SARBANES-OXLEY ACT; INTERNAL ACCOUNTING
CONTROLS.
EXCEPT AS SET FORTH ON SCHEDULE 4(AA), EACH BORROWER IS IN MATERIAL
COMPLIANCE WITH THE REQUIREMENTS OF THE SARBANES-OXLEY ACT OF 2002 APPLICABLE TO
IT, AND ANY AND ALL APPLICABLE RULES AND REGULATIONS PROMULGATED BY THE SEC
THEREUNDER THAT ARE EFFECTIVE AS OF THE DATE HEREOF; (II) EACH BORROWER AND EACH
OF ITS SUBSIDIARIES MAINTAINS A SYSTEM OF INTERNAL ACCOUNTING CONTROLS
SUFFICIENT TO PROVIDE REASONABLE ASSURANCE THAT (1) TRANSACTIONS ARE EXECUTED IN
ACCORDANCE WITH MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATIONS, (2)
TRANSACTIONS ARE RECORDED AS NECESSARY TO PERMIT PREPARATION OF FINANCIAL
STATEMENTS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND TO
MAINTAIN ASSET AND LIABILITY ACCOUNTABILITY, (3) ACCESS TO ASSETS OR INCURRENCE
OF LIABILITIES IS PERMITTED ONLY IN ACCORDANCE WITH MANAGEMENT'S GENERAL OR
SPECIFIC AUTHORIZATION AND (4) THE RECORDED ACCOUNTABILITY FOR ASSETS AND
LIABILITIES IS COMPARED WITH THE EXISTING ASSETS AND LIABILITIES AT REASONABLE
INTERVALS AND APPROPRIATE ACTION IS TAKEN WITH RESPECT TO ANY DIFFERENCE; AND
(III) EACH BORROWER MAINTAINS DISCLOSURE CONTROLS AND PROCEDURES (AS SUCH TERM
IS DEFINED IN RULE 13A-15 UNDER THE 1934 ACT) THAT ARE EFFECTIVE IN ENSURING
THAT INFORMATION REQUIRED TO BE DISCLOSED BY ANY BORROWER IN THE REPORTS THAT IT
FILES OR SUBMITS UNDER THE 1934 ACT IS RECORDED, PROCESSED, SUMMARIZED AND
REPORTED, WITHIN THE TIME PERIODS SPECIFIED IN THE RULES AND FORMS OF THE SEC,
INCLUDING, WITHOUT LIMITATION, CONTROLS AND PROCEDURES DESIGNED TO ENSURE THAT
INFORMATION REQUIRED TO BE DISCLOSED BY ANY BORROWER IN THE REPORTS THAT IT
FILES OR SUBMITS UNDER THE 1934 ACT IS ACCUMULATED AND COMMUNICATED TO THE
BORROWER'S MANAGEMENT, INCLUDING ITS PRINCIPAL EXECUTIVE OFFICER OR OFFICERS AND
ITS PRINCIPAL FINANCIAL OFFICER OR OFFICERS, AS APPROPRIATE, TO ALLOW TIMELY
DECISIONS REGARDING REQUIRED DISCLOSURE.
17
5.
CERTAIN COVENANTS.
(a)
Transfer Restrictions.
The Purchaser acknowledges and agrees that
the Note has not been and is not being registered under the provisions of the
1933 Act or any state securities laws, and, except as provided in Section 8, the
Securities have not been and are not being registered under the 1933 Act or any
state securities laws, and that the Note and the Securities may not be
transferred unless either the Note or the Securities is registered under the
1933 Act or an exemption from registration applies.
(b)
Restrictive Legends.
The Purchaser acknowledges and agrees that the
Note and the Securities may bear a restrictive legend in substantially the
following form (and a stop-transfer order may be placed against transfer of the
Note or the Securities):
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
THIS NOTE HAS BEEN
ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION