Contracts; Debt Instruments 32 4.12. Litigation........................................................... 32 4.13.
Contracts; No Defaults (a) Part 3.17(a) of the Disclosure Letter contains a complete and accurate list, and Sellers have delivered to Buyer true and complete copies, of: (i) each Contract that involves performance of services or delivery of goods or materials by the Company of an amount or value in excess of $100,000. (ii) each Contract that involves performance of services or delivery of goods or materials to the Company of an amount or value in excess of $10,000: (iii) each current Insurance Policy; (iv) each Contract that was not entered into in the Ordinary Course of Business and that involves expenditures or receipts of the Company in excess of $10,000; (v) each lease, rental or occupancy agreement, license, installment and conditional sale agreement, and other Contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real or personal property (except personal property leases and installment and conditional sales agreements having a value per item of less than $10,000, and having an aggregate value of all items having a value per item of less than $10,000 items not exceeding $50,000.00); (vi) each licensing agreement or other Contract with respect to patents, trademarks, copyrights, or other intellectual property, including agreements between the Company and current or former employees, consultants, or contractors regarding the appropriation or the non-disclosure of any of the Intellectual Property Assets; (vii) each collective bargaining agreement and other Contract to or with any labor union or other employee representative of a group of employees; (viii) each joint venture, partnership, and other Contract (however named) involving a sharing of profits, losses, costs, or liabilities by the Company with any other Person; (ix) each Contract containing covenants that in any way purport to restrict the business activity of the Company or limit the freedom of the Company to engage in any line of business or to compete with any Person; (x) each Contract providing for payments to or by any Person based on sales, purchases, or profits, other than direct payments for goods; (xi) each power of attorney that is currently effective and outstanding; (xii) each Contract entered into other than in the Ordinary Course of Business that contains or provides for an express undertaking by the Company to be responsible for consequential damages; (xiii) each Contract for capital expenditures in excess of $10,000; (xiv) each written warranty, guaranty, and or other similar undertaking with respect to contractual performance extended by the Company other than in the Ordinary Course of Business; and (xv) each amendment, supplement, and modification (whether oral or written) in respect of any of the foregoing, except for change orders which will have no material adverse effect to the Company;. (b) Part 3.17(b) of the Disclosure Letter is a work in progress schedule setting forth the total amount of each contract and certain information as reflected in the captions thereto.
Title to the Shares Seller owns of record and beneficially the Shares of the Company, free and clear of all liens, encumbrances, pledges, claims, options, charges and assessments of any nature whatsoever, with full right and lawful authority to transfer the Shares to Buyer. No person has any preemptive rights or rights of first refusal with respect to any of the Shares. There exists no voting agreement, voting trust, or outstanding proxy with respect to any of the Shares. There are no outstanding rights, options, warrants, calls, commitments, or any other agreements of any character, whether oral or written, with respect to the Shares.
Conduct of the Business Pending the Closing (a) Except as otherwise expressly provided by this Agreement or with the prior written consent of Newco, between the date hereof and the Closing, the Company shall: (i) conduct the Business only in the Ordinary Course of Business; (ii) use its commercially reasonable efforts to (A) preserve the present business operations, organization (including officers and Employees) and goodwill of the Company and (B) preserve the present relationships with Persons having business dealings with the Company (including customers and suppliers); (iii) maintain (A) all of the assets and properties of, or used by, the Company consistent with past practice, and (B) insurance upon all of the assets and properties of the Company in such amounts and of such kinds comparable to that in effect on the date of this Agreement; (iv) (A) maintain the books, accounts and records of the Company in the Ordinary Course of Business, (B) continue to collect accounts receivable and pay accounts payable and other Liabilities set forth on the Balance Sheet in the Ordinary Course of Business utilizing normal procedures and without discounting or accelerating payment of such accounts or Liabilities utilizing all available cash and any available line of credit, and (C) comply with all contractual and other obligations of the Company; (v) comply with the capital expenditure plan of the Company for 2009 set forth on Company Disclosure Schedule 6.2(a)(v), including making such capital expenditures in the amounts and at the times set forth in such plan; (vi) comply in all material respects with all applicable Laws; (vii) take steps to renew all Permits in a timely manner prior to their lapse; and (viii) pay all maintenance and similar fees and take all other appropriate actions as necessary to prevent the abandonment, loss or impairment of all Intellectual Property of the Company. (b) Without limiting the generality of the foregoing, except as otherwise expressly provided by this Agreement or with the prior written consent of Newco, the Company shall not: (i) (A) increase the salary or other compensation of any director or Employee of the Company except for normal year-end increases in the Ordinary Course of Business, (B) grant any bonus, benefit or other direct or indirect compensation to any Employee or director, (C) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement made to, for, or with any of the directors, officers, Employees, agents or representatives of the Company or otherwise modify or amend or terminate any such plan or arrangement (D) enter into any employment, deferred compensation, stay bonus, severance, special pay, consulting, non-competition or similar agreement or arrangement with any directors or officers of the Company (or amend any such agreement) to which the Company is a party; or (E) pay or make any dividend or distribution of cash or other property with respect to the units or other equity interests of the Company; (ii) (A) create, incur, assume, guarantee, endorse or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any Indebtedness except (u) the Indebtedness related to the Permitted Exceptions, (x) the Indebtedness reflected in the Balance Sheet, (y) the Indebtedness incurred in the Ordinary Course of Business since the Balance Sheet Date, or (z) the Indebtedness set forth on Company Disclosure Schedule 4.5; (B) except in the Ordinary Course of Business, pay, prepay, accelerate, discharge, purchase, repurchase or satisfy any Indebtedness issued or guaranteed by the Company; (C) materially modify the terms of any Indebtedness or other Liability; or (D) make any loans, advances of capital contributions to, or investments in, any other Person; (iii) subject to any Lien or otherwise encumber or, except for Permitted Exceptions, permit, allow or suffer to be subjected to any Lien or otherwise encumbered, any of the Purchased Assets; (iv) acquire any material properties or assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the Purchased Assets (except for fair consideration in the Ordinary Course of Business) of the Company; (v) except as provided in Section 6.6 hereof, enter into or agree to enter into any merger or consolidation with any Person, and not engage in any new business or invest in, make a loan, advance or capital contribution to, or otherwise acquire the securities of any Person; (vi) cancel or compromise any debt or claim, or waive or release any material right of the Company except in the Ordinary Course of Business; (vii) enter into, modify or terminate any labor or collective bargaining agreement or, through negotiation or otherwise, make any commitment or incur any Liability to any labor organization with respect to any Employee; (viii) introduce any material change with respect to the operation of the Business, including any material change in the types, nature, composition or quality of products or services, or, other than in the Ordinary Course of Business, make any change in product specifications or prices or terms of distributions of such products; (ix) enter into any transaction or enter into, modify or renew any Contract which by reason of its size or otherwise is not in the Ordinary Course of Business; (x) enter into any Contract, understanding or commitment that restrains, restricts, limits or impedes the ability of the Business, or the ability of Newco or Purchaser, to compete with or conduct any business or line of business in any geographic area or solicit the employment of any persons; (xi) terminate, amend, restate, supplement or waive any rights under any (A) Material Contract, Real Property Lease, Personal Property Lease or Intellectual Property License, other than in the Ordinary Course of Business or (B) Permit; (xii) settle or compromise any pending or threatened Legal Proceeding or any claim or claims for, or that would result in a loss of revenue of, an amount that could, individually or in the aggregate, reasonably be expected to be greater than $50,000; (xiii) change or modify its credit, collection or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) or fail to pay or delay payment of payables or other liabilities; (xiv) take any action which would adversely affect the ability of the parties to consummate the transactions contemplated by this Agreement; (xv) amend the operating agreement of the Company; (xvi) agree to materially increase Liabilities from the amounts set forth on the Balance Sheet except in the Ordinary Course of Business under loan or credit agreements or arrangements up to the maximum amounts and other terms as in effect on the date of this Agreement; or (xvii) agree to do anything (A) prohibited by this Section 6.2, (B) that would make any of the representations and warranties of the Company in this Agreement or any of the Company Documents untrue or incorrect in any material respect or could result in any of the conditions to the Closing not being satisfied or (C) that could be reasonably expected to have a Material Adverse Effect with respect to the Company.
Seller Contracts All contracts and agreements, other than ---------------- Governmental Permits and those relating to Real Property, pertaining to the ownership, operation and maintenance of the Assets or the Business or used or held for use in the Business, as described on SCHEDULE 5.6 or, in the case of contracts and agreements relating to Real Property, on SCHEDULE 5.7.
Contracts and Leases Schedule 4.10 sets forth a true and complete list of all Leases and executory Contracts of the Company that are material to the Business, and Sellers have delivered to Buyer true and complete copies of all such Leases and Contracts, each as amended as of the Agreement Date (the “Material Contracts”). Subject to receipt of the Necessary Consents and compliance with Section 6.10 and subject to the entry of the Sale Order, and any ancillary orders of the Bankruptcy Court pertaining to assumption and assignment of Contracts (a) each of the Material Contracts is in full force and effect and constitutes a valid and binding obligation of the Company or Sellers, and, to the Knowledge of Sellers, each other party thereto, and (b) except as a result of the commencement of the Bankruptcy Cases, the Company or Sellers are not in breach or default in any material respect under any of the Material Contracts and, to the Knowledge of Sellers, the other parties to such Contracts are not in breach or default in any material respect thereunder (and in each such case, to the Knowledge of Sellers, no event exists that with the passage of time or the giving of notice would constitute such material breach or default in any material respect, result in a loss of material rights, result in the payment of any damages or penalties or result in the creation of any Liens thereunder or pursuant thereto other than Permitted Liens); except (i) for those defaults that will be cured in accordance with the Sale Order, are not required to be cured pursuant to section 365(b)(1)(A) of the Bankruptcy Code, or waived in accordance with section 365 of the Bankruptcy Code, or (ii) to the extent such breach or default would not reasonably be expected to have a Seller Material Adverse Effect. Except for filings in the Chapter 11 Cases, to Sellers’ Knowledge, none of the Material Contracts have been cancelled or otherwise terminated by the Company or Sellers, and neither the Company nor Sellers have not delivered any written notice to any counterparty to such Material Contract regarding any such cancellation or termination by the Company or Sellers.
Conduct of Business Pending the Closing During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with its terms or the Closing, the Company shall, and shall cause each of its Subsidiaries to, carry on the Business in the ordinary course of business and, to the extent consistent therewith, use all commercially reasonable efforts to preserve the Business intact and preserve the goodwill of and relationships with Governmental Entities, customers, suppliers, partners, lessors, licensors, licensees, contractors, distributors, agents, officers and employees and others having business dealings with the Business, provided that the foregoing shall not prevent Sellers from rejecting Contracts that are not Assumed Contracts. During the period from the date of this Agreement through the Closing Date, the Company shall endeavor to maintain the Net Receivables Amount, the Inventory Value and each component of Inventory at or in excess of the amounts set forth on Schedule 7.1. Without limiting the generality of the first sentence of this Section 7.1, during the period from the date of this Agreement through the Closing Date, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Buyer: (a) abandon any rights under any of the Assumed Contracts; terminate, amend, modify or supplement the terms of any Assumed Contract; or fail to honor or perform, the Assumed Contracts; (b) other than sales of Inventory in the ordinary course of business or the disposition of obsolete equipment, lease, license, surrender, relinquish, sell, transfer, convey, assign or otherwise dispose of any Acquired Assets; (c) mortgage, pledge or subject to Liens (other than Permitted Liens), any property, business or any of the Acquired Assets, other than as would not result in any Liability that would be or would increase an Assumed Liability as of or subsequent to the Closing; (d) incur or permit to be incurred any Liability (other than Accounts Payable or in connection with the performance of Assumed Contracts) that would be or would increase an Assumed Liability as of or subsequent to the Closing; (e) fail to replenish the Inventory and Supplies of the Business in the ordinary course of business; (f) increase the salary of any Identified Employee at or after the time such person becomes an Identified Employee, other than in the ordinary course of business consistent with past practice; (g) make or rescind any material Tax election or take any material Tax position (unless required by law) or file any Tax Return or change its fiscal year or financial or Tax accounting methods, policies or practices, or settle any Tax Liability, except in each case as would not reasonably be expected to affect the Buyer; (h) institute, settle or agree to settle any litigation, action or Proceeding before any court or Governmental Entity relating to the Acquired Assets, or modify in any manner that is adverse to the Business or the Acquired Assets, rescind or terminate a material Permit, allowance, or credit (or application therefor) relating to the Business or the Acquired Assets; (i) transfer or grant any rights under, modify any existing rights under, or enter into any settlement regarding the breach or infringement of, any material Intellectual Property; or (j) enter into any Contract to do any of the foregoing.
Conduct of Business Pending Closing Between the date of this Agreement and the Funding and Consummation Date, the Company will, except as set forth on Schedule 7.2: (i) carry on its business in substantially the same manner as it has heretofore and not introduce any material new method of management, operation or accounting; (ii) use its reasonable efforts to maintain its properties and facilities, including those held under leases, in as good working order and condition as at present, ordinary wear and tear excepted; (iii) perform in all material respects all of its obligations under agreements relating to or affecting its respective assets, properties or rights; (iv) use its reasonable efforts to keep in full force and effect present insurance policies or other comparable insurance coverage; (v) use its reasonable efforts to maintain and preserve its business organization intact, retain its respective present key employees and maintain its relationships with suppliers, customers and others having business relations with the Company; (vi) use its reasonable efforts to maintain compliance with all Licenses, laws, rules and regulations, consent orders, and all other orders of applicable courts, regulatory agencies and similar governmental authorities applicable to it; (vii) maintain present debt and lease instruments and not enter into new or amended debt or lease instruments without the knowledge and consent of TCI (which consent shall not be unreasonably withheld), provided that debt and/or lease instruments may be replaced without the consent of TCI if such replacement instruments are on terms at least as favorable to the Company as the instruments being replaced; and (viii) maintain or reduce present salaries and commission levels for all officers, directors, employees and agents except for ordinary and customary bonus and salary increases for employees in accordance with past practices.
Compliance with Laws, Contracts, Licenses, and Permits The Borrower and the Guarantors will, and will cause each of their respective Subsidiaries to, and, to the extent permitted by the terms of the Leases, will cause the Operators of the Pool Properties to, comply in all respects with (i) all Applicable Laws and regulations now or hereafter in effect wherever its business is conducted, including all Environmental Laws, (ii) the provisions of its corporate charter, partnership agreement, limited liability company agreement or declaration of trust, as the case may be, and other charter documents and bylaws, (iii) all agreements and instruments to which it is a party or by which it or any of its properties may be bound, (iv) all applicable decrees, orders, and judgments, and (v) all licenses and permits required Applicable Laws for the conduct of its business or the ownership, use or operation of its properties, except where failure so to comply with either clause (i) or (v) would not result in the material non-compliance with the items described in such clauses. If any authorization, consent, approval, permit or license from any officer, agency or instrumentality of any government shall become necessary or required in order that the Borrower, any Guarantor or their respective Subsidiaries may fulfill any of its obligations hereunder, the Borrower, such Guarantor or such Subsidiary will promptly take or cause to be taken all steps necessary to obtain such authorization, consent, approval, permit or license and furnish the Agent and the Lenders with evidence thereof. The Borrower shall develop and implement such programs, policies and procedures as are necessary to comply with the Patriot Act and shall promptly advise Agent in writing in the event that the Borrower shall determine that any investors in the Borrower are in violation of such act.
Conduct of Business of the Company Except as expressly ---------------------------------- contemplated by this Agreement or as set forth on Schedule 6.01 hereto, during the period from the date hereof to the Effective Time, the Company and its subsidiaries will each conduct its operations according to its ordinary course of business consistent with past practice, and the Company and its subsidiaries will each use its reasonable best efforts to (i) preserve intact its business organization, (ii) keep available the services of its officers and employees, other than those officers and employees identified on Schedule 6.01 hereto, and (iii) maintain existing relationships with its lenders, suppliers and others having business relationships with it. Without limiting the generality of the foregoing, and except as otherwise contemplated by this Agreement or as set forth on Schedule 6.01 hereto, prior to the Effective Time, neither the Company nor any of its subsidiaries will, without the prior written consent of Acquisition: (a) amend or propose to amend any of their respective certificates or articles of incorporation or by-laws; (b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell, pledge, encumber, deliver or otherwise dispose of (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other equity securities or equity equivalents of the Company or any of its subsidiaries or amend in any material respect any of the terms of any such securities outstanding as of the date hereof; (c) split, combine or reclassify any shares of its capital stock or the capital stock of any of its subsidiaries, declare, set aside or pay any dividend (other than dividends (whether in cash, stock, or property or any combination thereof), if any, paid by wholly-owned subsidiaries to the Company or another wholly-owned subsidiary of the Company) or other distribution in respect of its capital stock or redeem, repurchase or otherwise acquire any of its securities or any securities of its subsidiaries or any options, warrants or other rights to acquire any shares of its capital stock or adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries, other than the redemption, repurchase or other acquisition of the equity securities of any subsidiary of the Company which is not wholly-owned by the Company for aggregate consideration not in excess of the book value of such securities; (i) except as set forth in clause (e), incur any additional indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse the obligations of any other person except for the obligations of wholly-owned subsidiaries of the Company in the ordinary course of business consistent with past practice; (ii) make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly- owned subsidiaries of the Company and advances to employees for travel or other business related expenses in the ordinary course of business consistent with past practices); (iii) pledge or otherwise encumber shares of capital stock of the Company or any of its subsidiaries; (iv) mortgage or pledge any of its material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon; or (v) enter into any contract, agreement, commitment or arrangement to do any of the foregoing; (e) incur any advances pursuant to that certain Revolving Credit Agreement, dated as of June 18, 1991, among the Company, various subsidiaries of the Company and Xxxxxx (as successor in interest to HCR Partners), as amended (the "Credit Agreement"), other than advances which at any time outstanding do not exceed $3,000,000. (f) enter into, adopt or (except as may be required by law) amend or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee, or (except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company or an increase in excess of 5% in the case of any individual (other than compensation based upon the payment of commissions pursuant to commission schedules previously made available to Parent or Acquisition by the Company)) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan or arrangement in effect as of the date hereof (including, without limitation, the granting of stock appreciation rights or performance units) or enter into any contract, agreement, commitment or arrangement to do any of the foregoing; (g) acquire, sell, lease or dispose of any assets outside the ordinary course of business or any assets which in the aggregate are material to the Company and its subsidiaries, taken as a whole, or commit or agree to do any of the above; (h) except as required by GAAP, change any of the accounting principles or practices used by it; (i) make any tax election or settle or compromise any income tax liability material to the Company and its subsidiaries taken as a whole; (j) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company and its subsidiaries or incurred in the ordinary course of business consistent with past practice; provided that, in no event shall the Company and its subsidiaries repay any long-term indebtedness except to the extent required by the terms thereof; (i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) enter into or commit to enter into any contract or agreement other than in the ordinary course of business consistent with past practice or which requires the payment of amounts in excess of $100,000 or which gives rise to obligations which extend beyond ninety (90) days from the date hereof other than agreements to provide services to customers of the Company or any of its subsidiaries; (iii) authorize any capital expenditures, other than those as to which the Company or its subsidiaries have committed as set forth on Schedule 6.01 hereto, individually in excess of $100,000, or in the aggregate in excess of $1,000,000, except with the consent of Parent (which shall not be unreasonably withheld); or (iv) enter into or amend any contract, agreement, commitment or arrangement with respect to any of the foregoing; (i) make or enter into any new lease of real property other than any new lease of real property which will replace an existing lease or (ii) extend or amend any existing lease of real property other than in the ordinary course of business consistent with past practice or on terms and conditions no less favorable to the Company or the subsidiary than the existing lease; (m) enter into or commit to enter into any amendment or modification to any contract, agreement or arrangement with any vendor or supplier identified on Schedule 6.01(m) hereto which individually or in the aggregate with all other such amendments and modifications is or could reasonably be expected to be material to such contract, agreement or arrangement; (n) intentionally take or omit to take, or enter into an agreement to take or agree to omit to take, any action that would result in any of the conditions to the Offer set forth in Annex A attached hereto or the conditions to the Merger set forth in Article VII hereof not being timely satisfied; (o) release or relinquish any material contractual rights, other than in the ordinary course of business consistent with past practice; (p) settle any pending or threatened material action, suit, claim or proceeding involving the Company or any subsidiary, other than in the ordinary course of business consistent with past practice and other than any settlements which require only the payment of money not in excess of $50,000 individually or $250,000 in the aggregate; (q) enter into or commit to enter into any contract, agreement or arrangement or any amendment or modification to any existing contract, agreement or arrangement with Xxxxxx Holdings, Inc. or any affiliate thereof; or (r) commit or agree in writing or otherwise to take any of the actions described in Sections 6.01(a) through 6.01(q) hereof or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect as of the date when made or as of the Effective Time, or omit to take or commit or agree to omit to take any action necessary to prevent any such representation or warranty from being untrue or incorrect in any material respect in any respect at any time which would result in any of the conditions set forth in this Agreement not being satisfied.
