This excerpt taken from the PGI 10-K filed Mar 15, 2005.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that the statements contained in this Article III are true and correct on the date hereof and, on the Closing Date, except as set forth in the disclosure schedule accompanying this Agreement (the Disclosure Schedule). The Disclosure Schedule will be arranged in paragraphs corresponding to the numbered paragraphs contained in this Article III.
3.1 Due Incorporation. Seller is a limited liability company, duly organized and validly existing and in good standing under the laws of the State of Delaware with all requisite corporate power and authority to own, lease and operate the Acquired Assets. Seller is duly authorized to do business and in good standing in each other jurisdiction set forth on Schedule 3.1 which are the only jurisdictions in which either the nature of the activities conducted by it or ownership of the Acquired Assets requires it to be so qualified, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.
- 7 -
3.2 Due Authorization. Seller has power and full limited liability company authority to enter into this Agreement and to carry out the transactions contemplated hereby. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action by the sole member of Seller (Sellers Board of Directors) and no other limited liability company proceedings or actions are required to carry out the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Seller and constitutes the legal, valid and binding obligation of Seller, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors rights generally, and except that the availability of the remedy of specific performance or other equitable relief is subject to the discretion of the court before which any proceeding therefore may be brought. The execution, delivery and performance by Seller of this Agreement and all other instruments, agreements, certificates and documents contemplated hereby: (a) do not, and will not, violate or conflict with any provision of the certificate of formation, operating agreement or other governing documents of Seller; (b) do not, and will not, violate or constitute a default under any Law or any Contract to which Seller is a party, or by which it or any of the Acquired Assets are bound; and (c) will not result in the creation of any Encumbrance upon the Acquired Assets, or permit the acceleration of the maturity of any indebtedness secured by the Acquired Assets. No notice to, filing with, authorization of, exemption by, or Consent of any Person is required in order for Seller to consummate the transactions contemplated hereby, except as set forth on Schedule 3.2 or as shall have been obtained on or prior to the Closing Date.
3.3 Capitalization. Frontier Communications of Rochester, Inc. is the sole member of Seller. There are no outstanding Contracts relating to the issuance, sale or transfer of any equity securities or other securities of Seller. None of the outstanding securities of Seller were issued in violation of the Securities Act of 1933, or any other law.
3.4 No Adverse Change. Except as set forth on Schedule 3.4, since October 31, 2004, the Conferencing Business has been operated only in the ordinary course of business and there has not been any: (a) material Loss or damage or other material adverse change to any of the Acquired Assets (whether or not covered by insurance); (b) sale, transfer or disposition of any of the Acquired Assets necessary for the operation of the Conferencing Business as presently conducted; (c) Encumbrance placed on any of the Acquired Assets (other than Permitted Encumbrances); (d) material change in the accounting systems, tax elections, policies or practices of Seller related to the Conferencing Business; (e) Material Contract, with respect to the Conferencing Business, entered into by Seller other than in the ordinary course of business; (f) net loss of any customers material to the results of operation of the Conferencing Business; (g) notice of any actual or threatened labor trouble, strike, walk out, picketing, boycott or other similar occurrence; (h) cancellation, without fair consideration, of any material Liability due with respect to the Conferencing Business; (i) modification, cancellation or termination of any Material Contract; or (j) any other event that has had a Material Adverse Effect on the Conferencing Business.
3.5 Title to and Condition of Assets. Seller has good and valid title to the Acquired Assets (including the assets reflected in the Financial Statements), free and clear of any Encumbrance (including any finance or equipment lease), except Permitted Encumbrances. Seller has delivered to Purchaser original title certificates for each material certificated asset, if
- 8 -
any, included within the Acquired Assets. The Acquired Assets are in normal operating condition, reasonable wear and tear excepted. Schedule 3.5 sets forth the location of all tangible Acquired Assets.
3.6 Financial Statements. A true and correct copy of the Financial Statements is set forth on Schedule 3.6. The Financial Statements have been prepared in accordance with GAAP consistently applied and fairly present in all material respects the assets and Liabilities of the Conferencing Business as then in existence and the financial condition of the Conferencing Business and the results of operations of the Conferencing Business as of the dates thereof and the periods then ended, except such Financial Statements do not include notes and the Financial Statements for the twelve (12) month period ended December 31, 2004 are subject to normal year end adjustments. The Financial Statements have been prepared in accordance with the books and records of Seller and do not reflect any transactions that are not bona fide.
3.7 Taxes. Except as described on Schedule 3.7, all income and other material Taxes of Seller have been properly determined in accordance with applicable rules and regulations and have been timely paid in full if due and, if not due, will be timely paid when due. Except as described on Schedule 3.7, Seller has duly and timely filed all income and other material Tax Returns of every nature required to be filed by it, in every jurisdiction in which the same may have been so required and has paid all Taxes disclosed on such returns. Each such Tax Return is true and complete in all material respects. Except as described on Schedule 3.7, all Taxes that Seller is required by law to withhold or collect, including sales and use taxes and amounts required to be withheld for Taxes of employees, have been duly withheld or collected and, to the extent required, have been paid over to the proper Governmental Authorities.