(c)Application of Principal Payments and Reductions. All payments and prepayments of principal on this Note and all principal reductions effected in accordance with the terms of this Note shall be applied first to any outstanding interest owed under this Note and second to the unpaid principal balance of this Note.
3.Representations, Warranties and Covenants. The Borrower hereby represents, warrants, and covenants to the Lender, as of the date hereof, as follows:
(a)Organization and Good Standing. The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the Province of British Columbia, with the requisite power and capacity to own and use its properties and assets and to carry on its business as currently conducted. The Borrower is not in violation nor default of any of the provisions of its organizational or charter documents. The Borrower is duly qualified to conduct business and is in good standing in each jurisdiction in which the nature of the business conducted or property owned, leased or licensed or otherwise held by it makes such qualification necessary in all material respects and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
(b)Corporate Power. The Borrower has all requisite corporate power and capacity to execute and deliver the Note and to carry out and perform its obligations under the terms of this Note.
(c)Authorization. The Borrower has the requisite corporate power and capacity to enter into this Note and to consummate the transactions contemplated hereby and otherwise to carry out its obligations hereunder. The execution and delivery of this Note by the Borrower and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Borrower and no further action is required by the Borrower, the Board of Directors or the Borrower’s shareholders in connection herewith. This Note, when executed and delivered by the Borrower, shall constitute valid and binding obligations of the Borrower enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors, equitable principles, and, with respect to rights to indemnity, subject to federal and state securities laws.
(d)No Conflicts. The execution, delivery and performance by the Borrower of this Note and the consummation by it of the transactions contemplated hereby do not and will not (a) conflict with or violate any provision of the Borrower’s organizational or charter documents, or (b) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Borrower debt or otherwise) to which the Borrower is a party or by which any property or asset of the Borrower is bound or affected, or (c) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Borrower is subject (including U.S. federal securities laws and regulations), or by which any property or asset of the Borrower is bound or affected; except in the case of clause (c), such as could not be reasonably expected to result in a Material Adverse Effect.
(e)Litigation. There is no material claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or to the Borrower’s knowledge, currently threatened in writing (i) against the Borrower that could materially adversely impact the Borrower’s ability to perform in any material respect on a timely basis its obligations under this Note, or (ii) that questions the validity of this Note or the right of the Borrower to enter into this Note, or to consummate the transactions contemplated by this Note.