RELATING TO THE OPERATIONS OF THE SELLERS OR ASSUMED, GUARANTEED OR OTHERWISE
BECOME LIABLE FOR ANY OBLIGATION OF ANY PERSON ON BEHALF OF OR RELATING TO THE
BUSINESS, EXCEPT IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE; OR
(II)
FAILED TO DISCHARGE OR SATISFY ANY LIEN OR
PAY OR SATISFY ANY OBLIGATION ARISING FROM THE OPERATION OF THE BUSINESS, OTHER
THAN LIABILITIES BEING CONTESTED IN GOOD FAITH AND FOR WHICH ADEQUATE RESERVES
HAVE BEEN PROVIDED AND EXCEPT FOR PERMITTED LIENS;
(III)
PLACED OR PERMITTED TO OCCUR AN ENCUMBRANCE
UPON ANY OF THE ASSETS, EXCEPT FOR PERMITTED LIENS;
(IV)
SOLD OR TRANSFERRED ANY OF THE ASSETS MATERIAL
TO THE BUSINESS OR CANCELED ANY MATERIAL DEBTS OR CLAIMS OR WAIVED ANY RIGHTS
MATERIAL TO THE BUSINESS, EXCEPT IN THE ORDINARY COURSE OF BUSINESS CONSISTENT
WITH PAST PRACTICE;
(V)
DISPOSED OF ANY PATENTS, TRADEMARKS OR
COPYRIGHTS OR ANY PATENT, TRADEMARK, OR COPYRIGHT APPLICATIONS USED IN THE
BUSINESS;
(VI)
ENTERED INTO ANY MATERIAL TRANSACTION IN
CONNECTION WITH OR RELATING
14
to the Business (including any capital expenditure exceeding in total USD
$30,000), except in the ordinary course of business consistent with past
practice;
(VII)
DEFAULTED ON ANY MATERIAL OBLIGATION;
(VIII)
INCURRED ANY MATERIAL OBLIGATION OR LIABILITY FOR
THE PAYMENT OF BENEFITS RELATED TO SEVERANCE, CHANGE OF CONTROL, GOLDEN
PARACHUTES, CONTINUATION OF EMPLOYMENT, SERVICE, MANAGEMENT OR SIMILAR CHARGES
OR OTHER SIMILAR PAYMENTS, TO ANY OTHER PERSON OR TO ANY MEMBER OF THE SELLERS;
OR
(IX)
ENTERED INTO ANY AGREEMENT OR MADE ANY
COMMITMENT TO DO ANY OF THE FOREGOING.
3.7.
REAL AND PERSONAL PROPERTIES.
(A)
THE SELLERS HAVE GOOD TITLE TO, OR VALID
AND BINDING LEASEHOLD INTERESTS IN, THE PERSONAL PROPERTY INCLUDED IN THE
ASSETS, FREE AND CLEAR OF ALL ENCUMBRANCES BUT SUBJECT TO NORMAL WEAR AND TEAR,
EXCEPT: (I) AS DISCLOSED IN THE FINANCIAL STATEMENTS; (II) LIENS FOR TAXES,
ASSESSMENTS AND OTHER GOVERNMENTAL CHARGES NOT YET DUE AND PAYABLE OR, IF DUE,
(A) NOT DELINQUENT OR (B) BEING CONTESTED IN GOOD FAITH BY APPROPRIATE
PROCEEDINGS DURING WHICH COLLECTION OR ENFORCEMENT AGAINST THE PROPERTY IS
STAYED; (III) MECHANICS', WORKMEN'S, REPAIRMEN'S, WAREHOUSEMEN'S, CARRIERS' OR
OTHER LIKE LIENS ARISING OR INCURRED IN THE ORDINARY COURSE OF BUSINESS IF THE
UNDERLYING OBLIGATIONS ARE NOT PAST DUE; (IV) ORIGINAL PURCHASE PRICE
CONDITIONAL SALES CONTRACTS AND EQUIPMENT LEASES WITH THIRD PARTIES ENTERED INTO
IN THE ORDINARY COURSE OF BUSINESS (WHICH THIRD PARTY EQUIPMENT LEASES, OTHER
THAN LEASES RELATED TO PHOTOCOPIERS, ARE SET FORTH IN SECTION 3.7(A) OF THE
DISCLOSURE SCHEDULE) AND (V) OTHER ENCUMBRANCES (OTHER THAN LIENS, SECURITY
INTERESTS, PLEDGES OR MORTGAGES), IF ANY, WHICH DO NOT MATERIALLY IMPAIR THE
CONTINUED USE AND OPERATION OF ANY SUCH ASSETS.
SUCH LIENS, CHARGES AND
ENCUMBRANCES DESCRIBED IN CLAUSES (I)-(V) HEREOF ARE REFERRED TO HEREIN AS
("PERMITTED LIENS").
(B)
THE SELLERS DO NOT OWN ANY REAL PROPERTY AND
HAVE NOT OWNED ANY REAL PROPERTY (FREEHOLD OR LEASEHOLD) FOR WHICH THERE ARE ANY
CONTINGENT LIABILITIES EXISTING AS OF THE DATE HEREOF.
SECTION 3.7(B) OF THE
DISCLOSURE SCHEDULE CONTAINS A LIST OF