IN ANY OF
THE INVESTMENT DOCUMENTS.
5.06
LITIGATION.
EXCEPT FOR MATTERS EXISTING ON THE
CLOSING DATE AND SET FORTH ON SCHEDULE 5.06, THERE ARE NO ACTIONS, SUITS OR
PROCEEDINGS PENDING OR, TO THE KNOWLEDGE OF THE COMPANY, THREATENED, AGAINST OR
IN ANY OTHER WAY ADVERSELY RELATING TO OR AFFECTING ANY GROUP MEMBER, ITS
OPERATIONS OR ANY OF ITS PROPERTIES IN ANY COURT OR BEFORE ANY ARBITRATOR OF ANY
KIND OR BEFORE OR BY ANY GOVERNMENTAL AUTHORITY, WHICH IF ADVERSELY DETERMINED
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
NO ACTION, SUIT
OR PROCEEDING IS PENDING BEFORE ANY COURT OR ANY GOVERNMENTAL AUTHORITY OR, TO
THE KNOWLEDGE OF THE COMPANY, HAS BEEN THREATENED, AGAINST THE PURCHASER OR THE
COMPANY THAT CONSTITUTES (OR, IF COMMENCED, WOULD CONSTITUTE) AN EVENT OF
DEFAULT UNDER SECTION 6(A)(XI) OF THE NOTE.
THE COMPANY HAS NO KNOWLEDGE OR
INFORMATION RELATING TO THE POSSIBLE ASSERTION OF, OR THREATS OF, CLAIMS AGAINST
THE COMPANY, ANY GROUP MEMBER OR ANY OFFICER OR DIRECTOR THEREOF IN THE
BANKRUPTCY PROCEEDING WHETHER BY POSSIBLE DREAMS, AS CHAPTER 11 DEBTOR, ANY
CREDITORS' COMMITTEE APPOINTED IN THE BANKRUPTCY PROCEEDING, ANY TRUSTEE, OR ANY
OTHER PERSON INCLUDING, WITHOUT LIMITATION, CLAIMS ASSERTING LIABILITIES OF THE
COMPANY, ANY GROUP MEMBER OR ANY OFFICER OR DIRECTOR THEREOF TO POSSIBLE DREAMS
OR ITS CREDITORS, CLAIMS ASSERTING THAT THE COMPANY, ANY GROUP MEMBER OR ANY
OFFICER OR DIRECTOR THEREOF IS LIABLE OR RESPONSIBLE FOR SOME OR ALL OF CLAIMS
OF CREDITORS OF POSSIBLE DREAMS, CLAIMS ASSERTING THAT THE COMPANY, ANY GROUP
MEMBER OR ANY OFFICER OR DIRECTOR THEREOF HAS
22
LIABILITIES TO CREDITORS OF POSSIBLE DREAMS, CLAIMS THAT POSSIBLE DREAMS SHOULD
BE SUBSTANTIVELY CONSOLIDATED WITH THE COMPANY OR ANY GROUP MEMBER OR P.D.
HOLDINGS, OR CLAIMS FOR PIERCING THE VEIL OF THE COMPANY OR ANY GROUP MEMBER OR
P.D. HOLDINGS.
5.07
NO DEFAULT OR BREACH.
EXCEPT FOR VIOLATIONS OF THE
TERMS OF THE SENIOR LOAN DOCUMENTS THAT WOULD OCCUR IN CONNECTION WITH THE
ISSUANCE OF THE GUARANTIES IF THE SENIOR LOAN DOCUMENTS WERE NOT FIRST AMENDED,
NO EVENT HAS OCCURRED AND IS CONTINUING OR WOULD RESULT FROM THE INCURRING OF
OBLIGATIONS BY ANY GROUP MEMBER UNDER THE INVESTMENT DOCUMENTS (INCLUDING THE
GUARANTIES) WHICH CONSTITUTES OR, WITH THE GIVING OF NOTICE OR LAPSE OF TIME OR
BOTH, WOULD CONSTITUTE AN EVENT OF DEFAULT.
NO GROUP MEMBER IS IN DEFAULT UNDER
OR WITH RESPECT TO ANY CONTRACTUAL OBLIGATION IN ANY MATERIAL RESPECT.
5.08
TITLE TO PROPERTIES.
EACH GROUP MEMBER HAS SUCH
TITLE TO ALL REAL PROPERTY OWNED BY IT AND SUBSISTING LEASEHOLD INTERESTS IN ALL
REAL PROPERTY LEASED BY IT, IN EACH CASE AS IS NECESSARY TO THE CONDUCT OF ITS
BUSINESS AND VALID AND LEGAL TITLE TO ALL OF ITS PERSONAL PROPERTY AND ASSETS
OWNED BY IT.
5.09
USE OF REAL PROPERTY.
ALL REAL PROPERTIES ARE
LISTED ON SCHEDULE 5.09.
EXCEPT AS SET FORTH ON SCHEDULE 5.09, EACH REAL
PROPERTY USED IN CONNECTION WITH THE BUSINESS OF THE GROUP MEMBERS IS USED AND
OPERATED BY THE APPLICABLE GROUP MEMBER