NORTHERN PRIOR TO THE EFFECTIVE DATE.
6.1.6
REAL PROPERTY INTERESTS.
THE ATTACHED SCHEDULE 6.1.6 SETS FORTH A
COMPLETE AND ACCURATE DESCRIPTION OF ALL THE REAL PROPERTY AND INTERESTS IN REAL
PROPERTY USED BY KLAMATH NORTHERN IN CONNECTION WITH THE BUSINESS (THE "KNRC
REAL PROPERTY"). KLAMATH NORTHERN DOES NOT OWN OR LEASE AND HAS NOT AGREED TO
ACQUIRE OR LEASE ANY REAL PROPERTY OR INTEREST IN REAL PROPERTY MATERIAL TO THE
BUSINESS OTHER THAN THE KNRC REAL PROPERTY. EXCEPT AS OTHERWISE DESCRIBED ON
SCHEDULE 6.1.6, KLAMATH NORTHERN HAS THE EXCLUSIVE RIGHT TO POSSESS, USE, AND
OCCUPY ALL OF THE KNRC REAL PROPERTY, FREE AND CLEAR OF ALL LIENS OTHER THAN
PERMITTED ENCUMBRANCES. EXCEPT AS DESCRIBED IN THAT CERTAIN UNDATED REPORT
REGARDING KNRC'S TRACKS PREPARED AT BUYER'S REQUEST BY JIM L. STUTTERS, ALL
BUILDINGS, STRUCTURES, IMPROVEMENTS AND APPURTENANCES SITUATED ON THE KNRC REAL
PROPERTY ARE ADEQUATE AND SUITABLE IN ALL MATERIAL RESPECTS FOR THE PURPOSES FOR
WHICH THEY ARE CURRENTLY BEING USED AND KLAMATH NORTHERN HAS ADEQUATE RIGHTS OF
INGRESS AND EGRESS FOR THE OPERATION OF THE BUSINESS IN THE ORDINARY COURSE. TO
SELLER'S KNOWLEDGE, NONE OF SUCH BUILDINGS, STRUCTURES, IMPROVEMENTS OR
APPURTENANCES (OR ANY EQUIPMENT THEREIN), NOR THE OPERATION OR MAINTENANCE
THEREOF, VIOLATES IN ANY MATERIAL RESPECT ANY RESTRICTIVE COVENANT OR ANY
PROVISION OF ANY APPLICABLE LEGAL REQUIREMENT, OR ENCROACHES ON ANY PROPERTY
OWNED BY ANY OTHER PERSON.
6.1.7
TANGIBLE PERSONAL PROPERTY.
ALL MATERIAL TANGIBLE PERSONAL
PROPERTY OWNED BY KLAMATH NORTHERN THAT IS USED IN THE BUSINESS IS LOCATED ON
THE KNRC REAL PROPERTY OR AT THE GILCHRIST MILL.
THE ATTACHED SCHEDULE 6.1.7
CONTAINS A TRUE AND COMPLETE LIST OF ALL MACHINERY, EQUIPMENT, MOTOR VEHICLES,
FURNISHINGS, TRADE FIXTURES, CHATTELS, AND OTHER TANGIBLE PERSONAL PROPERTY
OWNED BY KLAMATH NORTHERN AND USED IN CONNECTION WITH THE BUSINESS AS OF THE
EFFECTIVE DATE (OTHER THAN ITEMS OF TANGIBLE PERSONAL PROPERTY THE AGGREGATE
COST OF WHICH TO KLAMATH NORTHERN WAS LESS THAN $50,000).
6.1.8
INTANGIBLE PROPERTY.
(A)
THE ATTACHED SCHEDULE 6.1.8 CONTAINS A COMPLETE AND ACCURATE LIST
OF ALL GOVERNMENTAL AUTHORIZATIONS HELD BY OR ISSUED TO KLAMATH NORTHERN IN
RESPECT OF THE BUSINESS (THE "PERMITS AND LICENSES"). TO SELLER'S KNOWLEDGE, THE
PERMITS AND LICENSES ARE ALL LICENSES, PERMITS, APPROVALS, CONSENTS,
CERTIFICATES, REGISTRATIONS AND AUTHORIZATIONS (GOVERNMENTAL, REGULATORY, OR
OTHERWISE) REQUIRED FOR THE CONTINUED LAWFUL CONDUCT OF THE BUSINESS AS THE SAME
HAS BEEN CONDUCTED BY KLAMATH NORTHERN PRIOR TO THE EFFECTIVE DATE.
(B)
KLAMATH NORTHERN NEITHER OWNS NOR IS LICENSED TO USE ANY
TRADEMARKS, TRADE NAMES, BUSINESS NAMES, PATENTS, INVENTIONS, COPYRIGHTS,
SERVICE MARKS, BRAND NAMES, OR INDUSTRIAL DESIGNS THAT ARE USED IN CONDUCTING
THE BUSINESS.
6.1.9
FINANCIAL STATEMENTS.
THE FINANCIAL STATEMENTS HAVE BEEN PREPARED
SUBSTANTIALLY IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
APPLIED ON A BASIS CONSISTENT WITH PRIOR PERIODS, ARE CORRECT AND COMPLETE IN
ALL MATERIAL RESPECTS, AND PRESENT FAIRLY AND ACCURATELY THE ASSETS, KNOWN AND
RECORDED LIABILITIES, AND FINANCIAL CONDITION OF KLAMATH NORTHERN AS AT THE
RESPECTIVE DATES OF THE FINANCIAL STATEMENTS AND THE SALES, EARNINGS AND RESULTS
OF OPERATIONS OF KLAMATH NORTHERN