Exhibit 10.1
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AGREEMENT FOR PURCHASE AND SALE
OF MEMBERSHIP INTERESTS
by and among
GLOBALNET ENTERPRISES, LLC,
a Pennsylvania limited liability company,
as
SELLER,
LEARNED ASSOCIATES OF NORTH AMERICA, LLC, a New Jersey limited
liability
company, SEVEN HILLS MANAGEMENT, LLC, a Pennsylvania limited
liability
company, DIVERSIFIED DEVELOPMENT LLC, a Pennsylvania limited
liability
company and
AJAX BARON, LLC, a Pennsylvania limited liability
company
as
MEMBERS of SELLER,
and
FIRSTPLUS ENTERPRISES, INC., a Texas corporation and
FIRSTPLUS DEVELOPMENT COMPANY, a Texas corporation,
as
BUYERS
Dated July 30th, 2007
This AGREEMENT FOR PURCHASE AND SALE OF MEMBERSHIP
INTERESTS (this
"AGREEMENT"), dated July 30, 2007, is by and among Globalnet
Enterprises, LLC, a
Pennsylvania limited liability company ("SELLER"), and its
members, to wit:
Learned Associates of North America, LLC, a New Jersey limited
liability company
("LEARNED"), Seven Hills Management, LLC, a Pennsylvania
limited liability
company ("SEVEN HILLS"), Diversified Development LLC, a
Pennsylvania limited
liability company ("DIVERSIFIED") and Ajax Baron, LLC, a
Pennsylvania limited
liability company ("AJAX") (Learned, Seven Hills, Diversified and
Ajax are each
referred to herein as a "MEMBER" and collectively as the
"MEMBERS") on the one
hand and FirstPlus Enterprises, Inc. ("FP ENTERPRISES")
and FirstPlus
Development Company ("FP DEVELOPMENT") , each a Texas corporation
(collectively,
and jointly and severally, the "BUYERS"), on the other hand.
W I T N E S S E T H:
WHEREAS, Seller owns all of the issued and
outstanding membership
interests of each of Globalnet Development Co., LLC, a
Pennsylvania limited
liability company ("DEVELOPMENT"), Globalnet Facility Services
Co., LLC, a
Pennsylvania limited liability company ("FACILITY") and Globalnet
Restoration
Co., LLC, a Pennsylvania limited liability company
("RESTORATION" and
collectively with Development and Facility, the "SUBSIDIARIES");
WHEREAS, FP Enterprises desires to purchase all of the
issued and
outstanding membership interests of Facility (the "FACILITY
INTERESTS") and all
of the issued and outstanding membership interests of
Restoration (the
"RESTORATION INTERESTS") from Seller, and Seller desires to sell
the Facility
Interests and the Restoration Interests to FP Enterprises;
WHEREAS, FP Development desires to purchase all of the
issued and
outstanding membership interests of Development (the "DEVELOPMENT
INTERESTS")
from Seller, and Seller desires to sell the Development
Interests to FP
Development;
WHEREAS, Members are the sole members of Seller;
NOW, THEREFORE, in consideration of the premises and
the mutual
representations, warranties, covenants and undertakings
contained herein, and
for other good and valuable consideration, the receipt and
sufficiency of which
are hereby acknowledged, the parties hereto, intending to be
legally bound,
agree as follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 CERTAIN DEFINITIONS. As used in this Agreement,
the following
terms have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any
Person directly
or indirectly controlling, controlled by, or under common
control with, such
other Person. For purposes of this definition, the term "control"
(including the
correlative meanings of the terms "controlled by" and "under
common control
with"), as used with respect to any Person, means the possession,
directly or
indirectly, of the power to direct or cause the direction of
the management
policies of such Person, whether through the ownership of voting
securities or
by contract or otherwise.
"ANCILLARY AGREEMENTS" means collectively the Note,
the Development
Assignment (as defined in SECTION 2.7(A)), the Facility
Assignment (as defined
in SECTION 2.7(B)) and the Restoration Assignment (as
defined in SECTION
2.7(C)).
"BOOKS AND RECORDS" means all books, ledgers, files,
reports, plans,
records, manuals and other materials (in any form or medium) of,
or maintained
for, the respective businesses of the Subsidiaries, but excluding
any such items
to the extent (i) any Law prohibits their transfer or (ii) any
transfer thereof
otherwise would subject Seller or any of its Affiliates to any
Liability to
anyone other than Buyers.
"BUSINESS" means business of all or any, as
applicable, of the
Subsidiaries.
"BUSINESS DAY" means any day other than Saturday,
Sunday or a day on
which banks in Philadelphia, Pennsylvania are authorized or
obligated by Law or
executive order to close.
"BUYER SHARES" is as defined in SECTION 2.2.
"CLOSING" means the closing of the sale of the
Interests that is the
subject of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as
amended.
"COMMON STOCK" means the common stock of FirstPlus,
as defined in
SECTION 4.3.
"CONTRACTS" means all personal property leases,
agreements and
contracts, of each of the Subsidiaries.
"ENVIRONMENTAL LAWS" shall mean all federal, state
and local laws,
ordinances, rules and regulations and other provisions having
the force or
effect of law pertaining to pollution or protection of the
environment,
including without limitation, all those relating to the
presence, use,
production, generation, handling, transportation, treatment,
storage, disposal,
distribution, labeling, testing, processing, discharge,
release, threatened
release, control or cleanup of any Hazardous Material and air,
water, ground or
subsurface pollution and to the storage, use, handling,
transportation,
discharge, and disposal (including spills and leaks) of
gaseous, liquid,
semi-solid or solid materials.
"FINANCIAL STATEMENTS" is as defined in SECTION 3.5.
"FIRSTPLUS" means FirstPlus Financial Group,
Inc., a Nevada
corporation, the parent corporation of Buyers.
"GAAP" means United States generally accepted
accounting principles
as in effect from time to time, consistently applied.
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"GOVERNMENT ENTITY" means any federal, state,
local, foreign or
domestic court, administrative body or other governmental or
quasi-governmental
entity with competent jurisdiction.
"HAZARDOUS MATERIAL" shall mean any solid waste
disposal, toxic
substance, hazardous substance, hazardous waste, toxic chemical,
pollutant or
contaminant.
"INTERESTS" is as defined in SECTION 2.1.
"LAW" means any law, statute, ordinance, rule,
regulation, code,
order, judgment, injunction or decree enacted, issued, promulgated,
enforced or
entered by a Government Entity.
"LIABILITY" or "LIABILITIES" means any and all debts,
liabilities,
commitments and obligations of any kind, whether fixed, contingent
or absolute,
matured or unmatured, liquidated or unliquidated, accrued or
not accrued,
asserted or not asserted, known or unknown, determined,
determinable or
otherwise, whenever or however arising (including, whether
arising out of any
contract or tort based on negligence or strict liability) and
whether or not the
same would be required by GAAP to be reflected in financial
statements or
disclosed in the notes thereto.
"LIEN" shall mean any security interest, lien,
claim, pledge,
mortgage, charge, restriction on transfer, right under
conditional sales
contract or other encumbrance or charge of any nature whatsoever.
"MATERIAL ADVERSE EFFECT" is as defined in SECTION 3.1.
"MEMBERS' AGENT" is as defined in SECTION 9.12.
"NON-COMPETITION PERIOD" is as defined in SECTION 5.8.
"NOTE" is as defined in SECTION 2.3.
"ORDINARY COURSE" or "ORDINARY COURSE OF BUSINESS"
means the conduct
of the Business in accordance with the normal day-to-day customs,
practices and
procedures of each of the Seller Companies, as applicable.
"PERMITS" are as defined in SECTION 3.10.
"PERSON" means any individual, corporation,
partnership, limited
liability company, limited liability partnership, firm,
joint venture,
association, joint-stock company, trust, unincorporated
organization, estate,
sole proprietorship, association, Government Entity or other
entity.
"REGULATION D" means Regulation D of the United
States Securities
and Exchange Commission, as amended, issued under the Securities
Act.
"RIGHTS" means warrants, options, rights, convertible
securities and
other capital stock equivalents which obligate an entity
to issue its
securities.
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"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SELLER COMPANIES" means, collectively, Seller,
Development,
Facility and Restoration.
"TAX RETURNS" means all reports, returns or other
information filed
or required to be filed with respect to Taxes, including any
amendments thereto.
"TAX" or "TAXES" means all federal, state or local
and all foreign
taxes, including income, gross receipts, windfall profits,
value added,
property, sales, use, duty, license, excise, franchise, employment,
withholding
or similar taxes, together with any interest, additions or
penalties with
respect thereto and any interest in respect of such additions or
penalties.
"TRANSACTION" means the purchase and sale of the
Interests pursuant
to this Agreement.
Section 1.2 OTHER DEFINITIONAL PROVISIONS. Unless the
express context
otherwise requires: (a) the words "hereof", "herein", and
"hereunder" and words
of similar import, when used in this Agreement, shall refer to this
Agreement as
a whole and not to any particular provision of this Agreement;
(b) the terms
defined in the singular have a comparable meaning when used in the
plural, and
vice versa; (c) the terms "Dollars" and "$" mean United States
Dollars; (d)
references herein to a specific Section, Subsection or Schedule
shall refer,
respectively, to Sections, Subsections or Schedules of this
Agreement; (e)
wherever the word "include," "includes," or "including" is
used in this
Agreement, it shall be deemed to be followed by the words "without
limitation;"
and (f) references herein to any gender includes each other gender.
ARTICLE II
PURCHASE AND SALE OF INTERESTS
Section 2.1 PURCHASE AND SALE OF INTERESTS.
(a) On the terms and subject to the conditions set
forth herein, at
the Closing, Seller shall sell, convey, transfer, assign and
deliver to FP
Development, free and clear of all Liens, and FP Development shall
purchase from
Seller all of Seller's right, title and interest, as of the
Closing, in and to
the Development Interests.
(b) On the terms and subject to the conditions set
forth herein, at
the Closing, Seller shall sell, convey, transfer, assign and
deliver to FP
Enterprises, free and clear of all Liens, and FP Enterprises shall
purchase from
Seller all of Seller's right, title and interest, as of the
Closing, in and to
the Facility Interests and the Restoration Interests.
The Development Interests, the Facility Interests and the
Restoration Interests
are herein collectively referred to as the "INTERESTS".
Section 2.2 PURCHASE PRICE. On the terms and subject to the
conditions set
forth herein, in consideration of the sale of the Interests,
Buyers shall pay
and deliver to Seller (a) FOUR MILLION FIVE HUNDRED FORTY
THOUSAND DOLLARS
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($4,540,000), consisting of (i) THREE MILLION FORTY FIVE
THOUSAND DOLLARS
($3,045,000) in cash at the Closing and (ii) ONE MILLION FOUR
HUNDRED NINETY
FIVE THOUSAND DOLLARS ($1,495,000) payable subsequent to Closing,
the obligation
of payment of which shall be evidenced by a promissory note
providing for a
seven percent (7%) per annum interest rate and a maturity date
two years from
the date hereof, and payment of the outstanding principal and
interest due in a
balloon payment on such maturity date, which note is in the form
of EXHIBIT A
(the "NOTE"); and (b) within five Business Days after the Closing,
ONE MILLION
ONE HUNDRED THOUSAND (1,100,000) shares of common stock of
FirstPlus (the "BUYER
SHARES") issued to the Seller under Regulation D, to be allocated
and issued as
set forth on SCHEDULE 2.2(B) hereof (collectively, the "PURCHASE
PRICE").
Section 2.3 PURCHASE PRICE ALLOCATION. The Purchase
Price shall be
allocated among the Interests as set forth on SCHEDULE 2.3
hereof for all Tax
purposes including, without limitation, Code Section 1060.
Seller and Buyers
(and their respective Affiliates) shall file all Tax Returns
consistent with the
allocation described in this SECTION 2.3 hereof and use
their reasonable
commercial efforts to sustain such allocation in any subsequent
tax audit or
dispute. Each party shall file its respective IRS Form 8594
consistent herewith.
Section 2.4 CLOSING. The Closing shall take place at
the offices of
FirstPlus at 10:00 a.m. prevailing Central Time, on the later of
July 30th, 2007
or the day on which all of the conditions precedent set forth in
ARTICLE VI
shall have been satisfied or waived. Such time and date are herein
referred to
as the "CLOSING DATE." Subject to the provisions of ARTICLE VIII
hereof, failure
to consummate such transactions on the date and the time determined
pursuant to
this SECTION 2.4 shall not result in the termination of this
Agreement and shall
not relieve any party of any obligation under this Agreement.
Section 2.5 DELIVERIES BY BUYERS.
(a) At the Closing, Buyers shall deliver to Seller the
following:
(i) The cash portion of the Purchase Price
payable at the
Closing in immediately available funds by wire transfer to an
account or
accounts which have been designated by Seller;
(ii) The Note;
(iii)Duly executed counterparts of each of
the Ancillary
Agreements, if any, as applicable; and
(iv) Resolutions of the Boards of
Directors of Buyers
authorizing the execution and delivery of this Agreement by
Buyers and the
performance of their obligations hereunder, certified by the
Secretaries of
Buyers;
(b) Within five Business Days after the Closing Date,
Buyers shall
deliver to Seller duly issued share certificates representing the
Buyer Shares.
Section 2.6 DELIVERIES BY SELLER. At the Closing,
Seller shall
deliver, or cause to be delivered, to Buyers the following:
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(a) An Assignment of Limited Liability Company
Interest and
Assumption Agreement, duly endorsed, representing the
transfer of the
Development Interest from Seller to FP Development in the form
and content
attached hereto as EXHIBIT B (the "DEVELOPMENT ASSIGNMENT"),
together with
Membership Certificate No. 1 for 100% of the Development Interests;
(b) An Assignment of Limited Liability Company
Interest and
Assumption Agreement, duly endorsed, representing the transfer of
the Facility
Interest from Seller to FP Enterprises in the form and content
attached hereto
as EXHIBIT C (the "FACILITY ASSIGNMENT") together with Membership
Certificate
No. 1 for 100% of the Facility Interests;
(c) An Assignment of Limited Liability Company
Interest and
Assumption Agreement, duly endorsed, representing the
transfer of the
Restoration Interest from Seller to FP Enterprises in the form
and content
attached hereto as EXHIBIT D (the "RESTORATION ASSIGNMENT")
together with
Membership Certificate No. 1 for 100% of the Restoration Interests;
(d) Duly executed counterparts of each of the
other Ancillary
Agreements, as applicable;
(e) Resolutions of the members of Seller adopted at
meetings or by
consent authorizing the execution and delivery of this Agreement
by Seller and
the performance of its obligations hereunder, certified by
the Manager of
Seller;
(f) Certificates of the Secretary of State of the
Commonwealth of
Pennsylvania dated as of a recent date as to the good standing
of the Seller
Companies;
(g) Resignations, effective immediately, of each
incumbent manager
and officer of the Subsidiaries; and
(h) Such other separate bills of sale, assignments or
documents of
transfer that Buyer may reasonably deem necessary or
appropriate in order to
perfect, confirm or evidence title to all or any part of the
Interests.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND MEMBERS
Seller and Members jointly and severally represent and
warrant to Buyers
as of the date hereof and as of the Closing as follows:
Section 3.1 ORGANIZATION. The Seller Companies are
limited liability
companies duly organized, validly existing and in good standing
under the laws
of Pennsylvania. Seller has all requisite power and
authority to own the
Interests. The Subsidiaries have all requisite power and
authority to conduct
each such entity's respective Business as currently conducted.
Complete and
correct copies of Certificates of Formation of each of the Seller
Companies, and
all amendments thereto, certified by the Secretary of State of the
Commonwealth
of Pennsylvania, and of the Limited Liability Company Operating
Agreements of
the Seller Companies and all amendments thereto, previously have
been delivered
to Buyers. Each of the Seller Companies is duly qualified to do
business as a
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foreign limited liability company, and is in good standing in each
jurisdiction
where the character of the properties owned, leased or operated
by it or the
nature of its activities makes such qualification necessary,
except where the
failure to be so duly qualified and in good standing would not
reasonably be
expected to have a Material Adverse Effect. For the purposes of
this Agreement,
"MATERIAL ADVERSE EFFECT" means any effect or change that would
be materially
adverse to the Business or the Interests of any of the Seller
Companies on one
hand, or Buyers on the other hand, or on the ability of Seller
or Buyers to
consummate timely the transactions contemplated hereby.
Section 3.2 AUTHORIZATION. Each of Seller and Members has
full power and
authority to execute and deliver this Agreement and each of
the Ancillary
Agreements to which it is a party, and to perform its obligations
hereunder and
thereunder. The execution, delivery and performance by Seller
and Members of
this Agreement and such Ancillary Agreements has been duly
and validly
authorized and no additional limited liability company
authorization or consent
is required in connection with the execution, delivery and
performance by Seller
or Members of this Agreement or such Ancillary Agreements.
There are no
contractual, statutory or other restrictions of any kind upon
the power and
authority of Seller to execute and deliver this Agreement or to
consummate the
transactions contemplated hereunder and no action, waiver or
consent by any
Government Entity is necessary to make this Agreement valid and
binding upon
Seller in accordance with its respective terms. Assuming the due
execution and
delivery of this Agreement by Buyers, this Agreement is a
legal, valid and
binding obligation of Seller and Members, enforceable against them
in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization and
moratorium laws and other laws of general application affecting
the enforcement
of creditors' rights generally, and the fact that equitable
remedies or relief
(including, but not limited to, the remedy of specific
performance) are subject
to the discretion of the court from which such relief may be
sought.
Section 3.3 NO BREACH OF STATUTE OR CONTRACT. Neither the
execution and
delivery of this Agreement by Seller or Members, nor the
consummation by Seller
or Members of the transactions contemplated hereby, nor compliance
by Seller or
Members with any of the provisions hereof will violate or cause a
default under
any statute (domestic or foreign), judgment, order, writ,
decree, rule or
regulation of any Government Entity applicable to any of the Seller
Companies or
Members or any of their respective properties; breach or
conflict with any of
the terms, provisions or conditions of the Certificate of
Formation or Limited
Liability Company Operating Agreement of any of the Seller
Companies; or
violate, conflict with or breach any agreement, contract,
mortgage, instrument,
indenture or license to which any of the Seller Companies or
Members is a party
or by which Seller or Members is or may be bound with respect to
the Interests
or the Business, or constitute a default (in and of itself or with
the giving of
notice, passage of time or both) thereunder, or result in the
creation or
imposition of any Lien upon, or give to any other party or
parties any claim,
interest or right, including rights of termination or
cancellation in, or with
respect to, the Interests.
Section 3.4 SUBSIDIARIES. Other than the Subsidiaries,
Seller has no
subsidiaries or equity investments in any other corporation,
association,
partnership, joint venture or other entity that carries on the
Business.
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Section 3.5 FINANCIAL STATEMENTS. The following unaudited
consolidated
financial statements of the Seller Companies (collectively,
the "FINANCIAL
STATEMENTS"), which have been furnished previously to Buyers by
Seller, have
been prepared from and are in accordance with the books and
records of the
Seller Companies in conformity with GAAP applied on a
consistent basis
throughout the periods involved, and fairly present the financial
condition of
the Seller Companies as at the dates stated and the results of
operations of the
Seller Companies for the periods then ended: consolidated balance
sheets of the
Seller Companies at December 31, 2005 and the income statements
for the year
then ended, including footnotes (audited); and consolidated
balance sheets of
the Seller Companies at May 31, 2007 and monthly income
statements for each of
the five months in the period then ended.
Section 3.6 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as
set forth on
SCHEDULE 3.6, since December 31, 2006 there has not been with
respect to any
Business or any Subsidiary:
(i) Any material adverse change in its operations (as
now conducted
or as presently proposed to be conducted), assets, properties
or rights,
prospects or condition (financial or otherwise);
(ii) Any material transaction entered into or carried
out other than
in the ordinary and usual course of its business including,
without limitation,
any transaction resulting in the incurrence of liabilities or
obligations;
(iii) Any material change made in the methods of doing
business or
in the accounting principles or practices or the method of
application of such
principles or practices;
(iv) Any Lien imposed or agreed to be imposed on or
with respect to
the Interests or the assets of any of the Subsidiaries that
will not be
discharged prior to the Closing;
(v) Any modification, waiver, change, amendment,
release, rescission
or termination of, or accord and satisfaction with respect
to any term,
condition or provision of any Contract, other than any
satisfaction by
performance in accordance with the terms thereof in the
ordinary and usual
course of its business; or
(vi) Any damage, destruction or similar loss, whether
or not covered
by insurance, adversely affecting the Business.
Section 3.7 LIABILITIES. Except as set forth on SCHEDULE
3.7, none of the
Seller Companies has any Liability or obligation of any
nature (whether
liquidated, unliquidated, accrued, absolute, contingent or
otherwise and whether
due or to become due) in respect of the Business except:
(i) those set forth or reflected in the Financial
Statements that
have not been paid or discharged since the date thereof;
(ii) those arising under agreements or other
commitments listed on
any Schedule hereto; and
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(iii) current Liabilities arising in the Ordinary
Course of Business
subsequent to May 31, 2007 that are accurately reflected in
the Books and
Records in a manner consistent with past practice.
Section 3.8 TAXES. Except as set forth on SCHEDULE 3.8:
(i) Each of the Seller Companies has duly filed all
federal, state,
local and foreign tax returns and tax reports required to be
filed by it. All
such returns and reports are true, correct and complete in
all material
respects, none of such returns and reports has been amended,
and all taxes,
assessments, fees and other governmental charges due with respect
to the periods
covered by such returns and reports have been fully paid;
(ii) SCHEDULE 3.8 sets forth the dates and results
of any and all
audits of federal, state, local and foreign tax returns of any
of the Seller
Companies performed by federal, state, local or foreign taxing
authorities. No
waivers of any applicable statutes of limitations are
outstanding. All
deficiencies proposed as a result of any audits have been paid or
settled. There
is no pending or to Seller's knowledge threatened federal,
state, local or
foreign tax audit of any of the Seller Companies and no
agreement with any
federal, state, local or foreign tax authority that may affect
the subsequent
tax liabilities of any of the Seller Companies; and
(iii) None of the Seller Companies has any
liabilities for taxes
other than those that are not yet due and payable, and no federal,
state, local
or foreign tax authority is now asserting or threatening to
assert any
deficiency or assessment for additional taxes with respect to any
of the Seller
Companies.
Section 3.9 LITIGATION. Except as set forth on SCHEDULE 3.9,
there are no
claims, actions, suits or proceedings pending or, to the knowledge
of Seller or
Members, threatened against or affecting the Seller Companies, or
any of them,
or any Member, officer or director of Seller in connection with
the Business or
the Interests, before any federal, state, local or foreign court
or Government
Entity. None of the Seller Companies or Members is subject to or in
default with
respect to any judgment, order, writ, injunction or decree that is
binding upon
the Seller Companies, or any of them, or Members with respect to
the Business.
Section 3.10 COMPLIANCE WITH LAWS. Except as listed on
SCHEDULE 3.10, each
of the Seller Companies and Members in compliance in all material
respects with
all laws, ordinances, regulations and orders applicable to the
Business and the
Interests and has no notice or knowledge of any violations,
whether actual,
claimed or alleged, thereof. Each of the Seller Companies has such
licenses and
permits issued by the relevant Government Entity as are
necessary for the
conduct of its Business (the "PERMITS"). Each of the Permits is
currently valid
and in full force and effect and the Permits constitute all
franchises,
licenses, permits, consents, authorizations, approvals, and
certificates of any
Government Entity necessary to the conduct of the Business. None
of the Seller
Companies or Members is in violation of any of the Permits. There
is no pending
or, to the knowledge of Seller or Members, threatened
proceeding that could
result in the revocation or cancellation of, or inability of any
of the Seller
Companies to renew, any Permit.
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Section 3.11 EMPLOYEE BENEFIT PLANS. None of the Seller
Companies has any
pension, retirement, profit-sharing, deferred compensation, bonus,
stock option
or other incentive plan, or other employee benefit program,
arrangement,
agreement or understanding, or medical, vision, dental or other
health plan, or
life insurance or disability plan, or any other employee benefit
plan as defined
in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as
amended ("ERISA"), (whether or not any such employee benefit plans
are otherwise
exempt from the provisions of ERISA, whether or not legally
binding), adopted,
established, maintained or contributed to by any of the Seller
Companies or
under which it would otherwise be a party or have liability
and under which
employees or former employees (whether or not retired employees)
of any of the
Seller Companies (or their beneficiaries) are eligible to
participate or derive
a benefit.
Section 3.12 TITLE TO ASSETS. (a) Each of the Seller
Companies has good
and marketable title to all assets owned by it and valid leasehold
interests in
all assets leased by it in the operation of its Business, free and
clear of all
Liens, except as listed on SCHEDULE 3.12 hereto, and excluding
(i) liens for
taxes, fees, levies, imposts, duties or governmental charges of
any kind that
are not yet delinquent or are being contested in good faith by
appropriate
proceedings that suspend the collection thereof; or (ii) liens
for mechanics,
materialmen, laborers, employees, suppliers or others that
are not yet
delinquent or are being contested in good faith by appropriate
proceedings. None
of the Seller Companies is in violation of any covenant, condition,
restriction,
easement, agreement, order or regulation of any Government
Entity having
jurisdiction over the Seller Companies or their assets or the use
thereof.
Except as listed on SCHEDULE 3.12, no financing
statement under the
Uniform Commercial Code or similar law naming Seller as debtor has
been filed in
any jurisdiction in respect of the Interests, and Seller is not
a party to or
bound under any agreement or legal obligation authorizing any
party to file any
such financing statement.
Section 3.13 CONTRACTS AND COMMITMENTS. Each of the Contracts
is valid and
binding, in full force and effect and enforceable in
accordance with its
respective provisions. Except as set forth on SCHEDULE 3.13, none
of the Seller
Companies has assigned, mortgaged, pledged, encumbered,
or otherwise
hypothecated any of its right, title or interest under the
Contracts and no
Contract has been amended, supplemented or superseded. Except as
set forth on
SCHEDULE 3.13, none of the Seller Companies or, to the knowledge
of the Seller
or Members, any other party thereto is in material violation of,
in default in
respect of, nor, to knowledge of the Seller or Members, has there
occurred an
event or condition which, with the passage of time or giving
of notice (or
both), would constitute a material violation or a default of any
Contract. No
notice has been received by any of the Seller Companies
claiming any such
default by any of the Seller Companies or indicating the desire or
intention of
any other party thereto to amend, modify, rescind or terminate any
Contract.
Section 3.14 BOOKS OF ACCOUNT; RECORDS. The general
ledgers, books of
account and other records of the Seller Companies in respect of the
Business are
complete and correct in all material respects, have been
maintained in
accordance with sound business practices and the matters
contained therein are
appropriately and accurately reflected in the Financial Statements.
-11-
Section 3.15 CAPITALIZATION. The Subsidiaries are authorized
to issue the
classes and numbers of Interests set forth on SCHEDULE 3.15, of
which the number
of Interests set forth on Schedule 3.15 are issued and are owned by
Seller, free
and clear of all Liens. No other Person owns any Interests.
Seller has full
right, power, legal capacity and authority to transfer and deliver
the Interests
pursuant to this Agreement and Seller is not a party to or
bound by any
agreements, arrangements or understandings restricting in any
manner the sale or
transfer of the Interests. There is not outstanding, and none of
Seller or the
Subsidiaries is bound by or subject to, any subscription, option,
warrant, call,
right, contract, commitment, agreement, understanding or
arrangement to issue
any additional membership interests in the Subsidiaries, including
any right of
conversion or exchange under any outstanding security or other
instrument, and
no such membership interests are reserved for issuance for any
purpose.
Section 3.16 REQUIRED FILINGS AND CONSENTS. Except as
set forth on
Schedule 3.16 hereto, none of the Seller or the Subsidiaries
is required to
submit any notice, report or other filing to or with any
Government Entity in
connection with the execution, delivery or performance of the
Agreement. The
execution, delivery and performance of this Agreement by
Seller and the
consummation of the transactions contemplated hereby will not
result in the loss
of any license, franchise, legal privilege or permit
possessed by the
Subsidiaries or give a right of termination to any party to any
agreement or
other instrument to which the Subsidiaries, or any of them, are
parties or by
which any of their respective properties are bound.
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