CORPORATIONS.
SECTION 4.9
ABSENCE OF CERTAIN CHANGES.
Except as and to the extent set forth in Schedule 4.9, or as permitted by the
Agreement or consented to by the Buyer, since December 31, 2004, the
Corporations have conducted their business only in the Ordinary Course of
Business and there has not been any:
(A)
CHANGE IN THE CORPORATIONS' AUTHORIZED OR
ISSUED CAPITAL STOCK, GRANT OF ANY STOCK OPTION OR RIGHT TO PURCHASE SHARES OF
CAPITAL STOCK OF THE CORPORATIONS OR ISSUANCE OF ANY SECURITY CONVERTIBLE INTO
SUCH CAPITAL STOCK;
(B)
AMENDMENT TO THE GOVERNING DOCUMENTS OF THE
CORPORATIONS;
(C)
PAYMENT (EXCEPT IN THE ORDINARY COURSE OF
BUSINESS) OR INCREASE BY THE CORPORATIONS OF ANY BONUSES, SALARIES OR OTHER
COMPENSATION TO ANY SHAREHOLDER, DIRECTOR OR OFFICER OR ENTRY INTO ANY
EMPLOYMENT, SEVERANCE OR SIMILAR CONTRACT WITH ANY DIRECTOR OR OFFICER PROVIDING
FOR AN ANNUAL RATE OF COMPENSATION EXCEEDING CDN$50,000.00 AND THAT IS NOT
CANCELABLE WITH NO MORE THAN 90 DAYS NOTICE;
(D)
ADOPTION OF, AMENDMENT TO OR INCREASE IN THE
PAYMENTS TO OR BENEFITS UNDER, ANY EMPLOYEE PLAN;
(E)
DAMAGE TO OR DESTRUCTION OR LOSS IN EXCESS
OF CDN$25,000.00 TO ANY ASSET OF THE CORPORATIONS, WHETHER OR NOT COVERED BY
INSURANCE;
(F)
EXCEPT AS IS DESCRIBED IN
SCHEDULE 4.13(A), (B), (C), OR (D) ENTRY INTO, TERMINATION OF OR RECEIPT OF
NOTICE OF TERMINATION OF (I) ANY LICENSE, DISTRIBUTORSHIP, DEALER, SALES
REPRESENTATIVE, JOINT VENTURE CONTRACT TO WHICH THE EITHER CORPORATION IS A
PARTY, OR (II) ANY CONTRACT OR TRANSACTION (OTHER THAN ANY CONTRACT OR
TRANSACTION INVOLVING THE PERFORMANCE OF SERVICES OR DELIVERY OF GOODS OR
MATERIALS BY ANY CORPORATION OR TO ANY CORPORATION IN THE ORDINARY COURSE OF
BUSINESS) INVOLVING A TOTAL REMAINING COMMITMENT BY EITHER CORPORATION OF AT
LEAST CDN$25,000.00;
22
(G)
SALE (OTHER THAN SALES OF INVENTORIES OR
SERVICES IN THE ORDINARY COURSE OF BUSINESS OF THE CORPORATIONS), LEASE OR OTHER
DISPOSITION OF ANY ASSET OR PROPERTY OF EITHER CORPORATION (INCLUDING THE
INTELLECTUAL PROPERTY ASSETS) WHERE THE PROCEEDS FROM SUCH DISPOSITION EXCEEDED
CDN$25,000.00 OR THE CREATION OF ANY ENCUMBRANCE ON ANY ASSET WITH A BOOK VALUE
GREATER THAN CDN$25,000.00;
(H)
CANCELLATION OR WAIVER OF ANY CLAIMS OR
RIGHTS WITH A VALUE TO ANY CORPORATION IN EXCESS OF CDN$25,000.00;
(I)
NOTIFICATION BY ANY CUSTOMER OR SUPPLIER
OF DISCONTINUANCE OF OR CHANGES TO THE TERMS OF ITS RELATIONSHIP WITH EITHER
CORPORATION;
(J)
MATERIAL CHANGE IN THE ACCOUNTING METHODS
USED BY THE CORPORATIONS; OR
(K)
CONTRACT BY THE CORPORATIONS
TO DO ANY OF
THE FOREGOING.
SECTION 4.10
NO MATERIAL CHANGE.
Except as set forth in Schedule 4.10, or, as may be shown in the Adjusted
Purchase Price Notice (as it may be re-calculated pursuant to Section 2.4) since
the date of the Interim Consolidated Balance Sheet, there has not been any
material adverse change in the business, assets, liabilities (contingent or
otherwise), results of operations or financial position, of the Corporations.
SECTION 4.11
LITIGATION.
(a)
Except as set forth in Schedule 4.11, there
is no pending (which, for the purpose of this