OR ANY SUBSIDIARY (OTHER THAN AS HOLDERS OF
STOCK OPTIONS AND/OR WARRANTS, AND 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 ISSUER'S KNOWLEDGE, ANY ENTITY IN WHICH ANY
OFFICER, DIRECTOR, OR ANY SUCH EMPLOYEE HAS A SUBSTANTIAL INTEREST OR IS AN
OFFICER, DIRECTOR, TRUSTEE OR PARTNER.
3.1.16
INTERNAL CONTROLS.
THE ISSUER 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 GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES 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 DIFFERENCE.
THE ISSUER MAINTAINS AND WILL CONTINUE TO MAINTAIN A
STANDARD SYSTEM OF ACCOUNTING ESTABLISHED AND ADMINISTERED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN THE UNITED STATES AND THE APPLICABLE
REQUIREMENTS OF THE EXCHANGE ACT. THE ISSUER'S OFFICERS CERTIFIED TO THE
ISSUER'S INTERNAL CONTROLS AS OF THE FILING OF THE ISSUER'S FORM 10-QSB FOR THE
QUARTER ENDED SEPTEMBER 30, 2007 AND SINCE THAT DATE, THAT THERE HAVE BEEN NO
SIGNIFICANT CHANGES IN THE ISSUER'S INTERNAL CONTROLS (AS SUCH TERM IS DEFINED
IN SECTION 307(B) OF REGULATION S-K) OR, TO THE ISSUER'S KNOWLEDGE, ANY OTHER
FACTS THAT WOULD SIGNIFICANTLY AFFECT THE ISSUER'S INTERNAL CONTROLS.
THE
ISSUER IS NOT REQUIRED AT THIS DATE TO CERTIFY ITS INTERNAL CONTROLS UNDER
SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002 AND HAS NOT TAKEN ANY STEPS
NECESSARY TO EVALUATE ITS INTERNAL CONTROLS TO DETERMINE WHETHER IT WILL BE ABLE
TO TAKE SUCH A CERTIFICATION.
3.1.17
ACKNOWLEDGMENT REGARDING PURCHASER'S PURCHASE OF THE SECURITIES.
THE
ISSUER ACKNOWLEDGES AND AGREES THAT PURCHASER IS NOT ACTING AS A FINANCIAL
ADVISOR OR FIDUCIARY OF THE ISSUER (OR IN ANY SIMILAR CAPACITY) WITH RESPECT TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THAT THIS AGREEMENT AND
THE TRANSACTION CONTEMPLATED HEREBY, AND THE RELATIONSHIP BETWEEN EACH PURCHASER
AND THE ISSUER, ARE "ARMS-LENGTH," AND THAT ANY STATEMENT MADE BY PURCHASER
(EXCEPT AS SET FORTH IN SECTION 3.2), OR ANY OF ITS REPRESENTATIVES OR AGENTS,
IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY IS
NOT
12
advice or a recommendation, is merely incidental to Purchaser's purchase of the
Securities and has not been relied upon as such in any way by the Issuer, its
officers or directors.
The Issuer further represents to Purchaser that the
Issuer's decision to enter into this Agreement and the transactions contemplated
hereby has been based solely on an independent evaluation by the Issuer and its
representatives.
3.1.18
NO GENERAL SOLICITATION.