HAS RECEIVED ALL
NECESSARY GOVERNMENTAL AUTHORIZATIONS.
TO THE KNOWLEDGE OF THE COMPANY, EXCEPT
AS NOTED ON SCHEDULE 4.8, ALL BUILDINGS, IMPROVEMENTS AND FIXTURES ARE IN
MATERIAL COMPLIANCE WITH ALL APPLICABLE LEGAL REQUIREMENTS, INCLUDING BUT NOT
LIMITED TO ENVIRONMENTAL AND SAFETY REGULATIONS, INCLUDING THOSE PERTAINING TO
ZONING, BUILDING AND THE DISABLED, TO THE EXTENT APPLICABLE, ARE IN GOOD REPAIR
AND IN GOOD CONDITION, ORDINARY WEAR AND TEAR EXCEPTED, AND, TO THE KNOWLEDGE OF
THE COMPANY, ARE FREE FROM LATENT AND PATENT DEFECTS.
TO THE KNOWLEDGE OF THE
COMPANY, EXCEPT AS NOTED ON SCHEDULE 4.8, NO PART OF ANY BUILDINGS, IMPROVEMENTS
AND FIXTURES ENCROACHES ON ANY REAL PROPERTY NOT INCLUDED IN THE REAL PROPERTY,
AND THERE ARE NO BUILDINGS, STRUCTURES, FIXTURES OR OTHER IMPROVEMENTS PRIMARILY
SITUATED ON ADJOINING PROPERTY WHICH ENCROACH ON ANY PART OF THE REAL PROPERTY.
TO THE KNOWLEDGE OF THE COMPANY, THERE IS NO EXISTING OR PROPOSED PLAN TO MODIFY
OR REALIGN ANY STREET OR HIGHWAY OR ANY EXISTING OR PROPOSED EMINENT DOMAIN
PROCEEDING THAT WOULD RESULT IN THE TAKING OF ALL OR ANY PART OF ANY FACILITY OR
THAT WOULD PREVENT OR HINDER THE CONTINUED USE OF ANY FACILITY AS HERETOFORE
USED IN THE CONDUCT OF THE BUSINESS.
4.9
TITLE AND CONDITION OF ASSETS.
(A)
TITLE; SUFFICIENCY.
THE COMPANY HAS GOOD, VALID AND MARKETABLE TITLE TO
ALL OF THE PURCHASED ASSETS, AND AT CLOSING, THE COMPANY WILL CONVEY GOOD, VALID
AND MARKETABLE TITLE TO EACH OF THE PURCHASED ASSETS TO BUYER.
THE TITLE TO
EACH PURCHASED ASSET IS, AND AT CLOSING WILL BE, FREE AND CLEAR OF ALL LIENS,
EXCEPT FOR PERMITTED ENCUMBRANCES.
THE PURCHASED ASSETS CONSTITUTE ALL OF THE
MATERIAL ASSETS AND RIGHTS NECESSARY FOR THE CONDUCT OF THE BUSINESS AS
PRESENTLY CONDUCTED.
(B)
INVENTORY.
EXCEPT AS DISCLOSED ON SCHEDULE 4.9(B), THE INVENTORY CONSISTS
OF A QUALITY AND QUANTITY SALEABLE IN THE ORDINARY COURSE OF BUSINESS IN
ACCORDANCE WITH NORMAL INDUSTRY PRACTICE.
(C)
EQUIPMENT.
EXCEPT WITH RESPECT TO ANY INDIVIDUAL ITEM ORIGINALLY
PURCHASED BY THE COMPANY FOR LESS THAN $25,000.00 AND AS OTHERWISE DISCLOSED ON
SCHEDULE 4.9(C), THE
22
EQUIPMENT IS IN GOOD OPERATING CONDITION AND REPAIR (NORMAL WEAR AND TEAR
EXCEPTED), HAS BEEN MAINTAINED IN ACCORDANCE WITH NORMAL INDUSTRY PRACTICE AND
IS SUITABLE FOR THE PURPOSES FOR WHICH IT IS PRESENTLY USED.
(D)
ACCOUNTS RECEIVABLE.
THE ACCOUNTS RECEIVABLE REPRESENT VALID OBLIGATIONS
ARISING FROM SALES ACTUALLY MADE OR SERVICES ACTUALLY PERFORMED BY THE COMPANY
IN THE ORDINARY COURSE OF BUSINESS.
THE RESERVE AGAINST LIABILITY FOR
UNCOLLECTIBLE ACCOUNTS RECEIVABLE SET FORTH ON THE ESTIMATED WORKING CAPITAL
STATEMENT IS REASONABLE BASED ON PAST PRACTICE.
4.10 TAXES.
EXCEPT AS SET FORTH ON SCHEDULE 4.10, WITH REGARD TO THE BUSINESS
AND THE PURCHASED ASSETS:
(A)
THE COMPANY IS AND HAS ALWAYS BEEN A VALID SUBCHAPTER S CORPORATION;
(B)
THE COMPANY HAS TIMELY FILED OR SHALL TIMELY FILE ALL TAX RETURNS WHICH
ARE REQUIRED TO BE FILED ON OR BEFORE THE CLOSING DATE, AND ALL SUCH TAX RETURNS
ARE TRUE, COMPLETE AND ACCURATE;
(C)
ALL TAXES DUE AND PAYABLE BY THE