TO APPLICABLE RULES AND REGULATIONS
OF THE PATENT AND TRADEMARK OFFICE OR CORRESPONDING INTERNATIONAL AUTHORITIES,
TO PROTECT THE SECRECY, CONFIDENTIALITY AND VALUE OF ALL OF THEIR INTELLECTUAL
PROPERTIES, EXCEPT WHERE FAILURE TO DO SO COULD NOT, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE OR REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
(P)
INSURANCE.
THE COMPANY AND THE SUBSIDIARIES ARE INSURED BY
INSURERS OF RECOGNIZED FINANCIAL RESPONSIBILITY AGAINST SUCH LOSSES AND RISKS
AND IN SUCH AMOUNTS AS ARE CUSTOMARY IN THE BUSINESSES IN WHICH THE COMPANY AND
THE SUBSIDIARIES ARE ENGAGED, INCLUDING, BUT NOT LIMITED TO, DIRECTORS AND
OFFICERS INSURANCE COVERAGE.
NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS ANY
REASON TO BELIEVE THAT IT WILL NOT BE ABLE TO RENEW ITS EXISTING INSURANCE
COVERAGE AS AND WHEN SUCH COVERAGE EXPIRES OR TO OBTAIN SIMILAR COVERAGE FROM
SIMILAR INSURERS AS MAY BE NECESSARY TO CONTINUE ITS BUSINESS WITHOUT A
12
SIGNIFICANT INCREASE IN COST.
(Q)
TRANSACTIONS WITH AFFILIATES AND EMPLOYEES.
EXCEPT AS SET FORTH
IN THE SEC REPORTS, NONE OF THE OFFICERS, DIRECTORS OR EMPLOYEES OF THE COMPANY
IS PRESENTLY A PARTY TO ANY TRANSACTION WITH THE COMPANY OR ANY SUBSIDIARY
(OTHER THAN FOR SERVICES AS EMPLOYEES, OFFICERS AND DIRECTORS), INCLUDING ANY
CONTRACT, AGREEMENT OR OTHER ARRANGEMENT PROVIDING FOR THE FURNISHING OF
SERVICES TO OR BY, PROVIDING FOR RENTAL OF REAL OR PERSONAL PROPERTY TO OR FROM,
OR OTHERWISE REQUIRING PAYMENTS TO OR FROM ANY OFFICER, DIRECTOR OR SUCH
EMPLOYEE OR, TO THE KNOWLEDGE OF THE COMPANY, ANY ENTITY IN WHICH ANY OFFICER,
DIRECTOR, OR ANY SUCH EMPLOYEE HAS A SUBSTANTIAL INTEREST OR IS AN OFFICER,
DIRECTOR, TRUSTEE OR PARTNER, IN EACH CASE IN EXCESS OF $120,000 OTHER THAN FOR
(I) PAYMENT OF SALARY OR CONSULTING FEES FOR SERVICES RENDERED,
(II) REIMBURSEMENT FOR EXPENSES INCURRED ON BEHALF OF THE COMPANY AND
(III) OTHER EMPLOYEE BENEFITS, INCLUDING STOCK OPTION AGREEMENTS UNDER ANY STOCK
OPTION PLAN OF THE COMPANY.
(R)
SARBANES-OXLEY; INTERNAL ACCOUNTING CONTROLS.
THE COMPANY IS IN
MATERIAL COMPLIANCE WITH ALL PROVISIONS OF THE SARBANES-OXLEY ACT OF 2002
(INCLUDING ALL RULES AND REGULATIONS PROMULGATED THEREUNDER) WHICH ARE
APPLICABLE TO IT AS OF THE CLOSING DATE.
THE COMPANY AND THE SUBSIDIARIES
MAINTAIN A SYSTEM OF INTERNAL ACCOUNTING CONTROLS SUFFICIENT TO PROVIDE
REASONABLE ASSURANCE THAT (I) TRANSACTIONS ARE EXECUTED IN ACCORDANCE WITH
MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATIONS, (II) TRANSACTIONS ARE RECORDED
AS NECESSARY TO PERMIT PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH
GAAP AND TO MAINTAIN ASSET ACCOUNTABILITY, (III) ACCESS TO ASSETS IS PERMITTED
ONLY IN ACCORDANCE WITH MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATION, AND
(IV) THE RECORDED ACCOUNTABILITY FOR ASSETS IS COMPARED WITH THE EXISTING ASSETS
AT REASONABLE INTERVALS AND APPROPRIATE ACTION IS TAKEN WITH RESPECT TO ANY
DIFFERENCES.
THE COMPANY HAS ESTABLISHED DISCLOSURE CONTROLS AND PROCEDURES (AS
DEFINED IN EXCHANGE ACT RULES 13A-15(E) AND 15D-15(E)) FOR THE COMPANY AND
DESIGNED SUCH DISCLOSURE CONTROLS AND PROCEDURES TO ENSURE THAT INFORMATION
REQUIRED TO BE DISCLOSED BY THE COMPANY IN THE REPORTS IT FILES OR SUBMITS UNDER
THE EXCHANGE ACT IS RECORDED, PROCESSED, SUMMARIZED AND