JBL » Topics » 3.24. Properties.

This excerpt taken from the JBL 10-K filed May 15, 2007.

3.24. Properties.

(a) Section 3.24(a) of the Graduate Disclosure Letter contains a true and complete list of (i) all real property owned by Graduate or any of its Subsidiaries where revenues attributable to each such real property site exceeded NT$23million in Graduate’s last completed fiscal year and (ii) all material real property owned by Graduate (collectively, the “Owned Real Property”) and for each parcel of Owned Real Property, identifies the correct street address and current use (including business unit, if applicable) of such Owned Real Property. Neither Graduate nor any of its

 

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Subsidiaries has received any notice of any, and to the knowledge of Graduate there is no, default under any restrictive covenants, restrictions and conditions affecting the Owned Real Property and there has not occurred any event that with the lapse of time or the giving of notice or both would constitute such a default under any such restrictive covenants, restrictions or conditions.

(b) Section 3.24(b) of the Graduate Disclosure Letter contains a true and complete list of (i) all real property leased, subleased, licensed or otherwise used or occupied (whether as a tenant, subtenant or pursuant to other occupancy arrangements) by Graduate or any of its Subsidiaries or which Graduate or any of its Subsidiaries has the right to use or occupy where revenues attributable to each such real property site exceeded NT$23 million in the Graduate’s last completed fiscal year and (ii) all material real property leased, subleased, licensed or otherwise used or occupied (whether as a tenant, subtenant or pursuant to other occupancy arrangements) by Graduate or any of its Subsidiaries or which Graduate or any of its Subsidiaries has the right to use or occupy (collectively, including the improvements thereon, the “Leased Real Property”), and for each Leased Real Property, identifies the correct street address and current use (including business unit, if applicable) of such Leased Real Property. True and complete copies of all written agreements and written summaries of the material terms of all oral agreements (in each case, including all material written modifications, amendments, supplements, waivers and side letters thereto) under which Graduate or any of its Subsidiaries is the landlord, sublandlord, tenant, subtenant, or occupant (each a “Real Property Lease”) that have not been terminated or expired as of the date of this Agreement have been made available to Buyer prior to the date hereof.

(c) Except as otherwise disclosed in Section 3.24(c) of the Graduate Disclosure Letter, Graduate and/or its Subsidiaries have good and marketable title to all Owned Real Property and valid leasehold estates in all Leased Real Property free and clear, in each case, of all liens and third party claims.

(d) Other than the Real Property Leases, none of the Owned Real Property or the Leased Real Property is subject to any lease, sublease, license or other agreement granting to any other person, other than Subsidiaries, any right to the use, occupancy or enjoyment of such Owned Real Property or Leased Real Property or any part thereof.

(e) Each Real Property Lease is in full force and effect and constitutes the valid and legally binding obligation of Graduate or any of its Subsidiaries, enforceable in accordance with its terms and subject to limitation under Applicable Laws, and there is no material default under any Real Property Lease either by Graduate or any of its Subsidiaries party thereto or, to the knowledge of Graduate or any of its Subsidiaries, by any other party thereto.

(f) There does not exist any violations of building codes or pending condemnation or eminent domain proceedings that materially and adversely affects any Owned Real Property or, to the knowledge of Graduate or any of its Subsidiaries, any such proceedings that affect any Leased Real Property or, to the knowledge of Graduate or any of its Subsidiaries, any threatened condemnation or eminent domain proceedings that materially and adversely affects any Owned Real Property or Leased Real Property, and neither Graduate nor any of its Subsidiaries have received any written notice of the intention of any Governmental Authority or other person to take or use any Owned Real Property or Leased Real Property.

(g) The buildings and improvements on the Owned Real Property and the Leased Real Property are in reasonable condition and in a state of reasonable and working maintenance and repair, ordinary wear and tear excepted.

(h) Except as otherwise disclosed in Section 3.24(h) of the Graduate Disclosure Letter, Graduate and each of its Subsidiaries are in possession of and have good title to free and clear of all

 

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liens, or have valid leasehold interests in, all tangible personal property used in the business of Graduate and each of its Subsidiaries, respectively.

3.25. Corrupt Practices. Neither Graduate, nor any of its Subsidiaries, nor any of their respective board directors, officers, agents, employees or, to the knowledge of Graduate or any of its Subsidiaries, any other persons acting on their behalf has, in connection with the operation of their respective businesses, (i) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating to political activity, to government officials, candidates or members of political parties or organizations, or established or maintained any unlawful or unrecorded funds in violation of any applicable foreign, federal or state law, and (ii) paid, accepted or received or any unlawful contributions, payments, expenditures or gifts, except, in the case of clauses (i) and (ii), has not had and is not reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

3.26. Related Party Transactions. Except to the extent disclosed in Section 3.26 of the Graduate Disclosure Letter, there are and have been no transactions, agreements, arrangements or understandings involving Graduate or its Subsidiaries that would be required to be disclosed under Taiwan Statute or TSE rules.

3.27. Product Warranty. Neither Graduate nor any of its Subsidiaries has any liability (and there is no known basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against it giving rise to any liability) for replacement or repair thereof or other damages in connection with any product manufactured, sold, leased or delivered by Graduate or any of its Subsidiaries, subject only to the reserve, if any, for product warranty claims set forth on the face of the Graduate Financials (rather than in any notes thereto), as adjusted for the passage of time through the Merger Effective Date in accordance with past custom and practice. Neither Graduate nor any of its Subsidiaries has standard terms and conditions of sale or lease.

3.28. Product Liability. Neither Graduate nor any of its Subsidiaries is aware of any liability (or any basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against it giving rise to any liability) arising out of any injury to individuals or property as a result of the ownership, possession, or use of any product sold by Graduate or any of its Subsidiaries.

3.29. Customers and Suppliers. Section 3.29(a) of the Graduate Disclosure Letter lists the 10 largest customers of Graduate and its Subsidiaries for each of the two most recent fiscal years and sets forth opposite the name of each such customer the percentage of consolidated net sales attributable to such customer. Section 3.29(a) of the Graduate Disclosure Letter also lists any additional current customers that Graduate and its Subsidiaries anticipate shall be among the five largest customers for 2006.

(b) Section 3.29(b) of the Graduate Disclosure Letter lists the 10 largest non-equipment suppliers of Graduate and its Subsidiaries for each of the two most recent fiscal years and sets forth opposite the name of each such supplier the annual expenses attributable to such supplier. Since June 30, 2006, to the knowledge of Graduate or any of its Subsidiaries, no such supplier of Graduate or any Subsidiary has indicated that it shall stop, or materially decrease the rate of, supplying materials, products or services to Graduate or any of its Subsidiaries, and no customer listed in Section 3.29 of the Graduate Disclosure Letter has indicated that it shall stop, or materially decrease the rate of, buying products from Graduate or its Subsidiaries.

3.30. Disclosure. None of the representations or warranties made by Graduate herein or in any Exhibit hereto or in the Graduate Disclosure Letter, or document furnished by Graduate on or prior to the Merger Effective Date pursuant to Section 6.2 of this Agreement, when all such documents

 

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are read together in their entirety, contains or will contain at the Merger Effective Date any untrue statement of a material fact, or omits or will omit at the Merger Effective Date to state any material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading.

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