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ASSET PURCHASE AND SALE AGREEMENT

Asset Purchase Agreement

ASSET PURCHASE AND SALE AGREEMENT | Document Parties: CHROMADEX CORP. | Calgary, AB | CHROMADEX CORPORATION | NEUTRISCI INTERNATIONAL INC You are currently viewing:
This Asset Purchase Agreement involves

CHROMADEX CORP. | Calgary, AB | CHROMADEX CORPORATION | NEUTRISCI INTERNATIONAL INC

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Title: ASSET PURCHASE AND SALE AGREEMENT
Governing Law: New York     Date: 3/29/2013
Industry: Biotechnology and Drugs     Sector: Healthcare

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Exhibit 10.1

ASSET PURCHASE AND SALE AGREEMENT

 

THIS AGREEMENT is dated as of the 28 th day of March 2013

 

BETWEEN:

 

NEUTRISCI INTERNATIONAL INC, a corporation incorporated pursuant to the laws of the Province of Alberta (hereinafter called the “ Purchaser ”)

 

- and -

 

CHROMADEX CORPORATION., a corporation incorporated pursuant to the laws of the State of Delaware (hereinafter called the “ Vendor ”)

 

WHEREAS:

 

A.

the Vendor carries on the business of manufacture, distribution, marketing and sale of the products containing pterostilbene marketed by the Vendor under the brand, “BlūScience”; and

 

B.

the Purchaser desires to purchase and the Vendor desires to sell the Purchased Assets (defined hereafter) of the Business for the Purchase Price (defined hereafter) and upon the terms and conditions hereinafter set forth;

 

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants, agreements, warranties and payments hereinafter set forth, the parties hereto agree as follows:

 

ARTICLE 1   - INTERPRETATION

 

1.1   Definitions .  Whenever used in this Agreement, unless there is something in the subject matter or context inconsistent therewith, the following words and phrases shall have the respective meanings ascribed to them as follows:

 

(a)  

Agreement ” means this asset purchase and sale agreement and any instrument amending this Agreement;

 

(b)  

Assumed Liabilities ” has the meaning given in Section 3.3 of this Agreement;

 

(c)  

Bulk Sales Legislation  means the bulk sales laws and regulations of any other jurisdiction, domestic or foreign;

 

(d)  

Business ” means the manufacture, distribution, marketing and sale of the products containing pterostilbene marketed by the Vendor under the brand, “BlūScience”, including, but not limited to the products under the names, “HeartBlū”, “MemoryBlū”, “EternalBlū”, “TrimBlū” and “Blū2Go”;

 

(e)  

Business Day ” means every day other than Saturday, Sunday or any other day on which the principal banks located in either New York,  New York  or Calgary, Alberta are not open for business during normal banking hours;

 

(f)  

Closing ” means the completion of the transactions herein contemplated, including the sale to and purchase by the Purchaser of the Purchased Assets hereunder as herein contemplated;

 

(g)  

Closing Date ” means March 27, 2013 or such earlier or later date as may be agreed upon;

 

 

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(h)  

Debt Instrument  means any bond, debenture, promissory note or other instrument evidencing indebtedness for borrowed money or other liability;

 

(i)  

Encumbrance ” means any mortgage, charge, easement, encroachment, lien, adverse claim, assignment by way of security, security interest, servitude, pledge, hypothecation, conditional sale agreement, security agreement, title retention agreement, financing statement or other encumbrance;

 

(j)  

Excluded Assets ” means the property and assets referred to in Section 3.2;

 

(k)  

Financial Statements ” means the unaudited financial statements of the Vendor relating to the Business as at the Financial Year End, a copy of which is annexed hereto as Schedule 1.1(k) ;

 

(l)  

Financial Year End ” means  December 31 st of each calendar year;

 

(m)  

Intellectual Property ” means the rights provided in law to patents, trademarks, copyrights, industrial designs, formulae, software, firmware, trade secrets, know-how, show how, concepts, information and other intellectual and industrial property as applicable;

 

(n)  

Inventory ” means all raw materials, works in process and finished goods, of every kind and nature, and wheresoever situated owned by the Vendor relating to the Business including, without limitation, the Inventory listed and described in Schedule 1.1(l) at the time of Closing;

 

(o)  

Legal Proceeding ” means any litigation, action, suit, investigation, hearing, claim, complaint, grievance, arbitration proceeding or other proceeding with any third party or governmental or regulatory authority and includes any appeal or review and any application for same;

 

(p)  

Letter of Intent ” means the letter of intent entered into by the Vendor and the Purchaser dated February 8, 2013, as amended on March 20, 2013;

 

(q)  

NSI Financial Statements ” has the meaning given in Section 6.1(k) of this Agreement;

 

(r)  

NSI Shares ” has the meaning given in Section 4.1(d) of this Agreement

 

(s)  

Permitted Encumbrances ” means those Encumbrances described in Schedule1.1(s);

 

(t)  

Person ” means any individual, corporation, firm, partnership, sole proprietorship, syndicate, joint venture, trustee, trust and any unincorporated organization or association;

 

(u)  

Purchased Assets ” means the property and assets described in Section 3.1;

 

(v)  

Purchase Price ” means the purchase price payable by the Purchaser to the Vendor for the Purchased Assets provided for in Article 4;

 

(w)  

Purchaser's Representatives ” means the directors, officers, employees, auditors, legal counsel and fiscal and tax advisors of the Purchaser and any other Person authorized by the Purchaser to represent the Purchaser;

 

(x)  

Royalty Agreement ” means the royalty agreement dated March 28, 2013 between the Purchaser and the Vendor in the form attached hereon as Exhibit E ;

 

(y)  

Security Agreement ” means the security agreement dated March 28, 2013 between the Purchaser in favor of the Vendor in the form attached hereto as Exhibit A securing the purchaser’s obligations to the Vendor pursuant to the Senior Secured Note;

 

 

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(z)  

Senior Secured Note ” means the senior secured convertible promissory note for the principal amount of $2,500,000 in the form attached hereto as Exhibit B and secured by the Collateral (as defined in the Security Agreement);

 

(aa)  

Subsidiary Guarantee  means the subsidiary guarantee dated March 28, 2013 by Britlor Health and Wellness, Inc., a wholly-owned subsidiary of the Purchaser (the “ Subsidiary ”), in the form attached hereto as Exhibit C ;

 

(bb)  

Supply Agreement ” means the supply agreement dated March 28, 2013 between the Purchaser and the Vendor in the form attached hereto as Exhibit D ;

 

(cc)  

Taxes ” means all taxes payable under any applicable Tax Legislation, including, without limitation, income taxes, excise taxes, sales taxes, goods and services taxes, transfer taxes, property and municipal and school taxes, capital taxes, import and customs, duties and other governmental charges and assessments , and includes additions by way of penalties, interest, fines and other amounts with respect thereto;

 

(dd)  

Tax Legislation ” means, collectively, the Canadian Income Tax Act, R.S.C. 1985, c.1 (5 th Supp.),  the Internal Revenue Code (United States), and the related rules, regulations, interpretation bulletins and releases, orders and decrees of any other jurisdiction, domestic or foreign which may impose a tax of any kind;

 

(ee)  

Time of Closing ” means 12:01 am ( Eastern Standard Time) on the Closing Date or such other time on the Closing Date as the parties may agree as the time at which the Closing shall take place; and

 

(ff)  

Transaction Documents ” means this Agreement, the Senior Secured Note, the Security Agreement, the Subsidiary Guarantee, the Supply Agreement and any documents, instruments and certificates contemplated therein.

 

1.2   Gender and Number. In this Agreement words importing a specific gender include all genders and words importing the singular include the plural and vice versa.

 

1.3   Currency.   Unless otherwise indicated all dollar amounts referred to in this Agreement, including the symbol $, refer to lawful money of United States of America.

 

1.4   Headings.   The division of this Agreement into Articles and Sections and the use of headings are for convenience of reference only and shall not affect the interpretation of this Agreement.

 

 

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ARTICLE 2   - SCHEDULES

 

2.1   Description of Schedules.   The following are the Schedules attached to and incorporated in this Agreement by reference and deemed to be a part hereof:

 

Schedule 1.1(k)                           Financial Statements

Schedule 1.1(n)                           Inventory

Schedule 1.1(s)                           Permitted Encumbrances

Schedule 3.1(a)                           Intellectual Property Rights

Schedule 3.1(c)                           Accounts Receivable

Schedule 3.1(d)                           Prepaid Expenses

Schedule 3.2                                Excluded Assets

Schedule 3.3                                Assumed Liabilities

Schedule 4.1                                Vendor’s Wire Instructions

Schedule 5.1(j)                            Legal Proceedings

Schedule 6.1(k)                           NSI Financial Statements

Schedule 6.1(v)(i)                       Purchaser’s Share Capitalization and Subsidiaries

Schedule 6.1(w)                          Indebtedness of Purchaser other than as listed on Senior Secured Note and Security Agreement

 

Schedule 8.4                                Assumed Contracts, Obligations or Liabilities

Exhibit A                                      Security Agreement

Exhibit B                                      Senior Secured Note

Exhibit C                                      Subsidiary Guarantee

Exhibit D                                      Supply Agreement

Exhibit E                                       Royalty Agreement

 

ARTICLE 3   - AGREEMENT OF PURCHASE AND SALE

 

3.1   Property and Assets to be Purchased and Sold .  Subject to the terms and conditions hereof, the Vendor agrees to sell, assign and transfer to the Purchaser and the Purchaser agrees to purchase as, at and from the Time of Closing, on an as-is and where-is basis all the property and assets of the Business of every kind and description and wheresoever situated, including without limiting the generality of the foregoing:

 

(a)  

Intellectual Property :  all the right, title, benefit and interest of the Vendor in and to all Intellectual Property and concepts, information and business goodwill relating to the Business, including, without limitation, those trademarks  listed and described in Schedule 3.1(a) ;

 

(b)  

Inventory : all Inventory;

 

(c)  

Accounts Receivable :  a portion of the accounts receivable related to or resulting from the Business,  that are listed and described in Schedule 3.1(c) ;

 

(d)  

Prepaid Expenses :  all prepaid expenses and deposits relating to the Business as listed and described in Schedule 3.1(d) ;

 

(e)  

Goodwill : the goodwill of the Business, together with the exclusive right of the Purchaser to represent itself as carrying on the Business in continuation of and in succession to the Vendor and the right to use any words indicating that the Business is so carried on;

 

(f)  

Records :  all books, records, files, customer lists, broker lists and other documentation and written materials relating to the Purchased Assets including, without limitation all inventory, sales and customer records except where the Vendor is required by law to retain a particular book, record, file, document or other written material, it shall retain the original thereof and deliver to the Purchaser a copy thereof;

 

(g)  

Past and Present Customers : all past and present customers related to the Business; and

 

(h)  

Media : all television commercials, radio commercials, campaigns, presentations, brochures, regulatory materials, booth properties, the BlūScience label and the Business website,

 

 

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except to the extent that any of the foregoing are or relate to Excluded Assets.

 

3.2   Excluded Assets .  The property and assets of the Vendor set out and described in Schedule 3.2 hereof shall be excluded from the purchase and sale of property and assets herein contemplated, and shall remain the property of the Vendor.

 

3.3   Assumption of Liabilities .  The Purchaser shall assume, perform, and fulfill those liabilities and obligations of the Vendor with respect to the Business specified in Schedule 3.3 (the “ Assumed Liabilities ”).

 

3.4   Supply Agreement .   Concurrently with the completion of the within purchase and sale of the Purchased Assets, the parties agree to enter into the Supply Agreement.

 

3.5   Royalty Agreement .   Concurrently with the completion of the within purchase and sale of the Purchased Assets, the parties agree to enter into the Royalty Agreement.

 

ARTICLE 4   - PURCHASE PRICE

 

4.1   Purchase Price .  The Purchase Price payable by the Purchaser to the Vendor for the Purchased Assets shall be the sum of $6,178,831 payable at the Time of Closing as follows:

 

(a)  

$250,000 which was previously paid by the Vendor to the Purchaser by bank wire on February 14, 2013;

 

(b)  

$250,000 at Closing and an additional $500,000 (the “ Cash Balance ”) within 60 days of the Closing (the “ Cash Balance Payment Date ”) in each instance, in accordance with the wire transfer instructions set forth on Schedule 4.1 attached hereto.  Upon failure to pay the Cash Balance on or prior to the Cash Balance Payment Date, the Cash Balance will begin to accrue interest at a rate equal to 18% per annum from the Cash Balance Payment Date and shall be considered an Event of Default under the Senior Secured Note. In the event that the Purchaser fails to pay the Cash Balance on or prior to the Cash Balance Payment Date then the outstanding principal amount of the Senior Secured Note shall be increased by the amount of the Cash Balance and shall be payable on demand;

 

(c)  

$2,500,000 payable by the issuance to the Vendor of the Senior Secured Note, payment of which shall be secured by the Security Agreement and the Subsidiary Guarantee; and

 

(d)  

 $2,678,831 payable by the issuance to the Vendor at Closing of  669,708  shares of Series I Preferred Shares that are convertible into  2,678,832 , Class “A” Common Shares in the capital of the Purchaser (the “ NSI Shares ”), representing an aggregate of (19%) of the NSI Shares at a deemed price for each Class A Common Share of $1.00 per share.

 

4.2   Deposit .  The Vendor acknowledges that a non-refundable deposit in the amount of $250,000 has already been paid by the Purchaser.  The parties agree that the full amount of such deposit shall be applied towards the amount required under Section 4.1(a) of this Agreement at the Time of Closing.

 

4.3   Legend .  The parties acknowledge that the NSI Shares have not been registered under the United States Securities Act of 1933, as amended nor under the laws of any state of the United States and that therefore the certificate(s) representing the NSI Shares issued hereunder and the Class A Common Shares issuable upon the conversion of the NSI Shares will bear the following legend:

 

“The securities represented hereby have not been registered under the United States Securities Act of 1933, as amended (the “1933 Act”) or any state securities laws. These securities may be offered, sold, pledged, hypothecated or otherwise transferred or encumbered only (a) outside the United States in compliance with Rule 904 of Regulation S promulgated under the 1933 Act, (b) in compliance with the exemption from the registration requirements under the 1933 Act provided by Rule 144 or Rule 144 thereunder. If available, and in accordance with any applicable state securities laws, or (c) in a transaction that is otherwise exempt from the registration requirements of the 1933 Act and any applicable state laws, and the holder has, prior to such sale, furnished to the company an opinion of counsel or other evidence of exemption, in either case reasonably satisfactory to the company.  Delivery of this certificate may not constitute “good delivery” in settlement of transactions on stock exchanges in Canada.  If these securities are being sold at any time the company is a “foreign issuer” as defined in Rule 902 under the 1933 Act, a new certificate, bearing no legend, the delivery of which will constitute “good delivery” may be obtained from the company's transfer agent upon delivery of this certificate and a duly executed declaration, in form satisfactory to the company and the company's transfer agent to the effect that the sale of the securities is being made in compliance with Rule 904 of Regulation S under the 1933 Act.”

 

 

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4.4   Anti-dilution .

 

(a)  

In the event that the Purchaser issues any common shares of any class or Common Shares Equivalents at a price less than $1.00 per share (the “ Protected Price ”) (other than an issuance pursuant to an option agreement with an employee or otherwise to compensate an employee pursuant to a plan not to exceed 30% of the outstanding capital stock of the Purchaser in the aggregate) (the “ Dilutive Shares ”), concurrently with such transaction, the Purchaser will issue to the Vendor additional Series I Preferred Shares convertible into Class A Common Shares in an amount which provides the Vendor with a percentage interest in the Purchaser which the NSI Shares would have represented had the Dilutive Shares been issued at a price of $1.00 per share. For the purposes of this Agreement, “ Common Shares Equivalent ” means any securities of the Purchaser which would entitle the holder thereof to acquire at any time common shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, common shares.

 

(b)  

In the event that the NSI Shares are: (i) subdivided, redivided or the number of outstanding  NSI Shares is changed into a greater number of  NSI Shares; or (ii) reduced, combined or the number of outstanding NSI Shares is consolidated into a smaller number of  NSI Shares (a “ NSI  Share Reorganization ”), the Protected Price shall be adjusted to the amount determined by multiplying the Protected Price by a fraction:

 

 

A.

the numerator of which shall be the number of NSI Shares outstanding on the date of the NSI Share Reorganization, before giving effect to NSI Common Share Reorganization; and

 

 

B.

the denominator of which shall be the number of NSI Shares which will be outstanding immediately after giving effect to such NSI Share Reorganization.

 

(c)  

This Section 4.4 shall be in effect from the Time of Closing until the later of: (a) the date which is eighteen months from the Closing Date; or (b) the date upon which the Purchaser becomes a reporting issuer in any province or territory of Canada; after which time this Section 4.4 shall immediately expire and shall have no further force or effect.

 

4.5   Transfer Taxes .   The Purchaser shall be liable for and shall pay, either to the Vendor at Closing or directly to the government authority, as required, all transfer taxes, federal, provincial and states sales taxes and all other Taxes or other like charges properly payable upon and in connection with the transfer of the Business and the Purchased Assets to the Purchaser.

 

ARTICLE 5   - REPRESENTATIONS AND WARRANTIES OF THE VENDOR

 

5.1   Representations and Warranties of the Vendor .   The Vendor hereby represents and warrants to the Purchaser as follows and acknowledges that the Purchaser is relying on such representations and warranties in connection with the transactions herein contemplated:

 

(a)  

Organization and Qualification of the Vendor:   The Vendor is a corporation duly incorporated and subsisting under the laws of the State of Delaware. No proceedings have been instituted or are pending for the dissolution or liquidation of the Vendor. The Vendor has the necessary power, authority and capacity to own or lease the Purchased Assets and to carry on the Business as now being conducted by it.

 

(b)  

Due Authorization of Agreement:   The Vendor has the necessary power, authority and capacity to enter into this Agreement, to sell the Purchased Assets to the Purchaser as herein contemplated and to perform its other obligations hereunder. The execution and delivery of this Agreement and the completion of the transactions herein contemplated have been duly and validly authorized by all necessary action on behalf of the Vendor and this Agreement has been duly and validly executed and delivered by the Vendor and is a valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms.

 

 

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(c)  

Conflicting Instruments:   The entering into of this Agreement by the parties hereto, the performance by the Vendor of its obligations hereunder and the completion of the transactions herein contemplated do not and will not conflict with or result in the breach or violation of any of the terms and provisions of (i) the  certificate of incorporation and the bylaws of the Vendor, (ii) subject to Section 8.4 the obtaining of any consent, approval, permit or acknowledgment which may be required thereunder in connection with the completion of the transactions herein contemplated with respect to the Purchased Assets, any licence or registration or any agreement, contract or commitment that the Vendor is a party to or bound by or subject to, or (iii) any law or regulation, domestic or foreign, or any judgment, decree, injunction, ruling, order or award of any tribunal.

 

(d)  

Title to Purchased Assets:   The Vendor is the owner of the Purchased Assets with good and marketable title thereto free of any Encumbrance, except Permitted Encumbrances, and is exclusively entitled to possess and dispose of the same.

 

(e)  

Accuracy of Books and Records:   The books and records of the Vendor relating to the Business fairly and correctly set out and disclose in all material respects the financial position of the Vendor and the Business as at the date hereof and all material financial transactions of the Vendor relating to the Business have been accurately recorded in such books and records in conformity with generally accepted accounting principles.

 

(f)  

Financial Records:   All material financial transactions of the Vendor have been recorded in the financial books and records of the Vendor in accordance with good business practice.

 

(g)  

Financial Statements:   The Financial Statements have been prepared on a basis consistent with those of previous years and present fairly:

 

(i)  

all of the assets, liabilities (whether accrued, absolute, contingent or otherwise) and the financial condition of the Vendor and Business as at the Financial Year End;  and

 

(ii)  

the revenues, earnings and results of operations of the Vendor and Business for the 12 month period ended on the Financial Year End.

 

(h)  

Business Carried on in Ordinary Course:   The Business has been carried on in the ordinary course since the Financial Year End.  The Vendor has not, since the Financial Year End, sold or otherwise disposed of any of its property or assets relating to the Business except in the ordinary course of business.

 

(i)  

Material Contracts :  Except for agreements, contracts and commitments in the ordinary course of the Business, none of which has more than three months to run or agreements, contracts and commitments under which the obligations of the Vendor do not exceed $10,000 in the aggregate, the Vendor is not a party to or bound by or subject to any agreement, contract or commitment, written or oral, of any nature or kind relating to the Business except for:

 

(i)  

forward commitments by the Vendor for supplies or materials entered into in the ordinary course of the Business for use in the Business;

 

(ii)  

service contracts on office equipment;

 

(iii)  

Permitted Encumbrances set forth and described in Schedules 1.1(s) and 8.4 ; and

 

(iv)  

other agreements, contracts and commitments set forth and described in Schedule 8.4 ;

 

and, except as disclosed in such Schedules, no consent, approval, permit or acknowledgment is required under any of the said agreements, contracts, and commitments from any party thereto or any other Person in connection with the completion of the transactions herein contemplated.

 

 

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(j)  

Status of Agreements :  Except as set forth and described in Schedule 8.4 , each of the agreements, contracts and commitments that  the Vendor is a party to or bound by or subject to relating to the Business (including, without limitation, those agreements, contracts and commitments referred to in Section 5.1(i)) is valid and subsisting and in good standing, there is no default thereunder and, to the best of the knowledge of the Vendor, there are no facts which, after notice or lapse of time or both, would constitute such a default.

 

(k)  

Legal Proceedings:   There are no Legal Proceedings in progress, pending, threatened against or affecting the Vendor relating to the Business or the Purchased Assets at law or in equity or before or by any tribunal, except as described in Schedule 5.1(k) .

 

(l)  

Compliance with Applicable Laws:   The Vendor has conducted and is conducting the Business in material compliance with all applicable laws, rules and regulations (including those applicable to any labour or employment matter or standard) of each jurisdiction, domestic or foreign, in which the Business is carried on, is not in breach of any of such laws, rules or regulations, and is duly licensed or registered in each jurisdiction in which it owns or leases the Purchased Assets or carries on the Business, so at to enable the Business to be carried on as now conducted and the Purchased Assets to be so owned or leased.

 

(m)  

Health and Safety Regulations

 

(i)  

to the best of the Vendor’s knowledge, the Vendor is and has been in compliance in all material respects with all Health or Safety Regulations (as hereinafter defined) with respect to the Purchased Assets and the Business;

 

(ii)  

no notice, demand, request for information, citation, summons or order has been received, no complaint has been served, no penalty has been assessed, and no investigation, action, claim, suit, proceeding or review is pending or, to the knowledge of the Vendor, is threatened by any Governmental Authority (as hereinafter defined) or other person with respect to the Purchased Assets or the Business relating to or arising out of any Health or Safety Regulation; and

 

(iii)  

there are no material claims or liabilities of or relating to the Purchased Assets or the Business of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, arising under or relating to any Health or Safety Regulation and to the best of the Vendor’s knowledge, there are no facts, conditions, situations or set of circumstances which could reasonably be expected to result in or be the basis for any such liability.

 

For purposes of this Section 5.1(m), (i) “ Health and Safety Regulations ” means any and all laws, statutes, ordinances, rules, regulations, orders or determinations of any Governmental Authority (hereinafter defined) pertaining to health, health supplements, pharmaceuticals or neutriceuticals currently in effect in any and all jurisdictions in which the Business is conducted and (ii)  “ Governmental Authority ” includes any governmental or supervisory organization having authority over the Business in the United States of America, as well as any other state, province, country, city and political subdivision in which any part of the Business is conducted, and any agency, department, commission, board, bureau or instrumentality of any of them that exercises jurisdiction over the Business.

 

(n)  

Intellectual Property .

 

(i)  

As at the Closing Date, the Vendor owns or has rights in all of the Intellectual Property necessary to carry on the Business in a manner consistent with the year ended immediately prior to the Closing Date.

 

(ii)  

The Vendor has not received written notice from any Person challenging the validity of any of the Vendor’s Intellectual Property or the Vendor’s rights in respect of any of the Vendor’s Intellectual Property or alleging that any of the Vendor’s Intellectual Property infringes the intellectual property rights of any Person.

 

 

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(iii)  

To the best of the knowledge of the Vendor, neither the use of the Vendor’s Intellectual Property nor the conduct of the Business, or the carrying on of the Business following the Closing Date as it is currently carried on, has infringed, currently infringes, has been or might reasonably be alleged to infringe, or is the subject of an opinion from counsel that it might infringe or be alleged to infringe, the intellectual property rights of any Person and to the best of the knowledge of the Vendor the conduct of the Business does not include any activity which may constitute passing off.

 

(iv)  

The Vendor has been provided with copies of:

 

 

A.

all patents, patent applications, trademarks and registrations, internet domain addresses, copyright applications and registrations, trade names, domestic or foreign, owned by the Vendor relating to the operation of the Business; and

 

 

B.

all agreements whereby any rights in any of the Vendor’s Intellectual Property have been granted or licensed to the Vendor.

 

(v)  

The Vendor has the exclusive right to use all of the Vendor’s Intellectual Property in respect of the Business and has not granted any licence or other rights to any other person in respect of the Vendor’s Intellectual Property in respect of the Business.

 

(o)  

Liabilities:   To the knowledge of the Vendor, there are no liabilities of the Vendor of any kind whatsoever, contingent or otherwise, relating to the Business existing on the date hereof except for:

 

(i)  

liabilities (including liabilities for unpaid Taxes) disclosed on, reflected in or provided for in the Financial Statements;

 

(ii)  

liabilities disclosed or referred to in this Agreement, including the Schedules hereto;  and

 

(iii)  

liabilities incurred in the ordinary course of the Business and attributable to the period since the Financial Year End, none of which is materially adverse to the operations, affairs, prospects or condition (financial or otherwise) of the Business.

 

(p)  

Inventory:   The Inventory:

 

(i)  

is saleable or resalable (or useable) in the ordinary course of the Business for the purpose for which they were intended; and

 

(ii)  

is at a level consistent with the level of Inventory that has been maintained in the operation of the Business prior to the date hereof in accordance with normal practice and reasonably anticipated requirements in light of seasonal adjustments, market fluctuations in the North American industry and the requirements of customers of the Business.

 

(q)  

Third Party Consents .  Except as set forth on Schedule 8.4 , no consent, approval, authorization, order, filing, registration or qualification of or with any court, governmental authority or body or regulatory authority is required except such as shall have been made or obtained at or before the Time of Closing, for the execution, delivery and performance by the Vendor of this Agreement and or the Vendor’s obligations hereunder.

 

(r)  

Broker . The Vendor has not engaged a banker or broker in connection with this Agreement or the transaction contemplated herein and no fee is due or owed as a result thereof.

 

(s)  

Disclosure . To the best of the knowledge of the Vendor, no representation or warranty contained in this Article, and no statement contained in any schedule, certificate, list, summary or other disclosure document provided or to be provided to the Purchaser pursuant hereto, or in connection with the transactions contemplated hereby, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact which is necessary in order to make the statements contained herein and therein not misleading.

 

 

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(t)  

No Other Representations and Warranties:   Except for the representations and warranties set forth in this Article 5, the Vendor make no further representations or warranties to the Purchaser, whether express or implied, statutory or otherwise, with respect to the Purchased Assets or the Business.

 

ARTICLE 6   - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

6.1   Representations and Warranties of the Purchaser .  The Purchaser hereby represents and warrants to the Vendor as follows and acknowledges that the Vendor is relying on such representations and warranties in connection with the


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