OF SUCH TAX RETURNS, AND
(Z) GROSSED UP TO TAKE INTO ACCOUNT FEDERAL TAXES PAYABLE ON SUCH CAPITAL GAINS
INCREASE PAYMENT SO THAT SUCH SELLER WILL BE IN THE SAME POSITION AS IF SUCH
SELLER DID NOT HAVE TO PAY FEDERAL TAXES ON SUCH CAPITAL GAINS INCREASE PAYMENT.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MAJORITY OWNERS AND SELLERS
Majority Owners, jointly and severally, represent and warrant to Buyer with
respect to the Company, and Brand solely represents and warrants to Buyer with
respect to Parent, as follows in Sections 3.1 through 3.31 (collectively,
"Majority Owners' Representations") and each Seller, severally, represents and
warrants to Buyer with respect to himself or herself only as follows in
Section 3.32 (collectively, the "Seller Fundamental Representations"):
3.1
ORGANIZATION AND GOOD STANDING.
(A)
SECTION 3.1 OF THE DISCLOSURE SCHEDULE
CONTAINS A COMPLETE AND ACCURATE LIST FOR EACH OF PARENT AND THE COMPANY:
ITS
NAME, ITS JURISDICTION OF INCORPORATION, OTHER JURISDICTIONS IN WHICH IT IS
AUTHORIZED TO DO BUSINESS, AND ITS CAPITALIZATION (INCLUDING THE IDENTITY OF
EACH STOCKHOLDER AND THE NUMBER OF SHARES HELD BY EACH).
EACH OF PARENT AND THE
COMPANY IS A CORPORATION DULY INCORPORATED, VALIDLY EXISTING, AND IN GOOD
STANDING
28
UNDER THE LAWS OF ITS JURISDICTION OF INCORPORATION, WITH FULL CORPORATE 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 ALL
ITS OBLIGATIONS UNDER APPLICABLE CONTRACTS.
EACH OF PARENT AND THE COMPANY IS
DULY QUALIFIED TO DO BUSINESS AS A FOREIGN CORPORATION AND IS IN GOOD STANDING
UNDER THE LAWS OF EACH STATE OR OTHER JURISDICTION IN WHICH EITHER THE OWNERSHIP
OR USE OF THE PROPERTIES OWNED OR USED BY IT, OR THE NATURE OF THE ACTIVITIES
CONDUCTED BY IT, REQUIRES SUCH QUALIFICATION, EXCEPT WHERE THE LACK OF SUCH
QUALIFICATION WOULD NOT HAVE A MATERIAL ADVERSE EFFECT ON PARENT OR THE COMPANY.
(B)
EACH OF PARENT AND THE COMPANY HAS DELIVERED
TO BUYER COPIES OF ITS ORGANIZATIONAL DOCUMENTS, AS CURRENTLY IN EFFECT.
3.2
AUTHORITY; NO CONFLICT.
(A)
THIS AGREEMENT CONSTITUTES THE LEGAL,
VALID, AND BINDING OBLIGATION OF EACH OF MAJORITY OWNERS, PARENT AND THE
COMPANY, ENFORCEABLE AGAINST EACH OF THEM IN ACCORDANCE WITH ITS TERMS, EXCEPT
TO THE EXTENT THAT ENFORCEABILITY MAY BE LIMITED BY (I) APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, RECEIVERSHIP, MORATORIUM AND OTHER SIMILAR LAWS
RELATING TO OR AFFECTING THE RIGHTS AND REMEDIES OF CREDITORS GENERALLY AND
(II) GENERAL PRINCIPLES OF EQUITY.
EACH OF MAJORITY OWNERS, PARENT AND THE
COMPANY HAS THE ABSOLUTE AND UNRESTRICTED RIGHT, POWER, AUTHORITY, AND CAPACITY
TO EXECUTE AND DELIVER THIS AGREEMENT AND TO PERFORM HIS OR ITS OBLIGATIONS
UNDER THIS AGREEMENT.
(B)
EXCEPT AS SET FORTH IN SECTION 3.2(B) OF THE
DISCLOSURE SCHEDULE, NEITHER THE EXECUTION AND DELIVERY OF THIS AGREEMENT NOR
THE CONSUMMATION OR PERFORMANCE OF ANY OF THE CONTEMPLATED TRANSACTIONS WILL,
DIRECTLY OR INDIRECTLY (WITH OR WITHOUT NOTICE OR LAPSE OF TIME):
(I)
CONTRAVENE, CONFLICT WITH, OR RESULT IN
A VIOLATION