares;
(18) such Vendor acknowledges and understands that Purchaser and its officers and affiliates possess material non-public information which may not be known to Vendor that may impact the value of the Purchaser Shares (the “Information”); and such Vendor understands, based on its experience, the disadvantage to which Vendor is subject due to the disparity of information between the Purchaser and the Purchaser, and notwithstanding this, Vendor has deemed it appropriate to engage in the transactions contemplated under this Agreement;
(19) such Vendor agrees that Purchaser and its Affiliates, officers, directors, stockholders, partners, employees and agents shall have no liability to Vendor or any penalty its grantor or interest thereon and beneficiaries, whatsoever (other than to the extent such Information is required to, but has not filed any waiver for a taxation year been, be disclosed under Canadian Securities Laws) due to or in connection with Purchaser’s use or non-disclosure of the Corporation Information or otherwise as a result of the transactions contemplated under the Income Tax Act (Canada) or this Agreement, and such Vendor hereby irrevocably waives any other legislation imposing Tax claim that it might have based on the Corporation; all obligations failure of the Purchaser to disclose the Information; and
(20) such Vendor acknowledges that it has taken its own tax and/or legal advice regarding the terms of this Agreement and neither the Purchaser and/or the Corporation with respect shall have any liability to its employees for withholding Taxes, Canada Pension Plan contributions, unemployment insurance contributions and workers compensation remittances or contributions of any kind which are the Vendor in relation to tax due from them as a result of the Closing Date will have been paid transactions contemplated by the Corporation prior this Agreement including but not limited 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 receipt of the Corporation as disclosed Purchaser Shares by them 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 part consideration for the Premises Leases, the Personal Property Leases and the employment agreement with the Vendors listed on Schedule 3sale of their Purchased Shares.
Appears in 1 contract
Sources: Share Purchase Agreement
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. 2.1 Representations and Warranties of the Vendors The Vendors represent and warrant, jointly and severally represent and warrant severally, to the Purchaser the followingClipclop, and acknowledge that the Purchaser is entitled to rely on such as continuing representations and warranties notwithstanding which are true and correct on the date hereto or, if any due diligence investigation done by such representation and warranty is expressed to be made and given in respect of a particular date other than the Purchaser prior date hereto, then such representation and warranty shall be true and correct on the earlier of such date or the Closing Date (as defined herein), and all representations and warranties herein shall be true and correct on each day thereafter to and including the closingClosing Date with the same effect as if made and given on and as of each such day, that:
3.1.1 (a) each Vendor is the Corporation is a corporation duly incorporated, organized and subsisting under sole beneficial owner of the laws of British Columbia as a private issuer as that term is defined membership interest 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 Company as a percentage 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 total membership interest of the Vendors Company as is hereinafter set forth on Schedule 2.1.1;
3.1.3 a true and complete copy opposite each Vendor's name (collectively the "Vendors' Interests"): Name of Vendor % of Total Membership Interest of the Memorandum and Articles of the Corporation, including the rights, privileges, restrictions and conditions attached to the Shares are attached hereto as Schedule 3.1.3;
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 Company ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 31.25% ▇▇▇▇▇ ▇▇▇▇ 31.25% ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 25.00% ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇ompany12.50%
(b) the Vendors' Interests are free and clear of any actual, chartered accountantspending, thereon or threatened hold periods, liens, charges, claims, options, set-offs, encumbrances, voting agreements, voting trusts, escrow restrictions or other limitations or restrictions of any nature whatsoever, except as expressly provided for or disclosed herein;
(c) the Vendors' Interests represent 100% of the Company's issued and outstanding membership interests;
(d) no person, firm or corporation has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option to purchase or otherwise acquire any of the Vendors' Interests;
(e) each Vendor has the full and absolute right, power and authority to enter into this Agreement on the terms and subject to the conditions herein set forth, to carry out the transactions contemplated hereby and to transfer to Clipclop on the Closing Date, legal and beneficial title and ownership of his portion of the Vendors' Interests;
(f) each of the Vendors acknowledges that the Exchange Shares (as defined herein) to be issued pursuant to this Agreement have not been registered pursuant to the securities laws of any jurisdiction and are being issued pursuant to exemptions from registration contained in the Securities Act (British Columbia)(the "B.C. Securities Act") and the notes thereto United States Securities Act of 1933, as amended (hereinafter collectively referred to as the "Financial Statements1933 Act"), and the Exchange Shares may only be sold in a copy of which is attached hereto as Schedule 3.1.8:
(i) are jurisdiction in accordance with the books and accounts restrictions on resale prescribed under the laws of the Corporation as at the Balance Sheet Date,
(ii) jurisdiction in which such shares 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 appliedsold, and
(iv) present fairly all of which may vary depending on 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 May 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 May 31, 1998,
(ii) are true and correct and present fairly the financial position of the Corporation as at May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $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 valuesjurisdiction;
(▇▇▇g) ▇▇▇sent fairly all each of the assets Vendors is aware that Clipclop is a "reporting issuer" as defined in the B.C. Securities Act and liabilities as a consequence the Exchange Shares are restricted from transfer within the province of the Corporation as at May 31, 1998British Columbia for a period of twelve (12) months after issuance; and
(ivh) have been prepared in accordance with accounting principles consistent with the principles of GAAP used in the preparation each of the Balance Sheet;
3.1.10 since the Balance Sheet Date, the Business of the Corporation Vendors 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 authorized, executed 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 3delivered this Agreement.
Appears in 1 contract
Sources: Share Exchange Agreement (Worldwide Technologies Inc)
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Vendors represent and warrant, jointly and severally represent and warrant severally, to the Purchaser the followingWorldwide, and acknowledge that the Purchaser is entitled to rely on such as continuing representations and warranties notwithstanding which are true and correct on the date hereto or, if any due diligence investigation done by such representation and warranty is expressed to be made and given in respect of a particular date other than the Purchaser prior date hereto, then such representation and warranty shall be true and correct on the earlier of such date or the Closing Date (as defined herein), and all representations and warranties herein shall be true and correct on each day thereafter to and including the closingClosing Date with the same effect as if made and given on and as of each such day, that:
3.1.1 (a) each Vendor is the Corporation is a corporation duly incorporated, organized and subsisting under sole beneficial owner of the laws of British Columbia as a private issuer as that term is defined membership interest 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 Company as a percentage 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 total membership interest of the Vendors Company as is hereinafter set forth on Schedule 2.1.1;
3.1.3 a true and complete copy opposite each Vendor's name (collectively the "Vendors' Interests"): Name of Vendor % of Total Membership Interest of the Memorandum and Articles of the Corporation, including the rights, privileges, restrictions and conditions attached to the Shares are attached hereto as Schedule 3.1.3;
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 Company ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 50.00% ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇ompany, chartered accountants, thereon and the notes thereto (hereinafter collectively referred to as the "Financial Statements"), a copy of which is attached hereto as Schedule 3.1.8:50.00%
(ib) the Vendors' Interests are in accordance with the books free and accounts clear of the Corporation any actual, pending, or threatened hold periods, liens, charges, claims, options, set-offs, encumbrances, voting agreements, voting trusts, escrow restrictions or other limitations or restrictions of any nature whatsoever, except 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, expressly provided for the period ended on May 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 May 31, 1998,
(ii) are true and correct and present fairly the financial position of the Corporation as at May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $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 valuesdisclosed herein;
(▇▇▇c) ▇▇▇sent fairly all the Vendors' Interests represent 100% of the assets Company's issued and liabilities outstanding membership interests;
(d) no person, firm or corporation has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option to purchase or otherwise acquire any of the Corporation as at May 31Vendors' Interests;
(e) each Vendor has the full and absolute right, 1998power and authority to enter into this Agreement on the terms and subject to the conditions herein set forth, to carry out the transactions contemplated hereby and to transfer to Worldwide on the Closing Date, legal and beneficial title and ownership of his portion of the Vendors' Interests; and
(ivf) have been prepared in accordance with accounting principles consistent with the principles of GAAP used in the preparation each of the Balance Sheet;
3.1.10 since the Balance Sheet Date, the Business of the Corporation Vendors 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 authorized, executed 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 3delivered this Agreement.
Appears in 1 contract
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The Representations and Warranties. Except as disclosed in the Vendors’ Disclosure Letter, the Vendors jointly and severally hereby represent and warrant warrant, on a joint and several basis, to the Purchaser, with the intent that the Purchaser shall rely thereon in entering into this Agreement and in concluding the Transactions, both at the date hereof and at the Closing Time, that:
(a) the ▇▇▇▇▇▇▇ Shares (which include the Purchased Shares) are the property of the Vendors, the Vendors have good and marketable title to the ▇▇▇▇▇▇▇ Shares (which include the Purchased Shares) and the Vendors have the complete and exclusive right and authority to sell, transfer, assign and deliver the Purchased Shares to the Purchaser the following, free and acknowledge that the Purchaser is entitled to rely on such representations and warranties notwithstanding clear of 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 itLien whatsoever except Permitted Liens;
3.1.2 Schedule 2.1.1 sets out (ib) as at the date hereof, the authorized share capital of the Corporation and (ii) the number ▇▇▇▇▇▇▇ consists of Shares 28,272,347 ▇▇▇▇▇▇▇ Shares, all of the Corporation which are validly issued and outstanding, which shares have been validly issued outstanding 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 Schedule 3.1.3;
3.1.4 the Purchased Shares constitute all of the issued and outstanding Shares 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 ▇▇▇▇▇▇▇;
(c) none of the ▇▇▇▇▇▇▇ & Shares are subject to escrow restrictions, pooling arrangements, or voting trusts, whether voluntary or otherwise;
(d) no person other than the Purchaser hereunder has any contract or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming a contract for the purchase or acquisition from the Vendors of any of the ▇ompany▇▇▇▇▇▇ Shares (which includes the Purchased Shares);
(e) no person has any contract or any right or privilege (whether by law, chartered accountantspre- emptive or contractual) capable of becoming a contract, thereon including convertible securities, warrants or convertible obligations of any nature, for the purchase, subscription, allotment or issuance of any issued or un-issued shares, or other securities of ▇▇▇▇▇▇▇;
(f) the board of directors of ▇▇▇▇▇▇▇ has approved the sale and transfer of the Purchased Shares in connection with this Agreement;
(g) this Agreement has been duly executed and delivered by the Vendors and (assuming due execution and delivery by the Purchaser) is a legal, valid and binding obligation of the Vendors enforceable against them in accordance with its terms, except as that enforcement may be limited by bankruptcy, insolvency and other similar laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction;
(h) no Permit, Authorization or consent of any third party is necessary for the consummation by the Vendors of the sale and transfer of the Purchased Shares or the execution and delivery of this Agreement, and the notes thereto consummation by the Vendors of the Transactions will not result in a violation or breach of, or constitute (hereinafter collectively referred with or without due notice or lapse of time or both) a default under any indenture, agreement or other instrument to as which ▇▇▇▇▇▇▇ or the "Financial Statements")Vendors are a party or by which they are bound;
(i) the execution and delivery by the Vendors of this Agreement and the performance by them of their covenants hereunder (including the transfer of the Purchased Shares) do not and will not violate, conflict with or result in a copy breach of which is attached hereto as Schedule 3.1.8any provision of the constating documents of ▇▇▇▇▇▇▇ and will not:
(i) are violate, conflict with or result in accordance with the books and accounts a breach of:
A. any agreement, Contract, indenture, deed of the Corporation as at the Balance Sheet Date,trust, mortgage, bond, instrument, Authorization, licence or permit to which ▇▇▇▇▇▇▇ is a party, or by which ▇▇▇▇▇▇▇ is bound; or
B. any Laws to which ▇▇▇▇▇▇▇ or is subject or by which ▇▇▇▇▇▇▇ is bound;
(ii) are true and correct and present fairly give rise to any right of termination, or the financial position acceleration of the Corporation as at the Balance Sheet Date,any indebtedness, under any such agreement, Contract, indenture, Authorization, deed of trust, mortgage, bond, instrument, licence or permit to which ▇▇▇▇▇▇▇ is a party, or by which ▇▇▇▇▇▇▇ is bound;
(iii) have been prepared result in accordance with GAAP consistently appliedthe creation or imposition of any Liens upon any of the properties or assets of ▇▇▇▇▇▇▇ or restrict, andhinder, impair or limit the ability of ▇▇▇▇▇▇▇ to conduct its business as and where it is now being conducted; or
(iv) present fairly all of the assets and liabilities of the Corporation except 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 May 31, 1998 (hereinafter collectively referred waived pursuant to as the "Interim Financial Statements"Section 2.5(g), a copy give rise to any rights of which is attached hereto as Schedule 3.1.9:
(i) are first refusal or rights of first offer, trigger any change in accordance with the books and accounts control or influence provisions or any restriction or limitation under any such agreement, Contract, indenture, Authorization, deed of the Corporation as at May 31trust, 1998,
(ii) are true and correct and present fairly the financial position of the Corporation as at May 31mortgage, 1998bond, subject only to usual and proper adjustmentsinstrument, which will not exceed, in aggregate, $30,000 and without provision for income licence 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 valuespermit;
(▇▇▇) ▇▇▇sent fairly all of the assets and liabilities of the Corporation as at May 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, (iiij) there is currently no outstanding default by the Corporation under the Premises Leases nor is there currently any outstanding default by any landlord thereunder court, administrative, regulatory or dispute between the Corporation and any landlord under any of the Premises Leases; similar proceeding (iv) the Corporation has not subletwhether civil, assigned quasi-criminal 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 effectcriminal), 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 arbitration or other interest in dispute settlement procedure, investigation or right affecting any real estate inquiry before 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, or any claim, action, suit, demand, arbitration, charge, indictment, hearing or other similar civil, quasi-criminal or criminal, administrative or investigative matter or proceeding (collectively, “Proceedings”) against or involving the Vendors, ▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇ Properties (whether in progress or, to the knowledge of the Vendors or ▇▇▇▇▇▇▇, threatened). There is no judgment, writ, decree, injunction, rule, award or order of any Governmental Authority outstanding against ▇▇▇▇▇▇▇ in respect of its businesses, properties or assets or against either of the Vendors or ▇▇▇▇▇▇▇;
(k) ▇▇▇▇▇▇▇ is duly incorporated and organized, and is validly subsisting and in good standing as a corporate entity under the Laws of Peru and has full right and authority to acquire and hold recorded title to the ▇▇▇▇▇▇▇ Properties;
(l) the Vendors have disclosed and delivered to the Purchaser, or will at Closing, deliver to the Purchaser, all information and data in the possession or under the control of the Vendors including, without limitation, all historical documentation with respect to title, all geological, geophysical and assay results, maps, environmental studies, tests and assessments and notification from regulatory authorities, and corporate records, concerning ▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ Properties (including buildingany prior exploration, environmentaldevelopment, firereclamation and remediation work carried out on the ▇▇▇▇▇▇▇ Properties and within the Vendor’s or ▇▇▇▇▇▇▇’▇ knowledge);
(m) ▇▇▇▇▇▇▇ has filed all applicable Tax returns required to be filed to date and has paid, healthor made provisions for the payment of, labour all Taxes and no assessments have been issued and no re-assessments have been made questioning or police authoritieschallenging in any way the returns filed;
(n) [Commercially sensitive information redacted]
(o) other than this Agreement, the Existing Explora Services Agreement and the agreements pursuant to which it acquired the ▇▇▇▇▇▇▇ Properties, ▇▇▇▇▇▇▇ has not entered into any Contracts, written or verbal agreements, obligations or liabilities of any nature to any person;
(p) ▇▇▇▇▇▇▇ has not made any payment or loan to, or borrowed any moneys from or is otherwise indebted to the Vendors, except for indebtedness owing to the Vendors or subsidiaries of either of the Vendors that shall be capitalized for the issuance of ▇▇▇▇▇▇▇ Shares before the Closing Date;
(q) ▇▇▇▇▇▇▇ has no liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise, and is not a party to or bound by any agreement of guarantee, support, indemnification, assumption or endorsement of, or any other similar commitment with respect to the liabilities, obligations, indebtedness or commitments (whether accrued, absolute, contingent or otherwise) of any entity, except for indebtedness owing to the Vendors or subsidiaries of either of the Vendors that shall be capitalized for the issuance of ▇▇▇▇▇▇▇ Shares before the Closing Date;
(r) ▇▇▇▇▇▇▇ was incorporated on August 13, 2018, and other than its ownership of the ▇▇▇▇▇▇▇ Properties, has not carried on any business activity and has never had any employees;
(s) except for the Purchaser’s rights pursuant to this Agreement, no person has any agreement, Contract or option or any right or privilege capable of becoming an agreement or option for the purchase the whole or part of the assets of ▇▇▇▇▇▇▇ (including the ▇▇▇▇▇▇▇ Properties), and there are no matters active areas of mutual interest provisions or areas of exclusion in any contracts binding upon ▇▇▇▇▇▇▇, or otherwise to which the assets of ▇▇▇▇▇▇▇ (including the ▇▇▇▇▇▇▇ Properties) are subject;
(t) ▇▇▇▇▇▇▇ is not in conflict with, or in default (including cross defaults) under discussion or in violation of: (i) its constating documents or, as applicable, equivalent organizational documents; or (i) any agreement, Contract or understanding to which it or by which any of the ▇▇▇▇▇▇▇ Properties in which it has a controlling interest or an option to acquire a controlling interest is bound or affected;
(u) to the knowledge of the Vendors, each of ▇▇▇▇▇▇▇ and the respective predecessors in title to the ▇▇▇▇▇▇▇ Properties have (prior to ownership by the Vendors) conducted their activities in compliance with all applicable Laws, including Environmental Laws, tariffs and directives of each jurisdiction in which the ▇▇▇▇▇▇▇ Properties are located and possesses all Authorizations issued by the appropriate provincial, state, municipal, federal or other regulatory agency or body necessary to carry on the business currently carried on by it, is in compliance in all material respects with the terms and conditions of all such Authorizations and with all Laws, tariffs and directives, and ▇▇▇▇▇▇▇ has not received any notice of the modification, revocation or cancellation of, or any intention to modify, revoke or cancel or any proceeding relating to the modification, revocation or cancellation of any such Governmental Authority relating to orders, notices or similar requirementsAuthorization;
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 (v) neither ▇▇▇▇▇▇▇ nor 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 liabilitydirectors, obligation or commitment for the payment of Taxes of whatever nature or kindofficers, supervisors, managers, employees, or interest or penalties with respect theretoagents has: (i) violated any applicable anti-bribery, 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 madeanti- corruption, export control, and economic sanctions Laws, including the Corporation is not in arrears with respect to any required withholdings or instalment payments or other payments Corruption 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 Foreign Public Officials Act (Canada) or any other legislation imposing Tax on and the Corporation; all obligations of United States Foreign Corrupt Practice Act, including 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 Leasesapplicable Peruvian Anti-Money Laundering Laws, the Personal Property Leases Peruvian Criminal Code, Law No. 30424 and the employment agreement with the Vendors listed on Schedule 3.its regulations approved by Supreme Decree No. 002-2019-JUS, as amended;
Appears in 1 contract
Sources: Share Purchase Agreement
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. Representations and Warranties
3.01 The Vendors jointly and severally hereby represent and warrant to the Purchaser Purchaser, with the following, and acknowledge intent that the Purchaser is entitled to shall rely on such representations thereon in entering into this Agreement and warranties notwithstanding any due diligence investigation done by in concluding the Purchaser prior transactions contemplated hereby, that to the closingbest of the Vendors' knowledge, information and belief:
3.1.1 (a) KAS does not have any material outstanding indebtedness or any liabilities or obligations (whether accrued, contingent or otherwise) exceeding $10,000 in the Corporation is a corporation aggregate;
(b) no person has any agreement or option, present or future, contingent, absolute or capable of becoming an agreement or option or which with the passage of time or the occurrence of any event could become an agreement or option to acquire the KAS Shares;
(c) the Vendors are the registered holders and beneficial owners of and have good marketable title to the KAS Shares, free and clear of all liens, charges and encumbrances whatsoever;
(d) the KAS Shares have been duly incorporated, organized and subsisting under the laws of British Columbia validly allotted and issued and are outstanding 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 Schedule 3.1.3;
3.1.4 the Purchased Shares constitute all of the issued and outstanding Shares shares in the capital stock of KAS;
(e) the Vendors have good and sufficient right and authority to enter into this Agreement on the terms and conditions herein contained and to transfer the legal and beneficial title of the CorporationKAS Shares to the Purchaser;
3.1.5 each (f) assuming this Agreement is a valid, binding and enforceable obligation of the Vendors is the beneficial Purchaser and registered owner assuming satisfaction or waiver of the number of Purchased Shares set opposite the name of such Vendor on Schedule 2.1.1conditions precedent in section 4.01 and 4.04, free this Agreement shall constitute a valid, binding 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 enforceable obligation of the Vendors. On Closing, the Vendors will not be a party to, bound by or subject to sellany indenture, transfermortgage, assignlease, agreement, instrument, statute, regulation, order, judgment, decree or grant law which would be violated, contravened or breached by or under which any Lien on or affecting, or in any other way dispose of or encumber any default would occur as a result of the Purchased Shares other than pursuant to execution and delivery by the provisions Vendors of this Agreement or any the performance by the Vendors of its assets other than in the ordinary course of business, or
(ii) the Corporation to allot or issue any of the unissued shares terms hereof; and
(g) at Closing KAS will not be indebted to the Vendors or securities any employees or directors of the Corporation Vendors or to create the Vendors' general partner or any additional class affiliate or associate of shares or securities;the Vendors, on any account whatsoever.
3.1.7 except as disclosed on Schedule 3.1.7, neither the entering into nor the delivery of this Agreement 3.02 The representations and the Ancillary Agreements nor warranties contained in section 3.01 shall survive 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 this Agreement 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 ▇▇▇▇▇▇▇▇▇▇ & ▇ompany, 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 May 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 May 31, 1998,
(ii) are true and correct and present fairly the financial position of the Corporation as at May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $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;
(▇▇▇) ▇▇▇sent fairly all of the assets and liabilities of the Corporation as at May 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 shall continue in full force and effecteffect for the benefit of the Purchaser until the earlier of three (3) years from the date of this Agreement or dissolution of the Vendors, unamended by oral whichever occurs first, notwithstanding any independent enquiry 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 investigation 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 3Purchaser.
Appears in 1 contract
Sources: Share Purchase Agreement (Fidelity Capital Concepts LTD)
REPRESENTATIONS AND WARRANTIES OF THE VENDORS. The 3.01 In order to induce the Purchaser to enter into and to complete the transactions contemplated by this Agreement, the Vendors jointly represents and severally represent 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 closingthat:
3.1.1 a) The Vendor is the Corporation is a corporation duly incorporatedrecorded and beneficial owner of 100% of the Properties described in Schedule A to this Agreement and, organized and subsisting under has the laws of British Columbia as a private issuer as that term is defined in the Securities Act (British Columbia) with the corporate power right to own its assets enter into this Agreement and to carry on sell and assign 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 Schedule 3.1.3;
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, Properties free and clear of all Liens, options and any other rights of othersliens or encumbrances;
3.1.6 there is no contract, option or any other b) The Vendor has the 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 enter into this Agreement or any of its assets other than in to sell and assign 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 ▇▇▇▇▇▇▇▇▇▇ & ▇ompany, 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 May 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 May 31, 1998,
(ii) are true and correct and present fairly the financial position of the Corporation as at May 31, 1998, subject only to usual and proper adjustments, which will not exceed, in aggregate, $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;
(▇▇▇) ▇▇▇sent fairly all of the assets and liabilities of the Corporation as at May 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, Properties free and clear of any lends and encumbrances and to become the recipient of the consideration to be paid for Properties;
c) The Mineral Claim comprising the Properties have been property staked and recorded in compliance with all Lienslaws and regulations of the Province of British Columbia and there are no disputes over the title, options and any other rights the staking or recording of others, except for the Liens described on Schedule 3.1.12 of all assets shown or reflected mineral prospets on the Balance SheetProperties, except only such or outstanding agreements or options to acquire or purchase the Properties or any protion thereof, and no person has any royal or other interest whatsoever in production from any of the assets of crown grant claims which comprise 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 DateProperties;
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"d) 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 The Properties are in good standing, and all rental necessary filings, permits and other payments payable by the Corporation under the leases have necessary documentation has 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 made 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 received from 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 agreementregulatory authorities, and the Corporation is entitled to the full benefit properties are free and advantage clear of each Personal Property Lease in accordance with the terms thereofany liens, (ii) each Personal Property Lease is in good standing, all rental and other payments payable charges or encumbrances or claims 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 thereunderof any nature or kind whatsoever;
e) Neither the Vendor, nor any predecessor in the interest or title, has done anything whereby the Properties may become encumbered; and
f) There are no pending or threatened actions, suits, claims or proceedings regarding the Properties.
3.02 The Vendor shall indemnify and save the Purchaser harmless from all loss, damage, costs, actions, and (iv) the Corporation has treated all Personal Property Leases as operating leases for Canadian income tax purposes;suits arising out of or in connection with any breach of any representation, warranty, covenant, agreement or condition made by it and contained in this agreement.
3.1.16 except 3.03 The representations and warranties contained in this paragraph are provided 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 exclusive benefit 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 authoritiesPurchaser, and there are no matters under discussion with a breach of any such Governmental Authority relating to orders, notices one 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 more thereof may be waived by the Corporation since the Balance Sheet Date;
3.1.20 except as disclosed on Schedule 3.1.20, no dividends have been declared Purchaser in whole or paid on or in part at any time without prejudice to its rights in respect of the Shares and no any 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 breach 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) same or any other legislation imposing Tax on representation or warranty.
3.04 The representations and warranties contained in this Paragraph shall survive the Corporation; execution hereof.
3.05 On Closing, the Vendor shall deliver duly executed transfer forms to the Purchaser so that The Purchaser can make all obligations required filings to record the transfer 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 title to the Closing Date; there are no outstanding disputes with or assessments from Properties to 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 3Purchaser.
Appears in 1 contract
Sources: Mining Contract (Ugods, Inc.)