affecting the Business that has had, or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Companies taken as a whole.
17
Section 4.5
Property.
(A)
THE COMPANIES HOLD AND POSSESS THE REAL PROPERTY AND THE REAL
PROPERTY AGREEMENTS THAT ARE USED BY THEM TO CONDUCT, OR ARE REASONABLY
NECESSARY TO CONDUCT, THE BUSINESS, AS PRESENTLY OPERATED, FREE AND CLEAR OF ALL
LIENS, EXCEPT (I) LIENS DESCRIBED IN SECTION 1 OF SCHEDULE 4.5; (II) LIENS
DISCLOSED IN THE FINANCIAL STATEMENTS; (III) LIENS FOR TAXES, ASSESSMENTS AND
OTHER GOVERNMENTAL CHARGES NOT YET DUE AND PAYABLE OR, IF DUE, NOT DELINQUENT OR
BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS (AND AS TO WHICH
ADEQUATE RESERVES HAVE BEEN SET ASIDE IN ACCORDANCE WITH GAAP); (IV) MECHANICS',
WORKMEN'S, REPAIRMEN'S, WAREHOUSEMEN'S, CARRIERS' OR OTHER LIKE LIENS ARISING OR
INCURRED IN THE ORDINARY COURSE OF BUSINESS, BUT ONLY TO THE EXTENT THE
UNDERLYING OBLIGATIONS ARE NOT MORE THAN SIXTY (60) DAYS PAST DUE OR ARE BEING
CONTESTED IN GOOD FAITH; (V) WITH RESPECT TO PERSONAL PROPERTY LIENS OR TITLE
RETENTION ARRANGEMENTS ARISING UNDER ORIGINAL PURCHASE PRICE CONDITIONAL SALES
CONTRACTS AND EQUIPMENT LEASES WITH THIRD PARTIES ENTERED INTO IN THE ORDINARY
COURSE OF BUSINESS; (VI) THE MATTERS IDENTIFIED IN THE TITLE REPORTS, (VII)
LIENS, EASEMENTS, LICENSES, COVENANTS, RIGHTS-OF-WAY AND OTHER CONDITIONS AND
RESTRICTIONS (A) RECORDED IN THE APPLICABLE REAL PROPERTY RECORDS OF SACRAMENTO,
SAN JOAQUIN AND/OR SOLANO COUNTIES, CALIFORNIA, (B) THAT MAY REASONABLY BE SHOWN
OR IDENTIFIED BY SURVEY OR PHYSICAL INSPECTION (WHETHER OR NOT MADE) OF THE REAL
PROPERTY OR THE PROPERTY DESCRIBED IN THE REAL PROPERTY AGREEMENTS, AND (C) SET
FORTH IN APPLICABLE ZONING, BUILDING AND OTHER SIMILAR REGULATIONS, SO LONG AS
NO SUCH MATTER IDENTIFIED IN CLAUSES (A), (B) OR (C) PREVENTS OR MATERIALLY
HINDERS OR INTERFERES WITH THE USE OF SUCH PROPERTY SUBSTANTIALLY AS CURRENTLY
USED FOR THE PURPOSES OF THE BUSINESS; (VIII) LIENS, IF ANY, CREATED OR EXISTING
PURSUANT TO THE DISCLOSED CONTRACTS, (IX) LIENS, IF ANY, CREATED OR EXISTING
PURSUANT TO REAL PROPERTY AGREEMENTS, (X) LIENS, IF ANY, CREATED OR EXISTING
PURSUANT TO THE MATTERS AND AGREEMENTS LISTED IN SCHEDULES 3.4 AND 4.8, (XI)
PRIOR TO THE CLOSING, LIENS, IF ANY, CREATED OR EXISTING PURSUANT TO THE MATTERS
AND AGREEMENTS LISTED IN SCHEDULE 3.3, (XII) AT AND FOLLOWING THE CLOSING,
LIENS, IF ANY, CREATED OR EXISTING PURSUANT TO THE MATTERS AND AGREEMENTS LISTED
IN SCHEDULE 3.3(1) AND (2) AND LIENS IN RESPECT OF REMAINING INDEBTEDNESS TO THE
EXTENT BUYER RECEIVES PAYOFF LETTERS IN RESPECT THEREOF PRIOR TO THE CLOSING,
AND (XIII) SUCH DEFECTS, BURDENS, ENCUMBRANCES, IMPERFECTIONS OR IRREGULARITIES
OF TITLE, IF ANY, AS ARE NOT SUBSTANTIAL IN CHARACTER, AMOUNT OR EXTENT AND DO
NOT, INDIVIDUALLY OR IN THE AGGREGATE, MATERIALLY IMPAIR THE CONDUCT OF NORMAL
OPERATIONS OF THE BUSINESS AS CURRENTLY CONDUCTED (THE MATTERS DESCRIBED IN
CLAUSES (I) THROUGH (XIII) ABOVE ARE COLLECTIVELY REFERRED TO HEREIN AS THE
"PERMITTED LIENS").
(B)
SECTION 2 OF SCHEDULE 4.5 SETS FORTH A COMPLETE AND