EXECUTIONS,
ASSIGNMENTS FOR THE BENEFIT OF CREDITORS, OR PROCEEDINGS IN BANKRUPTCY OR UNDER
ANY OTHER DEBTOR RELIEF LAWS PENDING, OR, TO PURCHASER'S KNOWLEDGE, THREATENED
OR CONTEMPLATED AGAINST PURCHASER OR ITS ASSETS OR PROPERTIES.
11.5.
HST REGISTRATION . PURCHASER IS REGISTERED FOR
PURPOSES OF PART IX OF THE EXCISE TAX ACT (CANADA) OR WILL BECOME REGISTERED
PRIOR TO CLOSING.
11.6.
FINANCIAL CAPABILITY.
PURCHASER HAS, AND AT
CLOSING WILL HAVE, THE FINANCIAL CAPABILITY TO COMPLETE THE TRANSACTIONS
CONTEMPLATED UNDER THIS AGREEMENT.
11.7.
PURCHASER'S INVESTIGATIONS.
PURCHASER IS RELYING
UPON PURCHASER'S OWN INVESTIGATION OF THE ASSETS, AND EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, NOT UPON
ANY OTHER
REPRESENTATIONS, WARRANTIES, GUARANTIES, PROMISES, STATEMENTS OR
ASSURANCES OF SELLER OR ANY OF SELLER'S EMPLOYEES OR AGENTS, WHETHER WRITTEN OR
ORAL, EXPRESS OR IMPLIED, OR OTHERWISE.
12.
SURVIVAL; KNOWLEDGE AND MATERIALITY.
(A)
SURVIVAL.
AS PROVIDED ABOVE, THE RESPECTIVE REPRESENTATIONS AND
WARRANTIES OF SELLER AND PURCHASER CONTAINED HEREIN, AND THE RIGHT TO COMMENCE
ANY CLAIM WITH RESPECT THERETO, SHALL SURVIVE CLOSING FOR A PERIOD OF TWENTY
FOUR (24) MONTHS (EXCEPT AS OTHERWISE PROVIDED IN SECTION 10.1), AND THEREAFTER
SHALL EXPIRE AND TERMINATE, AND EACH PARTY SHALL BE FOREVER RELEASED FROM
LIABILITY TO THE OTHER BASED UPON SUCH REPRESENTATIONS AND WARRANTIES EXCEPT AS
TO MATTERS FOR WHICH THE OTHER PARTY HAS DULY COMMENCED A PROCEEDING AGAINST THE
DEFAULTING PARTY WITH REGARD TO THE ALLEGED BREACH OF REPRESENTATION OR WARRANTY
ON OR PRIOR TO SUCH TERMINATION DATE.
(B)
KNOWLEDGE DEFINED.
AS USED IN THIS AGREEMENT:
(I)
"SELLER'S KNOWLEDGE" SHALL MEAN THE
ACTUAL CURRENT KNOWLEDGE (AS OPPOSED TO CONSTRUCTIVE OR IMPUTED KNOWLEDGE) OF
THE FACT OR MATTER IN QUESTION OF SEAN ERWIN, STEVEN HEINRICHS OR NOAH BENZ,
WITHOUT ANY DUTY TO CONDUCT ANY INVESTIGATION OR INQUIRY.
9
(II)
"PURCHASER'S KNOWLEDGE" SHALL MEAN THE
ACTUAL CURRENT KNOWLEDGE (AS OPPOSED TO CONSTRUCTIVE OR IMPUTED KNOWLEDGE) OF
THE FACT OR MATTER IN QUESTION OF THE PRESIDENT OF PURCHASER, WITHOUT ANY DUTY
TO CONDUCT ANY INVESTIGATION OR INQUIRY.
(C)
LIMITATION AS TO CLAIMS.
IN THE EVENT OF ANY CLAIM BY PURCHASER
AGAINST SELLER FOR BREACH OF REPRESENTATION OR WARRANTY UNDER THIS AGREEMENT, NO
CLAIM SHALL BE PAYABLE BY SELLER UNTIL THE AGGREGATE AMOUNT OF LOSS OR DAMAGE
UNDER SUCH CLAIMS EXCEEDS $500,000.00 (THE "FLOOR").
NOTWITHSTANDING THE FLOOR,
SELLER SHALL BE OBLIGATED ONLY TO PAY THE FULL AGGREGATE AMOUNT OF ALL SUCH
CLAIMS AFTER THE AGGREGATE CLAIMS BY PURCHASER EXCEED THE FLOOR.
THE AGGREGATE
AMOUNT PAID BY THE SELLER FOR BREACH OF WARRANTY SHALL NOT EXCEED $5,000,000.00
(THE "CEILING").
NOTWITHSTANDING THE FOREGOING FLOOR AND CEILING, NO SUCH
LIMITS SHALL APPLY OR BE EFFECTIVE WITH RESPECT TO ANY CLAIM ARISING FROM THE
FRAUD OF SELLER, OR FROM ANY MORTGAGE, SECURITY INTEREST, OR STATUTORY LIEN
AGAINST THE ASSETS.
13.
CONTINGENCIES.
(A)
SELLER'S OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREBY IS SUBJECT TO THE FOLLOWING CONDITIONS, EACH OF WHICH MAY BE WAIVED IN
THE SOLE AND ABSOLUTE DISCRETION OF SELLER:
(I)
PURCHASER PERFORMING, IN ALL MATERIAL
RESPECTS, ITS OBLIGATIONS UNDER THE AGREEMENT;
(II)