STOCK PURCHASE AGREEMENT
dated as of December 7, 1999
pertaining to the acquisition by
FINOVA CAPITAL CORPORATION
of all of the outstanding shares of:
FREMONT FINANCIAL CORPORATION
TABLE OF CONTENTS
1. SALE AND TRANSFER OF SHARES; CLOSING .................. 1
1.1.
Shares.........................................................1
1.2.
Purchase Price.................................................1
1.3.
Closing........................................................1
1.4.
Closing Obligations............................................1
1.5.
Determination of Purchase Price................................2
2. REPRESENTATIONS AND WARRANTIES OF
SELLERS.............................3
2.1.
Organization and Good Standing.................................3
2.2.
Enforceability; No Conflict....................................3
2.3.
Capitalization.................................................4
2.4.
Financial Statements...........................................5
2.5.
Books and Records..............................................5
2.6.
Title To Properties; Encumbrances..............................5
2.7.
Condition of Assets............................................6
2.8.
Loans..........................................................6
2.9.
Certain Liabilities............................................7
2.10.
Taxes..........................................................7
2.11.
No Material Adverse Change.....................................9
2.12.
Employee Benefits..............................................9
2.13.
Compliance With Legal Requirements; Governmental
Authorizations................................................13
2.14.
Environmental Matters.........................................13
2.15.
Legal Proceedings.............................................14
2.16.
Absence of Certain Changes and Events.........................14
2.17.
Contracts; No Defaults........................................15
2.18.
Insurance.....................................................16
2.19.
Employees.....................................................16
2.20.
Labor Relations; Compliance...................................17
2.21.
Intellectual Property.........................................17
2.22.
Certain Payments..............................................18
2.23.
Relationships With Related Persons............................18
2.24.
Year 2000.....................................................18
2.25.
Brokers Or Finders............................................18
2.26.
Full Disclosure...............................................19
3. REPRESENTATIONS AND WARRANTIES OF BUYER...............19
3.1.
Organization and Good Standing................................19
3.2.
Validity; No Conflict.........................................19
3.3.
Investment Intent.............................................19
3.4.
Certain Proceedings...........................................19
3.5.
Brokers Or Finders............................................20
4. CERTAIN SELLER COVENANTS..............................20
4.1.
Access and Investigation......................................20
4.2.
Operation of The Businesses of The Acquired Companies.........20
4.3.
Negative Covenant.............................................21
4.4.
No Negotiation................................................21
4.5.
Non-Competition and Non-Solicitation..........................22
5. CERTAIN ADDITIONAL COVENANTS..........................23
5.1.
Approvals of Governmental Bodies..............................23
5.2.
Best Efforts..................................................23
5.3.
Accrued Bonuses...............................................23
5.4.
Change of Name; Marks.........................................23
5.5.
Section 338(h)(10)............................................23
5.6.
Transition Services...........................................24
5.7.
Excluded Assets...............................................24
5.8.
Inter-Company Obligations.....................................26
5.9.
Asset Securitization Program; Letter of Credit Facilities.....26
5.10.
Severance, etc................................................26
5.11.
Indebtedness;
Preferred Share Dividends.......................26
5.12.
Real Property
Leases..........................................26
5.13.
Restricted Stock..............................................27
5.14.
Maintenance of Books and Records..............................27
5.15.
Company Welfare Plans.........................................27
5.16.
Tax Sharing Arrangements......................................28
6. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATION TO
CLOSE ........................................................ 28
6.1.
Accuracy of Representations...................................28
6.2.
Sellers' Performance..........................................28
6.3.
Consents......................................................28
6.4.
No Order......................................................28
6.5.
No Material Adverse Change....................................28
6.6.
Corporate Proceedings.........................................28
6.7.
Resignation of Directors......................................29
6.8.
HSR Act.......................................................29
7. CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATION TO
CLOSE.............29
7.1.
Accuracy of Representations...................................29
7.2.
Buyer's Performance...........................................29
7.3.
No Order......................................................29
7.4.
Corporate Proceedings.........................................29
7.5.
HSR Act.......................................................29
8. TERMINATION............................................29
8.1.
Termination Events............................................29
8.2.
Effect of Termination.........................................30
9. INDEMNIFICATION; REMEDIES.............................30
9.1.
Indemnification and Payment of Damages by the Sellers.........30
9.2.
Indemnification and Payment of Damages by the Buyer...........31
9.3.
Time Limitations..............................................31
9.4.
Limitations On Amount-- Sellers...............................31
9.5.
Limitations On Amount-- Buyer.................................32
9.6.
Procedure For Indemnification-- Third Party Claims............32
9.7.
Procedure for Indemnification-- Other Claims..................33
9.8.
Insurance.....................................................33
9.9.
No Limitation as a Result of Book Value Determination.........33
10. CERTAIN TAX MATTERS...................................33
10.1.
Tax Returns...................................................33
11.
GENERAL
PROVISIONS...................................................37
11.1.
Expenses......................................................37
11.2.
Public Announcements..........................................37
11.3.
Confidentiality...............................................37
11.4.
Notices.......................................................38
11.5.
Arbitration...................................................39
11.6.
Further Assurances............................................40
11.7.
Waiver........................................................41
11.8.
Entire Agreement and Modification.............................41
11.9. Assignments, Successors, and No Third-Party
Rights............41
11.10.
Severability..................................................41
11.11.
Section Headings, Construction................................41
11.12.
Governing Law.................................................42
11.13.
Counterparts..................................................42
SIGNATURE
PAGE..........................................................S-1
EXHIBIT A -
DEFINITIONS...................................................A-1
Schedules
2.1 Organization Information
2.2.3 Consents
2.6 Owned and Leased Properties
2.8.1 Description of Loans
2.8.4 Notices of Default
2.9.1 Undisclosed Liabilities
2.9.2 Debt Obligations
2.10.5 Tax Returns
2.12.2 Employee Benefit Plans
2.13.2 Government Authorizations
2.15 Legal Proceedings
2.17.1 Material Contracts
2.19 Employees
2.21.1 Trademarks
2.23 Transactions with Related Persons
4.2 Operation of the Businesses Exceptions
4.5.2 California Counties
5.7 Excluded Assets
5.9 Letter of Credit Facilities
5.15 Company Welfare Plan Exceptions
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of December 7, 1999
("Agreement"), by FINOVA Capital Corporation, a Delaware
corporation (the "Buyer"), Fremont General Corporation, a Nevada
corporation ("FGC"), and Fremont General Credit Corporation, a
California corporation ("FGCC," and, collectively with FGC, the
"Sellers"). In this Agreement, the term "Party" means the Sellers
on one hand, and the Buyer on the other. Exhibit A contains
definitions, or references to the definitions, of the capitalized
terms used in this Agreement.
RECITALS
1. The Sellers collectively own all of the issued
and outstanding shares of capital stock of Fremont Financial
Corporation, a California corporation (the "Company"),
consisting of 958,684 shares of Common Stock, $.10 par value per
share (the "Common Shares"), owned by FGCC, and 40,000 shares of
Series A 10% Cumulative Preferred Stock, $1,000 par value per
share (the "Preferred Shares" and, collectively with the
Common Shares, the "Shares"), owned by FGC.
2. The Parties desire to provide for the
Sellers' sale of the Shares to the Buyer, on the terms and
subject to the conditions stated in this Agreement.
AGREEMENT
The Parties, intending to be legally bound, agree
as follows:
1. SALE AND TRANSFER OF SHARES; CLOSING
1.1. Shares. Subject to the satisfaction or waiver of the
conditions to closing in Sections 6 and 7, at the Closing, the
Sellers will sell and transfer the Shares to the Buyer, and the
Buyer will purchase the Shares from the Sellers.
1.2. Purchase Price. The purchase price for the Shares (the
"Purchase Price") will be equal to the total of (a) Book Value as
reflected on the Closing Date Balance Sheet and (b) $18,000,000.
1.3. Closing. The closing of the purchase and sale of the
Shares (the "Closing") will take place at the offices of
O'Melveny & Myers LLP, 400 South Hope Street, Los Angeles,
California 90071, at 10:00 a.m. (local time) on the second
Business Day after the satisfaction of the conditions to
closing in Sections 6 and 7, or at any other time and place the
Parties agree. The Parties intend that the Closing occur on or
before December 31, 1999.
1.4. Closing Obligations. At the Closing:
1.4.1. Seller Deliveries. The Sellers will deliver to the Buyer
(a) certificates representing the Shares, duly endorsed
(or accompanied by duly executed stock powers) for
transfer to the Buyer;
(b) a certificate executed by an executive officer of FGC
certifying the satisfaction of the conditions in
Sections 6.1, 6.2, 6.3, 6.6, 6.7 and, to such
officer's knowledge, 6.4 and 6.5;
(c) supplements to the Disclosure Schedules pursuant to
Section 4.1, including an updated Schedule 2.8.1 as
contemplated by Section 2.8.1;
(d) (d) evidence of receipt of the Consents
required by Section 6.3; and
(e) the documents relating to corporate proceedings
specified in Section6.6.
1.4.2. Buyer Deliveries. The Buyer will deliver to the Sellers:
(a) $131,000,000 (the "Estimated Payment") by wire
transfer to an account specified by the Sellers; and
(b) a certificate executed by an executive officer
of the Buyer certifying the satisfaction of the
conditions in Sections 7.1, 7.2, 7.3, 7.4 and, to
such officer's knowledge, 7.3; and
(c) the documents relating to corporate proceedings
specified in Section 7.4.
1.5. Determination of Purchase Price.
1.5.1. Determination of Book Value. The Sellers will
cause the Company to prepare the consolidated unaudited balance
sheet of the Company as of the close of business on the date
during which the Closing Date occurs without giving effect to
purchase accounting adjustments (the "Closing Date Balance
Sheet"), which will include a computation of Book Value as of
that date. The Closing Date Balance Sheet will be prepared
in accordance with GAAP, Section 4.2(d) and the Company's past
practices. The Sellers will deliver the Closing Date
Balance Sheet and, as reasonably requested by the Buyer,
supporting schedules, backup documents and workpapers, to the
Buyer as soon as possible, and in any event within fifteen
Business Days, after the Closing Date. If within ten Business
Days after delivery of the Closing Date Balance Sheet and any
delivered supporting schedules, backup documents and workpapers,
the Buyer has not given the Sellers notice of its
objection to the computation of Book Value (together with a
reasonably detailed statement of the basis of the Buyer's
objection), Book Value as computed by the Sellers will be
presumed to be Book Value for purposes of computing the
Purchase Price, subject to the provisions of Section 9.
1.5.2. Objection. If there is a notice of objection with respect
to the Closing Date Balance Sheet, the issues in dispute will
be promptly submitted to the principal Los Angeles Office of
PricewaterhouseCoopers LLP, certified public accountants (the
"Accountants"), for resolution.
If this happens, (a) each Party (i) will furnish to the
Accountants the work papers, other documents and information
relating to the disputed issues that the Accountants reasonably
request and that are available to that Party or its Subsidiaries
(or its independent public accountants), and (ii) can present to
the Accountants any other relevant material and arguments the
Party desires; (b) the Accountants' determination of Book
Value as stated in a notice to both parties from the
Accountants, will be conclusive and binding on them; and (c)
each Party will bear 50% of the fees and expenses of the
Accountants in connection with that determination.
1.5.3. Payment. If the Estimated Payment is more than the Purchase
Price determined in accordance with Sections 1.2, 1.5.1 and 1.5.2,
the Sellers will pay the difference to the Buyer within three
Business Days of the final determination of the Purchase Price.
If the Estimated Payment is less than the Purchase Price, the
Buyer will pay the difference to the
Sellers within three Business Days of the final
determination of the Purchase Price (in either case, a "Post
Closing Payment"). Any Post Closing Payment will be made
together with interest at 8% simple interest for the period,
beginning on the Closing Date and ending on the date of payment.
Any such payment to a Party must be by wire transfer to the bank
account that Party specifies.
2. REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers, jointly and severally, represent and warrant
to the Buyer as follows (subject to any exceptions in the
Disclosure Schedules that expressly reference the section to
which the exception relates):
2.1. Organization and Good Standing. Schedule 2.1
accurately lists each Acquired Company's name, jurisdiction of
incorporation or formation, other jurisdictions where it is
qualified to do business as a foreign corporation or limited
liability company, and capitalization (including the identity of
each of its stockholders and the number of shares held
by each). Each Acquired Company is a corporation or limited
liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation,
with full corporate or limited liability company power and
authority to conduct its business as it is now being conducted,
to own or use the properties and assets that it purports to own or
use, and to perform its obligations under each Applicable
contract to which it is a party. Each Acquired Company is
duly qualified to do business as a foreign corporation or
limited liability company and is in good standing under the laws
of each state in which the failure to qualify would reasonably
be expected to have a Company Material Adverse Effect. Each
Seller is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation.
2.2. Enforceability; No Conflict.
2.2.1. Enforceability. This Agreement constitutes the legal,
valid, and binding obligation of the Sellers, enforceable
against them in accordance with its terms, subject to the
Enforceability Exceptions. The Sellers have the corporate power
and authority to execute and deliver, and perform their
obligations under, this Agreement.
2.2.2. No Conflict. Neither the execution and delivery of this
Agreement nor the consummation or performance of any of the
Transactions will (with or without notice or lapse of time):
(a) contravene, conflict with, or result in a
violation of the Organizational Documents of either of the
Sellers or any Acquired Company;
(b) contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right
to prevent, delay or otherwise interfere with any of the
Transactions or to exercise any remedy or obtain any relief
under, any Law or any Order to which any Acquired Company or
Seller, or any of the assets owned or used by any Acquired
Company, is subject;
(c) contravene, conflict with, or result in a violation
of any of the terms or requirements of, or give any
Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any material Governmental
Authorization held by any Acquired Company;
(d) contravene, conflict with, or result in a violation or
breach of any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate, or
modify, any Material Contract; or
(e) result in the imposition or creation of any
Encumbrance upon or with respect to any Acquired Company assets.
2.2.3. Consents. Other than the termination or expiration
of the applicable waiting period under the HSR Act and as
stated in Schedule
2.2.3, neither Seller, nor any Acquired Company, is or
will be required to give any notice to or obtain any Consent
from any Person in connection with the execution, delivery or
performance of this Agreement or the consummation of the
Transactions.
2.3. Capitalization. The authorized shares of the Company
consist only of (a) 2,500,000 shares of Common Stock, par value
$.10 per share, of which 958,684 shares are issued and
outstanding and constitute the Common Shares; and (b) 100,000
shares of 10% Preferred Stock, $1,000 par value per share, of
which 40,000 shares are issued and outstanding and
constitute the Preferred Shares. FGC and FGCC are, and will be
on the Closing Date, the record and beneficial owners and
holders of the Preferred Shares and the Common Shares,
respectively, free and clear of all encumbrances, adverse claims
and restrictions on transfer other than under applicable
securities laws. With the exception of the Common Shares and
the Preferred Shares, all of the outstanding equity
securities and other securities of each Acquired Company are
owned of record and beneficially by one or more of the other
Acquired Companies, free and clear of all encumbrances, adverse
claims and restrictions on transfer other than under applicable
securities laws. No legend or other reference to any purported
encumbrance appears upon any certificate representing equity
securities of any Acquired Company. All of the outstanding
equity securities of each Acquired Company have been duly
authorized and validly issued and are fully paid and non-
assessable and were not issued in violation of any preemptive
rights. Neither of the Sellers, and no Acquired Company, is
party to any Contract relating to the issuance, sale, or
transfer of any equity or other securities of any Acquired
Company. None of the outstanding equity or other securities
of any Acquired Company was issued in violation of the
Securities Act or any other Law. No Acquired Company owns, or has
any Contract to acquire, any equity or other securities of any
Person (other than Acquired Companies) or any direct or indirect
equity or ownership interest in any other business. At the
Closing, the Buyer will receive title to all of the Shares
free and clear of any encumbrances, adverse claims and
restrictions on transfer other than under applicable securities
laws.
2.4. Financial Statements. The Sellers have delivered to the
Buyer: (a) an unaudited consolidated balance sheet of the
Company at October 31, 1999 (the "Interim Balance Sheet"), and
the related unaudited consolidated statements of income and
changes in stockholder's equity for the ten months then ended
(collectively with the Interim Balance Sheet, the "Interim
Financial Statements") and (b) a consolidated balance sheet of
the Acquired Companies at December 31, 1998 (including the notes
to it, the "Balance Sheet"), and the related consolidated
statements of income, changes in stockholder's equity, and cash
flow for the fiscal year then ended, together with the report on
those statements of Ernst & Young LLP, independent certified
public accountants. These financial statements and notes
fairly present the consolidated financial condition and the
consolidated results of operations, changes in stockholder's
equity, and cash flow of the Acquired Companies as at the
respective dates of and for the periods referred to in the
financial statements, all in accordance with GAAP, subject,
in the case of the Interim Financial Statements, to normal
recurring year-end adjustments and the absence of notes. The
financial statements referred to in this Section 2.4 reflect the
consistent application of GAAP throughout the periods involved,
except as disclosed in the notes to those financial
statements.
2.5. Books and Records. The books of account, minute books,
stock record books, and other Acquired Company records are
complete and correct in all material respects. At the Closing,
all of those books and records will be in the Acquired Companies'
possession.
2.6. Title To Properties; Encumbrances. Schedule 2.6 accurately
lists (a) the only parcel of real property owned in fee by any
Acquired Company (the "Owned Real Property"), and (b) all
leasehold interests owned by or any other interests in real
"Leased Real Property"). The Acquired Companies own (with
good and marketable title in the case of the Owned Real Property,
subject only to the matters permitted by the following sentence)
all the properties and assets (whether real, personal, or
mixed and whether tangible or intangible) reflected as owned
in the Acquired Companies' books and records, including all
properties and assets reflected in the Balance Sheet and the
Interim Balance Sheet (except for assets held under
capitalized leases disclosed or not required to be disclosed in
Schedule 2.6 and personal property sold since the date of the
Balance Sheet and the Interim Balance Sheet, as the case may be,
in the Ordinary Course), and all properties and assets acquired
by the Acquired Companies since the date of the Balance Sheet
(except for personal property acquired and sold since the date
of the Balance Sheet in the Ordinary Course). All material
properties and assets reflected in the Balance Sheet and the
Interim Balance Sheet are free and clear of all Encumbrances
and are not, in the case of the Owned Real Property,
subject to any rights of way, building use restrictions,
exceptions, variances, reservations, or limitations of any
nature except, with respect to all such properties and assets,
(a) mortgages or security interests shown on the Balance Sheet
or the Interim Balance Sheet as securing specified liabilities
or obligations, with respect to which no default (or event
that, with notice or lapse of time or both, would constitute a
default) exists, and (b) mortgages or security interests
incurred in the Ordinary Course in connection with the
purchase of property or assets in the Ordinary Course after the
date of the Interim Balance Sheet (these mortgages and security
interests being limited to the property or assets so acquired),
with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists.
2.7. Condition of Assets. The Acquired Companies' tangible
assets are in good operating condition and repair in all material
respects.
2.8. Loans.
2.8.1. Lists. Schedule 2.8.1 contains the 11/30/99 version of the
"Loan Portfolio Listing Report" for the Acquired Companies' core
asset-based lending portfolio and the 11/30/99 version of the
"Rating Summary Report" for the Acquired Companies' syndicated
loan portfolio. On the Closing Date, the Sellers will deliver to
the Buyer an updated Schedule containing each of these two
reports prepared as of two Business Days before the Closing Date.
2.8.2. Documentation. To the Sellers' Knowledge, the Acquired
Companies' files contain complete originals or accurate
copies of each Loan Document, except files for certain Loans in
the core asset-based lending portfolio with respect to which
original Loan Documents may be in the possession of a custodian
on behalf of the trustee of the Fremont Small Business Loan
Master Trust. The Sellers have made all of their Loan Document
files available to the Buyer. With respect to each item of
collateral that secures a Loan for which a security interest
can be perfected by filing a UCC-1 financing statement, the
Acquired Companies have filed UCC-1 financing statements in the
proper filing office in each jurisdiction in which, to the
Sellers' Knowledge, such filing is
required under applicable Law, and such security interest
has the priority indicated in the Loan files. With respect
to each item of collateral that secures a Loan for which a
security interest can be perfected by filing a mortgage or deed
of trust, the Acquired Companies have filed a mortgage or deed
of trust in the proper filing office in each jurisdiction in
which, to the Sellers' Knowledge, such filing is required under
applicable Law, and such security interest has the
priority indicated in the Loan files.
2.8.3. Validity and Enforceability. Each Loan Document is
valid and enforceable, subject to the Enforceability Exceptions.
For purposes of this Section 2.8.3 only, the term "enforceable"
means that while each and every provision of a Loan Document
may not be enforceable in accordance with its terms under
applicable Laws, there are remedies adequate for the
substantial realization of the principal benefits intended to be
provided by the Loan Document.
2.8.4. Compliance. Each Acquired Company is in compliance
in all material respects with all applicable terms and
requirements of each Loan Document. Schedule 2.8.4 lists the
Loans for which an Acquired Company, or, in the case of
participation or syndicated loans, the lead lender or agent has,
to the Sellers' Knowledge, given written notice to the borrower
of an event of default under the related Loan Documents.
2.8.5. Claims. There are no pending, or to the Seller's
Knowledge, Threatened claims, offsets, recoupments, defenses or
senior Encumbrances involving the Loans that, if decided
adversely to the Acquired Companies, would aterially impair
the Acquired Companies' ability to realize the current book
value of the Loans.
2.8.6. No Escrow or Tax Items. The Acquired Companies do not
engage in the handling of escrowed items (such as property
Taxes). The Acquired Companies have properly handled all pass-
through items (such as payments of expenses for properties in
foreclosure) in accordance with their contractual obligations
and internal procedures, and have submitted invoices
substantiating all pass-through items to their servicing
clients in connection with their requests for reimbursement for
those items.
2.9. Certain Liabilities.
2.9.1. No Undisclosed Liabilities. To the Sellers' Knowledge, and
except as stated in Schedule 2.9.1, the Acquired Companies
have no material liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued,
contingent, or otherwise) except for liabilities or
obligations reflected or reserved against in the Balance Sheet or
the Interim Balance Sheet and current liabilities incurred in
the Ordinary Course since the respective dates of those balance
sheets.
2.9.2. Certain Scheduled Liabilities. With respect to all
of the Acquired Companies' obligations for borrowed money,
Schedule 2.9.2 lists (a) the credit facility or program, (b)
the current principal and interest outstanding, (c) interest
rate or formula, (d) maturity date and (e) prepayment
penalties if repaid before maturity. On the Closing Date, the
Sellers will deliver to the Buyer an updated Schedule 2.9.2 as
of two Business Days before the Closing Date.
2.10. Taxes.
2.10.1. Returns, Payments, Etc. FGC has filed as part of a
consolidated return, has caused each of the Acquired Companies to
file, or will file or cause to be filed on or prior to the
Closing Date, all federal, state, local, and foreign Tax (as
defined in Section 2.10.7) returns and Tax reports that are
required to be filed by, or with respect to, any Acquired Company
on or prior to the Closing Date (taking into account any
extension of time to file granted to or on behalf of the
Company)(collectively, the "Tax Returns"). At the time filed,
such Tax Returns were, or will be when filed, true, complete and
correct in all material respects. FGC, and each Acquired
Company has timely paid all Taxes shown as due on each such Tax
Return. The accruals and reserves reflected in the Interim
Balance Sheet are adequate to cover all Taxes of the Acquired
Companies accrued through such date for that and any prior periods
in accordance with GAAP. There are no liens for Taxes upon the
assets of any Acquired Company except liens for Taxes not yet due.
There are no outstanding deficiencies, assessments or
Proceedings for the collection of Taxes against or involving
any Acquired Company or any of their respective assets.
Except for this Agreement, all Tax-sharing, Tax indemnity or Tax
allocation agreements or similar Contracts or arrangements with
respect to or involving any Acquired Company will be terminated
as to each Acquired Company on or prior to the Closing Date, and
after such date, no Acquired Company will be bound thereby or have
any liability thereunder. All federal, state, local and foreign
Taxes due and payable by or with respect to any Acquired
Company have been, or prior to the Closing Date will be, paid.
There are no waivers in effect of the applicable statutory
period of limitation for Taxes of any Acquired Company for any
taxable period. No deficiency assessment or proposed
adjustment with respect to any Tax liability of any Acquired
Company for any Taxable period is pending or, to the Sellers'
Knowledge, Threatened. The statute of limitations for the
collection or assessment of federal income Taxes due from
each Acquired Company for all periods through December 31, 1993
are closed.
2.10.2. Elections, Consents, Etc. No election under any of
Section 108, 168, 338, 441, 172, 1017, 1033, or 4977 of the IRC
(or any predecessor provisions) has been made or filed by or
with respect to any Acquired Company. No consent to the
application of Section 341(f)(2) of the IRC (or any predecessor
provision) has been made or filed by or with respect to any
Acquired Company or any of their assets. None of the assets of
any Acquired Company is an asset or property that is or will be
required to be treated as being (i) owned by a Person (other
than an Acquired Company) pursuant to the provisions of Section
168(f)(8) of the Internal Revenue Code of 1954, as amended and in
effect immediately before the enactment of the Tax Reform Act of
1986, or (ii) tax-exempt use property within the meaning of
Section 168(h)(1) of the IRC.
2.10.3. Adjustment, Accounting Change. No Acquired Company has
agreed to or, to the Sellers' Knowledge, is required to make
any adjustment pursuant to Section 481(a) of the IRC or under
any similar provision relating to Subchapter L of the IRC (or
any predecessor provisions) or any similar provisions of Law,
and there is no application pending with any governmental
authority, domestic or foreign, having jurisdiction over the
assessment, determination, collection or other imposition of
Taxes (each, a "Taxing Authority") requesting permission for any
changes in any accounting method of any Acquired Company.
Neither the IRS nor any other Taxing Authority has proposed any
such adjustment or change in accounting method.
2.10.4. Consolidated Return. For the Tax years of the Acquired
Companies ending on the Closing Date, each Acquired Company will
be included in a consolidated federal income Tax Return that
includes FGC.
2.10.5. List of Returns. Schedule 2.10.5 contains a list of all
material state, local and foreign consolidated, combined and
unitary Tax Returns for the 1998 Tax year filed by or with
respect to the Acquired Companies.
2.10.6. No Foreign Person. Neither Seller is a "foreign person"
within the meaning of Section 1445(b)(2) of the IRC.
2.10.7. Definitions. "Tax" (including with correlative
meaning, the terms "Taxes" and "Taxable") means (a) any income,
gross receipts, ad valorem, premium, excises, value-added, sales,
use, transfer, franchise, license, severance, stamps,
occupation, service, lease, withholding, employment, payroll,
property or windfall profits tax, alternative or add-on minimum
tax, or other tax fee or assessment, together with any interest
and any penalty, addition to tax or additional amount imposed by
any governmental authority responsible for the imposition of any
such tax, with respect to any Acquired Company and (b) any
liability of any Acquired Company for the payment of any amount
of the type described in clause (a) as a result of any Acquired
Company being a member of an affiliated or combined group with,
or a successor to, or transferee of, any other corporation prior
to the Closing Date.
2.11. No Material Adverse Change. Since the date of the Interim
Balance Sheet, there has not been any change in the business,
operations, assets or condition of the Acquired Companies that
would reasonably be expected to have a Company Material Adverse
Effect.
2.12. Employee Benefits.
2.12.1. Definitions. As used in this Section 2.12, the following
terms have the meanings stated below.
(a) "Company Plan" means all Plans of which an Acquired
Company is or was a Plan Sponsor.
(b) "ERISA Affiliate" means, with respect to an Acquired
Company, any other Person (other than another Acquired Company)
that, together with the Company, would be treated as a single
employer under IRC SS 414.
(c) "Multi-Employer Plan" means a Plan that is also
described in ERISA SS 3(37)(A).
(d) "Non-Qualified Plan" means any Plan that is
intended to be exempt from the participation, vesting and
funding provisions of ERISA and is intended to be maintained
primarily for the purpose of providing deferred compensation
for a select group of management or highly compensated
employees.
(e) "Other Benefit Obligations" means all obligations,
arrangements, or customary practices, owed, adopted or followed
by an Acquired Company and whether or not legally enforceable, to
provide benefits, other than salary, as compensation for
services rendered, to present or former directors, employees, or
agents, other than obligations, arrangements, and practices
that are Plans. Other Benefit Obligations include consulting
agreements under which the compensation paid does not depend upon
the amount of service rendered, sabbatical policies, severance
payment policies, and fringe benefits within the meaning of IRC
SS 132.
(f) "PBGC" means the Pension Benefit Guaranty
Corporation, or any successor to it.
(g) "Pension Plan" has the meaning given in ERISA SS 3(2)
(A).
(h) "Plan" means a plan as defined in ERISA SS
3(3) maintained, contributed to or sponsored by an Acquired
Company.
(i) "Plan Sponsor" has the meaning given in ERISA SS 3(16)
(B).
(j) "Qualified Plan" means any Plan that meets or
purports to meet the requirements of IRC SS 401(a).
(k) "Title IV Plans" means all Pension Plans that are
subject to Title IV of ERISA, 29 U.S.C. SS 1301 et. seq.,
other than Multi-Employer Plans.
(l) "VEBA" means a voluntary employees' beneficiary
association under IRC SS 501(c)(9).
(m) "Welfare Plan" has the meaning given in ERISA ss.
3(1).
2.12.2. List. Schedule 2.12.2 contains a complete and accurate
list of all Plans and Other Benefit Obligations, and
identifies as such all Plans that are (a) defined benefit Pension
Plans, (b) Qualified Plans, (c) Title IV Plans, (d) Multi-
Employer Plans, (e) Non-Qualified Plans or (f) VEBA's.
2.12.3. Deliveries. The Sellers have delivered or made available
to the Buyer:
(a) all documents that state the terms of each Plan or
Other Benefit Obligation and of any related trust, including (i)
all plan descriptions and summary plan descriptions of Plans
for which the Sellers or the Acquired Companies are required to
prepare, file, and distribute plan descriptions and summary plan
descriptions, and (ii) all summaries and descriptions furnished
to participants and beneficiaries regarding Plans and Other
Benefit Obligations for which a plan description or summary
plan description is not required;
(b) all personnel, payroll, and employment manuals and
policies;
(c) all registration statements filed with respect to any
Company Plan;
(d) all insurance policies purchased by or to provide
benefits under any Company Plan;
(e) all contracts with third party administrators,
actuaries, investment managers, consultants, and other
independent contractors that relate to any Company Plan or Other
Benefit Obligation;
(f) all reports submitted within the two years
preceding the date of this Agreement by third party
administrators, actuaries, investment managers, consultants, or
other independent contractors with respect to any Company Plan;
(g) the Form 5500 filed in each of the most recent two
plan years with respect to each Company Plan for which that form
is required, including all related schedules and the opinions of
independent accountants;
(h) all notices that were given by the IRS, the PBGC, or
the Department of Labor to any Acquired Company, or any
Company Plan within the two years preceding the date of this
Agreement; and
(i) copies of the most recent favorable determination
letters issued with regard to any Qualified Plan.
2.12.4. Representations.
(a) Performance. The Acquired Companies have performed
their respective material obligations under all Company
Plans and Other Benefit Obligations.
(b) Certain Plans. There is no Company Plan that is a
Qualified Plan or a VEBA. There is no Multi-Employer Plan and the
Acquired Companies have not been required to contribute to a
Multi-Employer Plan or a Qualified Plan subject to Title IV of
ERISA within the past six years.
(c) Compliance.
(i) The Acquired Companies, with respect to all
Company Plans and Other Benefits Obligations, are, and each
Company Plan and Other Benefit Obligation is, in compliance with
the material provisions of ERISA, the IRC, and other applicable
Laws including the provisions of those Laws expressly mentioned
in this Section 2.12, and with any applicable collective
bargaining agreement.
(ii) With respect to each Company Plan, there has
not occurred any transaction prohibited by Title I of
ERISA or any "prohibited transaction" under IRC SS 4975(c)
that would create a material liability on the part of any Acquired
Company.
(iii) All filings required by ERISA and the IRC as to
each Company Plan have been timely filed, and all notices and
disclosures to participants required by either ERISA or the IRC
have been timely provided.
(iv) Favorable determination letters have been
issued under the Tax Reform Act of 1986 for any Qualified Plan,
and timely applications will be made for favorable determination
letters for any Qualified Plan prior to the expiration of the
remedial amendment period for amendments required by the Small
Business Job Protection Act and any subsequent legislation
effective prior to the Closing Date.
(v) All notices and certifications required to be
given concerning continuation of group health coverage under
ERISA SS 601 et. seq. and concerning group health plan
portability under ERISA SS 701 et. seq. have been timely
provided, and neither the Acquired Companies nor the Buyer will
have any liability concerning the continuation of group
health coverage or group health portability to any employees
who terminate employment on or before the Closing Date.
(d) Termination. Each Company Plan can be terminated
within thirty days, without payment of any additional contribution
or amount and without the vesting or acceleration of any
benefits promised by the Plan. The Acquired Companies'
participation in FGC's Qualified Plans and Non-Qualified
Plans will be terminated as of the Closing Date without any
costs to any Acquired Company or the Buyer, and FGC will have
the sole responsibility and liability for the payment of any
benefits from FGC's Qualified Plans and Non-Qualified Plans to
any Employees who are participants in those Plans.
(e) Claims. There are no pending Proceedings by any
Governmental Body involving or relating to any Company Plan and
no Threatened or pending claims (except for claims for benefits
payable in the normal operation of the Plan) or Proceedings
against any Company Plan or asserting any rights or claims to
benefits under any Company Plan that could give rise to a material
liability to the Acquired Companies or the Buyer.
(f) Former Employees. Except to the extent required
under ERISA SS 601 et. seq. and IRC -- --- SS 4980B, no Acquired
Company provides health or welfare benefits for any retired
or former employee (or their beneficiaries) or is obligated
to provide health or welfare benefits to any active employee
following the employee's retirement or other termination of
service. FGC will assume any and all liability to provide
continuation coverage under ERISA SS 601 et. seq. and IRC --
--- SS 4980B for any Employees or former employees (or their
beneficiaries) of the Acquired Companies who terminate employment
on or before the Closing Date.
(g) Effect of Transactions. The consummation of the
Transactions will not result in the payment, vesting, or
acceleration of any benefit, with respect to any Company Plan.
(h) Single Employer. No event has occurred that
could result in liability of an Acquired Company because of its
treatment, together with one or more ERISA Affiliates, as a single
employer.
2.13. Compliance With Legal Requirements; Governmental
Authorizations.
2.13.1. Compliance. Except as stated on Schedule 2.13.2,
(a) each Acquired Company is in compliance with each Law
applicable to it or to the conduct of its business, except for
instances of non-compliance that would not reasonably be
expected to have a Company Material Adverse Effect, and (b)
since January 1, 1997, none of the Sellers nor any Acquired
Company has received any written notice that any of the
Acquired Companies have violated any Law.
2.13.2. Governmental Authorizations. Schedule 2.13.2
lists the Governmental Authorizations held by each Acquired
Company. Except as stated on Schedule 2.13.2, each such
Governmental Authorization is valid and in full force and effect.
Except as would not reasonably be expected to have a Company
Material Adverse Effect or as stated in Schedule 2.13.2:
(a) each Acquired Company is in compliance with each
Governmental Authorization listed in Schedule 2.13.2; and
(b) no event has occurred or circumstance exists that
could reasonably be expected to (i) constitute or result
directly or indirectly in a violation of or a failure to comply
with any term or requirement of any Governmental Authorization
listed in Schedule 2.13.2 or (ii) result directly or
indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification
to, any Governmental Authorization listed in Schedule 2.13.2.
2.14. Environmental Matters. Without limiting Section 2.13:
2.14.1. Compliance. The Acquired Companies have complied
with all applicable federal, state, local and foreign Laws
relating to the generation, recycling, use, sale, storage,
handling, transfer and disposal of any Hazardous Substances,
except for any non-compliance that would not alone or in total
have a Company Material Adverse Effect. The Acquired Companies
have not received notice that any of them is alleged to be in
violation of or been subject to any administrative, judicial or
regulatory proceeding relating to those Laws. "Hazardous
Substances" means any asbestos, petroleum, or any substance or
material defined or designated as a hazardous or toxic waste,
material or substance by any Laws, including without limitation
the Federal Water Pollution Control Act, the Federal Resource
Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the
Hazardous Material Transportation Act, and any amendments
or successor provisions to those Laws.
2.14.2. Claims. To the Sellers' Knowledge, there are no claims
relating to Hazardous Substances or compliance with the
environmental Laws pending or threatened against (a) any of the
Acquired Companies, (b) any Person for which any of the Acquired
Companies may have assumed or retained liability for
environmental claims, including by operation of Law, or (c)
against any real or personal property or operations that any of
the Acquired Companies owns, leases, operates or manages, in whole
or in part, or did so previously.
2.14.3. Basis for Proceedings. To the Sellers' Knowledge and
except as disclosed in the Acquired Companies' files related to
the Loans and Loan Documents, there are no facts that reasonably
would form the basis of a Proceeding or a material cost
relating to any environmental matter affecting any Acquired
Company or any property securing any Loan that would reasonably
be expected to have a Company Material Adverse Effect.
2.15. Legal Proceedings. Schedule 2.15 lists all pending
Proceedings to which any Acquired Company is a party other than
pending Proceedings for the collection of accounts receivable
collateral that do not include counterclaims against any
Acquired Company. There is no pending Proceeding that has
been commenced by or against any Acquired Company or either Seller
and that (a) would reasonably be expected to have a Company
Material Adverse Effect or (b) challenges or would reasonably be
expected to have the effect of preventing, delaying, making
illegal or otherwise interfering with, any of the Transactions.
To the Sellers' Knowledge, no such Proceeding has been Threatened.
2.16. Absence of Certain Changes and Events. Since the date
of the Interim Balance Sheet, the Acquired Companies have
conducted the Business only in the Ordinary Course and there has
not been any:
(a) change in any Acquired Company's authorized or issued
capital stock; grant of any stock option or right to purchase
shares of capital stock of any Acquired Company; issuance of any
security convertible into such capital stock; grant of any
registration rights; purchase, redemption, retirement, or other
acquisition by any Acquired Company of any shares of any such
capital stock;
(b) amendment to the Organizational Documents of any
Acquired Company;
(c) damage to or destruction or loss of any Acquired
Company tangible asset, whether or not covered by insurance,
that would reasonably be expected to have a Company Material
Adverse Effect;
(d) entry into, termination of, or receipt of notice of
termination of any Applicable Contract (other than Loans in
the Ordinary Course) involving a total remaining commitment by
or to any Acquired Company of more than $500,000;
(e) sale, lease, or other disposition of any asset or
property of any Acquired Company, or mortgage, pledge, or
imposition of any lien or other Encumbrance on any material
asset or property of any Acquired Company, other than in the
Ordinary Course;
(f) material change in any Acquired Company's accounting
methods; or
(g) incurrence of any liability or obligation
whether absolute or contingent whether for borrowed money,
lease obligation or otherwise, other than in the Ordinary Course;
(h) with respect to the Company, declaration or payment
of any dividend or other distribution in respect of its capital
stock (other than the dividend on the Preferred Shares
contemplated by Section 5.11);
(i) agreement, whether oral or written, by any Acquired
Company to do any of the foregoing.
2.17. Contracts; No Defaults.
2.17.1. List. Schedule 2.17.1 lists the following types of
Applicable Contracts (the "Material Contracts"):
(a) each Applicable Contract that was not entered into
in the Ordinary Course and that involves expenditures or
receipts of one or more Acquired Companies in excess of
$500,000;
(b) each Applicable Contract relating to the ownership
of, leasing of, title to, use of, or any leasehold or other
interest in, any real or personal property (except personal
property leases and installment and conditional sales agreements
having a value per item or aggregate payments of less than
$25,000 and with terms of less than one year);
(c) each joint venture, partnership, and other
Applicable Contract (however named) involving a sharing of
profits, losses, costs, or liabilities (whether or not
contingent) by any Acquired Company with any other Person;
(d) each Applicable Contract containing covenants
that in any way purport to restrict the business activity of any
Acquired Company or any Affiliate of an Acquired Company or
limit the freedom of any Acquired Company or any Affiliate of an
Acquired Company to engage in any line of business or to compete
with any Person;
(e) any power of attorney outstanding or any obligations
or liabilities (whether contingent, absolute, accrued or
otherwise) as guarantor, surety, cosigner, endorser, co-maker,
indemnitor or otherwise in respect of the obligations of any
Person (other than an Acquired Company);
(f) each Applicable Contract providing for the
borrowing of more than $5,000,000;
(g) each Applicable Contract for personnel services which
is either
(i) written or
(ii) not terminable without cost or obligation at
an Acquired Company's option;
(h) each license or software contract that is material
to an Acquired Company (other than shrink-wrap licenses of
commercially available software); and
(i) each amendment, supplement or modification in respect
of any of the foregoing.
2.17.2. Validity. Each Material Contract, is in full force and
effect and is valid and enforceable against the relevant Acquired
Company and, to the Sellers' Knowledge, against the other
party to such Material Contract.
2.17.3. Compliance. Except as would not reasonably be expected to
have a Company Material Adverse Effect:
(a) each Acquired Company is in compliance in all material
respects with all applicable terms and requirements of each
Material Contract under which that Acquired Company has any
obligation or liability or by which that Acquired Company, or any
Acquired Company asset, is bound;
(b) to the Sellers' Knowledge, each other Person that
has or had any obligation or liability under any Material
Contract under which an Acquired Company has or had any rights is
in compliance in all respects with all applicable terms and
requirements of that Material Contract; and (c) no event has
occurred or circumstance exists that (with or without notice or
lapse of time) would result in a violation or breach of, or
give any Acquired Company or other Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or
modify, any Material Contract.
2.18. Insurance. The only insurance applicable to the Acquired
Companies is provided through the Sellers' policies. Other
than as described in Sections 5.15 and 9.8, the Acquired
Companies will cease to be covered by those policies at the time
of Closing. To the Sellers' Knowledge, a Seller or an Acquired
Company has given notice to the Sellers' insurers of all Acquired
Company-related claims that could be insured by such policies.
2.19. Employees. All employees who work for the Acquired
Companies (the "Employees") are employees of the Company.
Schedule 2.19 states the following information for each Employee:
name; job title; current annual compensation; vacation accrued;
annual bonus, special retention bonus and any other bonuses or
commission amounts accrued and payable; and service credited for
purposes of vesting and eligibility to participate under any
Acquired Company employee benefit plan. The Acquired Companies
would have no liability as a result of the termination of any
Employee other than as described on Schedule 2.19, as required by
COBRA or as set forth in Section 5.10. To the Sellers' Knowledge,
no Employee is a party to, or is otherwise bound by, any
agreement or arrangement that in any way adversely affects or
will affect (a) the performance of his or her duties as an
Employee, or (b) the ability of any Acquired Company to
conduct its business. As of the date of this Agreement, to the
Sellers' Knowledge, no Employee intends to terminate his or her
employment with any Acquired Company as a result of the
consummation of the Transactions other than those persons
identified as "excluded employees" on Schedule 2.19. As of the
date of this Agreement, each individual performing services for
any of the Acquired Companies is properly classified as an
employee or independent contractor under applicable Law.
2.20. Labor Relations; Compliance. No Acquired Company is a
party to any collective bargaining or other labor Contract.
There is not presently pending or existing, and to the
Seller's Knowledge there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage, or employee grievance
process, (b) any Proceeding against or affecting any Acquired
Company relating to the alleged violation of any Law pertaining
to labor relations or employment matters, or (c) any
application for certification of a collective bargaining agent.
There is no lockout of any Employees by any Acquired Company,
and no Acquired Company contemplates such an action. Each
Acquired Company has complied with all Laws relating to
employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes,
occupational safety and health, and plant closing, except for
instances of non-compliance that would not reasonably be
expected to have a Company Material Adverse Effect.
2.21. Intellectual Property.
2.21.1. Trademarks.
(a) Description. Schedule 2.21.1 lists all Acquired
Company business names, trading names, registered and
unregistered trademarks, service marks, and applications and
the owner of such Marks (collectively, "Marks"). One or more
of the Acquired Companies is the owner of all right, title,
and interest in and to each such Mark, free and clear of all
Encumbrances.
(b) Compliance. All Marks that have been registered
with the United States Patent and Trademark Office are
currently in compliance in all material respects with all
formal legal requirements (including the timely post-
registration filing of affidavits of use and incontestability
and renewal applications), and are valid and enforceable.
(c) Proceedings; Interference; Infringement. No Mark is
involved in any opposition, invalidation, or cancellation
Proceeding and, to the Sellers' Knowledge, no such Proceeding
is Threatened with respect to any Mark. To the Sellers' knowledge,
there is no potentially interfering trademark or trademark
application of any third party. No Mark is infringed or, to
the Sellers' Knowledge, has been challenged or threatened in
any way. No Mark used by any Acquired Company infringes or is
alleged to infringe any trade name, trademark, or service mark of
any third party.
(d) Rights to Software. As of the Closing Date, the
Acquired Companies will have all rights to use all software
currently used in the Business except as would not reasonably be
expected to have a Company Material Adverse Effect.
2.21.2. Trade Secrets. The Acquired Companies have taken
reasonable precautions to protect the secrecy, confidentiality,
and value of their know-how, trade secrets, business methods,
customer lists and other confidential information (collectively,
"Trade Secrets"). One or more of the Acquired Companies has the
right to use the Trade Secrets. To the Sellers' Knowledge, no
material Trade Secrets have been used, divulged, or appropriated
to the detriment of the Acquired Companies.
2.22. Certain Payments. Since November 30, 1996, no
Acquired Company or director, officer, agent, or Employee of any
Acquired Company or, to the Sellers' Knowledge, any other Person
associated with or acting for or on behalf of any Acquired
Company, has directly or indirectly made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of form,
whether in money, property, or services, in violation of any Law.
Since November 30, 1996, no Acquired Company has maintained any
fund or asset not recorded in the Acquired Companies' books and
records.
2.23. Relationships With Related Persons. Neither Seller,
nor any Related Person of either Seller or of any Acquired
Company, has any interest in any property (whether real,
personal, or mixed and whether tangible or intangible), used in
or pertaining to the Business. Neither Seller, nor any Related
Person of either Seller or of any Acquired Company owns an equity
interest or any other financial or profit interest in, a Person
that has business dealings or a material financial interest
in any transaction with any Acquired Company, other than inter-
company charges, services and transactions in the Ordinary
Course. Except as stated in Schedule 2.23, neither Seller, nor
any Related Person of either Seller or of any Acquired Company,
is a party to any Contract with, or has any claim or right
against, any Acquired Company.
2.24. Year 2000. The Acquired Companies have taken
reasonable steps to identify and analyze their computer
software, hardware and embedded chips in other equipment to
assure that those items will not be affected by the "Year 2000
Problem" (that is the risk that computer software, hardware
and embedded chips in other equipment may be unable to
recognize and perform properly date-sensitive functions
involving certain dates before and after December 31,
1999). The Acquired Companies have also surveyed their
borrowers, suppliers, service providers and others on whom the
Acquired Companies significantly depend (the "Business Contacts")
to ascertain the measures taken by the Business Contacts with
respect to the Year 2000 Problem. To the Sellers' Knowledge, the
Year 2000 Problem would not reasonably be expected to have a
Company Material Adverse Effect.
2.25. Brokers Or Finders. The Sellers and their agents
have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this
Agreement. The Acquired Companies have incurred no material costs
related to the Transactions.
2.26. Full Disclosure. To the Sellers' Knowledge, they have
not failed to disclose to Buyer any facts material to the
Business. No representation or warranty by the Sellers in this
Agreement (including the Disclosure Schedules and any supplement
thereto) or in any certificate delivered by the Sellers pursuant
to this Agreement contains or will contain any untrue statement
of material fact or omits or will omit to state any material
fact necessary, in light of the circumstances under which it
was made, in order to make those statements not misleading.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to the Sellers as follows:
3.1. Organization and Good Standing. The Buyer is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware.
3.2. Validity; No Conflict.
3.2.1. Validity. This Agreement constitutes the legal,
valid, and binding obligation of the Buyer, enforceable
against the Buyer in accordance with its terms, subject to the
Enforceability Exceptions. The Buyer has the corporate power and
authority to execute and deliver this Agreement and to perform its
obligations under it.
3.2.2. No Conflict. Other than the termination or expiration
of the applicable waiting period under the HSR Act, neither the
execution a
