BY THE COMPANY ARE
HELD BY THEM UNDER VALID, SUBSISTING AND ENFORCEABLE LEASES WITH WHICH THE
COMPANY IS IN MATERIAL COMPLIANCE.
10
(T)
DISCLOSURE.
THE COMPANY CONFIRMS THAT, NEITHER THE COMPANY NOR
ANY OTHER PERSON ACTING ON ITS BEHALF HAS PROVIDED ANY OF THE SUBSCRIBERS OR
THEIR AGENTS OR COUNSEL WITH ANY INFORMATION THAT CONSTITUTES OR MIGHT
CONSTITUTE MATERIAL, NON-PUBLIC INFORMATION.
THE COMPANY UNDERSTANDS AND
CONFIRMS THAT THE SUBSCRIBERS WILL RELY ON THE FOREGOING REPRESENTATIONS AND
COVENANTS IN EFFECTING TRANSACTIONS IN SECURITIES OF THE COMPANY. ALL DISCLOSURE
PROVIDED TO THE SUBSCRIBERS REGARDING THE COMPANY, ITS BUSINESS AND THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING THE DISCLOSURE SCHEDULES TO THIS
AGREEMENT (THE "DISCLOSURE SCHEDULES"), FURNISHED BY OR ON BEHALF OF THE COMPANY
ARE TRUE AND CORRECT AND DO NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT
OR OMIT TO STATE ANY MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
MADE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING.
(U)
INTERNAL ACCOUNTING CONTROLS.
THE COMPANY AND 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
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 THE 1934 ACT RULES 13A-14 AND 15D-14) FOR THE COMPANY AND DESIGNED
SUCH DISCLOSURE CONTROLS AND PROCEDURES TO ENSURE THAT MATERIAL INFORMATION
RELATING TO THE COMPANY (BUT NOT ANY PROPOSED ACQUISITION), AND EACH SUBSIDIARY,
IS MADE KNOWN TO THE CERTIFYING OFFICERS BY OTHERS WITHIN THOSE ENTITIES,
PARTICULARLY DURING THE PERIOD IN WHICH THE COMPANY'S FORM 10-KSB OR 10-QSB, AS
THE CASE MAY BE, IS BEING PREPARED.
(V)
REGISTRATION RIGHTS.
EXCEPT AS SET FORTH IN THE REPORTS OR ON
SCHEDULE 5(V), NO PERSON HAS ANY RIGHT TO CAUSE THE COMPANY TO EFFECT THE
REGISTRATION UNDER THE 1933 ACT OF ANY SECURITIES OF THE COMPANY.
6.
REGULATION D OFFERING.
THIS SERIES B OFFERING IS BEING MADE
PURSUANT TO THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE 1933 ACT
AFFORDED BY SECTION 4(2) OR SECTION 4(6) OF THE 1933 ACT AND/OR RULE 506 OF
REGULATION D PROMULGATED THEREUNDER.
ON THE CLOSING DATE, THE COMPANY WILL
PROVIDE AN OPINION REASONABLY ACCEPTABLE TO SUBSCRIBER FROM THE COMPANY'S LEGAL
COUNSEL OPINING ON THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE
1933 ACT AS IT RELATES TO THE OFFER AND ISSUANCE OF THE SECURITIES, EXCLUSIVE OF
THE ISSUE OF INTEGRATION WITH PRIOR OFFERINGS OF THE COMPANY.
THE COMPANY WILL
PROVIDE, AT THE COMPANY'S EXPENSE, SUCH OTHER LEGAL OPINIONS IN THE FUTURE AS
ARE REASONABLY NECESSARY FOR THE CONVERSION OF THE SERIES B PREFERRED STOCK,
EXERCISE OF