SWITCHGEAR BUSINESS, SELLER
REPRESENTS, WARRANTS AND
4
COVENANTS TO PURCHASER THAT THE FOLLOWING STATEMENTS ARE TRUE AND CORRECT AS OF
THE CONTRACT DATE, AND WILL BE TRUE AND CORRECT ON THE CLOSING DATE:
3.2.1
SET FORTH ON SCHEDULE 3.1
IS A TRUE AND CORRECT LIST OF ALL BANK AND CAR LOANS TO WHICH SELLER IS A
PARTY.
SELLER HAS PERFORMED IN ALL MATERIAL RESPECTS ITS OBLIGATIONS UNDER THE
LOANS, AND THERE IS NO DEFAULT OR EVENT WHICH WITH THE GIVING OF NOTICE, THE
PASSAGE OF TIME OR BOTH, WOULD RESULT IN A BREACH OR DEFAULT ON THE PART OF
SELLER UNDER ANY SUCH LOAN.
SELLER HAS NOT ASSIGNED ITS INTEREST UNDER THE
LOANS.
THE LOAN AMOUNTS FOR THE LOANS AS SET FORTH ON SCHEDULE 3.1 IS TRUE AND
CORRECT.
WITH RESPECT TO SUCH BANK LOANS, SELLER REPRESENTS AND WARRANTS THAT
SELLER'S ASSETS HAVE BEEN PLEDGED AS PART OF THE COLLATERAL FOR SUCH BANK LOANS.
3.3
LIABILITIES NOT ASSUMED BY PURCHASER.
EXCEPT
FOR THE ASSUMED LIABILITIES SET FORTH ON SCHEDULE 3.1, SELLER SHALL RETAIN ALL
OF ITS OTHER LIABILITIES AND OBLIGATIONS ("EXCLUDED LIABILITIES").
3.4
SELLER TO PAY LIABILITIES NOT ASSUMED.
SELLER
SHALL PAY AND DISCHARGE, AS THEY BECOME DUE AND PAYABLE, AND PERFORM IN
ACCORDANCE WITH THEIR RESPECTIVE TERMS ALL EXCLUDED LIABILITIES PURCHASER IS NOT
ASSUMING AND PURCHASER SHALL NOT BE LIABLE FOR EXCLUDED LIABILITIES.
3.5
WAIVER OF COMPLIANCE WITH BULK SALES LAWS.
THE PARTIES HEREBY WAIVE COMPLIANCE WITH ALL APPLICABLE LAWS RELATING TO OR
AFFECTING BULK TRANSFERS AND SALES, INCLUDING WITHOUT LIMITATION NOTIFYING THE
ILLINOIS DEPARTMENT OF REVENUE PURSUANT TO SECTION 902(D) OF THE ILLINOIS INCOME
TAX ACT (35 ILCS 5/902(D)), AND SECTION 5J OF THE ILLINOIS RETAILERS OCCUPATION
TAX ACT (35 ILCS 120/5J).
3.6
ALLOCATION OF THE PURCHASE PRICE.
THE
PURCHASE PRICE SHALL BE ALLOCATED FOR TAX PURPOSES AMONG THE SALE ASSETS AS
DETERMINED BY THE PURCHASER SUBJECT TO THE REASONABLE CONSENT OF SELLER.
THE
FINAL AGREED UPON ALLOCATION SHALL BE BINDING ON THE PARTIES HERETO, AND THE
PARTIES HERETO SHALL FILE THEIR RESPECTIVE TAX RETURNS, INCLUDING FILING WITH
THE INTERNAL REVENUE SERVICE FORM 8594 AND ALL OTHER INFORMATION AS MAY BE
REQUIRED BY SECTION 1060 OF THE INTERNAL REVENUE CODE AND REGULATIONS
PROMULGATED THEREUNDER, IN ACCORDANCE WITH SUCH ALLOCATION.
4.
Representations, Warranties and
Covenants of ECC and Seller.
ECC and Seller, jointly and severally, represent,
warrant and covenant to Purchaser that the following statements are true and
correct as of the Contract Date, and will be true and correct on the Accounting
Date and on the Closing Date:
4.1
ORGANIZATION.
ECC IS A CORPORATION DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF
DELAWARE.
SELLER IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE STATE OF DELAWARE.
SELLER HAS ALL REQUISITE
CORPORATE POWER AND AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO
CARRY ON ITS BUSINESS AS NOW CONDUCTED AND TO ENTER INTO THIS AGREEMENT AND
PERFORM ITS OBLIGATIONS HEREUNDER.
ECC AND