ADVERSE EFFECT.
EACH LOAN PARTY HAS THE POWER AND AUTHORITY AND LEGAL RIGHT TO EXECUTE, DELIVER
AND PERFORM ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS TO WHICH IT IS OR MAY
BECOME A PARTY.
F.Y.I. IS A HOLDING COMPANY AND IS NOT AN OPERATING COMPANY AND
DOES NOT ENGAGE IN ANY MATERIAL BUSINESS OPERATIONS APART FROM THE OWNERSHIP AND
MANAGEMENT OF ITS SUBSIDIARIES.
SECTION 7.2
FINANCIAL STATEMENTS.
(A)
F.Y.I. HAS DELIVERED TO THE ADMINISTRATIVE AGENT AND THE LENDERS
AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF F.Y.I. AND ITS SUBSIDIARIES AS OF
AND FOR THE FISCAL YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999, INCLUDING,
WITHOUT LIMITATION, BALANCE SHEETS AND INCOME AND CASH FLOW STATEMENTS.
TO
F.Y.I.'S KNOWLEDGE, SUCH FINANCIAL STATEMENTS ARE TRUE AND CORRECT, HAVE BEEN
PREPARED IN ACCORDANCE WITH GAAP AND FAIRLY AND ACCURATELY PRESENT, ON A
CONSOLIDATED BASIS, THE FINANCIAL CONDITION OF F.Y.I. AND ITS CONSOLIDATED
SUBSIDIARIES, AS OF THE RESPECTIVE DATES INDICATED THEREIN AND THE RESULTS OF
OPERATIONS FOR THE RESPECTIVE PERIODS INDICATED THEREIN.
THERE HAS NOT BEEN, AS
OF THE CLOSING DATE OR THE EFFECTIVE DATE, ANY MATERIAL ADVERSE CHANGE IN THE
BUSINESS, CONDITION (FINANCIAL OR OTHERWISE), OPERATIONS OR PROPERTIES OF F.Y.I.
OR ITS SUBSIDIARIES OR SINCE THE EFFECTIVE DATES OF THE MOST RECENT APPLICABLE
FINANCIAL STATEMENTS REFERRED TO IN THIS SECTION 7.2(A).
(B)
THE PROJECTIONS WERE PREPARED BY F.Y.I. ON A BASIS SUBSTANTIALLY
CONSISTENT WITH THE FINANCIAL STATEMENTS REFERRED TO IN SECTION 7.2(A).
THE
PROJECTIONS REPRESENT, AS OF THE CLOSING DATE AND THE EFFECTIVE DATE, THE GOOD
FAITH ESTIMATE OF F.Y.I. CONCERNING THE PROBABLE FINANCIAL CONDITION AND
PERFORMANCE OF F.Y.I. AND ITS SUBSIDIARIES BASED ON ASSUMPTIONS BELIEVED TO BE
REASONABLE AT THE TIME MADE.
SECTION 7.3
CORPORATE ACTION: NO BREACH.
THE EXECUTION, DELIVERY
AND PERFORMANCE BY EACH LOAN PARTY OF THE LOAN DOCUMENTS TO WHICH IT IS OR MAY
BECOME A PARTY AND COMPLIANCE WITH THE TERMS AND PROVISIONS HEREOF AND THEREOF
HAVE BEEN DULY AUTHORIZED BY ALL REQUISITE CORPORATE OR OTHER ENTITY ACTION ON
THE PART OF THE LOAN PARTIES AND DO NOT AND WILL NOT (A) VIOLATE OR CONFLICT
WITH, OR RESULT IN A BREACH OF, OR REQUIRE ANY CONSENT UNDER (I) THE ARTICLES OR
CERTIFICATES OF INCORPORATION OR BYLAWS OF ANY LOAN PARTY, (II) ANY GOVERNMENTAL
REQUIREMENT APPLICABLE TO A LOAN PARTY OR ANY OF ITS PROPERTY OR ANY ORDER,
WRIT, INJUNCTION OR DECREE OF ANY GOVERNMENTAL AUTHORITY OR ARBITRATOR
APPLICABLE TO A LOAN PARTY OR ANY OF ITS PROPERTY, OR (III) ANY MATERIAL
AGREEMENT, DOCUMENT OR INSTRUMENT TO WHICH ANY LOAN PARTY IS A PARTY OR BY WHICH
ANY LOAN PARTY OR ANY OF ITS PROPERTY IS BOUND OR SUBJECT, OR (B) CONSTITUTE A
DEFAULT UNDER ANY SUCH MATERIAL AGREEMENT, DOCUMENT OR INSTRUMENT, OR RESULT IN
THE CREATION OR IMPOSITION OF ANY LIEN (EXCEPT UNDER THE SECURITY DOCUMENTS AS
PROVIDED IN ARTICLE 5) UPON ANY OF THE REVENUES OR PROPERTY OF ANY LOAN PARTY.
SECTION 7.4
OPERATION OF BUSINESS.
THE LOAN PARTIES POSSESS ALL
MATERIAL PERMITS, FRANCHISES, LICENSES AND AUTHORIZATIONS NECESSARY OR
APPROPRIATE TO