Covenants and Undertakings The Customer hereby irrevocably and unconditionally covenants and undertakes as follows:
(a) it shall promptly, after the occurrence thereof, give notice to the Bank of any Event of Default or event which with the passing of time or the giving of notice, or both, would constitute an Event of Default, including the nature thereof and the steps being taken by the Customer to remedy or mitigate the effect of the Event of Default;
(b) it will not use any Account or carry out any Investments or Transactions for the purposes of money laundering, terrorist financing, drug trafficking or other illegal purposes or from funds/assets being proceeds of a predicate offence or obtained from other illicit, criminal or illegal activities, whether in Hong Kong or elsewhere;
(c) it shall forward to the Bank such information or documents that the Bank may require from time to time, including but not limited to (where the Customer is a corporation) a copy of its audited financial statements immediately after they are issued but in any event within 5 months after the close of each of the Customer’s financial year;
(d) it further undertakes to notify the Bank immediately in the event that any order or warrant is issued against the Customer or any of its assets or (where the Customer is a trustee of the Trust) any of the assets of the Trust under the applicable AML/CFT laws and regulations;
(e) it shall obtain all the requisite regulatory and governmental approvals (if any) in connection with each Agreement, deliver a copy of the same to the Bank, including without limitation, the requisite exchange controls approvals to purchase foreign currencies to make a payment in respect of the Facilities or Indebtedness (if such approvals are required);
(f) it shall notify the Bank forthwith in writing of any changes in the information supplied in or in connection with the Agreement (including without limitation, information relating to itself or any Authorised Persons, and any change of address or of any appointment or revocation of the authority of any Authorised Persons);
(g) it shall notify the bank forthwith in writing of any or any intended, threatened or pending Insolvency Event in respect of any Obligor or (where the Customer is a trustee of the Trust) the Trust, or Associated Company;
(h) it shall be solely and fully responsible for the Customer’s tax affairs, filings, duties and obligations (including but not limited to its own tax filings and tax duties and obligations in the country of its residence/ incorporation or to any country which might consider it to be liable for taxes). The Customer shall ensure the accuracy of all information it provides to any tax authorities or governmental authorities (whether pursuant to any law, regulatory requirement, guidelines, directives or otherwise). The Customer hereby acknowledges and agrees that the Bank shall not be responsible for the accuracy of such information whether provided by the Customer or not, including without limitation, any omission by the Customer to answer correctly and fully to its tax duties in the country of its residence/incorporation or to any country which might consider it as being liable for taxes; and
(i) it shall at all times comply with all applicable laws, rules and regulations. In particular but without limitation, the Customer acknowledges that it shall be responsible for ensuring that it complies with any applicable position reporting regulations.
Certain Covenants and Agreements 5.1 Conduct of Business by Target. From the date hereof to the Effective Date, Target will, except as required in connection with the Transaction and the other transactions contemplated by this Agreement and except as otherwise disclosed on the schedules hereto or consented to in writing by the Acquiring Company:
(a) carry on its business in the ordinary and regular course in substantially the same manner as heretofore conducted and not engage in any new line of business, or enter into any material agreement, transaction or activity or make any material commitment except those in the ordinary and regular course of business and not otherwise prohibited under this Section 5.1 with the exceptions of the planned product launch and the continuing bridge financing which will result in the issuance of additional Target Notes and underlying Target Note Warrants;
(b) neither change nor amend its Articles of Incorporation or Bylaws;
(c) not issue or sell shares of capital stock of Target or issue, sell or grant options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of any of the capital stock of Target or rights or obligations convertible into or exchangeable for any shares of the capital stock of Target or make any changes (by split-up, combination, reorganization or otherwise) in the capital structure of Target;
(d) not declare, pay or set aside for payment any dividend or other distribution in respect of the capital stock or other equity securities of Target and not redeem, purchase or otherwise acquire any shares of the capital stock or other securities of Target or rights or obligations convertible into or exchangeable for any shares of the capital stock or other securities of Target or obligations convertible into such, or any options, warrants or other rights to purchase or subscribe to any of the foregoing;
(e) not acquire or enter into any agreement to acquire, by merger, consolidation or purchase of stock or assets, any business or entity;
(f) use its best efforts to preserve intact the corporate existence, goodwill, and business organization of Target, to keep the officers and employees of Target available to Target and to preserve the relationships of Target with suppliers, customers and others having business relations with Target, and preserve, maintain and enforce all of Target's material licenses, permits, and similar rights, except for such instances which would not have a Target Material Adverse Effect;
(g) Not (i) enter into, modify or extend in any manner the terms of any employment, severance or similar agreements with officers and directors, (ii) grant any increase in the compensation of officers or directors, whether now or hereafter payable or (iii) grant any increase in the compensation of any other employees (it being understood by the parties hereto that for the purposes of (ii) and (iii) above increases in compensation shall include any increase pursuant to any option, bonus, stock purchase, pension, profit-sharing, deferred compensation, retirement or other plan, arrangement, contract or commitment);
(h) except in instances which would not have a Target Material Adverse Effect, perform all of its obligations under all Material Contracts (except those being contested in good faith) and not enter into, assume or amend any contract or commitment that would be a Material Contract other than contracts to provide services entered into in the ordinary course of business;
(i) except in instances which would not have a Target Material Adverse Effect, prepare and file all federal, state, local and foreign returns for taxes and other tax reports, filings and amendments thereto required to be filed by it, and allow the Acquiring Company to review all such returns, reports, filings and amendments at Target's offices prior to the filing thereof, which review shall not interfere with the timely filing of such returns; and
(j) Not borrow any funds under existing lines of credit or otherwise except as the Target deems reasonably necessary for the ordinary operation of Target's business, including the issuance of additional Target Notes and Target Note Warrants pursuant to the continuing bridge financing. In connection with the continued operation of the business of Target between the date of this Agreement and the Effective Date, Target shall confer in good faith and on a regular and frequent basis with one or more representatives of the Acquiring Company designated in writing to report operational matters of materiality and the general status of ongoing operations. In addition, during regular business hours, Target will allow employees and agents of the Acquiring Company to be present at Target's business locations to observe the business and operations of Target. Target acknowledges that the Acquiring Company does not and will not waive any rights it may have under this Agreement as a result of such consultations nor shall the Acquiring Company (or either of them) be responsible for any decisions made by Target's officers and directors with respect to matters which are the subject of such consultation.
Certain Covenants (a) The Company covenants that all shares of Common Stock issued upon conversion of Notes will be fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof.
(b) The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares of Common Stock may be validly issued upon conversion, the Company will, to the extent then permitted by the rules and interpretations of the Commission, secure such registration or approval, as the case may be.
(c) The Company further covenants that if at any time the Common Stock shall be listed on any national securities exchange or automated quotation system the Company will list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, any Common Stock issuable upon conversion of the Notes.
Certain Covenants and Agreements of the Company The Company covenants and agrees at its expense and without any expense to the Placement Agent as follows:
A. To advise the Placement Agent and the Investor of any material adverse change in the Company's financial condition, prospects or business or of any development materially affecting the Company or rendering untrue or misleading any material statement in the Offering Materials occurring at any time as soon as the Company is either informed or becomes aware thereof.
B. To use its commercially reasonable efforts to cause the Common Stock issuable in connection with the Standby Equity Distribution Agreement to be qualified or registered for sale on terms consistent with those stated in the Registration Rights Agreement and under the securities laws of such jurisdictions as the Placement Agent and the Investor shall reasonably request. Qualification, registration and exemption charges and fees shall be at the sole cost and expense of the Company.
C. Upon written request, to provide and continue to provide the Placement Agent and the Investor copies of all quarterly financial statements and audited annual financial statements prepared by or on behalf of the Company, other reports prepared by or on behalf of the Company for public disclosure and all documents delivered to the Company's stockholders.
D. To deliver, during the registration period of the Standby Equity Distribution Agreement, to the Investor upon the Investor's request, within forty five (45) days, a statement of its income for each such quarterly period, and its balance sheet and a statement of changes in stockholders' equity as of the end of such quarterly period, all in reasonable detail, certified by its principal financial or accounting officer; (ii) within ninety (90) days after the close of each fiscal year, its balance sheet as of the close of such fiscal year, together with a statement of income, a statement of changes in stockholders' equity and a statement of cash flow for such fiscal year, such balance sheet, statement of income, statement of changes in stockholders' equity and statement of cash flow to be in reasonable detail and accompanied by a copy of the certificate or report thereon of independent auditors if audited financial statements are prepared; and (iii) a copy of all documents, reports and information furnished to its stockholders at the time that such documents, reports and information are furnished to its stockholders.
E. To comply with the terms of the Offering Materials.
F. To ensure that any transactions between or among the Company, or any of its officers, directors and affiliates be on terms and conditions that are no less favorable to the Company, than the terms and conditions that would be available in an "arm's length" transaction with an independent third party.
Certain Covenants of the Parties Seller and Company, on the one hand, and Buyer, on the other hand, hereby covenant to and agree with one another as follows:
Representations and Undertakings 2.1. The Trust represents to the Distributor that all registration statements filed by the Trust with the SEC under the 1933 Act, with respect to Shares have been prepared in conformity with the requirements of the 1933 Act and rules and regulations of the SEC thereunder.
2.2. The Trust represents and warrants to the Distributor that any registration statement, when such registration statement becomes effective, will contain all statements required to be stated therein in conformity with the 1933 Act and the rules and regulations of the SEC; that all statements of fact contained in any such registration statement will be true and correct when such registration statement becomes effective; and that no registration statement, when such registration statement becomes effective, will include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading to a purchaser of Shares. The Trust authorizes the Distributor and authorized banks, broker/dealers and other financial institutions to use any prospectus or statement of additional information in the form furnished from time to time in connection with the sale of Shares and represented by the Trust as being the then-current form of prospectus or then-current form of statement of additional information.
2.3. No Shares shall be offered by either the Distributor or the Trust under any of the provisions of this Agreement and no orders for the purchase or sale of Shares hereunder shall be accepted by the Trust if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the 1933 Act, or if and so long as a current prospectus, as required by Section 10(b) of the 1933 Act is not on file with the SEC; provided, however, that nothing contained in this paragraph 2.3 shall in any way restrict or have any application to or bearing upon the Trust’s obligation to repurchase Shares from any shareholder in accordance with the provisions of the Trust’s prospectus or Declaration of Trust.
2.4. The Trust agrees to advise the Distributor as soon as reasonably practicable of the issuance by the SEC of any stop order suspending the effectiveness of the registration statement then in effect or of the initiation of any proceeding for that purpose.
Covenants and Additional Agreements 5.1. ACCESS; CONFIDENTIALITY.
Certain Covenants of the Company The Company covenants with each Underwriter as follows:
(a) During the period described in the following sentence of this Section 4(a), the Company shall advise the Representative promptly of any proposal to amend or supplement the Registration Statement, the Time of Sale Prospectus or the Prospectus (except by documents filed under the Exchange Act) and will not effect such amendment or supplement (except by documents filed under the Exchange Act) without the consent of the Representative, which consent will not be unreasonably withheld. If, at any time after the public offering of the Class B Certificates, the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with sales of the Class B Certificates by an Underwriter or a dealer, any event shall occur as a result of which it is necessary to amend or supplement the Prospectus so that the statements therein will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, contain a material misstatement or omission, or if it is necessary to amend the Registration Statement or amend or supplement the Prospectus to comply with law, the Company shall prepare and furnish at its expense to the Underwriters and to the dealers (whose names and addresses the Representative will furnish to the Company) to which Class B Certificates may have been sold by the Representative on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, contain a material misstatement or omission, or amendments or supplements to the Registration Statement or the Prospectus so that the Registration Statement or the Prospectus, as so amended or supplemented, will comply with law and cause such amendments or supplements to be filed promptly with the Commission.
(b) During the period mentioned in paragraph (a) above, the Company shall notify each Underwriter immediately of (i) the effectiveness of any amendment to the Registration Statement, (ii) the transmittal to the Commission for filing of any supplement to the Prospectus or any document that would as a result thereof be incorporated by reference in the Prospectus, (iii) the receipt of any comments from the Commission with respect to the Registration Statement or the Prospectus, (iv) any request by the Commission to the Company for any amendment to the Registration Statement or any supplement to the Prospectus or for additional information relating thereto or to any document incorporated by reference in the Prospectus and (v) receipt by the Company of any notice of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, the suspension of the qualification of the Class B Certificates for offering or sale in any jurisdiction, or the institution or threatening of any proceeding for any of such purposes; and the Company agrees to use every reasonable effort to prevent the issuance of any such stop order and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment and the Company shall endeavor (subject to the proviso to Section 4(g)), in cooperation with the Underwriters, to prevent the issuance of any such stop order suspending such qualification and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
(c) During the period mentioned in paragraph (a) above, the Company will furnish to each Underwriter as many conformed copies of the Registration Statement (as originally filed), the Time of Sale Prospectus, the Prospectus, and all amendments and supplements to such documents (excluding all exhibits and documents filed therewith or incorporated by reference therein) and as many conformed copies of all consents and certificates of experts, in each case as soon as available and in such quantities as each Underwriter reasonably requests.
(d) Promptly following the execution of this Agreement, the Company will prepare a Prospectus that complies with the Securities Act and that sets forth the face amount of the Class B Certificates and their terms not otherwise specified in the preliminary prospectus or the Basic Prospectus included in the Registration Statement, the name of each Underwriter and the face amount of the Class B Certificates that each severally has agreed to purchase, the name of each Underwriter, if any, acting as representative of the Underwriters in connection with the offering, the price at which the Class B Certificates are to be purchased by the Underwriters from the Class B Trustee, any initial public offering price, any selling concession and reallowance and any delayed delivery arrangements, and such other information as the Representative and the Company deem appropriate in connection with the offering of the Class B Certificates. The Company will timely transmit copies of the Prospectus to the Commission for filing pursuant to Rule 424 under the Securities Act.
(e) The Company shall furnish to each Underwriter a copy of each free writing prospectus relating to the offering of the Class B Certificates prepared by or on behalf of, used by, or referred to by the Company and shall not use or refer to any proposed free writing prospectus to which the Representative reasonably objects.
(f) If the Time of Sale Prospectus or any “issuer free writing prospectus” is being used to solicit offers to buy the Class B Certificates at a time when a Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus or any “issuer free writing prospectus” in order to make the statements therein, in the light of the circumstances when it is delivered to a prospective purchaser, not misleading in any material respect, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus or any “issuer free writing prospectus” conflicts with the information contained in the Registration Statement then on file, or if it is necessary to amend or supplement the Time of Sale Prospectus or any “issuer free writing prospectus” to comply with applicable law, the Company shall forthwith prepare, file promptly with the Commission and furnish, at the Company’s expense, to the Underwriters and to the dealers (whose names and addresses the Representative will furnish to the Company) to which Class B Certificates may have been sold by the Representative on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Time of Sale Prospectus or such “issuer free writing prospectus” so that the statements in the Time of Sale Prospectus or such “issuer free writing prospectus” as so amended or supplemented will not, in the light of the circumstances when it is delivered to a prospective purchaser, be misleading in any material respect or so that the Time of Sale Prospectus or such “issuer free writing prospectus”, as so amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus or such “issuer free writing prospectus”, as amended or supplemented, will comply with applicable law.
(g) The Company shall, in cooperation with the Underwriters, endeavor to arrange for the qualification of the Class B Certificates for offer and sale under the applicable securities or “blue sky” laws of such jurisdictions in the United States as the Representative reasonably designates and will endeavor to maintain such qualifications in effect so long as required for the distribution of such Class B Certificates; provided that the Company shall not be required to (i) qualify as a foreign corporation or as a dealer in securities, (ii) file a general consent to service of process or (iii) subject itself to taxation in any such jurisdiction.
(h) During the period of ten years after the Closing Date, the Company will promptly furnish to each Underwriter, upon request, copies of all Annual Reports on Form 10-K and any definitive proxy statement of the Company (including any successor by merger of the Company) filed with the Commission; provided that (a) filing such documents with the Commission or (b) providing a website address at which such Annual Reports and any such definitive proxy statements may be accessed will satisfy this clause (h).
(i) If the third anniversary of the initial effective date of the Registration Statement occurs before all the Class B Certificates have been sold by the Underwriters, then prior to the third anniversary, the Company shall file a new shelf registration statement and take any other action necessary to permit the public offering of the Class B Certificates to continue without interruption, in which case references herein to the Registration Statement shall include the new registration statement as it shall become effective.
(j) Between the date of this Agreement and the Closing Date, the Company shall not, without the prior written consent of the Representative, offer, sell or enter into any agreement to sell (as public debt securities registered under the Securities Act (other than the Class B Certificates and related Series B Equipment Notes, a junior class of pass through certificates with respect to a previously issued series and related equipment notes or up to three classes of pass through certificates for a newly-issued series and related equipment notes) or as debt securities which may be resold in a transaction exempt from the registration requirements of the Securities Act in reliance on Rule 144A thereunder and which are marketed through the use of a disclosure document containing substantially the same information as a prospectus for similar debt securities registered under the Securities Act), any equipment notes, pass through certificates, equipment trust certificates or equipment purchase certificates secured by aircraft owned by the Company (or rights relating thereto).
(k) The Company shall prepare a final term sheet relating to the offering of the Class B Certificates, containing only information that describes the final terms of the Class B Certificates or the offering in a form consented to by the Representative and shall file such final term sheet within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date the final terms have been established for the offering of the Class B Certificates.
WARRANTIES AND UNDERTAKINGS 18.1 Each Party warrants to the other that:
(a) subject to Clause 18.2, it has obtained and will maintain at all times during the Term all licences, authorisations, permits, consents and other approvals necessary to enter into this Agreement and to enable it to fulfil its obligations under this Agreement;
(b) it has negotiated, entered into and executed this Agreement as principal (and not as agent or in any other capacity, fiduciary or otherwise); and
(c) it is and will remain a party to the Network Code for the duration of the Term.
18.2 Where the Service Provider does not hold a gas shipper licence, the Service Provider warrants that it shall use the shipping services of the licensed gas shipper whose Shipper Short Code is specified in Schedule 1 for the purpose of fulfilling its obligations under this Agreement. The Service Provider warrants that such licensed gas shipper has and will continue to hold throughout the Term a licence permitting it to ship gas on the NTS, and will ship Natural Gas on the NTS on behalf of the Service Provider for the purposes of the Service Provider’s performance of this Agreement.
18.3 The Service Provider acknowledges that the Customer requires the services provided under this Agreement (and in particular the withdrawal service) to comply with the Gas Safety (Management) Regulations 1996, and that the Customer requires a physical flow of Natural Gas from the Facility at least equal to its Nominated Withdrawal Quantity. Accordingly, the Service Provider warrants to the Customer, subject to Clauses 7, 13 and 14, that it shall ensure that:
(a) the physical flow of Natural Gas from the Facility to the NTS on any Day in respect of which the Customer has submitted a Withdrawal Nomination is not less than the Nominated Withdrawal Quantity plus the Reallocation Quantity (if any) plus the quantity of Natural Gas nominated for withdrawal by other users of the Facility less the quantity of Natural Gas nominated for injection by the Customer and other users of the Facility; and
(b) the Service Provider shall not knowingly or deliberately do anything that would put the Customer in breach of the Gas Safety (Management) Regulations 1996 and shall fully co-operate with the Customer insofar as such co-operation is required to ensure that the Customer complies with its obligations under the Gas Safety (Management) Regulations 1996. The Service Provider acknowledges and agrees that the provision of the Service is in accordance with its obligation pursuant to Regulation 6(6) of the Gas Safety (Management) Regulations 1996.
18.4 The Service Provider warrants to the Customer that, at the Gas Delivery Point, Natural Gas to be withdrawn shall be free from lien, charge, encumbrance or adverse claim (as to title or otherwise) including any claim for any Tax, royalty or other charge arising on or before withdrawal. The Service Provider shall indemnify the Customer and hold it harmless against any loss, liability, damage, claim, action, proceeding, cost, and expense suffered or incurred by or made or brought against the Customer in consequence of a breach of this warranty.
18.5 The Customer warrants to the Service Provider that, at the Gas Delivery Point, Natural Gas to be injected shall be free from lien, charge, encumbrance or adverse claim (as to title or otherwise) including any claim for any Tax, royalty or other charge arising on or before injection. The Customer shall indemnify the Service Provider and hold it harmless against any loss, liability, damage, claim, action, proceeding, cost, and expense suffered or incurred by or made or brought against the Service Provider in consequence of a breach of this warranty.
18.6 The Service Provider acknowledges and agrees that nothing in this Agreement shall prevent the Customer from complying with any Legal Requirement and in such regard the Customer shall be able to take any action that it considers to be necessary to comply with any Legal Requirement.
18.7 The Customer warrants to the Service Provider that it is entering into this Agreement for Operating Margins Purposes and in accordance with the requirements of its gas transporter license.
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS (A) The Client hereby represents, warrants and undertakes to the Custodian that:
(i) it is duly organized and validly existing under the laws of the jurisdiction of its organization;
(ii) during the term of this Agreement it (and any person on whose behalf it may act as agent or otherwise in a representative capacity) has and will continue to have, or will take all action necessary to obtain, full capacity and authority to enter into this Agreement and to carry out the transactions contemplated herein, and has taken and will continue to take all action (including, without limitation, the obtaining of all necessary governmental consents in any applicable jurisdiction) to authorize the execution, delivery and performance of obligations of the Client, and the validity and enforceability of such obligations and the rights of the Custodian, under this Agreement;
(iii) it has authority to deposit the Property received in the Custody Account and the Custody Cash Account and there is no claim or encumbrances that adversely effects any delivery or payment of Property made in accordance with this Agreement; and
(iv) this Agreement is legal, valid and binding on the Client;
(v) on or prior to the execution of this Agreement, the Client has provided to the Custodian certified true copies of evidence of the due authorization for the execution, delivery and performance of this Agreement;
(vi) except as provided in Clause 16 of this Agreement, all Property deposited with the Custodian shall, at all times, be free from all charges, mortgages, pledges or other such encumbrances(except as otherwise provided by law);
(vii) the Client shall, at all times, be entitled or otherwise duly authorized to deal with, and dispose of, all or any part of the Property, whether through a relevant Clearance System or otherwise; and
(viii) the Client is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted; there is no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property which would prohibit its execution or performance of this Agreement. The Client agrees to inform the Custodian promptly if any statement set forth in this Section 4(A) ceases to be true and correct as of any date after the date hereof.
(B) The Custodian hereby represents, warrants and undertakes to the Client that:
(i) it is duly organized and validly existing under the laws of the jurisdiction of its organization;
(ii) during the term of this Agreement it has and will continue to have, or will take all action necessary to obtain, full capacity and authority to enter into this Agreement and to carry out the transactions contemplated herein, and has taken and will continue to take all action (including, without limitation, the obtaining of all necessary governmental consents in any applicable jurisdiction) to authorize the execution, delivery and performance of obligations of the Custodian and the validity and enforceability of such obligations and the rights of the Client, under this Agreement;
(iii) this Agreement is legal, valid and binding on the Custodian;
(iv) the Custodian is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted; there is no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property which would prohibit its execution or performance of this Agreement; and
(v) the Custodian will submit to the Client on an annual basis a copy of its Report on Policies and Procedures Placed in Operation and Tests of Operating Effectiveness" prepared in compliance with the requirements of Statement of Auditing Standards No. 70 issued by the American Institute of Certified Public Accountants, as it may be amended from time to time. The Custodian agrees to inform the Client promptly if any statement set forth in this Section 4(B) ceases to be true and correct as of any date after the date hereof.
