OR THREATENED RELEASES OF
CHEMICALS, POLLUTANTS, CONTAMINANTS, OR TOXIC OR HAZARDOUS SUBSTANCES OR WASTES
(COLLECTIVELY, "HAZARDOUS MATERIALS") INTO THE ENVIRONMENT, OR OTHERWISE
RELATING TO THE MANUFACTURE, PROCESSING, DISTRIBUTION, USE, TREATMENT, STORAGE,
DISPOSAL, TRANSPORT OR HANDLING OF HAZARDOUS MATERIALS, AS WELL AS ALL
AUTHORIZATIONS, CODES, DECREES, DEMANDS OR DEMAND LETTERS, INJUNCTIONS,
JUDGMENTS, LICENSES, NOTICES OR NOTICE LETTERS, ORDERS, PERMITS, PLANS OR
REGULATIONS ISSUED, ENTERED, PROMULGATED OR APPROVED THEREUNDER.
(Y)
TAX STATUS.
THE COMPANY AND EACH OF ITS SUBSIDIARIES (I) HAS MADE OR FILED
ALL FEDERAL AND STATE INCOME AND ALL OTHER TAX RETURNS, REPORTS AND DECLARATIONS
REQUIRED BY ANY JURISDICTION TO WHICH IT IS SUBJECT, (II) HAS PAID ALL TAXES AND
OTHER GOVERNMENTAL ASSESSMENTS AND CHARGES THAT ARE MATERIAL IN AMOUNT, SHOWN OR
DETERMINED TO BE DUE ON SUCH RETURNS, REPORTS AND DECLARATIONS, EXCEPT THOSE
BEING CONTESTED IN GOOD FAITH AND (III) HAS SET ASIDE ON ITS BOOKS PROVISION
REASONABLY ADEQUATE FOR THE PAYMENT OF ALL TAXES FOR PERIODS SUBSEQUENT TO THE
PERIODS TO WHICH SUCH RETURNS, REPORTS OR DECLARATIONS APPLY.
THERE ARE NO
UNPAID TAXES IN ANY MATERIAL AMOUNT CLAIMED TO BE DUE BY THE TAXING AUTHORITY OF
ANY JURISDICTION, AND THE OFFICERS OF THE COMPANY KNOW OF NO BASIS FOR ANY SUCH
CLAIM.
(Z)
INTERNAL ACCOUNTING CONTROLS.
THE COMPANY AND EACH OF ITS 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 AND LIABILITY
ACCOUNTABILITY, (III) ACCESS TO ASSETS OR INCURRENCE OF LIABILITIES IS PERMITTED
ONLY IN ACCORDANCE WITH MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATION AND (IV)
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.
(AA)
INVESTMENT COMPANY.
THE COMPANY IS NOT, AND IS NOT AN AFFILIATE
OF, AN "INVESTMENT COMPANY" WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED.
(BB)
FORM S-3 ELIGIBILITY.
THE COMPANY IS ELIGIBLE TO REGISTER THE
COMPANY COMMON STOCK FOR RESALE BY THE BUYERS UNDER FORM S-3 PROMULGATED UNDER
THE 1933 ACT.
(CC)
AVII COMMON STOCK.
(I)
THE TRANSFER OF THE AVII SHARES BY THE COMPANY HAVE BEEN
REGISTERED BY AVII UNDER THE 1933 ACT.
1,000,000 OF THE AVII SHARES WERE
REGISTERED BY AVII PURSUANT TO A REGISTRATION STATEMENT FILED ON FORM S-3 ON
DECEMBER 21, 1999, AS AMENDED ON
15
JANUARY 25, 2000, AND 1,684,211 OF THE AVII SHARES WERE REGISTERED BY AVII
PURSUANT TO A REGISTRATION STATEMENT FILED ON FORM S-3 ON SEPTEMBER 15, 2000
(THE "AVII REGISTRATION STATEMENTS").
THE "PLAN OF DISTRIBUTION" SECTION UNDER
EACH OF THE AVII REGISTRATION STATEMENTS PERMITS THE PLEDGE AND TRANSFER OF THE
AVII SHARES AS REQUIRED PURSUANT TO THE TRANSACTION DOCUMENTS.
(II)
THE COMPANY IS THE BENEFICIAL AND RECORD OWNER OF ALL OF THE AVII
SHARES, FREE AND CLEAR OF ANY LIENS, AND