Common use of Capitalization; Voting Rights Clause in Contracts

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 13,510,724 shares of which are issued and outstanding as of January 12August 10, 20012000, and 1,987,729 579,529 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 3,109,445 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none 444,190 of which are issued and outstandingoutstanding and which will convert into 1,332,570 Shares of Common Stock upon the effective date of the registration statement contemplated by Section 6.1(h) below, 25,000 of which are designated Series D Preferred Stock, 16,719.76 none of which are issued and outstanding but up to 16,216.216 of which may be purchased hereunder and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 3,688,974 shares reserved for issuance under the Option Plans, the Warrants, other warrants and Shares issued upon conversion of the Additional Warrants and any other outstanding warrants Series C Preferred Stock and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the ClosingClosing and the consummation of the transactions contemplated hereby, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 16,622,691 shares of which are issued and outstanding as of January 12, 2001outstanding, and 1,987,729 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 20,084,846 shares of which are reserved for issuance upon exercise of the Initial Series F Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 none of which are issued and outstanding, 65,000 of which are designated Series F Preferred Stock, 36,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently issued or outstanding. The authorized capital stock of the Company immediately after the Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 16,622,691 shares of which are issued and outstanding, and 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 22,205,874 shares of which are reserved for issuance upon exercise of the Warrants, warrants to purchase shares of Common Stock of the Company issued pursuant to the First Series F Purchase Agreement and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 73,000 of which are designated Series F Preferred Stock, 41,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be issued at any time. All issued and outstanding shares of the Company's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 24,193,603 shares reserved for issuance under the Option Plans, the Warrants, the Additional Initial Series F Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, the Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company is listed on the Schedule of Exceptions 5.2 hereto, and each such subsidiary is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (ia) 50,000,000 thirty-four million (34,000,000) shares of Common Stock, par value $.001 per share, 15,904,829 shares of which three million one hundred thirty-five thousand two hundred ninety-six (3,135,296) shares are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Companyoutstanding, and (iib) 2,000,000 twenty-six million seven hundred eighty-five thousand four hundred (26,785,400) shares of Preferred Stock, par value $.001 per share, 400 of which twelve million six hundred eighty-eight thousand one hundred seventy-eight (12,688,178) shares are designated Series A Preferred Stock, none of which twelve million five hundred thirty-three thousand six hundred seventy-six (12,533,676) are issued and outstanding, 225 and of which fourteen million ninety-seven thousand two hundred twenty-two (14,097,222) shares are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, nonassessable and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationCertificate. Other than the 22,072,575 shares The Conversion Shares have been duly and validly reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except issuance. Except as may be granted pursuant to the Related Agreementsthis Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Conversion Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the ClosingClosing and the consummation of the transactions contemplated hereby, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 16,622,691 shares of which are issued and outstanding as of January 12, 2001outstanding, and 1,987,729 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 22,727,492 shares of which are reserved for issuance upon exercise of the Warrants warrants issued pursuant to the Series F Preferred Stock Purchase Agreement dated January 18, 2001 and the Second Series F Preferred Stock and Warrant Purchase Agreement dated March 29, 2001 (collectively, the "Initial Series F Warrants") and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 none of which are issued and outstanding, 73,000 of which are designated Series F Preferred Stock, 45,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently issued or outstanding. The authorized capital stock of the Company immediately after the Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 16,622,691 shares of which are issued and outstanding, and 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 43,881,426 shares of which are reserved for issuance upon exercise of the Warrants (subject to the approval and filing of an amendment to the Company's Certificate of Incorporation to increase the number of shares of Common Stock the Company is authorized to issue), warrants to purchase shares of Common Stock of the Company issued pursuant to the First Series F Purchase Agreement and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 116,000 of which are designated Series F Preferred Stock, 66,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be issued at any time. All issued and outstanding shares of the Company's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 2,047,729 shares reserved for issuance under the Option Plans, the Warrants, the Additional Initial Series F Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, the Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company is listed on the Schedule of Exceptions 5.2 hereto, and each such subsidiary is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist consists of Fifteen Million (i15,000,000) 50,000,000 shares of Common Stock, no par value $.001 per share, 15,904,829 (a) 1,025,674.76 shares of which are issued and outstanding as of January 12outstanding, 2001, and 1,987,729 (b) 1,047,848 shares of which are reserved for future issuance to key employees pursuant to the Company's 1984 Stock Option Plan, as amended, and the 1995 Stock Option Plan (collectively, the "Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (iic) 2,000,000 Eight Million (8,000,000) shares of Preferred Stock, no par value $.001 per sharevalue, 400 (i) 41,300 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 (ii) 115,446 of which are designated as Series B Preferred Stock, none of which are issued and outstanding, 500,000 (iii) 450,481 of which are designated as Series C Preferred Stock, none of which are issued and outstanding, 25,000 and (iv) 6,800,000 of which are designated Series D Preferred Stock, 16,719.76 1,184,133 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (aA) have been duly authorized and validly issuedissued to the persons listed an Exhibit D hereto, (bB) are fully paid and nonassessable, and (cC) were issued in compliance with all applicable state state, federal and federal foreign laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares and the Exchange Series D Shares are as stated in the Certificate Restated Articles. Each series of DesignationPreferred Stock is convertible into Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreementsset forth on Exhibit E, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Articles, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares, the Exchange Series D Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. (a) The authorized capital stock of the Company, immediately prior to the Closing, will consist of (ia) 50,000,000 eighty million (80,000,000) shares of Common Stock, par value $.001 per share, 15,904,829 shares of which six million seven hundred sixty-five thousand two (6,765,002) shares are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Companyoutstanding, and (iib) 2,000,000 twenty-five million (25,000,000) shares of Preferred Stock, par value $.001 per share, 400 of which one million seven hundred fifty-one thousand nine hundred eighty-five (1,751,985) shares are designated Series A Preferred Stock, none of which one million seven hundred fifty-one thousand nine hundred eighty five (1,751,985) are issued and outstanding, 225 of which thirteen million six hundred fifteen thousand three hundred twenty-two (13,615,322) shares are designated Series B Preferred Stock, none of which thirteen million six hundred fifteen thousand three hundred twenty-two (13,615,322) are issued and outstanding, 500,000 and of which five million seven hundred fourteen thousand two hundred eighty-five (5,714,285) shares are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, nonassessable and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationCertificate. Other than the 22,072,575 shares The Conversion Shares have been duly and validly reserved for issuance under issuance. As of the Option PlansClosing, there has been no action taken by the WarrantsCompany which would have required an adjustment to the Series C Conversion Price, as defined in the Additional Warrants and any other outstanding warrants Certificate. Except as set forth on the Schedule of Exceptions and except as may be granted pursuant to this Agreement or the Related AgreementsInvestors' Rights Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, Shares and the Conversion Shares have been duly authorized and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issuedissued (including, without limitation, issued in compliance with applicable state and federal securities laws), fully paid and nonassessable, subject to no preemptive rights, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist consists of (ia) 50,000,000 148,500,000 shares of voting Common Stock, par value $.001 per share, 15,904,829 35,872,557 shares of which are issued and outstanding as of January 12outstanding, 2001, and 1,987,729 6,623,109 shares of which are currently reserved for future issuance to pursuant to the Company's Stock Option Plansoutstanding option agreements, as amended and restated (the "Option Plan"), 3,747,760 10,241,901 shares of which are currently reserved for issuance upon exercise of to key employees, consultants and others affiliated with the Warrants and Company pursuant to stock grant, stock purchase and/or option plans or any other warrants of stock incentive program, arrangement or agreement approved by the Company's Board of Directors, (b) 1,500,000 shares of non-voting Common Stock, of which 740,000 are issued and outstanding, and (iic) 2,000,000 40,000,000 shares of Preferred Stock, par value $.001 0.01 per shareshare (the "Preferred Stock"), 400 3,222,068 of which are designated Series A Convertible Preferred Stock, none all of which are issued and outstanding, 225 11,000,000 shares of which are designated Series B Convertible Preferred Stock, none all of which are issued and outstanding, 500,000 8,250,000 shares of which are designated Series C Convertible Preferred Stock, none all of which are issued and outstanding, 25,000 and 250,000 shares of which are designated Series D Convertible Preferred Stock, 16,719.76 all of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance in all material respects with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are Shares, upon the First Closing, will be as stated in the Certificate of DesignationCertificate. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Except as may be granted pursuant to the Related Agreementsthis Agreement and except as set forth above, there are no outstanding options, warrants, puts, calls, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from from, sale to or exchange, with the Company of or any of its securitiesSubsidiaries of any shares of any class or series of capital stock of the Company or any of its Subsidiaries or other restrictions on the incidents of ownership or transfer of any such shares of capital stock created by statute (other than Federal and state securities laws), the charter documents of the Company or any of its Subsidiaries or any agreement to which the Company or any of its Subsidiaries is a party, by which any of them is bound or of which any of them has knowledge. The Company is not a party or subject to any agreement or understanding, Shares have been duly authorized and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issuedissued (including, without limitation, issued in compliance with applicable state and federal securities laws, assuming the accuracy of Purchasers' representations in Section 4 hereof), fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transferLiens (other than Liens created by Purchasers); provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 25,000,000 shares of Common Stock, (par value $.001 0.01) per share, 15,904,829 share and 4,000,000 shares of Preferred Stock, (par value $0.01), of which 600,000 are designated Series A Cumulative Convertible Preferred Stock ("Series A Preferred Stock"); 1,700,000 are designated Series B Cumulative Convertible Preferred Stock ("Series B Preferred Stock"); and 1,225,000 are designated Series C Cumulative Convertible Preferred Stock ("Series C Preferred Stock") and 500,000 shares of Series D Cumulative Convertible Preferred Stock. Immediately prior to the effective date of this Agreement, 5,460,449 shares of Common Stock, 0 shares Series A Preferred Stock (subscribed for 600,000 shares), 407,900 shares of Series B Preferred Stock, 371,438 shares of Series C Preferred Stock and 244,898 shares of Series D Preferred Stock will be issued and outstanding as of January 12, 2001, and 1,987,729 outstanding. Of the authorized shares of which Common Stock, (i) 1.4 million shares are reserved for future issuance to employees pursuant to the 1998-A Incentive Stock Option and Non-Statutory Option Plan (the "1998 A-Plan") and 1.5 million shares are reserved for issuance to employees pursuant to the Company's 1998-B Incentive Stock Option Plans, as amended and restated Non-Statutory Plan (the "Option 1998-B Plan"), 3,747,760 (ii) 600,000 shares of which are reserved for issuance upon the exercise of certain warrants, (iii) 600,000 shares are reserved for issuance upon the Warrants and other warrants conversion of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none (iv) 1,785,000 shares are reserved for issuance upon the conversion of which are issued and outstanding, 225 of which are designated the Series B Preferred Stock, none and (v) 1,650,000 shares are reserved for issuance upon conversion of which are issued and outstanding, 500,000 of which are designated the Series C Preferred Stock, none . The Company has reserved 1,500,000 shares of which are issued and outstanding, 25,000 its Common Stock for issuance upon conversion of which are designated the Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Each series of Preferred Stock is convertible into Common Stock on the basis described in the Reports (as defined below), subject to adjustment as provided in the respective Certificate of Designation. The Conversion Shares have been duly and validly reserved for issuance. Other than as set forth in this Section 3.3 or in the 22,072,575 shares reserved for issuance under Company's annual, quarterly and 8-K reports, filed with the Option Plans, the Warrants, the Additional Warrants Securities and any other outstanding warrants and except as may be granted pursuant to the Related AgreementsExchange Commission ("Reports"), there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, and upon payment of the Purchase Price the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration laws as set forth herein or other changes in the vesting provisions Registration Rights Agreement or other terms of any outstanding options granted as otherwise required by such laws at the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 35,000,000 shares of Common Stock, (par value $.001 $ .001) per share, 15,904,829 10,203,600 shares of which are issued and outstanding as of January 12the date of this Agreement, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 5,000,000 shares of Preferred Stock, (par value $.001 $ .001) per share, 400 300,000 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 outstanding as of which are designated Series B Preferred Stock, none the date of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstandingthis Agreement. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, issued and (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationDesignations; all such rights, preferences, privileges and restrictions are valid, binding and enforceable against the Company and in accordance with applicable laws. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 977,310 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants Company's 1993 Long Term Incentive Plan and any other outstanding warrants to purchase an aggregate of 2,961,104 shares of Common Stock and except as may be granted pursuant to 44,006 shares reserved for issuance under the Related AgreementsCompany's 401(k) plan, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind authorized or outstanding for the purchase or acquisition from the Company of any of its securitiessecurities or any interest therein. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledgeExcept as set forth herein, there is no agreement commitment by the Company to issue shares, subscriptions, warrants, options, convertible securities, or understanding between other such rights or to distribute to holders of any persons and/or entitiesof its equity securities any evidence of indebtedness or asset. The Company has no obligation (contingent or otherwise) to purchase, which affects redeem or relates otherwise acquire any of its equity securities or any interest therein or to pay any dividend (other than dividends payable on the voting Shares) or giving of written consents with to make any other distribution in respect to any security or by a director of the Companythereof. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationDesignations, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. (1) The authorized capital stock of the Company, immediately prior to the ClosingClosing after giving effect to the Restated Certificate of Incorporation, will consist of (i) 50,000,000 [98,530,700] shares of Series A Common Stock, par value $.001 0.001 per shareshare (the “Series A Common Stock,” and together with the Series B Common Stock, 15,904,829 the “Common Stock”), none of which are issued and outstanding, and [98,530,700] shares of which are reserved for future issuance upon conversion of shares of Series B Common Stock, [98,530,700] shares of Series B Common Stock, [7,095,178] shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 [16,006,519] shares of which are reserved for future issuance to employees pursuant to the Company's ’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans, as amended ”) and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 [74,942,226] shares of Preferred Stock, par value $.001 0.001 per share, 400 8,904,567 of which are designated Series A Preferred Stock, all of which are issued and outstanding, 7,419,355 of which are designated Series B Preferred Stock, all of which are issued and outstanding, 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Preferred Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Preferred Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Preferred Stock, all of which are issued and outstanding, 2,083,333 of which are designated as Series G Preferred Stock, none of which are issued and outstanding, 225 8,333,333 of which are designated as Series B H Preferred Stock, 4,141,586 of which are issued and outstanding, and 681,819 of which are designated as Series I Preferred Stock, none of which are issued and outstandingoutstanding (collectively, 500,000 of which are designated Series C the “Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding”). All issued and outstanding shares of the Company's Common Stock ’s capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessablenon-assessable, and (c) were issued offered, issued, sold and delivered in compliance with all applicable federal and state and federal laws concerning the issuance of securitiessecurities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of DesignationIncorporation. Other than the 22,072,575 shares Each series of Preferred Stock is convertible into Series B Common Stock on a one-for-one basis. Each share of Series B Common Stock is convertible into a share of Series A Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedissuance.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the ClosingClosing and the consummation of the transactions contemplated hereby and by the Exchange Agreement, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 shares of which are issued and outstanding as of January 12, 2001outstanding, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Initial Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently issued or outstanding. The authorized capital stock of the Company immediately after the Closing and the consummation of the transactions contemplated by the Exchange Agreement, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 shares of which are issued and outstanding, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 20,084,846 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 65,000 of which are designated Series F Preferred Stock, 36,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be issued at any time. All issued and outstanding shares of the Company's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, the Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement, the Exchange Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Exchange Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares and the Exchange Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company is listed on the Schedule of Exceptions 5.2 hereto, and each such subsidiary is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the CompanyCompany consists of 50,000,000 shares, immediately prior to the Closing, will consist of such shares being designated as follows: (i) 50,000,000 48,000,000 shares of Common Stockcommon stock, par value $.001 .01 per share, 15,904,829 shares share (the "Common Stock") of which (a) 16,405,548 are issued and outstanding as of January 12, 2001, and 1,987,729 (b) (1) 3,323,700 shares of which are reserved for future issuance to employees pursuant to the Company's 1997 Equity Compensation Plan adopted by the Company on May 21, 1997, the Company's 1988 Stock Option Plan and the Company's Stock Option Plan for Directors (the "Stock Option Plans, as amended ") and restated (the "Option Plan"), 3,747,760 2) 3,000,000 shares of which are reserved for issuance upon exercise of pursuant to the Warrants Asset Purchase Agreement, dated February 13, 2001 by and other warrants of among the Company, Axial Technology Holding AG and Wyzdom Solutions, Inc. (the "Asset Purchase Agreement"); (ii) 2,000,000 shares of preferred stock, par value $.01 per share, consisting of 500,000 shares of Series A Convertible Preferred Stock, par value $.001 .10 per share, 400 of which are designated Series A Preferred Stock, none of which no shares are issued and outstanding, 225 200,000 shares of which are designated Series B Convertible Preferred Stock, none par value $.01 per share, of which no shares are issued and outstanding, 500,000 250,000 shares of which are designated Series C Convertible Preferred Stock, none par value $.01 per share, of which no shares are issued and outstanding, 25,000 9,500 shares of which are designated Series D Convertible Preferred Stock, 16,719.76 par value $.01 per share, of which no shares are issued and outstanding and 700,000 outstanding, 1,800 shares of Series A Junior Participating E Redeemable Preferred Stock, none par value $.01 per share, of which is presently no shares are issued and outstanding, and 3,000 shares of Series F Convertible Preferred Stock, par value $.01 per share (the "Series F Preferred Stock"), of which 3,000 shares will be upon consummation of the transactions contemplated hereby issued and outstanding. The Shares have been duly authorized, and upon consummation of the Conversion, will be fully paid and non-assessable and issued in compliance with all applicable state and federal laws concerning the issuance of securities. All issued and outstanding shares of the Company's Common Stock and the Shares (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, nonassessable and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Designations, which was accepted for filing by the Pennsylvania Department of DesignationState prior to the date hereof. The shares of Common Stock issuable upon conversion of the Shares pursuant to the terms of the Designations (the "Conversion Shares") have been duly and validly reserved for issuance. Other than the 22,072,575 3,323,700 shares reserved for issuance under the Stock Option Plans, the Warrants, the Additional Warrants Plans and any other outstanding warrants and except as may 3,000,000 shares of Common Stock to be granted issued pursuant to the Related AgreementsAsset Purchase Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party Shares are free of any liens or encumbrances; provided, however, that the Shares may be subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons restrictions on transfer under state and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Companyfederal securities laws. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationDesignations, the Conversion Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances other than liens and any restrictions on transferencumbrances; provided, however, that the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 25,000,000 shares of Common Stock of which, as of the date hereof, 10,708,335 are issued and outstanding and (ii) 500,000 shares of Preferred Stock, no par value $.001 per sharevalue, 15,904,829 of which (A) 250,000 shares have been designated Series A Participating Preferred Stock and reserved for issuance upon the exercise of the Rights distributed to the holders of the Common Stock pursuant to the Rights Agreement and (B) none of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstandingdate hereof. All issued and outstanding shares of the Company's Common Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessablenon-assessable, and (ciii) were issued in compliance with all applicable federal and state and federal laws Laws concerning the issuance of securitiessecurities and (iv) are free of preemptive rights. The rights, preferences, privileges and restrictions As of the date hereof, (i) 1,800,709 Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares were reserved for issuance under and issuable upon or otherwise deliverable in connection with the Option Plansexercise of outstanding options issued to directors, the Warrantsofficers, the Additional Warrants employees and any other outstanding warrants and except as may be granted consultants pursuant to the Related Agreements, there are no outstanding options, warrants, rights Stock Option Plans (including conversion the "Company Stock Options") and (ii) 200,000 Shares were reserved for issuance and issuable upon or preemptive rights and rights otherwise deliverable in connection with the exercise of first refusalwarrants (the "Warrants"), proxy or stockholder agreementsconsisting of (A) the Warrant to Purchase 100,000 Shares, or agreements exercisable until November 7, 1999 at an exercise price of any kind for $5.00, issued to Foothill Capital Corporation and (B) the purchase or acquisition from Warrant to Purchase 100,000 Shares, exercisable until December 31, 2001 at an exercise price of $6.50, issued to INK (AL) QRS 12-21, Inc. Except as and to the extent publicly disclosed by the Company in the Company SEC Reports (as hereinafter defined), since October 2, 1998, no shares of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledgecapital stock have been issued other than pursuant to Company Stock Options already in existence on such date, there is and no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director Company Stock Options have been granted. Except as set forth on Section 4.2 of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationDisclosure Schedule, the Shares execution and the Common Stock which may be issued upon exercise delivery of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements or the consummation of the transactions contemplated hereby and thereby will not result in acceleration cause any outstanding Company Stock Options or Warrants to become exercisable. Except as set forth above, as of the date hereof, there are outstanding (i) no shares of capital stock or other changes voting securities of the Company; (ii) no securities of the Company or any of its subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of the Company; (iii) except for the Rights Agreement, no options or other rights to acquire from the Company or any of its subsidiaries, and no obligations of the Company or any of its subsidiaries to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company; and (iv) no equity equivalents, interests in the vesting provisions ownership or earnings of the Company or any of its subsidiaries or other terms similar rights (including stock appreciation rights) (collectively, "Company Securities"). There are no outstanding obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any Company Securities. There are no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any of its subsidiaries is a party or to which it is bound relating to the voting of any outstanding options granted by shares of capital stock of the Company. Each subsidiary Section 4.2 of the Disclosure Schedule sets forth information regarding the current exercise price, date of grant and number granted of Company listed on the Schedule of Exceptions is wholly-ownedStock Options for each holder thereof.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the ClosingFirst Closing and the consummation of the transactions contemplated hereby, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 16,622,691 shares of which are issued and outstanding as of January 12, 2001outstanding, and 1,987,729 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 20,084,846 shares of which are reserved for issuance upon exercise of the Initial Series F Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 none of which are issued and outstanding, 65,000 of which are designated Series F Preferred Stock, 41,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently issued or outstanding. The authorized capital stock of the Company immediately after the First Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 16,622,691 shares of which are issued and outstanding, and 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 22,205,874 shares of which are reserved for issuance upon exercise of the Warrants, warrants to purchase shares of Common Stock of the Company issued pursuant to the First Series F Purchase Agreement and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 73,000 of which are designated Series F Preferred Stock, 42,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be issued at any time. All issued and outstanding shares of the Company's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 24,193,603 shares reserved for issuance under the Option Plans, the Warrants, the Additional Initial Series F Warrants and any other outstanding warrants and except as may be granted pursuant to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, the Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company is listed on the Schedule of Exceptions 5.2 hereto, and each such subsidiary is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist Company consists of (i) 50,000,000 20,000,000 shares of Common Stock, par value $.001 .00001 per share, 15,904,829 11,765,570 shares of which are were issued and outstanding as of January 12on February 28, 20012000, and 1,987,729 1,536,633 shares which are subject to outstanding options, 605,735 shares of which are reserved for future issuance to employees, directors and consultants pursuant to the Company's Stock Option Plansstock option plans, as amended and restated (the "Option Plan"), 3,747,760 532,000 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Companysubject to outstanding warrants, and (ii) 2,000,000 5,000,000 shares of Preferred Stock, par value $.001 .00001 per share, 400 350,000 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 250,000 of which are designated as Series B Preferred Stock, none and, as of February 28, 2000, 192,260 of which are issued and outstanding, 500,000 and which are convertible into 411,553 shares of Common Stock, and 250,000 of which are designated Series C Preferred Stock, none of which which, prior to the Closing, are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, and (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Charter. 1,119,565 shares of DesignationCommon Stock have been duly and validly reserved for issuance as Conversion Shares, and the Company will take all reasonable measures to ensure that, at all times, a sufficient number of shares of its Common Stock are reserved for issuance upon conversion of the Shares and exercise of the Warrants. Other As of February 28, 2000, other than the 22,072,575 605,735 shares reserved for issuance under the Option PlansCompany's stock option and stock compensation plans, the Warrants, the Additional Warrants 1,536,633 shares subject to outstanding options and any other 532,000 shares subject to outstanding warrants and except as may be granted pursuant to this Agreement or the Related AgreementsWarrants, there are no outstanding options, warrants, rights (including conversion conversion, anti-dilution or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationCharter, the Shares Securities and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company----------------------------- BC, immediately prior to the Closing, will consist of (ia) 50,000,000 eight hundred fifty million (850,000,000) shares of Common Stock, par value $.001 per share, 15,904,829 one hundred forty-two million nine hundred twenty-two thousand eight hundred ten (142,922,810) shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 thirty million five hundred eighty-three thousand five hundred (30,583,500) shares of which are currently reserved for issuance pursuant to outstanding option agreements, and seven hundred eighty-eight thousand four hundred sixty (788,460) shares of which will be reserved in the future for issuance to key employees, consultants and others affiliated with BC pursuant to stock grant, stock purchase and/or option plans or any other stock incentive program, arrangement or agreement approved by BC's Board of Directors and (b) one hundred fifty million (150,000,000) shares of Preferred Stock (the "Preferred Stock") , 19,481,130 of which are designated Series B A Convertible Participating Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 all of which are issued and outstanding and 700,000 shares 15,877,249 of which are designated Series A Junior B Convertible Participating Preferred Stock, none all of which is presently are issued and outstanding. The authorized capital stock of Merger Sub consists of one thousand (1,000) shares of common stock, $0.0001 par value, all of which are issued and outstanding and held by BC. All issued and outstanding shares of the Company's Common Stock BC and Merger Sub capital stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, (iii) are free of liens and encumbrances created by BC or Merger Sub and (civ) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Except as may be granted pursuant to the Related Agreementsthis Agreement and except as set forth above, there are no outstanding options, warrants, puts, calls, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company BC or Merger Sub of any of its securities. The Company their securities or other restrictions on the incidents of ownership or transfer created by statute, the charter documents of BC or Merger Sub or any agreement to which BC or Merger Sub is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, by which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedthey are bound.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of consists of: (i) 50,000,000 73,050,000 shares of Common Stock, par value $.001 0.001 per share, 15,904,829 shares of which 3,131,250 shares are issued and outstanding as and an aggregate of January 12, 2001, and 1,987,729 8,366,095 shares of which are reserved for future issuance to pursuant to the Company's Stock Option PlansNuPathe Inc. 2005 Equity Compensation Plan, as amended and restated (the "Option “Company Equity Incentive Plan"”), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 53,967,262 shares of Preferred Stockpreferred stock, par value $.001 0.001 per shareshare (the “Preferred Stock”), 400 17,056,914 of which are designated Series A Preferred Stock, none $0.001 par value per share (“Series A Preferred Stock”), 16,922,506 of which are issued and outstanding, 225 and 36,910,348 of which are designated Series B Preferred Stock, none 36,173,834 of which are issued and outstanding; and immediately prior to the Closing, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All all issued and outstanding shares of the Company's ’s Common Stock, Series A Preferred Stock and Series B Preferred Stock (a1) have been duly authorized and validly issuedissued to the persons listed on Exhibit E-1 hereto in the amounts set forth thereon, (b2) are fully paid and nonassessable, and (c3) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. When issued in compliance with this Agreement, the Notes, the Warrants and the Certificate, the Securities will be, except as set forth on Schedule 3.3, free of any liens or encumbrances other than liens and encumbrances created by or imposed upon the Purchasers; provided, however, that the Shares, the Warrant Shares, the Conversion Shares and the Warrant Conversion Shares may be subject to restrictions on transfer under the Related Agreements (as defined below) and state and/or federal securities laws. The Shares and the Conversion Shares have been duly and validly reserved for issuance. The rights, preferences, privileges and restrictions of the Shares Series B Preferred Stock and the Common Stock are as stated in the Certificate of DesignationCertificate. Other than the 22,072,575 shares reserved for issuance under the Option PlansExcept as set forth on Schedule 3.3, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or other agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Except as set forth on Schedule 3.3 and except as may be granted pursuant to the Related Agreements, there are no proxies, stockholder agreements or any other agreements between the Company is not a party or subject to and any agreement or understanding, andstockholder of the Company or, to the Company's knowledge’s Knowledge, there is between any stockholders of the Company, related to the capital stock of the Company, including agreements relating to the voting of the capital stock of the Company. Except as set forth in the Company Equity Incentive Plan or on Schedule 3.3, no stock plan, stock purchase agreement, stock option agreement or other equity-based agreement or understanding between the Company and any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free holder of any liens equity securities or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject rights to restrictions on transfer under applicable state and/or federal purchase equity securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of any outstanding options granted merger, consolidation, sale of stock or assets, change in control or other similar transaction by the Company. Each subsidiary The total outstanding capital stock of the Company listed on a fully diluted basis immediately following the Schedule Closing on a pro forma basis will be as set forth as Exhibit E-2. For purposes of Exceptions is wholly-ownedthis Agreement, “Related Agreements” means the Amended and Restated Investor Rights Agreement, dated as of July 8, 2008, by and among the Company and the other parties named therein (the “Investor Rights Agreement”) and the Amended and Restated Stockholders Agreement, dated as of July 8, 2008, by and among the Company and the other parties named therein (the “Stockholders Agreement”).

Capitalization; Voting Rights. The authorized capital stock of the Company----------------------------- Company consists of 50,000,000 shares, immediately prior to the Closing, will consist of such shares being designated as follows: (i) 50,000,000 48,000,000 shares of Common Stockcommon stock, par value $.001 .01 per share, 15,904,829 shares share (the "Common Stock") of which (a) 16,405,548 are issued and outstanding as of January 12, 2001, and 1,987,729 (b) (1) 3,323,700 shares of which are reserved for future issuance to employees pursuant to the Company's 1997 Equity Compensation Plan adopted by the Company on May 21, 1997, the Company's 1988 Stock Option Plan and the Company's Stock Option Plan for Directors (the "Stock Option Plans, as amended ") and restated (the "Option Plan"), 3,747,760 2) 3,000,000 shares of which are reserved for issuance upon exercise of pursuant to the Warrants Asset Purchase Agreement, dated February 13, 2001 by and other warrants of among the Company, Axial Technology Holding AG and Wyzdom Solutions, Inc. (the "Asset Purchase Agreement"); (ii) 2,000,000 shares of preferred stock, par value $.01 per share, consisting of 500,000 shares of Series A Convertible Preferred Stock, par value $.001 .10 per share, 400 of which are designated Series A Preferred Stock, none of which no shares are issued and outstanding, 225 200,000 shares of which are designated Series B Convertible Preferred Stock, none par value $.01 per share, of which no shares are issued and outstanding, 500,000 250,000 shares of which are designated Series C Convertible Preferred Stock, none par value $.01 per share, of which no shares are issued and outstanding, 25,000 9,500 shares of which are designated Series D Convertible Preferred Stock, 16,719.76 par value $.01 per share, of which no shares are issued and outstanding and 700,000 outstanding, 1,800 shares of Series A Junior Participating E Redeemable Preferred Stock, none par value $.01 per share, of which is presently no shares are issued and outstanding, and 3,000 shares of Series F Convertible Preferred Stock, par value $.01 per share (the "Series F Preferred Stock"), of which 3,000 shares will be upon consummation of the transactions contemplated hereby issued and outstanding. The Shares have been duly authorized, and upon consummation of the Conversion, will be fully paid and non-assessable and issued in compliance with all applicable state and federal laws concerning the issuance of securities. All issued and outstanding shares of the Company's Common Stock and the Shares (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, nonassessable and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Designations, which was accepted for filing by the Pennsylvania Department of DesignationState prior to the date hereof. The shares of Common Stock issuable upon conversion of the Shares pursuant to the terms of the Designations (the "Conversion Shares") have been duly and validly reserved for issuance. Other than the 22,072,575 3,323,700 shares reserved for issuance under the Stock Option Plans, the Warrants, the Additional Warrants Plans and any other outstanding warrants and except as may 3,000,000 shares of Common Stock to be granted issued pursuant to the Related AgreementsAsset Purchase Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party Shares are free of any liens or encumbrances; provided, however, that the Shares may be subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons restrictions on transfer under state and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Companyfederal securities laws. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationDesignations, the Conversion Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances other than liens and any restrictions on transferencumbrances; provided, however, that the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.

Capitalization; Voting Rights. 1 The authorized capital stock of the Company, immediately prior to the ClosingInitial Closing after giving effect to the Restated Charter, will consist of (i) 50,000,000 [80,932,230] shares of Common Stock, par value $.001 0.001 per share, 15,904,829 6,934,807 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 9,677,915 shares of which are reserved for future issuance to employees pursuant to the Company's ’s 1998 Stock Option Plan, 2002 Stock Incentive Plan, 2002 California Stock Incentive Plan and 2005 Stock Incentive Plan (collectively, the “Stock Incentive Plans, as amended ”) and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 [63,843,741] shares of Preferred Stock, par value $.001 0.001 per share, 400 8,904,567 of which are designated Series A Preferred Stock, none all of which are issued and outstanding, 225 outstanding 7,419,355 of which are designated Series B Preferred Stock, none all of which are issued and outstanding, 500,000 6,401,523 of which are designated Series C Preferred Stock, all of which are issued and outstanding, 12,618,296 of which are designated as Series D Stock, all of which are issued and outstanding, 20,500,000 of which are designated as Series E Stock, 19,633,531 of which are issued and outstanding, 8,000,000 of which are designated as Series F Stock, 8,000,000 of which are issued and outstanding, and [•] of which are designated as Series G Stock, none of which are issued and outstandingoutstanding (collectively, 25,000 of which are designated Series D the “Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding”). All issued and outstanding shares of the Company's Common Stock ’s capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessablenon-assessable, and (c) were issued offered, issued, sold and delivered in compliance with all applicable federal and state and federal laws concerning the issuance of securitiessecurities laws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Restated Charter. Each series of DesignationPreferred Stock is convertible into Common Stock on a one-for-one basis. Other than the 22,072,575 shares The Conversion Shares have been duly and validly reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedissuance.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 76,000,000 shares, of which 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 5,043,706 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 791,748 shares of which are reserved for future issuance to employees pursuant to the Company's Stock Option Plans, Plan (as amended hereinafter defined) and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 26,000,000 shares of Preferred Stock, par value $.001 per share, 400 ; 8,750,000 of which are designated Series A B Preferred Stock, 8,572,039 of which are issued and outstanding; 8,500,000 shares of which are designated Series C Preferred Stock, 8,492,749 of which are issued and outstanding; and 2,500,000 shares of which are designated Series D Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares Preferred Stock are as stated in the Certificate of DesignationRestated Certificate. Other than the 22,072,575 791,748 shares reserved for issuance under the Stock Option Plans, the Warrants, the Additional Warrants Plan and any other outstanding warrants to purchase 1,409,734 shares of Common Stock (the "Existing Warrants"), and except as may be granted pursuant to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Certificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares such shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration laws as set forth herein or other changes in the vesting provisions Purchasers Rights Agreement or other terms of any outstanding options granted as otherwise required by such laws at the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist consists of (ia) 50,000,000 500,000,000 shares of the Company's Common Stock, par value $.001 0.001 per shareshare (the "Common Stock"), 15,904,829 114,002,422 shares of which are issued and outstanding as of January 12outstanding, 2001, and 1,987,729 13,354,869 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are currently reserved for issuance upon exercise of the Warrants and other warrants of the Companypursuant to outstanding option agreements, and (iib) 2,000,000 50,000,000 shares of Preferred Stock, par value $.001 0.0001 per share, 400 of which are designated Series A share (the "Preferred Stock"), none of which are issued and outstanding, 225 6,400,000 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (ai) have been duly authorized and validly issued, and (bii) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are Shares, upon the Closing, will be as stated in the Certificate of DesignationCertificate. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Except as may be granted pursuant to the Related Agreementsthis Agreement and except as set forth above, there are no outstanding options, warrants, puts, calls, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from from, sale to or exchange, with the Company of or any of its securities. The Subsidiaries of any shares of any class or series of capital stock of the Company is not a party or subject to any of its Subsidiaries or other restrictions on the incidents of ownership or transfer of any such shares of capital stock created by: (i) the charter documents of the Company or any of its Subsidiaries, (ii) any agreement to which the Company or understandingany of its Subsidiaries is a party, andby which any of them is bound or of which any of them has Knowledge, or, (iii) to the Company's knowledgeKnowledge, there is no agreement or understanding between any persons and/or entitiesstatute (other than Federal and state securities laws). The Shares have been duly authorized and, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issuedissued (including, without limitation, issued in compliance with applicable state and federal securities laws, assuming the accuracy of Purchasers' representations in Section 4 hereof), fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transferLiens (other than Liens created by Purchasers); provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 25,000,000 shares of Common Stock, (par value $.001 0.01) per share, 15,904,829 share and 3,525,000 shares of Preferred Stock, (par value $0.01), of which 600,000 are designated Series A Cumulative Convertible Preferred Stock ("Series A Preferred Stock"); 1,700,000 are designated Series B Cumulative Convertible Preferred Stock ("Series B Preferred Stock"); and 1,225,000 are designated Series C Cumulative Convertible Preferred Stock ("Series C Preferred Stock") and 800,000 shares of Series D Cumulative Convertible Preferred Stock. Immediately prior to the effective date of this Agreement, 5,460,449 shares of Common Stock, 0 shares Series A Preferred Stock (subscribed for 600,000 shares), 407,900 shares of Series B Preferred Stock, 371,438 shares of Series C Preferred Stock and 163,268 shares of Series D Preferred Stock will be issued and outstanding as of January 12, 2001, and 1,987,729 outstanding. Of the authorized shares of which Common Stock, (i) 1.4 million shares are reserved for future issuance to employees pursuant to the 1998-A Incentive Stock Option and Non-Statutory Option Plan (the "1998 A-Plan") and 1.5 million shares are reserved for issuance to employees pursuant to the Company's 1998-B Incentive Stock Option Plans, as amended and restated Non-Statutory Plan (the "Option 1998-B Plan"), 3,747,760 (ii) 600,000 shares of which are reserved for issuance upon the exercise of certain warrants, (iii) 600,000 shares are reserved for issuance upon the Warrants and other warrants conversion of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none (iv) 1,785,000 shares are reserved for issuance upon the conversion of which are issued and outstanding, 225 of which are designated the Series B Preferred Stock, none and (v) 1,650,000 shares are reserved for issuance upon conversion of which are issued and outstanding, 500,000 of which are designated the Series C Preferred Stock, none . The Company has reserved 1,500,000 shares of which are issued and outstanding, 25,000 its Common Stock for issuance upon conversion of which are designated the Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Each series of Preferred Stock is convertible into Common Stock on the basis described in the Reports (as defined below), subject to adjustment as provided in the respective Certificate of Designation. The Conversion Shares have been duly and validly reserved for issuance. Other than as set forth in this Section 3.3 or in the 22,072,575 shares reserved for issuance under Company's annual, quarterly and 8-K reports, filed with the Option Plans, the Warrants, the Additional Warrants Securities and any other outstanding warrants and except as may be granted pursuant to the Related AgreementsExchange Commission ("Reports"), there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, and upon payment of the Purchase Price the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration laws as set forth herein or other changes in the vesting provisions Registration Rights Agreement or other terms of any outstanding options granted as otherwise required by such laws at the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The As of August 31, 1999, the authorized capital stock of the Company, immediately prior to the Closing, will consist Company consists of (i) 50,000,000 100,000,000 shares of Common Stock, Stock (par value $.001 0.001 per share), 15,904,829 4,108,381 shares of which are issued and outstanding as of January 12, 2001outstanding, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 50,069,615 shares of Preferred Stock, Stock (par value $.001 0.001 per share), 400 6,666,667 of which are designated Series A Preferred Stock, none all of which are issued and outstanding, 225 13,773,318 of which are designated Series B Preferred Stock, none 13,173,182 of which are issued and outstanding, 500,000 and 29,629,630 of which are designated Series C Preferred Stock, none all of which are issued and outstanding. At the Closing, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued the authorized and outstanding and 700,000 shares capitalization of Series A Junior Participating Preferred Stock, none of which is presently outstandingthe Company will be as set forth in the Final Prospectus. All issued and outstanding shares of the Company's Common Stock capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, non-assessable and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Investor Shares are as stated in the Certificate Articles of DesignationIncorporation, as amended and restated, of the Company (the "Articles"). Each series of Preferred Stock is convertible into Common Stock on a one-for-one basis and will automatically convert into Common Stock at the time of the closing of the IPO. The Warrant Shares have been duly and validly reserved for issuance. Other than (1) the 22,072,575 aggregate of 13,535,000 shares of Common Stock reserved for issuance under the Company's 1998 Stock Option/Stock Issuance Plan, 1999 Equity Incentive Plan, 1999 Employee Stock Purchase Plan and 1999 Non-Employee Directors' Stock Option PlansPlan, (2) warrants to purchase an aggregate of 600,136 shares of Series B Preferred Stock, (3) registration rights held by holders of 52,965,499 shares of Common Stock and Preferred Stock pursuant to that certain Amended and Restated Rights Agreement dated January 28, 1999, which will be replaced by the WarrantsRights Agreement the form of which is attached hereto as EXHIBIT B, the Additional Warrants and any other outstanding (4) warrants and except as may be granted to purchase an aggregate of up to 200,000 shares of Common Stock pursuant to the Related AgreementsStandby Loan Facility, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to Of the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving reserved shares of written consents with respect to any security or by a director Common Stock described in item (1) of the Companypreceding sentence, (i) options to purchase 6,136,622 shares have been granted and are currently outstanding, and (ii) 7,398,378 shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant to such Stock Option Plan. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationArticles, the Investor Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Shares will be validly issued, fully paid and nonassessablenon-assessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Investor Shares and the Warrant Shares may be subject to restrictions on transfer under applicable state and/or federal securities lawslaws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The consummation Except as described in this Section 3.2, there are no options, warrants, calls, rights, commitments or agreements of any character, written or oral, to which the Company is a party or by which it is bound that obligate the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms capital stock of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.COMMON STOCK AND WARRANT PURCHASE AGREEMENT

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (ix) 50,000,000 15,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 1,546,377 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 2,130,000 shares of which are reserved for future issuance to key employees and consultants pursuant to the Company's 1995 Stock Option PlansPlan, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved 974,425 remain available for issuance upon exercise of the Warrants and other warrants of the Companyunder such plan, and (iiy) 2,000,000 6,519,955 shares of Preferred Stock, par value $.001 per share, 400 337,420 of which are designated Series A Preferred Stock, none 189,630 shares of which are issued and outstanding, 225 3,132,535 of which are designated Series B Preferred Stock, none 3,118,785 shares of which are issued and outstanding, 500,000 and 3,050,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issuedissued to the persons listed on Exhibit F hereto, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Designationand are valid, binding and enforceable in accordance with applicable law. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansas set forth on Exhibit F, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is There are no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving rights of written consents first refusal with respect to any security or by a director the issuance of the CompanyShares and the subsequent conversion of the Shares into Conversion Shares that have not been complied with or for which waivers have not been obtained. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Certificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessablenonassessable with no personal liability attaching to the ownership thereof, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities lawslaws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The consummation Company has no obligation to purchase, acquire or redeem any of its outstanding securities. After giving effect to the transactions contemplated by this Agreement hereby, all officers, directors and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms holders of any outstanding options granted by the Company. Each subsidiary one percent (1%) of the Company listed on the Schedule of Exceptions is wholly-owned.the

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist Company consists of (i) 50,000,000 200,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 and 5,000,000 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stockpreferred stock, par value $.001 per share. As of June 7, 400 2004 the Company had 145,000 shares of which are convertible voting preferred stock outstanding designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated as Series D Preferred Stock, 16,719.76 of which are issued Stock and outstanding and 700,000 8,620.50 shares of convertible voting preferred stock outstanding designated as Series A Junior Participating E Preferred Stock. As of June 15, none 2004, the Company had 162,914,541 shares of which is presently Common Stock outstanding. An additional 7,569,632 shares of Common Stock are reserved for future issuance under the Company's stock option grants and pursuant to convertible securities, options and warrants as summarized below: Authorized Common Shares Reserved For Future Issuance Outstanding Stock Option Grants 4,136,665 Stock Purchase Warrants 1,452,355 Series D & E Preferred Stock 10,713,912 Total Unissued but Reserved for Issuance 16,302,932 Accordingly, the Company has either outstanding or reserved an aggregate of 179,217,473 of the 200,000,000 authorized shares of Common Stock. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, and (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement Agreement, the Notes and the Certificate of Designation, the Warrant Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Notes, Warrants and the Warrant Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 10,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 3,000,000 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 2,657,122 shares of Preferred Stockpreferred stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, of which 88,326 shares shall be designated Series A-1 Preferred Stock none of which are will be issued and outstanding, 225 of which are 1,068,796 shares shall be designated as Series B A-2 Preferred Stock, none of which are will be issued and outstanding, 500,000 of which are and 1,500,000 shares shall be designated as Series C A-3 Preferred Stock, none of which are will be issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (aand Preferred Stock(a) have been duly authorized and (b) the Company's Common Stock is validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges First Option Shares and restrictions of the Second Option Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares have been duly and validly reserved for issuance under the Option Plansand, the Warrantsupon issuance and delivery against payment therefor, the Additional Warrants will be validly issued, fully paid and any other outstanding warrants and except nonassessable. Except as may be granted pursuant to the Related Options and the Option Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationOption Agreements, the Purchased Shares, the First Option, the Second Option, the First Option Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants Second Option Shares (collectively, the "Warrant SharesSecurities") will be validly issuedissued (and, in the case of the Purchased Shares, the First Option Shares and the Second Option Shares only), fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares Securities may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The (a) Immediately prior to the Closing, the authorized capital stock of the Company, immediately prior to the Closing, Company will consist of of: (i) 50,000,000 97,500,000 shares of Common Stock, par value $.001 0.01 per share, 15,904,829 27,972,194 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 9,741,995 shares of which are reserved for future issuance to employees pursuant to the Company's 1999 Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, Incentive Plan and (ii) 2,000,000 32,775,228 shares of Preferred Stock, (A) 668,782 of which have been designated as Series A Preferred Stock, par value $.001 0.01 per share, 400 all of which is issued and outstanding, (B) 2,282,684 of which have been designated as Series B Preferred Stock, par value $0.01 per share, all of which are issued and outstanding, (C) 7,273,762 of which have been designated as Series C Preferred Stock, par value $0.01 per share, 6,576,246 of which are issued and outstanding, (D) 8,000,000 of which have been designated as Series D Preferred Stock, par value $0.01 per share, 3,878,720 of which are issued and outstanding, (E) 12,000,000 of which have been designated Series A Preferred D-1 Stock, par value $0.01 per share, 6,083,488 of which are issued and outstanding, (F) 550,000 of which have been designated Series D-2 Stock, par value $0.01 per share, 416,667 of which are issued and outstanding, and (G) 1,000,000 of which have been designated Series D-3 Stock, par value $0.01 per share, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (a) have been duly authorized and validly issuedissued to the persons listed on Exhibit F hereto, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationIncorporation. The Series C Stock, Series D Stock, Series D-1 Stock, Series D-2 Stock and Series D-3 Stock are initially convertible into Common Stock on a one-for-one basis subject to Adjustment. The Series A and Series B Stock are convertible into Common Stock on a two-for-one basis subject to Adjustment The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreementsset forth in Section 3.3, there are no outstanding options, warrants, rights (including registration, conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to Of the shares of Common Stock reserved for issuance under the Company's knowledge1999 Stock Incentive Plan, there is no agreement or understanding between any persons and/or entities(i) options to purchase 7,445,370 shares have been granted and are currently outstanding, which affects or relates and (ii) 2,296,625 shares of Common Stock remain available for issuance to the voting or giving of written consents with respect officers, directors, employees and consultants pursuant to any security or by a director of the Companysuch 1999 Stock Incentive Plan. When issued in compliance with the provisions of this Agreement and Agreement, the Certificate of DesignationIncorporation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities lawslaws as set forth herein or as otherwise required by such laws at the time a transfer is proposed and pursuant to any agreements entered into in connection with this Agreement. The consummation No stock plan, stock purchase, stock option or other agreement or understanding between the Company and any holder of the transactions contemplated by this Agreement and the Related Agreements will not result in any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of any outstanding options granted merger, consolidated sale of stock or assets, change in control or any other transaction(s) by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist consists of (ia) 50,000,000 1,000,000,000 shares of Common Stock, par value $.001 0.01 per shareshare (the "COMMON STOCK"), 15,904,829 695,971,046 shares of which were issued and outstanding on September 29, 2003, 341,014,782 shares of which are issued and outstanding as of January 12the date hereof reserved for issuance pursuant to outstanding option agreements, 2001warrants and other convertible securities, and 1,987,729 including 14,754,239 shares of which are reserved for future issuance to pursuant to as of the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are date hereof reserved for issuance upon exercise to key employees, consultants and others affiliated with the Company pursuant to stock grant, stock purchase and/or option plans or any other stock incentive program, arrangement or agreement approved by the Board of the Warrants and other warrants Directors of the Company, and (iib) 2,000,000 3,000,000 shares of Preferred Stock, par value $.001 0.01 per shareshare (the "PREFERRED STOCK"), 400 250,000 of which are designated Series A Convertible PIK Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 225 590,000 shares of which are designated Series B Convertible Preferred Stock, 24,000 of which are issued and outstanding as of the date hereof, 105,000 shares of which are designated Series C Convertible Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 500,000 10 shares of which are designated Series C D Convertible Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 25,000 10 shares of which are designated Series D E Convertible Preferred Stock, 16,719.76 none of which are issued and outstanding and 700,000 as of the date hereof, 20,000 shares of which are designated Series A Junior Participating F Convertible Preferred Stock, none of which is presently outstandingare issued and outstanding as of the date hereof, and 100,000 shares of which are designated Series G Convertible Preferred Stock, 12,000 of which are issued and outstanding as of the date hereof. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance in all material respects with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are will be as stated in the Certificate as of Designationthe Closing. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Except as may be granted pursuant to this Agreement, except as set forth above, and except pursuant to the Related AgreementsLoan Agreement, dated December 30, 2002 (the "LOAN AGREEMENT"), between the Company, SOFTBANK, and Draper Fisher Jurvetson ePlanet Ventures L.P., Draper Fisher Jurvetson xXxxxxt Xxxxxers Fund, LLC and Draper Fisher Juxxxxxxn xXxxxet Ventures GmbH & Co. KG, there are no outstanding optionsouxxxxxxixx xxxions, warrants, puts, calls, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from from, sale to or exchange with the Company of or any of its securitiesSubsidiaries of any shares of any class or series of capital stock of the Company or any of its Subsidiaries or other restrictions on the incidents of ownership or transfer of any such shares of capital stock created by statute (other than Federal and state securities laws), the charter documents of the Company or any of its Subsidiaries or any agreement to which the Company or any of its Subsidiaries is a party, by which any of them is bound or of which any of them has knowledge. The Company is not a party or subject to any agreement or understanding, Shares have been duly authorized and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated Liens (other than Liens created by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedPurchasers).

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to as of the Closingdate hereof consists of 41,000,000 shares, will consist of (i) 50,000,000 which 40,000,000 are shares of Common Stock, par value $.001 0.01 per share, 15,904,829 24,784,776 shares of which are issued and outstanding as of January 12March 5, 20012004, and 1,987,729 1,000,000 are shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stockpreferred stock, par value $.001 0.01 per of share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding. Except as disclosed on Schedule 4.3 and other than: (i) 2,578,555 and 120,000 shares of Common Stock reserved for issuance upon exercise of opition granted or to be granted, 225 respectively, under the Company’s stock option plans; (ii) 283,350 shares of Common Stock issuable upon exercise of warrants issued by the Company; and (iii) the shares which may be granted pursuant to this Agreement and the Related Agreements, there are designated Series B Preferred Stockno other outstanding options, none warrants, rights (including conversion or preemptive rights and rights of which are issued and first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Company of any of its securities. Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of any of the Note, or the issuance of any of the Note Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Company outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstandingunder anti-dilution or other similar provisions contained in or affecting any such securities. All issued and outstanding shares of the Company's ’s Common Stock Stock: (ai) have been duly authorized and validly issued, (b) issued and are fully paid and nonassessable, ; and (cii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares shares of the Common Stock are as stated in the Company’s Certificate of DesignationIncorporation (the “Charter”). Other than the 22,072,575 shares The Note Shares have been duly and validly reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Companyissuance. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationCompany’s Charter, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares Securities may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist consists of (ia) 50,000,000 500,000,000 shares of the Company's Common Stock, par value $.001 0.001 per shareshare (the "COMMON STOCK"), 15,904,829 114,002,422 shares of which are issued and outstanding as of January 12outstanding, 2001, and 1,987,729 13,354,869 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are currently reserved for issuance upon exercise of the Warrants and other warrants of the Companypursuant to outstanding option agreements, and (iib) 2,000,000 50,000,000 shares of Preferred Stock, par value $.001 0.0001 per shareshare (the "PREFERRED STOCK"), 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 6,400,000 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (ai) have been duly authorized and validly issued, and (bii) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are Shares, upon the Closing, will be as stated in the Certificate of DesignationCertificate. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Except as may be granted pursuant to the Related Agreementsthis Agreement and except as set forth above, there are no outstanding options, warrants, puts, calls, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from from, sale to or exchange, with the Company of or any of its securities. The Subsidiaries of any shares of any class or series of capital stock of the Company is not a party or subject to any of its Subsidiaries or other restrictions on the incidents of ownership or transfer of any such shares of capital stock created by: (i) the charter documents of the Company or any of its Subsidiaries, (ii) any agreement to which the Company or understandingany of its Subsidiaries is a party, andby which any of them is bound or of which any of them has Knowledge, or, (iii) to the Company's knowledgeKnowledge, there is no agreement or understanding between any persons and/or entitiesstatute (other than Federal and state securities laws). The Shares have been duly authorized and, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issuedissued (including, without limitation, issued in compliance with applicable state and federal securities laws, assuming the accuracy of Purchasers' representations in Section 4 hereof), fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transferLiens (other than Liens created by Purchasers); provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (ia) 50,000,000 fifteen million (15,000,000) shares of Common Stock, par value $.001 per share, 15,904,829 five hundred thousand (500,000) shares of which are issued and outstanding as of January 12, 2001outstanding, and 1,987,729 eight hundred thirty-three thousand (833,000) shares of which are reserved or will be reserved in the future for future issuance to key employees, consultants and others affiliated with the Company or a subsidiary thereof pursuant to stock grant, stock purchase and/or option plans or any other stock incentive program, arrangement or agreement approved by the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares Board of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, Directors and (iib) 2,000,000 six million five hundred thousand (6,500,000) shares of Preferred Stock, par value $.001 per share, 400 two million (2,000,000) of which are designated Series A Preferred Stock, none one million nine hundred six thousand one hundred thirty-seven (1,906,137) of which are issued and outstanding, 225 five hundred thousand (500,000) of which are designated Series B Preferred Stock, none four hundred fifty-five thousand one hundred twenty (455,120) of which are issued and outstanding, 500,000 and one million five hundred thousand (1,500,000) of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, nonassessable and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationRestated Certificate. Other than the 22,072,575 shares The Conversion Shares have been duly and validly reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except issuance. Except as may be granted pursuant to the Related Agreementsthis Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, Shares and the Conversion Shares have been duly authorized and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Restated Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and time the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of fifty million (i50,000,000) 50,000,000 shares of Voting Common Stock, Stock (par value $.001 per share), 15,904,829 two million six hundred eight thousand three hundred ninety (2,608,390) shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 one million nine hundred fifty four thousand one hundred twenty (1,954,120) shares of which are remain reserved for future issuance to employees, officers, directors and consultants pursuant to the Company's 1999 Equity Incentive Plan (after issuance of the 100,000 shares of Voting Common Stock Option Plans, thereunder as amended and restated (the "Option Plan"described below), 3,747,760 twenty five million (25,000,000) shares of Non-Voting Common Stock, none of which are reserved for issuance upon exercise of the Warrants issued and other warrants of the Companyoutstanding, and thirty two million six hundred thousand (ii32,600,000) 2,000,000 shares of Preferred Stock, Stock (par value $.001 per share), 400 eight million six hundred thousand (8,600,000) of which are designated Series A Preferred Stock, seven million nine hundred forty two thousand nine hundred seventy (7,942,970) of which are issued and outstanding, twelve million (12,000,000) of which are designated Series B-1 Voting Preferred Stock, none of which are issued and outstanding, 225 and twelve million (12,000,000) of which are designated Series B B-2 Non-Voting Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Restated Certificate. Each series of DesignationPreferred Stock is convertible into Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 2,054,120 shares initially reserved for issuance under the Option PlansCompany's 1999 Equity Incentive Plan (of which options for 240,000 shares of Voting Common Stock have been granted, and of such options granted, 100,000 shares of Voting Common Stock of which have previously been issued upon exercise thereof), the Warrantsoption to purchase up to eighty seven thousand seven hundred nineteen (87,719) shares of Series A Preferred Stock granted to Kevix Xxxxxxxx xxxsuant to that certain Key Employee Agreement by and between the Company and Kevix Xxxxxxxx xxxed as of February 10, 1999, as amended, and the Additional Warrants warrants to purchase in the aggregate 200,000 shares of Series A Preferred Stock pursuant to that certain Note and any other outstanding warrants Warrant Purchase Agreement, dated as of April 30, 1999, by and among the Company and the Purchasers listed therein (which will expire at the First Closing), and except as may be granted pursuant to this Agreement and the Related AgreementsInvestor Rights Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company or any Subsidiary of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to Following the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director acquisition of the Company. When issued in compliance with the provisions Shares as provided herein, and assuming conversion of this Agreement all outstanding Series A Preferred Stock and the Certificate of DesignationSeries B Preferred Stock, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of Company consists of: (iA) 50,000,000 shares of Common Stock, par value $.001 .00001 per share, 15,904,829 of which, as of January 31, 2003 (the “Reference Date”), (i) 14,912,899 shares of which are issued and outstanding, (ii) 1,419,225 shares are subject to outstanding as of January 12options, 2001, and 1,987,729 (iii) 1,245,825 shares of which are reserved for future issuance to employees, directors and consultants pursuant to the Company's Stock Option Plans’s stock option plans, as amended and restated (the "Option Plan"), 3,747,760 iv) 2,105,380 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Companysubject to outstanding warrants, and (iiv) 2,000,000 1,173,766 shares are issuable upon conversion of outstanding convertible promissory notes; and (B) 5,000,000 shares of Preferred Stock, par value $.001 .00001 per share, 400 of which (i) 350,000 shares are designated Series A Preferred Stock, none no shares of which are issued and outstandingoutstanding as of the Reference Date, 225 of which (ii) 250,000 shares are designated Series B Preferred Stock, none no shares of which are issued and outstandingoutstanding as of the Reference Date, 500,000 of which (iii) 300,000 shares are designated as Series C Preferred Stock, none 10,000 shares of which are issued outstanding as of the Reference Date and outstandingare convertible into 40,792 shares of Common Stock as of the Reference Date, 25,000 of which (iv) 250,000 shares are designated Series D Preferred Stock, 16,719.76 85,000 of which are issued outstanding as of the Reference Date and outstanding and 700,000 (v) 350,000 shares of are designated Series A Junior Participating E Preferred Stock, none of which is presently which, prior to the Closing, are issued and outstanding. All issued and outstanding shares of the Company's ’s Common Stock (a) have been duly authorized and validly issued, and (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Charter. 1,076,924 shares of Designation. Other than the 22,072,575 shares Common Stock have been duly and validly reserved for issuance under as Conversion Shares, and the Option PlansCompany will take all reasonable measures to ensure that, at all times, a sufficient number of shares of its Common Stock are reserved for issuance upon conversion of the Shares and exercise of the Warrants. As of the Reference Date, other than the Additional Warrants shares of capital stock issuable upon exercise or conversion of the foregoing outstanding options, warrants, convertible promissory notes and any other outstanding warrants convertible securities, and except as may be granted pursuant to this Agreement or the Related AgreementsWarrants, there are no outstanding options, warrants, rights (including conversion conversion, anti-dilution or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationCharter, the Shares Securities and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The Immediately after the Closing, the authorized capital stock of the Company, immediately prior to the Closing, will consist Company consists of (i) 50,000,000 20,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 (i) 10,230,449 shares of which are will be issued and outstanding as of January 12outstanding, 2001, and 1,987,729 (ii) 2,500,000 shares of which are reserved for future issuance to key employees pursuant to the Company's 1995 Stock Option Plans, as amended Plan (under which options to purchase 1,472,311 shares are outstanding and restated options to purchase 1,012,689 shares remain available for issuance) and (the "Option Plan"), 3,747,760 iii) 1,251,455 shares of which are reserved for issuance upon exercise of the Warrants and other certain warrants of the Company, and (ii) 2,000,000 to purchase shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstandingCommon Stock (the "Existing Warrants"). All issued and outstanding shares of the Company's Common Stock (ai) have been duly authorized and validly issuedissued to the persons listed on Exhibit C hereto, and (bii) are fully paid and 3 nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Except as may be granted pursuant to the Related AgreementsInvestors' Rights Agreement, the Company's 1995 Stock Option Plan and the Existing Warrants, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationAgreement, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities lawslaws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The consummation of Underlying Shares have been duly and validly reserved for issuance and, when issued in compliance with the transactions contemplated by this Agreement Warrant, will be validly issued, fully paid and the Related Agreements nonassessable and will not result in acceleration or other changes in the vesting provisions or other terms be free of any outstanding options granted liens or encumbrances; provided, however, that the Underlying Shares may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, Company immediately prior to after the Closing, will consist of twenty-five million (i25,000,000) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 four million five hundred five thousand nine hundred eighty six (4,505,986) shares of which are shall be issued and outstanding as of January 12, 2001outstanding, and 1,987,729 twenty-two million three hundred ninety-eight thousand (22,398,000) shares of which are reserved for future issuance to pursuant to Preferred Stock. Of the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 22,398,000 shares of Preferred Stock, par value $.001 per share, 400 three hundred twenty-five thousand (325,000)) shares of which Preferred Stock are designated reserved for Series A A-1 Preferred Stock, none of which are all will be issued and outstanding, 225 of which and 325,000 shares are designated reserved for Series B A-N Preferred Stock, none of which are none will be issued or outstanding; 1,804,000 shares will be reserved for Series B-1 Preferred Stock, of which all will be issued and outstanding, 500,000 of which are designated and 1,804,000 shares will be reserved for Series C B-N Preferred Stock, none of which are none will be issued and or outstanding, 25,000 of which are designated ; 4,070,000 shares will be reserved for Series D C-1 Preferred Stock, 16,719.76 of which are all will be issued and outstanding and 700,000 4,070,000 shares of will be reserved for Series A Junior Participating C-N Preferred Stock, none of which is presently none will be issued or outstanding. The Company has reserved three million (3,000,000) shares of Common Stock for issuance under the Company's Incentive Stock Option Plan to employees, consultants, and directors or officers of the Company, against which 1,824,400 options to purchase shares shall be issued and outstanding immediately after the Closing. All issued and outstanding shares securities of the Company's Common Stock Company (ai) will have been duly authorized and validly issuedissued to the persons listed in SCHEDULE I, (bii) are will be fully paid and nonassessable, and (ciii) were will have been issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationThird Restated Articles. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansas may be set forth in SCHEDULE II, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related AgreementsInvestor Rights Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to Except as may be set forth in the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationThird Restated Articles, the Shares and the Common Stock which may be issued upon exercise Company has no obligation to repurchase any of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedits capital stock.

Capitalization; Voting Rights. The authorized capital stock of the Company, Company (immediately prior to the Closing, ) will consist of (ia) 50,000,000 15 million shares of Common Stock, par value $.001 per shareof which 3,966,838 shares are issued and outstanding and held as described on Schedule 3.3, 15,904,829 and 2,426,997 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are or will be reserved for future issuance to key employees, consultants and others affiliated with the Company pursuant to the CompanyBioNumerik's 1993 Stock Option PlansPlan, as amended 1995 Director Stock Option Plan, 2004 Stock Incentive Plan and restated Employee Stock Purchase Plan (the "Option PlanEquity Incentive Plans"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (iib) 2,000,000 10 million shares of Preferred Stock, $0.01 par value $.001 per shareshare (the "Preferred Stock"), 400 the designation, by series, and number of shares issued and outstanding of which are designated Series A Preferred Stockset forth on Schedule 3.3; provided, none however, that the foregoing capitalization will be subject to adjustment to give effect to the issuance of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Common Stock in connection with a contemplated initial public offering ("IPO") of Common Stock by the Company and the resulting automatic conversion of outstanding Preferred Stock, none of which Stock in the event such initial public offering is presently outstandingcompleted before the Closing Date. All issued and outstanding shares of the Company's Common Stock (a) and Preferred Stock have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securitiessecurities laws. The rights, preferences, privileges and restrictions of the Conversion Shares are have been duly reserved for issuance. Except as stated set forth in the Certificate Company's Articles of Designation. Other than the 22,072,575 shares reserved for issuance under the Option PlansIncorporation, the Warrantsas amended, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreementsor on Schedule 3.3, (i) there are no authorized or outstanding options, subscriptions, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy (ii) the Company has no obligation (contingent or stockholder agreementsotherwise) to issue any options, subscriptions, warrants, rights or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The , and (iii) the Company is not a party has no obligation (contingent or subject otherwise) to purchase, redeem or otherwise acquire any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Companyits securities. When issued in compliance with the provisions of this Agreement and the Certificate of Designationdesignations for the Series I Preferred Stock and Series J Preferred Stock, as the case may be, the Conversion Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted created by the Company. Each subsidiary Schedule 3.3 of the Disclosure Schedule includes a true and complete summary of the capital stock and other securities of the Company listed showing the number of shares of Common or Preferred Stock, warrants, options or other securities (including convertible debt, if any). Other than the Transaction Documents and the Alliance Agreement or as set forth on Schedule 3.3, there are no agreements, written or oral, between the Schedule Company and any holder or prospective holder of Exceptions is wholly-ownedthe Company's capital stock or, to the Company's Knowledge, between or among any holders of the Company's capital stock, relating to the acquisition, disposition, voting or registration for sale of such capital stock, except those that will have been waived prior to Closing.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of Company consists of: (iA) 50,000,000 20,000,000 shares of Common Stock, par value $.001 .00001 per share, 15,904,829 of which, as of March 31, 2002 (the "Reference Date"), (i) 14,273,951 shares are issued and outstanding, (ii) 1,188,025 shares are subject to outstanding options, (iii) 173,250 shares are reserved for future issuance to employees, directors and consultants pursuant to the Company's stock option plans, (iv) 1,487,500 shares are subject to outstanding warrants, and (v) 1,072,238 shares are issuable upon conversion of outstanding convertible promissory notes; and (B) 5,000,000 shares of Preferred Stock, par value $.00001 per share, of which (i) 350,000 shares are designated Series A Preferred Stock, no shares of which are issued and outstanding as of January 12the Reference Date, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 250,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none no shares of which are issued and outstandingoutstanding as of the Reference Date, 500,000 of which (iii) 300,000 shares are designated as Series C Preferred Stock, none 10,000 shares of which are issued and outstandingoutstanding as of the Reference Date and are convertible into 39,042 shares of Common Stock as of the Reference Date, 25,000 of which and (iv) 250,000 shares are designated Series D Preferred Stock, 16,719.76 none of which which, prior to the Closing, are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, and (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Charter 1,138,889 shares of Designation. Other than the 22,072,575 shares Common Stock have been duly and validly reserved for issuance under as Conversion Shares, and the Option PlansCompany will take all reasonable measures to ensure that, at all times, a sufficient number of shares of its Common Stock are reserved for issuance upon conversion of the Shares and exercise of the Warrants. As of the Reference Date, other than the Additional Warrants shares of capital stock issuable upon exercise or conversion of the foregoing outstanding options, warrants and any other outstanding warrants convertible securities, and except as may be granted pursuant to this Agreement or the Related AgreementsWarrants, there are no outstanding options, warrants, rights (including conversion conversion, anti-dilution or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationCharter, the Shares Securities and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of twenty million (i20,000,000) 50,000,000 shares of Common Stock, (par value $.001 .001) per share, 15,904,829 two million thirty three thousand three hundred ninety (2,033,390) shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 one million seven hundred fifty thousand (1,750,000) shares of which are reserved for future issuance to employees, officers, directors and consultants pursuant to the Company's Stock Option Plans, as amended 1999 Equity Incentive Plan and restated eight million five hundred thousand (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii8,500,000) 2,000,000 shares of Preferred Stock, (par value $.001 .001) per share, 400 all of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Restated Certificate. Each series of DesignationPreferred Stock is convertible into Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 1,750,000 shares reserved for issuance under the Option PlansCompany's 1999 Equity Incentive Plan, the Warrantsoption to purchase up to four hundred thirty eight thousand five hundred ninety six (438,596) shares of Series A Preferred Stock granted to Kevix Xxxxxxxx xxxsuant to that certain Key Employee Agreement by and between the Company and Kevix Xxxxxxxx xxxed on or about the date hereof, and the Additional Warrants proposed issuance of up to one million two hundred fifty thousand (1,250,000) shares of Series A Preferred Stock to certain shareholders of Asia Communications Global Limited ("ACGL") pursuant to that certain Asset Purchase Agreement by and any other outstanding warrants between the Company and ACG, Inc., a subsidiary of ACGL, dated on or about the date hereof (the "ACGL Agreement"), and except as may be granted pursuant to this Agreement and the Related AgreementsInvestor Rights Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Certificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (ix) 50,000,000 16,850,000 shares of Common Stock, par value $.001 per share, 15,904,829 2,037,754 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 2,130,000 shares of which are have been reserved for future issuance to key employees and consultants pursuant to the Company's 1995 Stock Option PlansPlan, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved 90,062 remain available for issuance upon exercise of the Warrants and other warrants of the Companyunder such plan, and (iiy) 2,000,000 8,719,955 shares of Preferred Stock, par value $.001 per share, 400 337,420 of which are designated Series A Preferred Stock, none 189,630 shares of which are issued and outstanding, 225 3,132,535 of which are designated Series B Preferred Stock, none 3,118,785 shares of which are issued and outstanding, 500,000 3,050,000 of which are designated Series C Preferred Stock, none 2,946,088 shares of which are issued and outstanding, 25,000 outstanding and 2,200,000 of which are designated Series D Preferred Stock, 16,719.76 none of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issuedissued to the persons listed on Exhibit E hereto, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Designationand are valid, binding and enforceable in accordance with applicable law. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansas set forth on Exhibit E, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is There are no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving rights of written consents first refusal with respect to any security or by a director the issuance of the CompanyShares and the subsequent conversion of the Shares into Conversion Shares that have not been complied with or for which waivers have not been obtained. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Certificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessablenonassessable with no personal liability attaching to the ownership thereof, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities lawslaws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The consummation Company has no obligation to purchase, acquire or redeem any of its outstanding securities. After giving effect to the transactions contemplated by this Agreement hereby, all officers, directors and holders of one percent (1%) of the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary capital stock of the Company listed on are subject to a market stand-off agreement in substantially the Schedule form contained in Section 2.13 of Exceptions is wholly-ownedthe Investor Rights Agreement.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the ClosingFirst Closing and the consummation of the transactions contemplated hereby, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 16,622,691 shares of which are issued and outstanding as of January 12, 2001outstanding, and 1,987,729 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 20,084,846 shares of which are reserved for issuance upon exercise of the Initial Series F Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 none of which are issued and outstanding, 65,000 of which are designated Series F Preferred Stock, 41,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently issued or outstanding. The authorized capital stock of the Company immediately after the First Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 16,622,691 shares of which are issued and outstanding, and 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 22,205,874 shares of which are reserved for issuance upon exercise of the Warrants, warrants to purchase shares of Common Stock of the Company issued pursuant to the First Series F Purchase Agreement and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 73,000 of which are designated Series F Preferred Stock, 42,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be 3 issued at any time. All issued and outstanding shares of the Company's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 24,193,603 shares reserved for issuance under the Option Plans, the Warrants, the Additional Initial Series F Warrants and any other outstanding warrants and except as may be granted pursuant to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, the Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company is listed on the Schedule of Exceptions 5.2 hereto, and each such subsidiary is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of twenty million (i20,000,000) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 one million three hundred sixty-two thousand five hundred twenty-one (1,362,521) shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 six hundred thousand (600,000) shares of which are reserved for future issuance to key employees pursuant to the Company's 1996 Stock Option Plans, as amended Plan and restated one million four hundred thousand (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii1,400,000) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 all of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (ai) have been duly authorized and validly issuedissued to the persons listed on Exhibit H hereto, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationRestated Articles. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansas set forth on Exhibit H, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Articles, the Shares, the Warrant Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; providedPROVIDED, howeverHOWEVER, that the Shares, the Warrant Shares, the Warrants and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. (a) The authorized capital stock of the Company, immediately prior to the Closing, will consist of (ia) 50,000,000 forty million (40,000,000) shares of Common Stock, par value $.001 per share, 15,904,829 shares of which six million two hundred fifty thousand two (6,250,002) shares are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Companyoutstanding, and (iib) 2,000,000 nineteen million (19,000,000) shares of Preferred Stock, par value $.001 per share, 400 of which three million (3,000,000) shares are designated Series A Preferred Stock, none of which one million seven hundred fifty-one thousand nine hundred eighty five (1,751,985) are issued and outstanding, 225 and of which sixteen million (16,000,000) shares are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, nonassessable and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationCertificate. Other than the 22,072,575 shares The Conversion Shares have been duly and validly reserved for issuance under issuance. As of the Option PlansFirst Closing, there has been no action taken by the WarrantsCompany which would have required an adjustment to the Series B Conversion Price, as defined in the Additional Warrants and any other outstanding warrants Certificate. Except as set forth on Schedule 3.3 hereto and except as may be granted pursuant to this Agreement or the Related AgreementsInvestors' Rights Agreement, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, Shares and the Conversion Shares have been duly authorized and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issuedissued (including, without limitation, issued in compliance with applicable state and federal securities laws), fully paid and nonassessable, subject to no preemptive rights, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist Company consists of (i) 50,000,000 20,000,000 shares of Common Stock, par value $.001 .00001 per share, 15,904,829 11,364,314 shares of which are issued and outstanding, 1,334,600 shares which are subject to outstanding as of January 12, 2001, options and 1,987,729 339,056 shares of which are reserved for future issuance to employees, directors and consultants pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Companystock option plans, and (ii) 2,000,000 5,000,000 shares of Preferred Stock, par value $.001 .00001 per share, 400 350,000 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 outstanding and 250,000 of which are designated Series B Preferred Stock, none of which which, prior to the Closing, are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, and (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Charter. 1,075,000 shares of DesignationCommon Stock have been duly and validly reserved for issuance as Conversion Shares, and the Company will take all reasonable measures to ensure that, at all times, a sufficient number of shares of its Common Stock are reserved for issuance upon conversion of the Shares and exercise of the Warrants. Other As of December 2, 1998, other than the 22,072,575 339,056 shares reserved for issuance under the Option PlansCompany's stock option and stock compensation plans, the Warrants, the Additional Warrants 1,334,600 shares subject to outstanding options and any other 355,000 shares subject to outstanding warrants and except as may be granted pursuant to this Agreement or the Related AgreementsWarrants, there are no outstanding options, warrants, rights (including conversion conversion, anti-dilution or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.the

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of consists of: (i) 50,000,000 108,491,470 Class A Common Shares outstanding, plus (ii) 10,960,526 additional shares upon conversion of Common Stockconvertible debentures and notes, par value which would reduce the Company’s debt by $.001 per share0.4 million (plus another 4,705,882 that could be issued, 15,904,829 subject to a dispute with two convertible debenture holders) , plus (iii) 29,174,369 additional shares upon exercise of which are issued warrants and outstanding as options, plus (iv) approximately 16,000,000 additional shares if management elects to covert its $1,899,816 of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant debt to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise . Upon consummation of the Warrants purchase and other warrants sale of the CompanySecurities contemplated by this Agreement, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All all issued and outstanding shares of the Company's ’s Common Stock Shares issued pursuant to this Agreement will be: (a) have been duly authorized and authorized, validly issued, (b) are fully paid and nonassessable, and (cb) were issued in compliance with all applicable state and federal laws concerning the issuance of securities, and (c) free of any liens or encumbrances other than liens and encumbrances created by or imposed upon the Purchasers. The rights, preferences, privileges issuance and restrictions sale of the Securities will not obligate the Company to issue shares of Common Shares are as stated in the Certificate of Designation. Other or other securities to any Person (other than the 22,072,575 shares reserved for issuance under Securities and the Option Plans, Company’s obligation to issue to the Warrants, Placement Agent warrants representing the Additional Warrants and any other outstanding warrants and except as may be granted right to purchase an aggregate of 12.5% of the number of Shares issued pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights this Agreement) and rights of first refusal), proxy or stockholder agreements, or agreements will not result in a right of any kind for holder of Company securities to adjust the purchase exercise, conversion, exchange or acquisition from reset price under such securities. All of the outstanding shares of capital stock of the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and will be free state securities laws, and none of such outstanding shares was issued in violation of any liens preemptive rights or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject similar rights to restrictions on transfer under applicable state and/or federal securities lawssubscribe for or purchase securities. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration No further approval or other changes in the vesting provisions or other terms authorization of any outstanding options granted by stockholder, the Company. Each subsidiary Board of Directors of the Company listed on or others is required for the Schedule issuance and sale of Exceptions the Securities. Except as described in the SEC Reports, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is wholly-owneda party or, to the knowledge of the Company, between or among any of the Company’s stockholders. A complete list of stockholders of the Company that are officers, directors and individuals holding more than 5% of the outstanding Common Shares is included in the SEC Reports.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to as of the Closingdate hereof consists of 60,000,000 shares, will consist of (i) which 50,000,000 are shares of Common Stock, par value $.001 0.001 per share, 15,904,829 12,150,356 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 and 10,000,000 are shares of Series A Preferred STOCK, PAR VALUE $0.001 PER share of which are designated Series B Preferred Stock, none 16,500 shares of which preferred stock are issued and outstanding, 500,000 . The authorized capital stock of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares each Subsidiary of the Company's Common Stock Company is set forth on Schedule 4.3. Except as disclosed on Schedule 4.3, other than: (ai) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants Company's stock option plans; and any other outstanding warrants and except as (ii) shares which may be granted pursuant to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of the Note, or the issuance of any of the Note Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Company is not a party outstanding, under anti-dilution or subject to other similar provisions contained in or affecting any agreement or understanding, and, to such securities. All issued and outstanding shares of the Company's knowledgeCommon Stock: (i) have been duly authorized and validly issued and are fully paid and nonassessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, there is no agreement or understanding between any persons and/or entitiespreferences, which affects or relates to the voting or giving of written consents with respect to any security or by a director privileges and restrictions of the shares of the Common Stock are as stated in the Company's Certificate of Incorporation (the "Charter"). The Note Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationCompany's Charter, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares Securities may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (ix) 50,000,000 20,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 2,974,644 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 3,930,000 shares of which are have been reserved for future issuance to key employees and consultants pursuant to the Company's 1995 Stock Option PlansPlan, as amended amended, and restated (the "Option Company's 1999 Equity Incentive Plan"), 3,747,760 shares of which are reserved 497,400 remain available for issuance upon exercise of the Warrants and other warrants of the Company, under such plans and (iiy) 2,000,000 11,782,583 shares of Preferred Stock, par value $.001 per share, 400 337,420 of which are designated Series A Preferred Stock, none 189,630 shares of which are issued and outstanding, 225 3,132,535 of which are designated Series B Preferred Stock, none 3,118,785 shares of which are issued and outstanding, 500,000 2,954,784 of which are designated Series C Preferred Stock, none 2,946,088 shares of which are issued and outstanding, 25,000 2,166,667 of which are designated Series D Preferred Stock, 16,719.76 2,166,667 shares of which are issued and outstanding and 700,000 shares 3,191,177 of which are designated Series A Junior Participating E Preferred Stock, none of which is presently are issued and outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issuedissued to the persons listed on Exhibit E hereto, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Restated Certificate of Designationand are valid, binding and enforceable in accordance with applicable law. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansas set forth on Exhibit E, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.or

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of fifty million (i50,000,000) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 twenty-two million three hundred four thousand five hundred eight-six (22,304,586) shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 five million thirteen thousand two hundred eighty-six (5,013,286) shares of which are reserved for future issuance to employees pursuant to outstanding options under the Company's Stock Option Plans1996 Equity Incentive Plan, as amended and restated forty three thousand (43,000) shares upon the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other certain warrants to purchase Common Stock of the Company, and ten million (ii10,000,000) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 seven million five hundred thousand (7,500,000) of which are designated Series A Preferred Stock, none four million, nine hundred sixty one thousand five hundred thirty (4,961,530) shares of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, issued (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Restated Charter. Subject to adjustment as set forth in the Restated Charter, each series of DesignationPreferred Stock is convertible into Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option PlansCompany's 1996 Equity Incentive Plan, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the issuance by the Company or purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Charter, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 40,000,000 shares of Common Stock, (par value $.001 0.001 per share), 15,904,829 1,444,058 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 30,000,000 shares of Preferred Stock, Stock (par value $.001 0.001 per share), 400 14,000,000 of which are designated Series A Preferred Stock, none all of which are issued and outstanding, 225 12,000,000 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (a) have been duly authorized and validly issued, and (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securitiesnon- assessable. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Restated Charter. Each series of DesignationPreferred Stock is convertible into Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 7,400,000 shares reserved for issuance under the Option PlansCompany's 1999 Equity Incentive Plan, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understandingOf such reserved shares of Common Stock, and, (i) 444,058 shares have been issued pursuant to the Company's knowledgeexercise of options, there is no agreement or understanding between any persons and/or entities(ii) options to purchase 3,665,063 shares have been granted and are currently outstanding, which affects or relates and (iii) 3,290,879 shares of Common Stock remain available for issuance to the voting or giving of written consents with respect officers, directors, employees and consultants pursuant to any security or by a director of the Companysuch Equity Incentive Plan. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Charter, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessablenon-assessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist consists of (ia) 50,000,000 1,000,000,000 shares of Common Stock, par value $.001 0.01 per shareshare (the "Common Stock"), 15,904,829 695,971,046 shares of which were issued and outstanding on September 29, 2003, 341,014,782 shares of which are issued and outstanding as of January 12the date hereof reserved for issuance pursuant to outstanding option agreements, 2001warrants and other convertible securities, and 1,987,729 including 14,754,239 shares of which are reserved for future issuance to pursuant to as of the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are date hereof reserved for issuance upon exercise to key employees, consultants and others affiliated with the Company pursuant to stock grant, stock purchase and/or option plans or any other stock incentive program, arrangement or agreement approved by the Board of the Warrants and other warrants Directors of the Company, and (iib) 2,000,000 3,000,000 shares of Preferred Stock, par value $.001 0.01 per shareshare (the "Preferred Stock"), 400 250,000 of which are designated Series A Convertible PIK Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 225 590,000 shares of which are designated Series B Convertible Preferred Stock, 24,000 of which are issued and outstanding as of the date hereof, 105,000 shares of which are designated Series C Convertible Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 500,000 10 shares of which are designated Series C D Convertible Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 25,000 10 shares of which are designated Series D E Convertible Preferred Stock, 16,719.76 none of which are issued and outstanding and 700,000 as of the date hereof, 20,000 shares of which are designated Series A Junior Participating F Convertible Preferred Stock, none of which is presently outstandingare issued and outstanding as of the date hereof, and 100,000 shares of which are designated Series G Convertible Preferred Stock, 12,000 of which are issued and outstanding as of the date hereof. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance in all material respects with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are will be as stated in the Certificate as of Designationthe Closing. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Except as may be granted pursuant to this Agreement, except as set forth above, and except pursuant to the Related AgreementsLoan Agreement, dated December 30, 2002 (the "Loan Agreement"), between the Company, SOFTBANK, and Xxxxxx Xxxxxx Jurvetson ePlanet Ventures L.P., Xxxxxx Xxxxxx Jurvetson ePlanet Partners Fund, LLC and Xxxxxx Xxxxxx Jurvetson ePlanet Ventures GmbH & Co. KG, there are no outstanding options, warrants, puts, calls, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from from, sale to or exchange with the Company of or any of its securitiesSubsidiaries of any shares of any class or series of capital stock of the Company or any of its Subsidiaries or other restrictions on the incidents of ownership or transfer of any such shares of capital stock created by statute (other than Federal and state securities laws), the charter documents of the Company or any of its Subsidiaries or any agreement to which the Company or any of its Subsidiaries is a party, by which any of them is bound or of which any of them has knowledge. The Company is not a party or subject to any agreement or understanding, Shares have been duly authorized and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated Liens (other than Liens created by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedPurchasers).

Capitalization; Voting Rights. The As of the date hereof, the authorized capital stock of the CompanyCompany consists of (a) nine million, immediately nine hundred ninety-nine thousand, nine hundred (9,999,900) shares of Class A Common Stock, of which two million, seven hundred forty-three thousand, four hundred and eighty-three (2,743,483) shares are issued and outstanding (prior to the Closingissuance of the Shares), will consist of and (ib) 50,000,000 one hundred (100) shares of Class C Common Stock, $.0001 par value $.001 per sharevalue, 15,904,829 shares all of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Class A Common Stock and Class C Common Stock and the equity interests in the Subsidiaries (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, and (ciii) were offered, sold, and issued in compliance with all applicable state and federal laws concerning the offering, sale and issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreementsset forth in Section 2.2 of Schedule I, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company or any Subsidiary of any of its securities, nor are there any securities convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries. The None of the Company is not a party nor any of its Subsidiaries has any bond, debentures, notes or subject other obligations the holders of which have the right to any agreement or understanding, and, to vote with the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director shareholders of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationAgreement, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities lawslaws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The consummation Attached hereto as Exhibit C is a copy of the transactions contemplated by this Agreement and Company's Restated Certificate of Incorporation, as amended through the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owneddate hereof.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of of: twelve million (i12,000,000) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 seven hundred thirty thousand nine hundred eighty-eight (730,988) shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 nine hundred thirty-three thousand twenty-seven (933,027) shares of which are reserved for future issuance to pursuant employees and outside directors upon the exercise of options to purchase the Company's Stock Option Plans, as amended Common Stock; and restated nine million (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii9,000,000) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which two million seven hundred seven thousand four hundred three (2,707,403) shares are designated Series A Preferred Stock, none of which two million six hundred eighty-five thousand one hundred eighty-one (2,685,181) shares are issued and outstanding, 225 of which five hundred seventy-nine thousand four hundred seven (579,407) shares are designated Series B Preferred Stock, none of which five hundred seventy-nine thousand four hundred seven (579,407) shares are issued and outstanding, 500,000 outstanding and of which five million (5,000,000) shares are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock, Series A Preferred Stock and Series B Preferred Stock (ai) have been duly authorized and validly issuedissued to the persons listed on Exhibit F hereto, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationRestated Articles. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansas set forth on Exhibit F, the Warrants, the Additional Warrants and any other outstanding warrants and except (i) as may be granted pursuant to the Related AgreementsInvestors' Rights Agreement and the Co-Sale Agreement, (ii) a warrant for the purchase of an aggregate of 22,222 shares of Series A Preferred Stock and (iii) a warrant for the purchase of an aggregate of 21,357 shares of Common Stock, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Articles, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the ClosingClosing and the consummation of the transactions contemplated hereby, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 16,622,691 shares of which are issued and outstanding as of January 12, 2001outstanding, and 1,987,729 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 22,727,492 shares of which are reserved for issuance upon exercise of the Warrants warrants issued pursuant to the Series F Preferred Stock Purchase Agreement dated January 18, 2001 and the Second Series F Preferred Stock and Warrant Purchase Agreement dated March 29, 2001 (collectively, the "Initial Series F Warrants") and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 none of which are issued and outstanding, 73,000 of which are designated Series F Preferred Stock, 45,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently issued or outstanding. The authorized capital stock of the Company 4 immediately after the Closing, will consist of (i) 50,000,000 shares of Common Stock, par value $.001 per share, 16,622,691 shares of which are issued and outstanding, and 2,047,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 43,881,426 shares of which are reserved for issuance upon exercise of the Warrants (subject to the approval and filing of an amendment to the Company's Certificate of Incorporation to increase the number of shares of Common Stock the Company is authorized to issue), warrants to purchase shares of Common Stock of the Company issued pursuant to the First Series F Purchase Agreement and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, none of which are issued and outstanding, 116,000 of which are designated Series F Preferred Stock, 66,398.33 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is issued or outstanding. Except as provided in Schedule 5.3, none of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock designated by the Company may be issued at any time. All issued and outstanding shares of the Company's Common Stock and other capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of Designation. Other than the 22,072,575 2,047,729 shares reserved for issuance under the Option Plans, the Warrants, the Additional Initial Series F Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Schedule 5.3 sets forth all issued and outstanding options and warrants with an exercise price greater than $3.00 per share. Except as provided in Schedule 5.3, the Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company is listed on the Schedule of Exceptions 5.2 hereto, and each such subsidiary is wholly-owned.

Capitalization; Voting Rights. The authorized capital stock of the CompanyCorporation, immediately prior to the Closing, will consist of (i) 50,000,000 7,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 277,082 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 1,091,525 shares of which are reserved for future issuance to employees and directors of and consultants to the Corporation pursuant to the CompanyCorporation's 1995 Stock Option PlansPlan and 1997 Stock Option Plan and 5,535,000 shares of Preferred Stock, as amended 1,000,000 shares of which are designated Series A Preferred Stock, 790,000 shares of which are issued and restated (the "Option Plan"), 3,747,760 outstanding and 135,615 shares of which are reserved for future issuance upon exercise of the Warrants and other warrants of the Companywarrants, and (ii) 2,000,000 1,185,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A B Preferred Stock, 1,021,356 shares of which are issued and outstanding, 900,000 shares of which have been designated Series C Preferred Stock, 853,631 shares of which are issued and outstanding, 1,250,000 shares of which have been designated as Series D Preferred Stock, 1,196,570 shares of which are issued and outstanding, and 1,200,000 shares of which are designated Series E Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the CompanyCorporation's Common and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationRestated Articles. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants as set forth in this Section 3.2 and except as may be granted pursuant to for the conversion privileges of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D, and Series E Preferred Stock and the rights set forth in the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company Corporation of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Articles, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration laws as set forth herein or other changes in the vesting provisions related agreements, or other terms of any outstanding options granted as otherwise required by such laws at the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 40,000,000 shares of Common Stock, (par value $.001 0.001 per share), 15,904,829 4,059,701 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 30,000,000 shares of Preferred Stock, Stock (par value $.001 0.001 per share), 400 14,000,000 of which are designated Series A Preferred Stock, none all of which are issued and outstanding, 225 12,000,000 of which are designated Series B Preferred Stock, none 11,200,000 shares of which are issued and outstanding, 500,000 and 4,000,000 shares of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (a) have been duly authorized and validly issued, and (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securitiesnon-assessable. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Restated Charter. Each series of DesignationPreferred Stock is convertible into Common Stock on a one-for-one basis. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 7,400,000 shares reserved for issuance under the Option PlansCompany's 1999 Equity Incentive Plan, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understandingOf such reserved shares of Common Stock, and, (i) 3,029,701 shares have been issued pursuant to the Company's knowledgeexercise of options, there is no agreement or understanding between any persons and/or entities(ii) options to purchase 3,118,594 shares have been granted and are currently outstanding, which affects or relates and (iii) 1,664,205 shares of Common Stock remain available for issuance to the voting or giving of written consents with respect officers, directors, employees and consultants pursuant to any security or by a director of the Companysuch Equity Incentive Plan. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Charter, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessablenon-assessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the CompanyCompany consists, immediately or will consist prior to the Closing, will consist of twenty-five million (i25,000,000) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 four million six hundred sixty four thousand seven hundred forty nine (4,664,749) shares of which are shall be issued and outstanding as of January 12, 2001outstanding, and 1,987,729 twenty-two million three hundred ninety-eight thousand (22,398,000) shares of which are reserved for future issuance to pursuant to Preferred Stock. Of the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 22,398,000 shares of Preferred Stock, par value $.001 per share, 400 three hundred twenty-five thousand (325,000) shares of which Preferred Stock are designated reserved for Series A A-1 Preferred Stock, none of which are all will be issued and outstanding, 225 of which and 325,000 shares are designated reserved for Series B A-N Preferred Stock, none of which are none will be issued or outstanding; 1,804,000 shares will be reserved for Series B-1 Preferred Stock, of which all will be issued and outstanding, 500,000 of which are designated and 1,804,000 shares will be reserved for Series C B-N Preferred Stock, none of which are none will be issued and or outstanding, 25,000 of which are designated ; 4,059,573 shares will be reserved for Series D C-1 Preferred Stock, 16,719.76 of which are all will be issued and outstanding and 700,000 4,070,000 shares of will be reserved for Series A Junior Participating C-N Preferred Stock, none of which is presently none will be issued or outstanding; and 2,800,000 shares will be reserved for Series D Preferred Stock of which none will be issued or outstanding prior to the Closing. The Company has reserved five million six hundred thousand (5,600,000) shares of Common Stock for issuance under the Company's 1995 Stock Incentive Plan to employees, consultants, and directors or officers of the Company, against which 3,299,600 options to purchase shares shall be issued and outstanding immediately after the Closing. In addition to the 3,299,600 options that are outstanding, the Company has issued a total of 661,674 shares of its Common Stock pursuant to stock option exercises. All issued and outstanding shares securities of the Company's Common Stock Company (ai) will have been duly authorized and validly issued, (bii) are will be fully paid and nonassessable, and (ciii) were will have been issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationThird Restated Articles. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansas may be set forth in SCHEDULE II, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to Except as may be set forth in the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationThird Restated Articles, the Shares and the Common Stock which may be issued upon exercise Company has no obligation to repurchase any of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedits capital stock.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the first Closing, will consist of (i) 50,000,000 25,000,000 shares of Common Stock, (par value $.001 0.01) per share, 15,904,829 share and 3,525,000 shares of Preferred Stock, (par value $0.01), of which 600,000 are designated Series A Cumulative Convertible Preferred Stock ("Series A Preferred Stock") ; 1,700,000 are designated Series B Cumulative Convertible Preferred Stock ("Series B Preferred Stock"); and 1,225,000 are designated Series C Cumulative Convertible Preferred Stock ("Series C Preferred Stock"). Immediately prior to the effective date of this Agreement, 5,460,449 shares of Common Stock, 0 shares Series A Preferred Stock (subscribed for 600,000 shares), 407,900 shares of Series B Preferred Stock, 371,438 shares of Series C Preferred Stock and no shares of Series D Preferred Stock will be issued and outstanding as of January 12, 2001, and 1,987,729 outstanding. Of the authorized shares of which Common Stock, (i) 1.4 million shares are reserved for future issuance to employees pursuant to the 1998-A Incentive Stock Option and Non-Statutory Option Plan (the "1998 A-Plan") and 1.5 million shares are reserved for issuance to employees pursuant to the Company's 1998-B Incentive Stock Option Plans, as amended and restated Non-Statutory Plan (the "Option 1998-B Plan"), 3,747,760 (ii) 600,000 shares of which are reserved for issuance upon the exercise of certain warrants, (iii) 600,000 shares are reserved for issuance upon the Warrants and other warrants conversion of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which are designated Series A Preferred Stock, none (iv) 1,785,000 shares are reserved for issuance upon the conversion of which are issued and outstanding, 225 of which are designated the Series B Preferred Stock, none and (v) 1,650,000 shares are reserved for issuance upon conversion of which are issued and outstanding, 500,000 of which are designated the Series C Preferred Stock, none . The Company intends to reserve 714,300 shares of which are issued and outstanding, 25,000 its Common Stock for issuance upon conversion of which are designated the Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationDesignations. Each series of Preferred Stock is convertible into Common Stock on the basis described in the Reports (as defined below), subject to adjustment as provided in the respective certificate of designations. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreementsset forth in this Section 3.3 or as disclosed in Schedule 3.3 hereto, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationDesignations, and upon payment of the Purchase Price the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; providedPROVIDED, howeverHOWEVER, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration laws as set forth herein or other changes in the vesting provisions Registration Rights Agreement or other terms of any outstanding options granted as otherwise required by such laws at the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of twenty million (i20,000,000) 50,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 one million three hundred seventy-nine thousand thirty-nine (1,379,039) shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 one million (1,000,000) shares of which are reserved for future issuance to key employees pursuant to the Company's 1996 Stock Option Plans, as amended Plan and restated five million (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii5,000,000) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 of which (i) one million four hundred thousand (1,400,000) are designated Series A Preferred Stock, none one million two hundred five thousand (1,205,000) of which are issued and outstanding, 225 of which and (ii) two million four hundred (2,400,000) are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issuedissued to the persons listed on Exhibit H hereto, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationRestated Articles. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansas set forth on Exhibit H, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, voting agreements or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Articles, the Shares, the Warrant Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; providedPROVIDED, howeverHOWEVER, that the Shares, the Warrant Shares, the Warrants and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time a transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (ia) 50,000,000 eight hundred fifty million (850,000,000) shares of Common Stock, par value $.001 per shareone hundred forty-two million, 15,904,829 nine hundred twenty-two thousand, eight hundred ten (142,922,810) shares of which are issued and outstanding as of January 12outstanding, 2001thirty million, and 1,987,729 five hundred seventy-seven thousand, five hundred (30,577,500) shares of which are currently reserved for issuance pursuant to outstanding option agreements, and seven hundred ninety-four thousand, four hundred sixty (794,460) shares of which will be reserved in the future for issuance to key employees, consultants and others affiliated with the Company pursuant to stock grant, stock purchase and/or option plans or any other stock incentive program, arrangement or agreement approved by the Company's Board of Directors and (b) one hundred fifty million (150,000,000) shares of Preferred Stock Option Plans, as amended and restated (the "Option PlanPreferred Stock"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 per share, 400 19,481,130 of which are designated Series A Convertible Participating Preferred Stock, all of which are issued and outstanding, and 15,877,249 of which are designated Series B Convertible Participating Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, (iii) are free of liens and encumbrances created by the Company and (civ) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationCertificate. Other than the 22,072,575 shares The Conversion Shares have been duly and validly reserved for issuance under in sufficient number for issuance upon full conversion of the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Shares. Except as may be granted pursuant to the Related Agreementsthis Agreement and except as set forth above, there are no outstanding options, warrants, puts, calls, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The securities or other restrictions on the incidents of ownership or transfer created by statute, the charter documents of the Company or any agreement to which the Company is not a party or subject to any agreement or understanding, by which it is bound. The Shares and the Conversion Shares have been duly authorized and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issuedissued (including, without limitation, issued in compliance with applicable state and federal securities laws), fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of laws as set forth herein or as otherwise required by such laws at the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions time transfer is wholly-ownedproposed.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of of: (i) 50,000,000 [16,000,000] shares of Common Stock, (par value $.001 0.001 per share), 15,904,829 [7,460,917] shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 [1,500,000] shares of which are reserved for future issuance to pursuant to the Company's Stock Option Plans, as amended employees and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, consultants; and (ii) 2,000,000 [6,477,500] shares of Preferred Stock, Stock (par value $.001 0.001 per share), 400 of which [3,352,500] are designated “Series A Preferred Stock, none of which are issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 ,” [3,352,500] of which are issued and outstanding and 700,000 shares [3,125,000] of which are designated “Series A Junior Participating B Preferred Stock, ,” none of which is presently are issued and outstanding. All issued and outstanding shares of the Company's Common Stock ’s capital stock (a) have been duly authorized and validly issued, (b) were, at the time of issuance, exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws, (c) are fully paid and nonassessablenonassessable and (d) are held of record by the persons, and (c) were in the amounts indicated on Exhibit F attached hereto. All issued and outstanding shares of the Company’s Common Stock are subject to a right of first refusal in compliance with all applicable state and federal laws concerning favor of the issuance of securitiesCompany upon certain proposed transfers, as more fully set forth in the Company’s bylaws. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate of DesignationRestated Charter. The Conversion Shares have been duly and validly reserved for issuance. Other than the 22,072,575 shares reserved for issuance under the Option Plansto employees and consultants, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, the Restated Charter or the by-laws of the Company, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Charter, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer set forth in the Company’s by-laws or under applicable state and/or federal securities lawslaws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The consummation Under the Company’s 2004 Equity Incentive Plan (the “Plan”), (a) [7,500] shares have been issued pursuant to restricted stock purchase agreements and/or the exercise of outstanding options, (b) options to purchase [881,000] shares have been granted and are currently outstanding (as listed on Exhibit F), and (c) [611,500] shares of Common Stock remain available for options to be granted in the future to officers, directors, employees and consultants of the transactions contemplated by this Agreement Company. All options granted and Common Stock issued vest as follows: (a) 12.5% of such stock shall vest at the Related Agreements will not result in end of the six months following the earlier of the date of issuance or such person’s services commencement date with the Company, and (b) 87.5% of such stock shall vest on a monthly basis over the 42 months thereafter. No stock plan, stock purchase, stock option or other agreement or understanding between the Company and any holder of any equity securities or rights to purchase equity securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of (a) termination of employment or consulting services (whether actual or constructive), (b) any outstanding options granted merger, consolidated sale of stock or assets, change in control or any other transaction(s) by the Company, or (c) the occurrence of any other event or combination of events. The Company has not made any representations regarding equity incentives to any officer, employee, director or consultant that are inconsistent with the share amounts and terms set forth in the Company’s board minutes. Each subsidiary outstanding series of Preferred Stock is convertible into Common Stock on a one-for-one basis as of the Company listed on date hereof and the Schedule consummation of Exceptions is whollythe transactions contemplated hereunder will not result in any anti-owneddilution adjustment or other similar adjustment to the outstanding shares of Preferred Stock. All outstanding shares of Common Stock and Preferred Stock, and all shares of Common Stock and Preferred Stock issuable upon the exercise or conversion of outstanding options, warrants or other exercisable or convertible securities are subject to a market standoff or “lockup” agreement of not less than 180 days following the Company’s initial public offering.

Capitalization; Voting Rights. The (a) As of the date hereof and before giving effect to the transactions contemplated by this Agreement, the authorized capital stock of the CompanyCompany consists of 950,000,000 shares, immediately prior to the Closing, will consist of (i) 50,000,000 which 500,000,000 are shares of Common Stock, par value $.001 0.001 per share, 15,904,829 859,202 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 1,267,399 shares of which are reserved for future issuance to employees pursuant to the Company's Stock Option Plans, Plans (as amended hereinafter defined) and restated (the "Option Plan"), 3,747,760 shares of which 450,000,000 are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 shares of Preferred Stock, par value $.001 0.001 per share, 400 ; 8,750,000 shares of which are designated Series A B Preferred Stock, 7,881,248 of which are issued and outstanding; 8,500,000 shares of which are designated Series C Preferred Stock, 6,270,527 of which are issued and outstanding; 3,000,000 of which are designated Series D Preferred Stock, of which 2,374,436 are issued and outstanding; 1,904,898 of which are designated Series E Preferred Stock, none of which are issued and outstanding, 225 ; 30,000,000 of which are designated Series B F Preferred Stock, none 23,596,492 of which are issued and outstanding, 500,000 ; 329,000,000 of which are designated Series C G Preferred Stock, none of which 223,638,432 are issued and outstanding; 6,579,000 shares of which are designated Series H Preferred Stock, 690,791 of which are issued and outstanding, 25,000 ; and 2,223,000 shares of which are designated Series D I Preferred Stock, 16,719.76 494,102 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock capital stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares Preferred Stock are as stated in the Certificate of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedCertificate.

Capitalization; Voting Rights. The authorized capital stock (a) As of April 1, 2002, the capitalization of the Company, immediately prior to Company consisted of the Closing, will consist of following: (i) 50,000,000 100,000,000 shares of Common Stock, par value $.001 0.01 per shareshare (the "Common Stock"), 15,904,829 (1) 15,907,486 shares of which are were issued and outstanding as of January 12------------ outstanding, 2001, and 1,987,729 (2) 2,466,037 shares of which are were reserved for future issuance to pursuant to under the Company's Stock Option Plans, as amended and restated Plans (the "Option Plan"), 3,747,760 shares of which 1,871,637 shares are reserved for issuance pursuant to outstanding stock options and 594,400 shares are reserved for issuance pursuant to stock options and other rights which may be granted in the future, (3) 1,224,369 shares of which were reserved for issuance upon conversion of the Restructured Notes referred to in Sections 7.1(l)(i) and 7.1(l)(iv) into shares of Common Stock in connection with the Restructuring, and (4) ________ shares were reserved for issuance upon conversion of the Restructured Notes referred to in Section 7.1(l)(ii) and upon exercise of warrants issued in connection with the Warrants restructuring of such notes (the amounts in the preceding clauses (3) and other warrants of the Company(4) being subject, and nevertheless, to Section 6.6 hereof); (ii) 2,000,000 20,000,000 shares of Preferred Stock, par value $.001 0.01 per share, 400 of which are designated Series A share (the "Preferred Stock"), none of which are issued and outstanding, 225 . All --------------- previously outstanding shares of which are Preferred Stock designated Series A Preferred Stock and Series B Preferred StockStock have been redeemed and retired, none and restored to the status of which are issued authorized, unissued and outstanding, 500,000 of which are designated Series C undesignated Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares Preferred Stock are as stated in the Restated Certificate and such other certificates of Designation. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except designations as may be granted pursuant have been delivered to Investors on or prior to the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of Designation, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owneddate hereof.

Capitalization; Voting Rights. The authorized capital stock of the CompanyCompany as of May 31, immediately prior to the Closing, will consist 2000 consists of seventy-five million (i75,000,000) 50,000,000 shares of Common Stock, Stock (par value $.001 per share), 15,904,829 shares of which are (i) 37,977,220 shares were issued and outstanding as of January 12, 2001, and 1,987,729 (ii) 6,141,409 shares of which are were reserved for future issuance to employees and non-employee directors pursuant to outstanding stock options issued pursuant to the Company's Stock Company Option Plans, Plans (as amended defined below) and restated (iii) 25,000 shares were reserved for future issuance pursuant to the "Option Plan"Outstanding Warrants (as defined below), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and two million (ii2,000,000) 2,000,000 shares of Preferred Stock, Stock (par value $.001 per share), 400 of which are designated Series A Preferred Stock, none of which are no shares have been issued. The Company has not issued and outstanding, 225 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 any shares of Series A Junior Participating Preferred Stockits capital stock between May 31, none 2000 and the date of which is presently outstandingthis Agreement, except pursuant to the exercise of options. All issued and outstanding shares of the Company's Common Stock Stock: (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, (c) were issued without violation of any preemptive or preferential right, and (cd) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are as stated in the Certificate Restated Certificate. The Company will reserve an adequate number of Designation. Other than the 22,072,575 shares reserved of Common Stock for issuance under upon conversion of the Option Plans, Preferred Shares and exercise of the Warrants, the Additional Warrants and any other outstanding warrants and except . Except as may be granted pursuant to the Related Agreements, stock awards and options to purchase shares of Common Stock granted pursuant to the Company's 1997 Equity Incentive Plan, 1999 Equity Incentive Plan and 1999 Non-Employee Directors' Stock Option Plan (the "Company Option Plans") issued pursuant to the 1999 Employee Stock Purchase Plan (the "Purchase Plan") and outstanding warrants to purchase shares of the Company's Common Stock (the "Outstanding Warrants"), there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securitiessecurities or the designation of any board member by any series of Preferred Stock or by holders of Common Stock. The Company is not a party has reserved 12,800,000 shares of Common Stock for issuance to employees, officers or subject to any agreement directors of, or understanding, and, consultants or advisors to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates Company pursuant to the voting or giving Company Option Plans, of written consents with respect which 3,677,766 remain available for future grant and has reserved 600,000 shares of Common Stock for issuance to any security or by a director employees pursuant to the Purchase Plan, of the Companywhich 516,033 shares remain available for future issuance. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Certificate, the Shares, the Warrant Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") Conversion Shares will be duly authorized, validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transferencumbrances; provided, however, that the Shares and the Conversion Shares may be subject to restrictions on transfer under applicable state and/or federal securities lawslaws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. The Except as contained in the Related Agreements and the Restated Certificate, or as set forth in Section 3.2 of the Schedule of Exceptions, the Company is not aware of any written agreement or other understandings relating to the voting of its securities. Except as expressly provided in this Agreement or the Related Agreements, (x) there are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any securities of the Company and (y) there are no other subscriptions, options, calls, warrants or other rights (including registration rights, whether demand or piggyback registration rights), agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company to which the Company or any of its subsidiaries is a party. Except as set forth in Section 3.2 of the Schedule of Exceptions, the consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in trigger the vesting anti-dilution provisions or other terms price or conversion adjustment mechanisms of any outstanding options granted by subscriptions, options, calls, warrants, commitments, contracts, preemptive rights, rights of first refusal, demands, conversion rights or other agreements or arrangements of any character or nature whatsoever under which the CompanyCompany is or may be obligated to issue or acquire shares of any of its capital stock. Each subsidiary The sale of the Company listed on Shares and the Schedule issuance of Exceptions the Conversion Shares in accordance with the terms of the Restated Certificate and the issuance of the Warrant Shares in accordance with the terms of the Warrants is wholly-ownednot and will not be subject to any preemptive rights, rights of first refusal, subscription or similar rights that have not been properly waived.

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist consists of (ia) 50,000,000 1,000,000,000 shares of Common Stock, par value $.001 0.01 per shareshare (the "Common Stock"), 15,904,829 695,971,046 shares of which were issued and outstanding on September 29, 2003, 341,014,782 shares of which are issued and outstanding as of January 12the date hereof reserved for issuance pursuant to outstanding option agreements, 2001warrants and other convertible securities, and 1,987,729 including 14,754,239 shares of which are reserved for future issuance to pursuant to as of the Company's Stock Option Plans, as amended and restated (the "Option Plan"), 3,747,760 shares of which are date hereof reserved for issuance upon exercise to key employees, consultants and others affiliated with the Company pursuant to stock grant, stock purchase and/or option plans or any other stock incentive program, arrangement or agreement approved by the Board of the Warrants and other warrants Directors of the Company, and (iib) 2,000,000 3,000,000 shares of Preferred Stock, par value $.001 0.01 per shareshare (the "Preferred Stock"), 400 250,000 of which are designated Series A Convertible PIK Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 225 590,000 shares of which are designated Series B Convertible Preferred Stock, 24,000 of which are issued and outstanding as of the date hereof, 105,000 shares of which are designated Series C Convertible Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 500,000 10 shares of which are designated Series C D Convertible Preferred Stock, none of which are issued and outstandingoutstanding as of the date hereof, 25,000 10 shares of which are designated Series D E Convertible Preferred Stock, 16,719.76 none of which are issued and outstanding and 700,000 as of the date hereof, 20,000 shares of which are designated Series A Junior Participating F Convertible Preferred Stock, none of which is presently outstandingare issued and outstanding as of the date hereof, and 100,000 shares of which are designated Series G Convertible Preferred Stock, 12,000 of which are issued and outstanding as of the date hereof. All issued and outstanding shares of the Company's Common Stock and Preferred Stock (ai) have been duly authorized and validly issued, (bii) are fully paid and nonassessable, and (ciii) were issued in compliance in all material respects with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares are will be as stated in the Certificate as of Designationthe Closing. Other than the 22,072,575 shares reserved for issuance under the Option Plans, the Warrants, the Additional Warrants and any other outstanding warrants and except Except as may be granted pursuant to this Agreement, except as set forth above, and except pursuant to the Related AgreementsLoan Agreement, dated December 30, 2002 (the "Loan Agreement"), between the Company, SOFTBANK, and Draper Fisher Jurvetson ePlanet Ventures L.P., Draper Fisher Jurvetsox xXxxnxx Xxxtners Fund, LLC and Draper Fisher Xxxxxxsxx xXxanet Ventures GmbH & Co. KG, there are no outstanding optionsxxxxxxnxxxx xptions, warrants, puts, calls, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or acquisition from from, sale to or exchange with the Company of or any of its securitiesSubsidiaries of any shares of any class or series of capital stock of the Company or any of its Subsidiaries or other restrictions on the incidents of ownership or transfer of any such shares of capital stock created by statute (other than Federal and state securities laws), the charter documents of the Company or any of its Subsidiaries or any agreement to which the Company or any of its Subsidiaries is a party, by which any of them is bound or of which any of them has knowledge. The Company is not a party or subject to any agreement or understanding, Shares have been duly authorized and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When when issued in compliance with the provisions of this Agreement and the Certificate of DesignationCertificate, the Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, nonassessable and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated Liens (other than Liens created by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-ownedPurchasers).

Capitalization; Voting Rights. The authorized capital stock of the Company, immediately prior to the Closing, will consist of (i) 50,000,000 52,000,000 shares, of which 27,000,000 shares of Common Stock, par value $.001 per share, 15,904,829 1,800,000 shares of which are issued and outstanding as of January 12, 2001, and 1,987,729 3,687,500 shares of which are reserved for future issuance to employees pursuant to the Company's Stock Option Plans, Plan (as amended hereinafter defined) and restated (the "Option Plan"), 3,747,760 shares of which are reserved for issuance upon exercise of the Warrants and other warrants of the Company, and (ii) 2,000,000 25,000,000 shares of Preferred Stock, par value $.001 per share, 400 2,968,750 of which are designated Series A Preferred Stock, none of which are issued and outstanding, 225 ; 8,125,000 of which are designated Series B Preferred Stock, none of which are issued and outstanding, 500,000 ; 8,050,000 shares of which are designated Series C Preferred Stock, none of which are issued and outstanding, 25,000 of which are designated Series D Preferred Stock, 16,719.76 of which are issued and outstanding and 700,000 shares of Series A Junior Participating Preferred Stock, none of which is presently outstanding. All issued and outstanding shares of the Company's Common Stock capital stock (a) have been duly authorized and validly issued, (b) are fully paid and nonassessable, and (c) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The rights, preferences, privileges and restrictions of the Shares Preferred Stock are as stated in the Certificate Restated Certificate. A copy of Designationthe Company's Stock Option Plan is attached hereto as Exhibit E (the "Stock Option Plan"). Other than the 22,072,575 3,687,500 shares reserved for issuance under the Stock Option Plans, Plan and the Existing Warrants, the Additional Warrants and any other outstanding warrants and except as may be granted pursuant to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. The Company is not a party or subject to any agreement or understanding, and, to the Company's knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. When issued in compliance with the provisions of this Agreement and the Certificate of DesignationRestated Certificate, the Series B Preferred Shares, the Series C Preferred Shares, and Common Shares and the Common Stock which may be issued upon exercise of the Warrants and the Additional Warrants (the "Warrant Shares") will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances and any restrictions on transfer; provided, however, that the Shares may be subject to restrictions on transfer under applicable state and/or federal securities laws. The consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in acceleration or other changes in the vesting provisions or other terms of any outstanding options granted by the Company. Each subsidiary of the Company listed on the Schedule of Exceptions is wholly-owned.and