STOCK PURCHASE AGREEMENT (this “ Agreement ”), dated as of November 15, 2005 (the “ Closing Date ”), between PRIMEDIA Inc., a Delaware corporation (“ Purchaser ”), Automotive.com, Inc., a Delaware corporation (the “ Company ”), and the stockholders set forth on Schedule A to this Agreement (each a “ Stockholder ” and collectively, the “ Stockholders ”).

 

WHEREAS, the Company owns and operates the website www.automotive.com (and related websites) which provides information and services relating to new and used automobiles (collectively, the “ Company Business ”);

 

WHEREAS , the Stockholders collectively own all of the issued and outstanding capital stock of the Company;

 

WHEREAS , Purchaser desires to purchase, and the Stockholders desire to sell to Purchaser, an aggregate of 10,493,930 shares of the issued and outstanding Common Stock (as hereinafter defined) of the Company on the terms and conditions set forth herein.

 

NOW, THEREFORE in consideration of the mutual covenants and the respective representations and warranties contained herein, the parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

The following terms shall have the respective meanings given thereto in the sections indicated below:

 

Defined Term		Section
“1933 Act”		4.02(c)
“Additional Agreements”		5.01
“Additional Purchase Price”		2.02
“Agreement”		Preamble
“Base Purchase Price”		2.02

 

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Defined Term		Section
“Cap”		8.02(c)
“Claims”		8.02(a)
“Closing Date”		Preamble
“Code”		4.13(b)
“Common Stock”		2.01
“Company”		Preamble
“Company Business”		Preamble
“Company Disclosure Letter”		Article IV
“Company Employee”		6.02
“Company’s Additional Agreements”		4.01
“Confidentiality Agreement”		10.01
“Contribution Agreement”		7.01(e)
“Domain Names”		4.11(a)
“Effective Time”		3.01
“Employee Benefit Program”		4.13(a)(iii)
“Employment Agreements”		6.08
“Environmental Laws”		4.17(d)
“ERISA”		4.13(a)(ii)
“Financial Statements”		4.09
“GAAP”		4.09
“Governmental Authority”		4.04
“Hazardous Materials”		4.17(e)
“Indemnitee”		8.04
“Indemnitor”		8.04
“Intellectual Property”		4.11(b)
“Laws”		4.04
“License Agreement”		7.01(h)
“Lien”		4.02(b)
“Material Adverse Effect”		4.01
“Material Contracts”		4.12(a)
“New Car Leads”		4.22
“Outstanding Shares”		4.02(a)
“Person”		9.03(b)
“Plan”		4.13(a)(ii)

 

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Defined Term		Section
“Proposed Settlement”		8.06(a)
“Purchase Price”		2.02
“Purchaser”		Preamble
“Purchaser’s Additional Agreements”		5.01
“Real Estate Lease”		4.12(a)
“Regulations”		4.18(g)
“Shares”		2.01
“Shared Services Agreement”		7.01(g)
“Software”		4.11(b)
“Stockholder”		Preamble
“Stockholder Representatives”		3.02
“Stockholder Representatives Agreement”		3.02
“Stockholders Agreement”		7.01(f)
“Tax”		9.03(a)
“Tax Return”		9.03(c)
“Transaction Expenses”		6.01

 

ARTICLE II

 

PURCHASE AND SALE OF THE SHARES

 

2.01          Shares .   Upon the terms and subject to the conditions of this Agreement, effective immediately, each Stockholder hereby sells, conveys, assigns, transfers and delivers to Purchaser, and Purchaser purchases and acquires from each Stockholder, the number of shares of issued and outstanding common stock, par value $0.001 per share, of the Company (the “ Common Stock ”) set forth opposite such Stockholder’s name on Schedule A (the “ Shares ”), which Shares shall collectively comprise approximately seventy three and one-half percent (73.5%) of the Company’s total issued and outstanding Common Stock on a fully-diluted basis.

 

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2.02          Purchase Price .  Concurrently with the execution of this Agreement, in consideration of the sale, conveyance, assignment, transfer and delivery of the Shares by the Stockholders to Purchaser and in reliance upon the representations and warranties made herein by the Company and the Stockholders, Purchaser shall pay to the Stockholder Representatives (as defined in Section 3.02 below), for the benefit of the Stockholders, employees, certain creditors and former stockholders of the Company listed on Schedule 2.02 , the amount equal to Seventy-Two Million Five Hundred Thousand Dollars ($72,500,000) (the “ Base Purchase Price ”).  In addition to the Base Purchase Price, Purchaser shall pay to the Stockholder Representatives each calendar quarter as set forth below, for the benefit of the Stockholders and former stockholders of the Company listed on Schedule 2.02, an additional purchase price equal to thirty percent (30%) of the Remaining Free Cash Flow (as defined in the Stockholders Agreement) for such calendar quarter (the “ Additional Purchase Price ”).  The calculations of Remaining Free Cash Flow shall be consistent with the calculations of Remaining Free Cash Flow under the Stockholders Agreement.  The Additional Purchase Price shall be paid at the end of each calendar quarter commencing in 2005 and ending in 2008 or, if the Put/Call Extension Notice (as defined in the Stockholders Agreement) is delivered, 2009.  Such payments shall be made within 45 days after each such calendar quarter, provided that the payment date for the Additional Purchase Price for the last quarter of any calendar year shall be within 45 days after the date on which the Company’s independent auditor shall have issued its report containing its opinion as to the consolidated audited financial statements of the Company for the prior calendar year; provided, however , that, in the event that the Company’s independent auditor fails to issue its report within 90 calendar days following the applicable calendar year end, the dividend payment date shall be the 95 ^th calendar day following such calendar year end.  The Base

 

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Purchase Price and the Additional Purchase Price, if any, shall be referred to herein collectively as the “ Purchase Price .”

 

2.03          Purchase Price Payments .  All payments of the Purchase Price by Purchaser to the Stockholder Representatives shall be made by wire transfer of immediately available funds in New York City to an account specified by the Stockholder Representatives.  The Base Purchase Price shall be disbursed by the Stockholder Representatives to the Stockholders, employees, certain creditors and former stockholders of the Company in accordance with Schedule 2.02 .  The Additional Purchase Price shall be disbursed by the Stockholder Representatives to the Stockholders on a pro rata basis in accordance with their share ownership percentages set forth in Schedule 2.03 .  Notwithstanding anything herein to the contrary, Purchaser’s sole payment obligation is to deliver the Purchase Price to the Stockholder Representatives and Purchaser shall have no obligation or liability with respect to disbursements made by the Stockholder Representatives to any Stockholders, employees, certain creditors and former stockholders or any other party.

 

ARTICLE III

 

CLOSING; STOCKHOLDER REPRESENTATIVES

 

3.01          Closing Date Calculations; Effective Time .  For purposes of this Agreement, all calculations to be made as of the Closing Date shall be made as of 11:59 p.m. on the date hereof.  The actual time of the execution of this Agreement on the date hereof is referred to herein as the “ Effective Time .”

 

3.02          Appointment of Stockholder Representatives .  Pursuant to that certain Stockholder Representatives Agreement dated as of November 15, 2005 (the “ Stockholder Representatives Agreement ”), the Stockholders appointed Gary Fudge, Jason Phillips

 

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and Joshua Speyer as the representatives (the “ Stockholder Representatives ”)  with the full authority to act on behalf of the Stockholders on all matters relating to this Agreement, including without limitation, (i) those relating to payment to each of the Stockholders of their pro rata portions of the Purchase Price or any other amounts paid to the Stockholders hereunder, (ii) after the Closing, the power to execute and deliver any amendments, waivers or modifications to this Agreement and the Company’s Additional Agreements (as defined in Section 4.01 hereof) and (iii) giving or receiving notices or other communications or accepting summonses or other process on behalf of the Stockholders.  Any action of the Stockholder Representatives under or pursuant to this Agreement shall require consent of a majority of the Stockholder Representatives and shall be binding on the Stockholders, and Purchaser shall have no liability whatsoever with respect to any Stockholder for the actions taken by the Stockholder Representatives hereunder. 

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS

 

Each of the Company and the Stockholders, jointly and severally, represents and warrants to Purchaser, except as set forth in the disclosure letter dated as of the date hereof delivered by the Company to Purchaser (the “ Company Disclosure Letter ”) as follows:

 

4.01          Organization and Authority of the Company .  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the full corporate power and authority to (a) carry on its business in all material respects as currently conducted and (b) enter into this Agreement and the other agreements and instruments referred to in this Agreement that the Company and/or the

 

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Stockholders are executing and delivering (the “ Company’s Additional Agreements ”) and to carry out the transactions contemplated hereby and thereby.  The Company is in good standing and qualified to do business in each jurisdiction where the nature of its businesses requires such qualification, except where the failure to be in good standing or to be so qualified would not have a Material Adverse Effect.  A “ Material Adverse Effect ” shall mean a material adverse effect on the business, assets or condition (financial or otherwise) of the Company, excluding any such effects arising out of or resulting from changes in the general economy (including those arising from acts of war or terrorism) or the reaction of employees, suppliers or customers to (i) the Company’s entering into this Agreement, (ii) the announcement thereof or (iii) the consummation of the transactions contemplated hereby.   True and complete copies of the Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware and in effect as of the date hereof, and By-Laws of the Company, as amended and in effect as of the date hereof, have heretofore been made available to Purchaser.

 

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4.02          Capitalization of Company and Title to Shares .

 

(a)            The authorized capital of the Company consists solely of 19,500,000 shares of Common Stock, of which 14,059,727 shares are issued and outstanding as of the date hereof (the “ Outstanding Shares ”).  Schedule 4.02(a)  of the Company Disclosure Letter sets forth the ownership of the Outstanding Shares among the Stockholders.  Except as set forth on Schedule 4.02(a)  of the Company Disclosure Letter, the Outstanding Shares are the only issued and outstanding securities of the Company.  The Shares have been duly and validly authorized and issued, are fully paid and non-assessable and are subject to no preemptive rights.  Except as set forth on Schedule 4.02(a)  of the Company Disclosure Letter or as provided in the Contribution Agreement, there are no outstanding (i) options, warrants or other rights to purchase any capital stock of the Company, (ii) securities convertible into or exchangeable for shares of capital stock of the Company or (iii) commitments of any kind to which the Company is a party, or by which the Company is bound, for the issuance of any additional securities.

 

(b)            Except pursuant to those agreements listed on Schedule 4.02(b)  of the Company Disclosure Letter, each of the Stockholders has good and valid title to the Outstanding Shares listed next to its name on Schedule 4.02(a)  of the Company Disclosure Letter, free and clear of any covenant, condition, restriction, right of first refusal, voting trust arrangement or adverse claim of any kind.  When transferred to Purchaser at the Effective Time, the Shares will be free and clear of any lien, claim, charge, encumbrance, mortgage, pledge or security interest of any kind (“ Lien ”).

 

(c)            None of the Outstanding Shares were issued in violation of the Securities Act of 1933, as amended (the “ 1933 Act ”) or the securities or blue sky laws of any state or other jurisdiction.  Each Stockholder hereby waives any claim that any of the

 

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Outstanding Shares were issued in violation of the 1933 Act or the securities or blue sky laws of any state or other jurisdiction.

 

(d)            The Company does not have any subsidiaries and does not own, directly or indirectly, any equity interest in any other Person.

 

4.03          Authorization of Agreement .  The execution, delivery and performance by the Company of this Agreement and the Company’s Additional Agreements and the consummation by the Company of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of the Company.  Each of the Stockholders has the full right, power, legal capacity and authority to enter into this Agreement and the Company’s Additional Agreements, if applicable, and to perform his, her or its obligations hereunder and thereunder.  This Agreement and the Company’s Additional Agreements have been duly executed and delivered by the Company and the Stockholders and constitute legal, valid and binding obligations of the Company and the Stockholders, enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the rights of creditors generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing.

 

4.04          No Conflicts .   Neither the execution, delivery or performance of this Agreement or any of the Company’s Additional Agreements, nor the consummation by the Company and the Stockholders of the transactions contemplated hereby or thereby, nor compliance by the Company and the Stockholders with the terms and provisions hereof or thereof, will, directly or indirectly (with or without notice or lapse of time or both), (i) conflict

 

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with the Certificate of Incorporation or By-Laws of the Company, as amended to date, (ii) conflict with, or result in the breach or termination of, or constitute a default under (or with notice or lapse of time or both, result in the breach or termination of or constitute a default under) or result in the termination or suspension of, or accelerate the performance required by the terms, conditions or provisions of, any note, bond, mortgage, indenture, license, lease, agreement, commitment or other instrument to which the Company is a party or by which the Company is bound, except for those agreements listed on Schedule 4.04 , (iii) constitute a violation by any Stockholder or the Company of any law, statute, rule, regulation, ordinance, order, ruling, writ, judgment, injunction or decree (collectively, “ Laws ”) of any foreign or domestic federal, state or local legislative, judicial, executive or other governmental authority (“ Governmental Authority ”) applicable to the Company or the Shares or (iv) result in the creation of any Lien upon any of the Shares or any assets of the Company; except, in the case of clauses (ii) and (iii) above, for such conflicts, defaults, breaches, terminations, suspensions, acceleration of performance or violations which, taken as a whole, would not have a Material Adverse Effect or a material adverse effect on the Company’s and the Stockholders’ ability to consummate the transactions contemplated by this Agreement and the Company’s Additional Agreements.

 

4.05          No Consents .  No order, permission, consent, approval, license, authorization, registration, or validation of, or filing with, or notice to, or exemption by, any Governmental Authority is required to authorize, or is required in connection with, the execution, delivery or performance by the Company or the Stockholders of this Agreement or any of the Company’s Additional Agreements, except as would not, individually or in the aggregate, have a Material Adverse Effect.

 

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4.06          Compliance with Laws .  The Company is in material compliance with all applicable Laws.

 

4.07          Litigation .              Except as set forth on Schedule 4.07 of the Company Disclosure Letter, there are no actions, suits, inquiries, proceedings or investigations pending or, to the Stockholder Representatives’ knowledge, expressly threatened to be instituted by any third party before any court or other Governmental Authority (a) against the Company which, if decided adversely to the Company would, individually or in the aggregate, have a Material Adverse Effect or (b) against any of the Stockholders relating to the transactions contemplated by this Agreement or the Company’s Additional Agreements.

 

4.08          No Brokers .  There is no obligation or liability, contingent or otherwise, for brokers’ or finders’ fees or commissions in connection with the transactions contemplated by this Agreement for which the Company is liable.

 

4.09          Financial Statements .  Attached as Schedule 4.09 of the Company Disclosure Letter are: (a) the audited statements of income for the Company for the years ended December 31, 2004 and December 31, 2003 and the unaudited statement of income for the Company for the nine-month period ended September 30, 2005; (b) the audited balance sheets for the Company as of December 31, 2004 and December 31, 2003 and the unaudited balance sheet for the Company as of September 30, 2005 and (c) the audited statements of cash flow for the Company for the years ended December 31, 2004 and December 31, 2003 and the unaudited statement of cash flow for the Company for the nine-month period ended September 30, 2005 (collectively, the “ Financial Statements ”).  The Financial Statements have been prepared from books and records maintained by the Company consistent with past practice and in accordance with generally accepted accounting principles as in effect in the United States of America

 

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(“ GAAP ”).  The Financial Statements fairly present, in all material respects, the consolidated financial condition of the Company for the periods and as of the dates indicated and the results of operations for the periods then ended.

 

4.10          Undisclosed Liabilities .       Except for the liabilities (a) set forth on the Financial Statements or not required by GAAP to be reflected on the Financial Statements, (b) set forth on Schedule 4.10 of the Company Disclosure Letter, or (c) incurred since December 31, 2004 in the ordinary course of business consistent with past practice, the Company is not subject to any liability or liabilities, whether absolute, accrued, contingent or otherwise and whether due or to become due, which would, individually or in the aggregate, have a Material Adverse Effect.

 

4.11          Intellectual Property .

 

(a)            Schedule 4.11(a)  of the Company Disclsoure Letter contains a complete and correct list and description (including the record owners and identifying numbers) of all Internet domain names (“ Domain Names ”) and registered patents, copyrights, trademarks, trade names and service marks (and all existing and pending applications for, and any renewals, extensions, reissuances, continuations, revisions and reexaminations of, any of the foregoing) owned by the Company or held by third parties on behalf of the Company (including, without limitation, Domain Names registered by a third party on behalf of the Company).

 

(b)            Except as set forth on Schedule 4.11(b)  of the Company Disclsoure Letter, there are no proceedings pending or, to the Stockholder Representatives’ knowledge, threatened against the Company that directly challenge, and no express claim or demand in writing by any person or entity has been made to or upon the Company that directly challenges, the rights of the Company in respect of any patents, trademarks, service marks, trade names, trade dress, trade secrets, copyrights, Domain Names, (including Software under development and all object

 

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codes, source codes and other related documentation), or applications for or renewals, extensions, reissuances, continuations, revisions or reexaminations of any of the foregoing, or any computer software developed or under development by or for the Company (including, without limitation, all source code, executable code, data, databases and related documentation (collectively, the “ Software ”)), in each case to the extent owned or otherwise used by the Company (collectively, “ Intellectual Property ”).

 

(c)            Except as set forth on Schedule 4.11(c)  of the Company Disclsoure Letter, no Intellectual Property owned by the Company (i) is subject to any outstanding order, ruling, judgment, decree or stipulation by or with any Governmental Authority, or any express and enforceable contract, agreement, commitment or undertaking with any person or entity, restricting the scope or use of any such Intellectual Property, or (ii) to the Stockholder Representatives’ knowledge, infringes or misappropriates the rights of any other person or entity, or (iii) to the Stockholder Representatives’ knowledge, is being infringed or misappropriated by any other person or entity.

 

(d)            Except as set forth on Schedule 4.11(d)  of the Company Disclsoure Letter, the Company has not granted any material license (other than such licenses and permissions for one-time or other limited use granted in the ordinary course of business and the Terms of Use governing the website at www.automotive.com and related websites) to any person or entity to use any of the Intellectual Property owned or otherwise used by the Company.

 

(e)            The Company owns or has the right to use all of the Intellectual Property necessary to conduct its business immediately following the Effective Time as conducted immediately prior to the Effective Time.

 

(f)             To the Stockholder Representatives’ knowledge, the Company has full

 

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rights to register, transfer, renew and otherwise use, all the Domain Names without interference from any third-party, whether or not Company or a third-party is listed as the registrant.

 

4.12          Contracts and Commitments .

 

(a)            Schedule 4.12(a)  of the Company Disclsoure Letter lists: (i) all contracts to which the Company is a party (or by which the Company has rights or obligations) that involve the receipt of revenue, or require the expenditure, by the Company, of more than One Hundred Fifty Thousand Dollars ($150,000) in any consecutive twelve-month period after the date hereof, other than those terminable on not more than 90 days’ notice; (ii) all agreements governing long-term indebtedness of, or any guarantee thereof by, the Company; (iii) all material licensing agreements with third parties to which the Company is a party; (iv) each collective bargaining or other agreement with any labor union or other representative of a group of employees to which the Company is a party; (v) each partnership, joint venture, contribution, tax sharing or other agreement involving a sharing of profits, losses, costs or liabilities by the Company with any third party; (vi) each written contract or other agreement to which the Company is a party and containing terms which impose or purport to impose non-competition obligations upon the Company; (vii) each written warranty, guaranty or other similar undertaking with respect to contractual performance extended by the Company other than in the ordinary course of business; (viii) all real property leases (each, a “ Real Estate Lease ”) to which the Company is a party; and (ix) the agreements relating to the sale of leads listed on Schedule 4.22(b)  (with (i) through (ix) collectively referred to as the “ Material Contracts ”).

 

(b)            The Company has not obtained any letter of credit for, or given any power of attorney to, any person or entity for any purpose whatsoever that, in each case, is outstanding or will be in effect on the Closing Date.

 

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(c)            The Company is not in default, and to the Stockholder Representatives’ knowledge, there is no basis for any claim of default, under any of the Material Contracts, except such claims or defaults as would not, individually or in the aggregate, have a Material Adverse Effect.  To the knowledge of the Stockholder Representatives, all of the Material Contracts are in full force and effect and are valid, binding and enforceable in accordance with their respective terms.  Except as provided in those agreements identified on Schedule 4.12(c)  of the Company Disclsoure Letter, no consent by, notice to or approval from any Person is required under any of the Material Contracts as a result of the consummation of the transactions contemplated by this Agreement, except such consents the failure to obtain of which would not, individually or in the aggregate, have a Material Adverse Effect.

 

(d)            The Company has heretofore delivered or made available to Purchaser true and correct copies of all of the Material Contracts, including all amendments, modifications and supplements thereto.

 

4.13          Employee Benefits .

 

(a)            Schedule 4.13 of the Company Disclosure Letter lists:

 

(i)     each employment or severance agreement between the Company and any employee of the Company;

 

(ii)    each “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), or comparable provisions of foreign law) of the Company that is covered by ERISA or comparable provisions of foreign law and that is maintained or provides benefits for the benefit of any employee of the Company (a “ Plan ,” and collectively, the “ Plans ”); and

 

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(iii)   each plan, policy or arrangement not subject to ERISA maintained by the Company for the benefit of any employee of the Company and providing for retirement benefits, termination bonuses, deferred compensation, bonuses, severance, stock options, or employee insurance coverage (the “ Employee Benefit Programs ,” with each individually, an “ Employee Benefit Program ”).

 

(b)            To the knowledge of the Stockholder Representatives, each Plan and Employee Benefit Program has been maintained and administered at all times in material compliance with its terms and conditions and all applicable Laws, including, but not limited to, ERISA and the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “ Code ”), applicable to such Plan and Employee Benefit Program.

 

(c)            To the knowledge of the Stockholder Representatives, no “reportable event” (as such term is used in Section 4043 of ERISA, but excluding events for which the 30-day notice period has been waived), “prohibited transaction” (as such term is used in Section 406 of ERISA or Section 4975 of the Code, but excluding transactions that are exempt under a statutory or administrative exemption), or “fiduciary breach” under ERISA has heretofore occurred with respect to any Plan that could reasonably be expected to result in any material liability to the Company and there exists no condition or set of circumstances which could reasonably be expected to result in a “reportable event” (other than events for which the 30-day notice period has been waived).

 

(d)            The Company has not contributed to or participated in any pension plan which is a “Multi Employer Plan,” as defined in Section 3(37) of ERISA.  No Plan is subject to Title IV of ERISA or Section 412 of the Code.

 

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(e)            Complete and correct copies of all Plans and Employee Benefit Programs listed on Schedule 4.13 of the Company Disclosure Letter have been delivered or otherwise made available to Purchaser.

 

(f)             No employee of the Company is represented for purposes of collective bargaining.  There are no work stoppages or, to the Stockholder Representatives’ knowledge, threatened work stoppages, and to the Stockholder Representatives’ knowledge, no union organizing effort is under way with respect to any employees of the Company.

 

(g)            Each individual who renders services to the Company who is classified by the Company as having the status of independent contractor or other non-employee status for any purpose (including for purposes of taxation and tax reporting and under any Plan or employee Benefit Program) is properly so characterized.

 

4.14          Absence of Certain Changes .  Since December 31, 2004, the Company has not:

 

(a)            suffered any Material Adverse Effect;

 

(b)            suffered the loss of any material business relationships for the Company Business with any third parties;

 

(c)            except in the ordinary course of business, written off as uncollectible any notes or accounts receivable (or any portion thereof) that, individually or in the aggregate, are material to the Company;

 

(d)            except in the ordinary course of business, (i) sold, transferred or otherwise disposed of, or (ii) suffered any material damage or destruction (ordinary wear and tear excepted) of, or (iii) mortgaged, pledged or otherwise suffered or permitted the imposition of

 

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any Lien on, any properties or assets, whether real, personal, fixed, tangible or intangible, that, individually or in the aggregate, are material to the Company;

 

(e)            except in the ordinary course of business, made any capital expenditures or commitments for capital assets that, individually or in the aggregate, are material to the Company;

 

(f)             made any change in any accounting practices, principles, policies or methods, except as required by law, or made any change in accounting standards, that, individually or in the aggregate, are material to the Company;

 

(g)            except in the ordinary course of business, reduced any insurance coverages in any manner that, individually or in the aggregate, are material to the Company;

 

(h)            except in the ordinary course of business, entered into any material employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement), amended any of the Plans described on Schedule 4.13 of the Company Disclosure Letter or adopted any new employee benefit plan or, except as disclosed on Schedule 4.14(i)  of the Company Disclosure Letter, granted any general increase in compensation, bonus or other benefits payable to employees of the Company;

 

(i)             incurred any obligations or liabilities (whether absolute, accrued or contingent and whether due or to become due) related to indebtedness for borrowed money that, individually or in the aggregate, are material to the Company;

 

(j)             except in the ordinary course of business, changed its collection procedures or its payment incentives for customers;

 

(k)            amended its Certificate of Incorporation or By-laws (except that the Company filed a Certificate of Amendment of its Certificate of Incorporation on November 9, 2005

 

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and the Company’s Board of Directors has determined to amend the Bylaws in the manner set forth in the Stockholders Agreement); or

 

(l)             whether in writing or otherwise, agreed to take any action in the future that is otherwise prohibited to be taken pursuant to this Section 4.14.

 

4.15          Transactions with Affiliates .  Other than services of employees and directors of the Company, there are no services currently being provided to the Company by any Stockholder or other affiliate of the Company that are material to the Company.

 

4.16          Insurance .  Schedule 4.16 of the Company Disclosure Letter contains a list and brief description of all policies or binders of insurance held by or on behalf of the Company, or providing coverage for any of the properties, assets or operations of the Company or otherwise used in connection with the Company Business (in each case specifying the insurer, the amount of coverage and the type of insurance).

 

4.17          Environmental Matters .

 

(a)            The Company has not engaged in any operation upon any real property leased by the Company on which any Hazardous Materials (as hereinafter defined) have been handled, manufactured, treated, stored, used or generated by the Company, except for such quantities handled, manufactured, treated, stored, used or generated in connection with the normal operation and maintenance of such property in the ordinary course of the business of the Company in material compliance with applicable Laws and except for such activities as would not, individually or in the aggregate, have a Material Adverse Effect.

 

(b)            The Company is not a party to any litigation in which it is alleged, and the Company has not received express notice of or an express request for information related to any allegation or investigation of the possibility, that it or any of its assets is subject to any

 

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liability, clean-up or other obligation arising out of or relating to any discharge, or the storage, handling or disposal, of any Hazardous Material, except where any such allegations or investigations would not, individually or in the aggregate, have a Material Adverse Effect.

 

(c