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FOURTH. COLONIAL represents that it has no liabilities, absolute or contingent, due or to become due, not fully insured against, and no bonded indebtedness or other fixed liabilities, other than liabilities under executory contracts for materials and/or services or under executory leases and the like and/or otherwise current, except to the extent reflected or reserved in the foregoing balance sheet and except for such liabilities as may arise in the ordinary course of business. 

FIFTH. COLONIAL represents that it does not control or own shares of stock in any other corporation, except for shares constituting small interests in corporation owned jointly with other airlines and except for $10,500 par value City of New York Corporate Stock for Transit Unification. 

SIXTH. COLONIAL represents that it has no employment contracts with any employees, except (a) contracts with labor unions terminable or subject to alteration or change without penalty within one year of the date of this Agreement, (b) contracts of employment with four executives the maximum of which may be terminated with six months termination pay two years after the "Government Approval Date" as defined herein and COLONIAL agrees that it will not enter into any additional executive employment contracts without PURCHASER'S consent. 

SEVENTH. COLONIAL represents that it is the holder of certificates of public convenience and necessity issued by the Civil Aeronautics Board authorizing it to engage, subject to the conditions set forth in said certificates, as an air carrier in the carriage of persons, property and mail by aircraft over the routes known as 71-71F; 72-72F; and 33F.

EIGHTH. COLONIAL represents that its books of accounts are kept, and all times from the date of this Agreement to the Closing Date will be kept substantially in accordance with the Civil Aeronautics Board's Uniform System of Accounts. 

NINTH. COLONIAL represents that between the date of this Agreement and the Closing Date, it will not make additional investments in or commitments for the purchase and/or lease of aircraft or other major facilities in excess of an annual aggregate of One Million Dollars ($1,000,000), except with the concurrence of PURCHASER in writing and, in addition, COLONIAL reserves the right to sell, exchange, or otherwise dispose of any or all of its aircraft for fair value and to apply all or any part of the proceeds to the purchase and/or lease of other aircraft which, in the opinion of COLONIAL'S Board of Directors and PURCHASER'S management, are suitable for COLONIAL'S air transport operations and those of the combined company.

TENTH. COLONIAL represents that it has good and marketable title to all of its properties and assets, real and personal, reflected in its balance sheet (except for sales or other dispositions in the ordinary course of business or losses through casualty or Act of God) subject to no mortgage, pledge, lien, conditional sale agreement, encumbrance or charge, not reflected in its aforesaid balance sheet except for liens for current taxes not yet due and for minor imperfections of title of encumbrances which do not interfere with the normal operation of COLONIAL and except for a certain Chattel Mortgage dated February 1, 1954 from COLONIAL to Bankers Trust Company, New York, N.Y., attaching to three (3) DC-4 aircraft, eighteen (18) Pratt & Whitney R-2000 engines and eighteen (18) Hamilton Standard propellers and blades and securing a revolving credit from said Bankers Trust Company in an aggregate amount of not more than Three Hundred Thousand Dollars ($300,000) as provided in a certain Credit Agreement between COLONIAL and said Bankers Trust Company, dated February 1, 1954.

ELEVENTH. COLONIAL represents that between the date of this Agreement and the Closing Date it will take no action and undertake no steps to cause its Certificate of Public Convenience and Necessity, first mentioned in Article Seventh hereof, to be amended, altered or revised in any respect so as substantially to impair the rights and privileges enjoyed thereunder by COLONIAL.  

TWELFTH. COLONIAL represents that, as of the date of this Agreement, no litigation or legal proceedings of any nature have been commenced or are threatened against COLONIAL which might seriously jeopardize the continuing rights of COLONIAL to the full possession and enjoyment of any substantial portion of its franchises or substantially reduce its net worth.

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