PURCHASER SHALL DELIVER
TO THE VENDORS THE FINAL CLOSING BALANCE SHEET (THE "CLOSING BALANCE SHEET").
SUCH CLOSING BALANCE SHEET SHALL BE FINAL AND BINDING UPON THE PARTIES AND SHALL
NOT BE SUBJECT TO APPEAL, ABSENT MANIFEST ERROR.
(6)
WITHIN 3 BUSINESS DAYS AFTER RECEIPT OF THE
CLOSING BALANCE SHEET, EITHER THE PURCHASER SHALL PAY TO THE VENDORS IN THE
MANNER DESCRIBED IN SECTION 2.4(C),
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THE AMOUNT BY WHICH THE WORKING CAPITAL AS DETERMINED FROM THE CLOSING BALANCE
SHEET EXCEEDS $1,296,000, OR THE VENDORS SHALL PAY TO THE PURCHASER BY CERTIFIED
CHEQUE, BANK DRAFT OR WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS, THE AMOUNT
BY WHICH $1,296,000 EXCEEDS THE WORKING CAPITAL AS DETERMINED FROM THE CLOSING
BALANCE SHEET, AS THE CASE MAY BE.
THE DETERMINATION AND ADJUSTMENT OF THE
PURCHASE PRICE IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 2.5 SHALL NOT
LIMIT OR AFFECT ANY OTHER RIGHTS OR CAUSES OF ACTION EITHER THE PURCHASER OR THE
VENDORS MAY HAVE WITH RESPECT TO THE REPRESENTATIONS, WARRANTIES, COVENANTS AND
INDEMNITIES IN ITS OR THEIR FAVOUR IN THIS AGREEMENT; PROVIDED THAT, IT IS
UNDERSTOOD AND AGREED THAT ANY CLAIM REGARDING A REPRESENTATION, WARRANTY,
COVENANT OR INDEMNITY WILL BE REDUCED BY ANY ADJUSTMENT REFLECTED ON THE CLOSING
BALANCE SHEET THAT HAS BEEN MADE DIRECTLY RELATING TO THE SAID REPRESENTATION,
WARRANTY, COVENANT OR INDEMNITY CLAIM.
(7)
FOR PURPOSES OF THIS SECTION 2.5, "WORKING
CAPITAL" AS DETERMINED FROM ANY BALANCE SHEET, MEANS THE AMOUNT BY WHICH THE
AGGREGATE BOOK VALUE OF ALL THE CURRENT ASSETS OF THE CORPORATIONS AS SHOWN ON
SUCH BALANCE SHEET (EXCLUDING ACCOUNTS RECEIVABLE THAT HAVE BEEN OUTSTANDING
MORE THAN 90 DAYS, OTHER THAN ACCOUNTS RECEIVABLES FOR WHICH THERE IS INSURANCE
OR SPECIFIC PAYMENT TERMS NEGOTIATED WITH THE DEBTOR) EXCEEDS ALL OF THE
LIABILITIES (EXCEPT FOR DEFERRED TAXES) OF THE CORPORATIONS AS SHOWN ON SUCH
BALANCE SHEET.
(8)
EACH OF (I) THE VENDORS AND (II) THE
PURCHASER REPRESENT AND WARRANT TO THE OTHER THAT KPMG IS AN INDEPENDENT AUDITOR
IN RELATION TO IT, AND THAT KPMG HAS NOT PROVIDED ANY SERVICES TO IT DURING THE
THREE-YEAR PERIOD ENDING ON THE CLOSING DATE.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE VENDORS
SECTION 3.1
REPRESENTATIONS AND WARRANTIES OF
THE VENDORS.
The Vendors, on a joint and several basis (save for the representations and
warranties in Sections 3.2 (a-1), 3.2(a-2), 3.2(a-3), 3.2(f) and 3.2(g), which
are several) represent and warrant as follows to the Purchaser and acknowledge
and confirm that the Purchaser is relying upon the representations and
warranties in connection with the purchase by the Purchaser of the Purchased
Shares:
SECTION 3.2
CORPORATE MATTERS.
(A)
INCORPORATION AND QUALIFICATION.
EACH OF
THE CORPORATIONS IS A CORPORATION DULY INCORPORATED, ORGANIZED AND EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF CANADA, AND HAS THE CORPORATE POWER TO OWN
AND OPERATE ITS PROPERTY, CARRY ON ITS BUSINESS AND ENTER INTO AND
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PERFORM ITS OBLIGATIONS UNDER EACH OF THE ANCILLARY AGREEMENTS TO WHICH IT IS A
PARTY.
EACH CORPORATION IS DULY QUALIFIED, LICENSED OR REGISTERED TO