UNDER THIS AGREEMENT
AND THE BILL OF SALE.
3.2
ORGANIZATION AND STANDING.
SELLER IS A CORPORATION DULY FORMED,
VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ONTARIO AND SELLER IS
QUALIFIED TO DO BUSINESS IN EACH JURISDICTION WHERE SUCH QUALIFICATION IS
NECESSARY AND WHERE THE FAILURE TO BE SO QUALIFIED WOULD HAVE A MATERIAL ADVERSE
EFFECT ON SELLER.
SELLER HAS THE REQUISITE CORPORATE POWER AND AUTHORITY TO
CONDUCT ITS BUSINESS AS NOW CONDUCTED AND TO OWN OR LEASE THE PURCHASED ASSETS,
AND TO USE SUCH PURCHASED ASSETS IN THE CONDUCT OF ITS BUSINESS.
TRUE AND
COMPLETE COPIES OF THE CONSTATING DOCUMENTS OF SELLER HAVE BEEN DELIVERED TO
BUYER.
SELLER IS NOT IN VIOLATION OF ITS CONSTATING DOCUMENTS.
SELLER HAS NO
SUBSIDIARIES.
3.3
FINANCIAL STATEMENTS.
SELLER HAS DELIVERED TO BUYER UNAUDITED
NOTICE TO READER FINANCIAL STATEMENTS OF SELLER CONSISTING OF BALANCE SHEETS AS
OF THE END OF, AND THE RELATED STATEMENTS OF INCOME AND CASH FLOWS FOR, EACH OF
THE YEARS IN THE THREE-YEAR PERIOD ENDED DECEMBER 31, 2005, AND AN UNAUDITED
BALANCE SHEET AND RELATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE PERIOD
BEGINNING JANUARY 1, 2006 AND ENDING SEPTEMBER 30, 2006 (COLLECTIVELY, THE
"FINANCIAL STATEMENTS").
TRUE AND CORRECT COPIES OF THE FINANCIAL STATEMENTS
ARE ATTACHED HERETO AS SCHEDULE 3.3. THE FINANCIAL STATEMENTS WERE PREPARED IN
ACCORDANCE WITH GAAP, CONSISTENTLY APPLIED, AND FAIRLY PRESENT, ON AN ACCRUAL
BASIS, THE FINANCIAL CONDITION OF SELLER AND THE RESULTS OF ITS OPERATIONS AS AT
THE RELEVANT DATES THEREOF AND FOR THE RESPECTIVE PERIODS COVERED THEREBY.
SELLER HAS NO DEBTS, OBLIGATIONS OR LIABILITIES, FIXED OR CONTINGENT, OF A
NATURE THAT WOULD BE REQUIRED, IN ACCORDANCE WITH GAAP, TO BE SHOWN ON A BALANCE
SHEET AND THAT ARE NOT SHOWN ON THE BALANCE SHEET AS OF THE NINE (9) MONTH
PERIOD
ENDED SEPTEMBER 30, 2006 (THE "BALANCE SHEET"), OTHER THAN LIABILITIES INCURRED
AFTER SEPTEMBER 30, 2006 IN THE ORDINARY COURSE OF SELLER'S BUSINESS AND
CONSISTENT WITH PAST PRACTICES.
3.4
ABSENCE OF CERTAIN CHANGES.
EXCEPT AS SET FORTH ON SCHEDULE 3.4,
SINCE SEPTEMBER 30, 2006, THERE HAS NOT BEEN:
(A)
ANY SALE, TRANSFER, OR OTHER DISPOSITION OF, OR THE INCURRENCE OR
IMPOSITION OF, ANY ENCUMBRANCE OF ANY KIND ON OR AFFECTING, ANY OF THE PURCHASED
ASSETS;
(B)
ANY DAMAGE, DESTRUCTION OR LOSS, WHETHER OR NOT COVERED BY
INSURANCE, OF ANY OF THE PURCHASED ASSETS;
(C)
THE ENTRY OR VIOLATION OF ANY JUDGMENT, ORDER, WRIT OR DECREE THAT
HAS HAD OR COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON
SELLER;
(D)
ANY MATERIAL DEFAULT OR BREACH OR ANY AMENDMENT, TERMINATION OR
REVOCATION OR, TO THE KNOWLEDGE OF SELLER, ANY WRITTEN THREATENED TERMINATION OR
REVOCATION OF, ANY OF THE ASSIGNED CONTRACTS;
(E)
ANY ACTUAL OR THREATENED AMENDMENT, TERMINATION OR REVOCATION OF
ANY LICENSE, PERMIT OR FRANCHISE REQUIRED FOR THE CONTINUED OPERATION OF THE
BUSINESS; OR
(F)
THE OCCURRENCE OF ANY OTHER EVENT OR CIRCUMSTANCE WHICH HAS OR
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON SELLER.
3.5
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