Common use of Capitalization Clause in Contracts

Capitalization. The authorized capital stock of the Company consists solely of (a) 70,000,000 shares of Company Common Stock, of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of (ai) 70,000,000 500,000,000 shares of Company Common Stock, of which 50,199,874 167,031,898 shares are issued and outstanding on outstanding, no shares are reserved for issuance pursuant to securities (other than the date hereofNotes and the Warrants) exercisable for, 2,215,657 or convertible into or exchangeable for shares have been of Common Stock and 332,968,102 shares are reserved for issuance upon the conversion of the issued Notes and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms exercise of the Company ESP Plan, and none are held Warrants (subject to adjustment pursuant to the Company’s covenant set forth in the treasurySection 4(h) below); and (bii) 10,000,000 shares of Company Class A Preferred Stock, of which 3,000,000 are reserved for issuance as 187,500 shares of Series B Cumulative A Convertible Preferred Stock, of which 1,500,000 shares Stock are issued and outstanding on the date hereofoutstanding. All of the such outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issuedcapital stock are, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to upon issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as set forth abovedisclosed in Schedule 3(c), as of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act (except the Registration Rights Agreement) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, free the Warrants, the Conversion Shares or Warrant Shares. The Company has furnished to the Buyer true and clear correct copies of the Company’s Articles of Incorporation as in effect on the date hereof (“Articles of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “Bylaws”), and the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive or Chief Financial Officer on behalf of the Company as of the Closing Date.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of (ai) 70,000,000 50,000,000 shares of Company Common Stock, of which 50,199,874 33,960,150 shares are issued and outstanding on outstanding, -0- shares are reserved for issuance pursuant to the Company’s stock option plans, -0- shares are reserved for issuance pursuant to securities (other than the Notes and the Warrants) exercisable for, or convertible into or exchangeable for shares of Common Stock and, upon the increase in the number of authorized shares of the Company’s Common Stock to 750,000,000 shares within thirty (30) days from the date hereof, 2,215,657 hereof 300,000,000 shares have been shall be reserved for issuance upon the conversion of the issued Notes and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms exercise of the Company ESP Plan, and none are held Warrants (subject to adjustment pursuant to the Company’s covenant set forth in the treasurySection 4(h) below); and (bii) 10,000,000 5,000,000 shares of Company Preferred Stock, preferred stock of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 no shares are issued and outstanding on the date hereofoutstanding. All of the such outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issuedcapital stock are, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to upon issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenonassessable upon the increase in the number of authorized shares of the Company’s Common Stock to 750,000,000 shares within thirty (30) days from the date hereof. Other than No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as set forth abovedisclosed in Schedule 3(c), as of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act (except the Registration Rights Agreement) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, free the Warrants, the Conversion Shares or Warrant Shares. The Company has furnished to the Buyer true and clear correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive or Chief Financial Officer on behalf of the Company as of the Closing Date.

Capitalization. The authorized capital stock of the Company consists solely of (a) 70,000,000 51,000,000 shares of Company Common Stock, of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 725,729 shares have been reserved for issuance upon the conversion issued and are outstanding as of the issued and outstanding shares date of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Planthis Agreement, and none are held in the treasury; and (b) 10,000,000 36,505,724 shares of Company Preferred Stock, of which 3,000,000 which: (i) 752 shares are reserved for issuance designated as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 751 shares have been issued and are outstanding as of the date of this Agreement; (ii) 4,972 shares are designated as Series D Preferred Stock, of which 4,970 shares have been issued and are outstanding on as of the date hereofof this Agreement; and (iii) 36,500,000 shares are designated as Series E Preferred Stock, of which 23,141,927 shares have been issued and are outstanding as of the date of this Agreement. The outstanding shares of Company Capital Stock have been duly authorized and validly issued, and are fully paid and nonassessable. As of the date of this Agreement, all of the outstanding shares of Company Capital Stock are held by the Persons, with the addresses of record and in the amounts set forth in Part 2.3(a) of the Disclosure Schedule. The Company holds no repurchase options except pursuant to the terms of the Company 2000 Stock Option Plan. All of the stock of the Subsidiaries owned by the Company is owned by the Company free and clear of any Encumbrance. The outstanding shares of the Subsidiaries have been duly authorized and validly issued and are fully paid and nonassessable, have been issued in compliance with all applicable Legal Requirements, including securities laws, and were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities of such Subsidiaries. There are no options, warrants or other rights outstanding to subscribe for or purchase any shares of the capital stock of the Subsidiaries and the Subsidiaries are not subject to any Contract or court or administrative order under which either of the Subsidiaries is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities. There are no preemptive rights applicable to any shares of capital of any of the Subsidiaries. The Subsidiaries do not have the right to vote on or approve the Merger or any of the other transactions contemplated by this Agreement. The Company has reserved 8,088,985 shares of Company Common Stock for issuance under its 1996 Stock Option Plan, of which options to purchase 7,063,956 shares are outstanding as of the date of this Agreement, and 67,266 shares of Company Common Stock for issuance under its 2000 Stock Option Plan, of which options to purchase 63,726 shares are outstanding as of the date of this Agreement. Part 2.3(c) of the Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the Company Option Plan under which it was granted; and (iv) the exercise price per share of Company Common Stock purchasable under such Company Option. Part 2.3(d) of the Disclosure Schedule accurately sets forth, with respect to each warrant to purchase shares of capital stock of the Company that is outstanding as of the date of this Agreement: (i) the name of the holder of such warrant; (ii) the total number of shares of Company Capital Stock that are subject to such warrant and the number of shares of Company Capital Stock with respect to which such warrant is immediately exercisable; (iii) the date on which such warrant was issued and the term of such warrant; (iv) the vesting schedule for such warrant; and (v) the exercise price per share of Company Capital Stock purchasable under such warrant. The Company has delivered to Parent accurate and complete copies of each Contract pursuant to which any warrant to purchase shares of capital stock of the Company is outstanding. Except as set forth in Parts 2.3(c), 2.3(d) and 2.3(e) of the Disclosure Schedule, there is no: (i) outstanding subscription, option, call, convertible note, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of the Company; (iii) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities; or (iv) to the best of the knowledge of the Company, condition or circumstance that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities of the Company. All outstanding shares of Company Capital Stock and all outstanding Company Options, have been issued and granted in compliance with: (i) all applicable securities laws and other applicable Legal Requirements; and (ii) all requirements set forth in all applicable Contracts. None of the outstanding shares of Company Common Stock and all were issued in violation of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any or other statutory rights to subscribe for or contractual rights of any stockholders purchase securities of the Company. All shares of Company Common Stock subject to issuance upon exercise Part 2.3(f) of the outstanding Options described above will beDisclosure Schedule accurately identifies each Acquired Corporation Contract relating to any securities of any of the Acquired Corporations that contains any information rights, upon issuance on registration rights, financial statement requirements or other terms that would survive the terms and conditions specified in Closing unless terminated or amended prior to the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessableClosing. Other than Except as set forth abovein Part 2.3(g) of the Disclosure Schedule, there are no subscriptionsnone of the Acquired Corporations has ever repurchased, options, warrants, convertible securities redeemed or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue otherwise reacquired any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Lienssecurities.

Capitalization. (i) The authorized capital stock of the Company consists solely of an unlimited number of Company Shares. As at February 24, 2023, there were: (aA) 70,000,000 180,402,860 Company Shares issued and outstanding; (B) 8,312,000 Company Options outstanding providing for the issuance of an aggregate of 8,312,000 Company Shares upon the exercise thereof; (C) 2,396,789 Company RSUs outstanding providing for the issuance of an aggregate of 2,396,789 Company Shares upon settlement thereof; and (D) 24,644,814 Company Warrants outstanding providing for the issuance of an aggregate of 24,644,814 Company Shares upon exercise thereof. All outstanding Company Shares have been, and all Company Shares issuable upon the exercise or settlement of the Company Options, the Company RSUs and the Company Warrants in accordance with their terms have been duly authorized and, upon issuance, will be, validly issued as fully paid and non-assessable shares of the Company Common Stockand are not and will not be, as applicable, subject to or issued in violation of, any pre-emptive rights. (ii) Section 3.1(f) of which 50,199,874 shares are issued and outstanding on the Company Disclosure Letter sets forth a schedule, as of the date hereof, 2,215,657 shares have been reserved for issuance upon of all outstanding Company Options, Company RSUs and Company Warrants and, as applicable, the conversion number, exercise price, date of grant, expiration date, vesting schedule thereof, and the names of the issued and outstanding shares holders of such Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms securities. Except as set out in Section 3.1(f) of the Company ESP PlanDisclosure Letter, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company has no other outstanding agreement, subscription, warrant, option, right or transferredcommitment or other right or privilege (whether by law, have been so purchased pre-emptive or transferredcontractual), in compliance with nor has it granted any preemptive rights and right or privilege capable of becoming an agreement, subscription, warrant, option, right or commitment, obligating it to issue or sell any Company Shares or other statutory equity or contractual rights voting securities, including any security or obligation of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities kind convertible into or exchangeable or exercisable for its capital stock (any Company Shares or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the other equity or net income voting security of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there Company. (iii) There are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital any Company Shares. (iv) Other than pursuant to the Company Equity Incentive Plans, the Company does not have any share or stock (appreciation right, phantom equity, restricted share unit, deferred share unit or ownership interests) similar right, agreement, arrangement or to provide funds tocommitment based on the book value, or make any investment (in the form of a loanCompany Share price, capital contribution or otherwise) in, any Subsidiary income or any other Person. Schedule 4.5 attribute of or related to the Company. (v) The Company Shares are listed and posted for trading on the TSXV and, except for such listing and trading, no securities of the Disclosure Schedule sets forth Company are listed or quoted for trading on any other stock or securities exchange or market or registered under any securities Laws. (ivi) the number and exercise price No holder of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) securities issued by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, of its subsidiaries has any right to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of compel the Company or any Subsidiary. Each outstanding share of capital stock (its subsidiaries to register or ownership interests) of each Subsidiary is duly authorizedotherwise qualify securities for public sale in Canada, validly issued, fully paid and nonassessable, and is owned by the Company United States or another Subsidiary, free and clear of all Liens other than Permitted Lienselsewhere.

Capitalization. The (a) As of the close of business on January 9, 2026, the authorized capital stock of the Company consists solely of (ai) 70,000,000 995,000,000 shares of Company Common Stock, of which 50,199,874 shares are there were 53,453,882 issued and outstanding on and (ii) 5,000,000 shares of Company Preferred Stock, par value $0.01 per share (the “Company Preferred Stock”), of which no shares were issued and outstanding. As of the date hereofof this Agreement, 2,215,657 there were 7,817,027 shares of Company Common Stock held by the Company in its treasury. All of the outstanding Shares have been duly authorized and validly issued and are fully paid, non-assessable and free of preemptive rights. (b) As of the close of business on January 9, 2026, the Company has no shares of Company Common Stock, or Company Preferred Stock reserved for or otherwise subject to issuance, except for (i) 2,311,399 shares of Company Common Stock reserved for issuance upon exercise of outstanding Company Options, (ii) 922,362 shares of Company Common Stock reserved for issuance pursuant to outstanding Company RSU Awards, (iii) 515,038 shares of Company Common Stock reserved for issuance pursuant to outstanding Company PRSU Awards (which represents 125% of the target number of Company PRSU Awards outstanding) and (iv) 9,482,606 shares of Company Common Stock reserved for issuance pursuant to outstanding Company Warrants. (c) Except as described in Section 3.2(b), there are no options, warrants, calls, conversion rights, stock appreciation rights, “phantom” stock rights, performance units, interests in or rights to the ownership or earnings of the Company or any other equity equivalent or equity-based award or right, redemption rights, repurchase rights or other preemptive or outstanding rights, agreements, arrangements or commitments of any character obligating the Company to issue, acquire or sell any shares of Company Common Stock or other Equity Interests of the Company or any securities obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company, and no securities or obligations evidencing such rights are authorized, issued or outstanding. (d) There are no outstanding contractual obligations of any member of the Company Group (i) affecting the voting rights of, (ii) requiring the repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (iii) requiring the registration for sale of, (iv) granting any preemptive or antidilutive rights with respect to, or (v) restricting the transfer of, any shares of Company Common Stock or other Equity Interests in any member of the Company Group. (e) There is no Indebtedness of any member of the Company Group providing any holder thereof with the right to vote (or convertible into, or exchangeable for, Equity Interests providing the holder thereof with the right to vote) on any matters on which the holders of the Company Common Stock or any holder of Equity Interests in any member of the Company Group may vote. (f) The Company or another member of the Company Group owns, directly or indirectly, all of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms capital stock or other Equity Interests of each of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All Subsidiaries of the outstanding shares Company, free and clear of Company Common Stock any Liens (other than restrictions imposed by applicable securities Laws or the organizational documents of any such Subsidiary or Permitted Liens), and all of the outstanding such shares of Company Preferred Stock capital stock or other Equity Interests have been duly authorized and validly issued and are validly issuedfully paid, fully paid and nonassessable and free of preemptive rights. All , in each case, in all material respects, and no Subsidiary of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with owns any preemptive rights and any other statutory or contractual rights of any stockholders Shares of the Company. All shares of Company Common Stock subject to issuance upon exercise of Except for the outstanding Options described above will be, upon issuance on the terms and conditions specified Equity Interests in the instruments pursuant to which they are issuableCompany’s Subsidiaries, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which neither the Company or nor any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or Subsidiaries owns any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give Equity Interests in any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of Person. Neither the Company or nor any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (Subsidiaries is obligated to form or ownership interests) or to participate in, provide funds to, to or make any investment (in the form of a loan, capital contribution contribution, guarantee, credit enhancement or otherwise) other investment in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.

Capitalization. (a) The authorized capital stock of the Company SPAC consists solely of (ai) 70,000,000 60,000,000 shares of Company Class A Common Stock, (ii) 10,000,000 shares of which 50,199,874 Class B Common Stock, and (iii) 1,000,000 shares of preferred stock, in each case, par value $0.0001 per share. As of the date of this Agreement, (A) 18,385,000 shares of Class A Common Stock and 4,596,250 shares of Class B Common Stock are issued and outstanding on the date hereof(which includes 17,500,000 shares subject to Redemption Rights), 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, all of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable non-assessable, and free of preemptive rights. All of the issued (B) no shares of Company SPAC Common Stock are held in the treasury of SPAC. (b) Except for this Agreement, the Ancillary Documents or the transactions contemplated hereby and all of the issued shares of Company Preferred Stock were issuedthereby, and or as mutually agreed to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth aboveParties, there are no subscriptionsoutstanding (i) equity appreciation, phantom equity or profit participation rights, or (ii) options, restricted stock, phantom stock, warrants, convertible securities purchase rights, subscription rights, conversion rights, exchange rights, calls, puts, rights of first refusal or first offer or other agreements Contracts that would require SPAC, and, except as expressly contemplated by this Agreement, the Ancillary Documents or commitments (contingent as mutually agreed in writing by the Parties, there is no obligation of SPAC, to issue, sell or otherwise) pursuant otherwise cause to which the Company become outstanding or to acquire, repurchase or redeem any Subsidiary is required to issue any shares of its capital stock (Equity Securities or ownership interests) or any securities convertible into or exchangeable for its capital stock (Equity Securities of SPAC. There are no voting trusts, proxies or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing other Contracts with respect to the holders voting or transfer of shares SPAC Equity Securities to which SPAC, the Sponsor or, to SPAC’s knowledge, any other Person is a party. (c) The Equity Securities of capital stock (or ownership interests) Merger Sub outstanding as of the Company or any Subsidiary or any rights to participate in the equity or net income date of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth this Agreement (i) the number have been duly authorized and exercise price of all outstanding Options validly issued and are fully paid and non-assessable, (ii) the aggregate number of participants inwere issued in compliance in all material respects with applicable Law, and the aggregate amount contributed (and iii) were not otherwise withdrawn) by such participants to, the Company ESP Plan issued in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as breach or violation of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts any preemptive rights or other agreements or understandings Contract to which the Company or any Subsidiary SPAC is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock bound. All of the Company or any Subsidiary. Each outstanding share Equity Securities of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is Merger Sub are owned directly by the Company or another Subsidiary, SPAC free and clear of all Liens (other than Permitted Lienstransfer restrictions under applicable Securities Laws). As of the date of this Agreement, SPAC has no Subsidiaries other than Merger Sub and does not own, directly or indirectly, any Equity Securities in any Person other than Merger Sub. (d) Section 4.6(d) of the SPAC Disclosure Schedules sets forth a list of all Indebtedness of SPAC as of the date of this Agreement, including the principal amount of such Indebtedness, the outstanding balance as of the date of this Agreement and the debtor and the creditor thereof.

Capitalization. (a) The authorized capital stock of the Company ▇▇▇▇▇▇▇ consists solely of (a) 70,000,000 14,000,000 shares of Company ▇▇▇▇▇▇▇ Common Stock, of which 50,199,874 8,108,472 shares are issued were outstanding (net of 394,424 treasury shares) at September 30, 1996 and 3,000,000 shares of serial preferred stock, par value $.01 per share ("▇▇▇▇▇▇▇ Preferred Stock"), of which 150,869 shares of Series B Cumulative Convertible Preferred Stock (the "Series B Stock") were outstanding on the date hereofat September 30, 2,215,657 1996. At such date, there were options outstanding to purchase 596,940 shares have been reserved for issuance upon the conversion of ▇▇▇▇▇▇▇ Common Stock. All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company ▇▇▇▇▇▇▇ Common Stock and all of the outstanding shares of Company Preferred Series B Stock have been duly authorized and validly issued and are validly issuedfully paid, fully paid and nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. All As of the issued shares date of Company Common Stock and all of the issued shares of Company Preferred Stock were issuedthis Agreement, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than except as set forth above, there are no ▇▇▇▇▇▇▇ does not have and is not bound by any outstanding subscriptions, options, warrants, convertible securities calls, commitments or other agreements of any character calling for the purchase or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue issuance of any shares of its capital stock (▇▇▇▇▇▇▇ Common Stock or ownership interests) ▇▇▇▇▇▇▇ Preferred Stock or any other equity securities of ▇▇▇▇▇▇▇ or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person presenting the right to purchase or otherwise receive any benefits shares of ▇▇▇▇▇▇▇ Common Stock or rights similar ▇▇▇▇▇▇▇ Preferred Stock, other than a warrant to any rights enjoyed purchase 300,000 shares of ▇▇▇▇▇▇▇ Common Stock issued to Fleet Financial Group and a contingent payment arrangement with Fleet Financial Group as described in the Form 8-K filed by or accruing ▇▇▇▇▇▇▇ with the Securities and Exchange Commission for such event. The shares of ▇▇▇▇▇▇▇ Common Stock to be issued pursuant to the holders of Merger are authorized and, at the Effective Time, all such shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, will be validly issued, fully paid paid, nonassessable and nonassessablefree of preemptive rights, with no personal liability attaching to the ownership thereof. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, all of which are issued and is outstanding and owned by the Company or another Subsidiary, ▇▇▇▇▇▇▇ free and clear of all Liens other than Permitted Liensliens, charges, encumbrances and security interests whatsoever, and all of such shares are duly authorized and validly issued and fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to ownership thereof. (c) The authorized capital stock of ▇▇▇▇▇▇▇ Bank consists of 1,000 shares of common stock, par value $.01 per share, all of which are issued and outstanding. The outstanding shares of common stock of ▇▇▇▇▇▇▇ Bank are owned by ▇▇▇▇▇▇▇ free and clear of all liens, charges, encumbrances and security interests whatsoever, and all of such shares are duly authorized and validly issued and fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to ownership thereof.

Capitalization. The uKarma’s authorized capital stock consists of the Company consists solely of (a) 70,000,000 120,000,000 shares of Company capital stock (but will be increased to 250,000,000 shares at Closing), including 100,000,000 of which is designated as Common Stock, par value $0.001 (which will be increased to 200,000,000 shares at Closing), of which 50,199,874 52,791,982 shares are issued and outstanding on the as of this date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the (and 4,747,095 will be issued and outstanding as of the Closing Date, subject to slight adjustment for additional shares due to rounding) and 20,000,000 of which is designated as Preferred Stock (which will be increased to 50,000,000 designated shares of Company Preferred StockStock at Closing), 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stockpar value $0.001, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 no shares are issued and outstanding on the date hereofoutstanding. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly When issued, fully paid uKarma Shares and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above securities into which uKarma Shares can be converted into will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, be duly authorized, validly issued, fully paid paid, non-assessable and nonassessablefree of preemptive rights. Other than Except as set forth abovein SEC Documents, (a) there are no subscriptionsoutstanding or authorized options, optionsrights, warrants, calls, convertible securities securities, rights to subscribe, conversion rights or other agreements or commitments (contingent or otherwise) pursuant to which uKarma is a party or which are binding upon uKarma providing for the Company issuance by uKarma or any Subsidiary is required to issue transfer by uKarma of additional shares of uKarma’s capital stock and uKarma has not reserved any shares of its capital stock (for issuance, nor are there any outstanding stock option rights, phantom equity or ownership interests) similar rights, contracts, arrangements or any securities convertible into or exchangeable for its commitments to issue capital stock of uKarma; (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interestsb) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual voting trusts or any other agreements or understandings with respect to the voting of uKarma’s capital stock; (c) here are no obligations of the Company or any Subsidiary uKarma to repurchase, redeem or otherwise acquire require any shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 as of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options Closing and (iid) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreementsobligations of uKarma to register any shares of its outstanding common stock, voting trusts or other agreements shares of common stock issuable upon exercise or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting conversion of any capital stock of the Company outstanding securities, either on demand, piggybacked on other registrations, or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liensotherwise.

Capitalization. (a) The authorized capital stock of the Company Seller consists solely of (a) 70,000,000 50,000,000 shares of Company Common Stock, par value $0.0001 per share, (b) 1,000 shares of which 50,199,874 Non-Voting Common Stock, par value $0.0001 per share, and (c) 5,000,000 shares are issued and outstanding on of Preferred Stock, par value $0.0001 per share. As of the date hereof, 2,215,657 (i) 19,525,749 shares have been of Common Stock are issued and outstanding, all of which are validly issued, fully paid and nonassessable, (ii) 6,575,053 shares of Common Stock are reserved for issuance upon pursuant to employee stock options granted pursuant to the conversion Stock Option Plan, no shares of Non-Voting Common Stock are outstanding and (iv) no shares of Preferred Stock are outstanding. None of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all was issued in violation of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of any preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than Except as set forth abovein Section 3.03(a) of the Disclosure Schedule and the Stock Option Plan and the stock options issued thereunder, the Shares and the Warrants, there are no subscriptions, options, warrants, convertible securities or other agreements rights, agreements, arrangements or commitments (contingent or otherwise) pursuant of any character relating to which the Company or any Subsidiary is required to issue any shares of its capital stock (Common Stock or ownership interests) obligating the Seller to issue or sell any shares of Common Stock, or any securities convertible into or exchangeable for its capital stock (or ownership interests)other interest in, or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any SubsidiarySeller. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no outstanding contractual obligations of the Company or any Subsidiary Seller to repurchase, redeem or otherwise acquire any shares of its capital stock (or ownership interests) Common Stock or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no stockholders’ voting trusts, stockholder agreements, voting trusts proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Common Stock to which the Company or Seller, any Subsidiary is a party or by which it is bound or, to the Company’s KnowledgeSeller's knowledge, between or among stockholders, in each case with respect to any other Person is a party. (b) All the transfer or voting outstanding shares of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary that is duly authorized, a corporation are validly issued, fully paid paid, nonassessable and nonassessable, free of preemptive rights and is are owned by the Company Seller, whether directly or another Subsidiaryindirectly, free and clear of all Liens Encumbrances. There are no options, warrants, convertible securities or other than Permitted Liensrights, agreements, arrangements or commitments of any character relating to the capital stock of any Subsidiary or obligating the Seller or any Subsidiary to issue or sell any shares of capital stock of, or any other interest in, any Subsidiary. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any shares of capital stock of or any other interests in any Subsidiary to which the Seller, any Subsidiary or, to the Seller's knowledge, any other Person is a party. (c) Except as set forth in Section 3.03(c) of the Disclosure Schedule, the stock register of each Subsidiary accurately records: (i) the name and address of each Person owning shares of capital stock of such Subsidiary and (ii) the certificate number of each certificate evidencing shares of capital stock issued by such Subsidiary, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization. (a) The authorized capital stock of the Company consists solely of (ai) 70,000,000 200,000,000 shares of Company common stock, par value $1.00 per share (the “Common Stock”), and (ii) 25,000,000 shares of which 50,199,874 preferred stock, par value $1.00 per share (the “Preferred Stock”). As of August 27, 2011, (A) 108,837,406 shares are of Common Stock were issued and outstanding on outstanding, (B) no shares of Preferred Stock were issued and outstanding, (C) 14,767,938 shares of Common Stock were issued and held in the date hereoftreasury of the Company, 2,215,657 (D) 11,249,329 shares have been of Common Stock were reserved for issuance pursuant to the Company Equity Plan, including shares of Common Stock reserved for issuance upon the conversion exercise of the issued Company Options or vesting of Restricted Shares or other Company Equity Awards, and outstanding (E) 2,200,000 shares of Company Series B Junior Participating Preferred Stock, 6,633,543 shares have been Stock were reserved for issuance under pursuant to the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereofRights Agreement. All of the outstanding shares of Company Common Stock the Company’s capital stock are, and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the Shares which may be issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and pursuant to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Company Options described above or vesting of Restricted Shares or other Company Equity Awards will be, upon issuance on when issued in accordance with the terms and conditions specified in the instruments pursuant to which they are issuablethereof, duly authorized, validly issued, fully paid and nonassessablenon-assessable and are free of preemptive rights. Other than as set forth aboveThere are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) (“Voting Debt”) of the Company or any Company Subsidiary issued and outstanding. (b) Except for the Company Equity Awards and the Rights, there are no subscriptions(i) securities of the Company convertible into or exercisable or exchangeable for shares of capital stock of or other voting or equity interests in the Company, (ii) options, warrants, calls, pre-emptive rights, subscriptions or other rights, agreements, arrangements or commitments of any kind, relating to the issued or unissued capital stock of the Company, obligating the Company or any Company Subsidiary to (A) issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or Voting Debt of, or other equity interest in, the Company or securities convertible securities into or exchangeable for such shares or equity interests, (B) grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment (collectively, “Equity Interests”) or (C) repurchase, redeem or otherwise acquire any Shares or any capital stock of, or other Equity Interests in, the Company, or (iii) obligations (excluding Taxes and other fees) of the Company or any of its Subsidiaries to make any payments based on the market price or value of the Shares. (c) Schedule 3.2(c) of the Company Disclosure Letter sets forth a listing of all outstanding Company Equity Awards as of August 27, 2011. (d) There are no voting trusts, proxies or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Company Subsidiary is required a party with respect to issue the voting of the Company’s Common Stock or any shares capital stock of, or other Equity Interest, of the Company. The Company has not granted any preemptive rights, anti-dilutive rights or rights of first refusal or similar rights with respect to any of its capital stock or other Equity Interests. (e) The Company or ownership interestsanother Company Subsidiary owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other Equity Interests of each of the Company Subsidiaries, free and clear of any Liens (other than transfer and other restrictions under applicable federal and state securities Laws), and all of such shares of capital stock or other Equity Interests have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. There are no outstanding (i) securities of the Company or any of its Subsidiaries convertible into or exercisable or exchangeable for shares of capital stock of or other voting or equity interests in any Subsidiary of the Company, (ii) options or other rights or agreements, commitments or understandings of any kind to acquire from the Company or any of its Subsidiaries, or other obligation of the Company or any of its Subsidiaries to issue, transfer or sell, any shares of capital stock of or other voting or equity interests in any Subsidiary of the Company or securities convertible into or exercisable or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock of or other voting or equity interests in any Subsidiary of the Company, (iii) obligations of the Company or any of its Subsidiaries to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock, voting securities or other ownership interestsinterests in any Subsidiary of the Company (the items in clauses (i), (ii) and (iii), together with the capital stock of such Subsidiaries, being referred to collectively as the “Subsidiary Securities”) or (iv) obligations (excluding Taxes and other fees) of the Company or any of its Subsidiaries to make any payment based on the value of any shares of any Subsidiary or any rights to participate in the equity or net income of the Company or any SubsidiaryCompany. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any Subsidiary Securities. (f) Neither the Company nor any of the Company Subsidiaries owns any shares of its capital stock of or other voting or equity interests in (including any securities exercisable or ownership interestsexchangeable for or convertible into shares of capital stock of or other voting or equity interests in) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 Person that is not a Company Subsidiary where the ownership interest in such Person has a book value in excess of the Disclosure Schedule sets forth $1,000,000. (ig) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no stockholders’ agreements, voting trusts contractual obligations or other agreements or understandings commitments of any character to which the Company or any Company Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to restricting the transfer of, or voting requiring the registration for sale of, any shares of any capital stock of or other voting or equity interests in the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liensits Subsidiaries.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 authorized shares of Company Common Stock, $ par value per share, of which 50,199,874 shares are issued and outstanding on outstanding; and (ii) Series A preferred stock - $.001 par value; 200,000,000 shares authorized; 474,000 shares issued and outstanding; and (iii) Series B preferred stock - $.00001 par value; 10 shares authorized; 1 share issued and outstanding; and (iv) Series C preferred stock - $.00001 par value; 50,000,000 shares authorized; 2,406,191 shares issued and outstanding; (v) Series D preferred stock - $.00001 par value; 10,000,000 shares authorized; no shares issued and outstanding; no shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of (a) 70,000,000 150,000,000 shares of Company Common Stock, of which 50,199,874 74,162,895 shares are issued and outstanding on outstanding, 9,300,000 shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 and, 66,537,105 shares have been are reserved for issuance upon the conversion of the issued Notes and exercise of the Warrants (subject to adjustment pursuant to the Company’s covenant set forth in Section 4(h) below). All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as set forth abovedisclosed in Schedule 3(c), as of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act (except the Registration Rights Agreement) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, free the Warrants, the Conversion Shares or Warrant Shares. The Company has furnished to the Buyer true and clear correct copies of the Company’s Articles of Incorporation as in effect on the date hereof (“Articles of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive or Chief Financial Officer on behalf of the Company as of the Closing Date.

Capitalization. (a) The entire authorized capital stock of the Company consists solely of (a) 70,000,000 2,500,000 shares of Company Common Stock, of which 50,199,874 shares 1,499,912.94290 are issued and outstanding on the date hereofoutstanding, 2,215,657 shares have been reserved for issuance upon the conversion 3,712.01120 of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been which are reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms Company’s Equity Incentive Plan and 3,487.48880 of the Company ESP Plan, and none which are held in the treasury; . The record and (b) 10,000,000 shares beneficial owners of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all the number of the issued shares held by each such holder are set forth in Schedule 5.4(a). (b) All outstanding shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than non-assessable, were issued in compliance with applicable securities Laws or exemptions therefrom and, except as set forth abovein Schedule 5.4(b), are not subject to and were not issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the certificate of incorporation or by-laws of the Company or any Contract to which the Company is a party or otherwise bound. (c) Except as set forth above and in Schedule 5.4(c), there are no subscriptions, not any options, warrants, rights, convertible securities or other agreements exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or commitments (contingent or otherwise) pursuant undertakings of any kind to which the Company or any Subsidiary is required to issue any shares of its capital stock (Subsidiaries is a party or ownership interests) by which any of them is bound obligating the Company or any securities convertible into of its Subsidiaries to issue, deliver or exchangeable for its capital stock (or ownership interests)sell, or is otherwise required cause to give any Person the right to receive any benefits be issued, delivered or rights similar to any rights enjoyed by or accruing to the holders of sold, additional shares of capital stock (or ownership interests) other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or of any of its Subsidiaries. Except for the Equity Incentive Plan, since September 7, 2012, the Company or any Subsidiary of its Subsidiaries have not adopted, sponsored or maintained any stock option plan or any rights to participate in the other plan or Contract providing for equity or net income equity-based compensation to any Person. Each Restricted Share was granted under the Interline Brands, Inc. Amended and Restated 2012 Stock Options Plan and each Option has an exercise price that equals or exceeds the fair market value of a share of Common Stock as of the Company or date of grant of such Option (and as of any Subsidiary. Except as set forth on Schedule 4.5 later modification thereof within the meaning of Section 409A of the Disclosure ScheduleCode) within the meaning of Section 422 of the Code. Schedule 5.4(c) sets forth (A) with respect to each Option, there (i) the holder’s employee identification number, (ii) the number of shares of Common Stock subject to such Option, (iii) the exercise price per share of such Option, and (B) with respect to each Restricted Share, (i) the holder’s employee identification number, (ii) to the Knowledge of the Company, whether the holder of the Restricted Share made an election under Section 83(b) of the Code with respect to such Restricted Share and (iii) the number of shares of Common Stock subject to such Restricted Share. (d) There are no not any outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries. (e) None of the Company nor any of its Subsidiaries is a party to and, to the Knowledge of the Company, there will not be, whether or not the Company or any of its Subsidiaries is a party thereto, any Contract, right of first refusal, right of first offer, proxy, voting agreement, voting trust, registration rights agreement or stockholders agreement with respect to the purchase, sale or voting of any shares of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiaryany of its Subsidiaries or any securities convertible into or exchangeable or exercisable for any shares of capital stock of the Company or any of its Subsidiaries, free and clear of all Liens other than Permitted Liensthis Agreement and except as set forth on Schedule 5.4(e).

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 500,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 29,530,000 shares are issued and outstanding on outstanding; and (ii) 5,000,000 shares of Preferred Stock, $0.001 par value per share, of which no shares are issued and outstanding; no shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Note and two (2) prior convertible promissory note in favor of the Buyer: (a) prior convertible promissory note in favor of the Buyer dated September 22, 2011 in the amount of $42,500.00 for which 8,585,859 shares of Common Stock are presently reserved and (b) prior convertible promissory note in favor of the Buyer dated November 17, 2011 in the amount of $32,500.00 for which 10,750,000 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 186,300,000 shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The authorized capital stock of the Company consists solely of (a) 70,000,000 100,000,000 shares of Company Common Stock, Stock and (b) 10,000,000 shares of which 50,199,874 shares are issued and outstanding on preferred stock. As of the date hereof, 2,215,657 of the 100,000,000 shares of Common Stock authorized, (i) 18,054,262 shares of Common Stock are issued and outstanding, (ii) 6,378,443 shares are reserved for issuance pursuant to outstanding options and warrants and existing employee stock plans, (iii) 19,369,873 shares are reserved for issuance upon conversion of the shares of Series C preferred stock and (iv) 36,560,937 shares are reserved for issuance upon exercise of the Warrants. As of the date hereof, of the 10,000,000 shares of preferred stock authorized, (i) 1,000,000 shares have been designated Series A preferred stock, none of which will be issued or outstanding but all of which have been reserved for issuance upon the conversion exercise of rights under the issued and outstanding shares of Company Preferred Stock, 6,633,543 Rights Agreement (ii) 726,371 shares have been reserved for issuance under the Company Option Plansdesignated Series B preferred stock, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding and (iii) 726,371 shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized designated Series C preferred stock, 726,371 of which are issued and are validly issued, fully paid and nonassessable and free outstanding. Each share of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each that is issued and outstanding has been and each share of capital stock (of the Company issuable upon exercise of Options or ownership interests) warrants or upon conversion of each Subsidiary is the preferred stock of the Company will be when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable, and is owned not subject to nor issued in violation of, any preemptive rights. Except for the Warrants and as set forth on Section 4.05 of the Company Disclosure Letter, there are (a) no outstanding or authorized options, warrants, agreements, conversion rights, preemptive rights, other rights, subscriptions, claims of any character, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to shares of capital stock of the Company or pursuant to which the Company is or may become obligated to issue shares of its capital stock or any securities convertible into, exchangeable for, or evidencing the right to subscribe for, purchase or acquire, any shares of the capital stock of the Company, (b) no restrictions upon the dividends, voting or transfer of any shares of capital stock of the Company pursuant to its Certificate of Incorporation, Bylaws or other governing documents or any agreement or other instruments (other than pursuant to agreements with Royal Ahold or its Affiliates) to which it is a party or by which it is bound (provided that no representation is made with respect to capital stock held by Royal Ahold or its Affiliates), and (c) no shares of Common Stock or Preferred Stock held by the Company in its treasury. The Company has no authorized or another Subsidiaryoutstanding bonds, free and clear debentures, notes or other indebtedness the holders of all Liens which have the right to vote (or convertible or exercisable for or exchangeable into securities the holders of which have the right to vote) on any matter. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of Common Stock or any other than Permitted Lienscapital stock of the Company. These are no voting trusts or other agreements or understandings to which the Company is party with respect to the voting of the capital stock or other equity interest of the Company.

Capitalization. (a) The authorized capital stock of Buyer as of the Company date of this Agreement consists solely of 1,070,000,000 shares divided into (ai) 70,000,000 1,050,000,000 shares of Company Common Buyer Stock and (ii) 20,000,000 undesignated shares. As of October 15, 2009, there were (i) 427,916,244 shares of Buyer Stock issued and outstanding, (ii) no undesignated shares, (iii) employee stock options to purchase an aggregate of 18,952,728 shares of Buyer Stock, all of which 50,199,874 were fully vested and exercisable, (iv) 19,431,039 shares are issued of unvested Buyer Stock issuable pursuant to Buyer’s equity compensation plans, (v) 2,214,492 unvested performance based share awards, and (vi) other rights to purchase an aggregate of 188,170 shares of Buyer Stock outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued pursuant to Buyer’s equity compensation plans and arrangements. (b) All outstanding shares of Company Preferred Stock, 6,633,543 shares capital stock of Buyer have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Planbeen, and none are held all shares that may be issued pursuant to any employee stock option or other equity compensation award or equity compensation plan or arrangement will be, when issued in accordance with the treasury; and (b) 10,000,000 shares of Company Preferred Stockrespective terms thereof, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All As of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issuedOctober 15, and to the extent purchased by the Company or transferred2009, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than except as set forth abovein Section 4.02(a), there are no subscriptions, options, warrants, convertible outstanding (i) shares of capital stock or other voting securities or other agreements equity ownership interests in Buyer or commitments (contingent ii) Equity Rights under which Buyer is or otherwise) pursuant may become obligated to which the Company issue, deliver, redeem, purchase or sell, or cause to be issued, delivered, redeemed, purchased or sold, or in any Subsidiary is required to issue way dispose of, any shares of its capital stock (or ownership other equity interests) , or any securities convertible into or obligations that are exercisable or exchangeable for for, or convertible into, any shares of its capital stock or other equity interests, and no securities or obligations evidencing such rights are authorized, issued or outstanding. As of October 15, 2009, Buyer did not have any (or ownership interests), or is otherwise required x) outstanding Indebtedness that could convey to give any Person the right to receive any benefits vote, or that is convertible into or exercisable for capital stock or other equity interests of Buyer or (y) rights similar that entitle or convey to any rights enjoyed by or accruing Person the right to vote with the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of Buyer on any matter. As of October 15, 2009, the Company or any Subsidiary. Each outstanding share of capital stock (and other equity interests of Buyer were not subject to any Contract restricting or ownership otherwise relating to the voting, dividend rights or disposition of such capital stock or other equity interests) . As of each Subsidiary is duly authorizedOctober 15, validly issued2009, fully paid and nonassessablethere were no outstanding or authorized phantom stock, and is owned by profit participation or similar rights providing economic benefits based, directly or indirectly, on the Company value or another Subsidiary, free and clear price of all Liens the capital stock or other than Permitted Liensequity interests of Buyer.

Capitalization. (a) The authorized capital stock of the Company consists solely of (a) 70,000,000 10,000,000 shares of Company common stock, par value $0.0001 (“Common Stock”), of which 50,199,874 5,000,000 shares are issued and outstanding as of the close of business on the date hereof and constitute the Purchased Shares. There are no other authorized shares of capital stock other than the Common Stock. (b) Section 5.02(b) of the Disclosure Schedules sets forth, as of the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion name of each Person that is the registered owner of any Shares of Common Stock and the number of Shares of Common Stock owned by such Person. (c) There is no subscription, warrant, option, convertible or exchangeable security, or other right (contingent or otherwise) to purchase or otherwise acquire equity securities of the Company is authorized or outstanding, and (ii) there is no commitment by the Company to issue shares, subscriptions, warrants, options, convertible or exchangeable securities, or other such rights or to distribute to holders of any of its equity securities any evidence of indebtedness or asset, to repurchase or redeem any securities of the Company or to grant, extend, accelerate the vesting of, change the price of, or otherwise amend any warrant, option, convertible or exchangeable security or other such right. There are no declared or accrued unpaid dividends with respect to any shares of Common Stock. (d) All issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of (including the outstanding shares of Company Preferred Stock have been duly authorized and Purchased Shares) are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, (i) duly authorized, validly issued, fully paid and nonassessable. Other than as set forth abovenon-assessable; (ii) not subject to any preemptive rights created by statute, there are no subscriptionsthe charter, options, warrants, convertible securities by-laws or other agreements organizational documents of the Company, or commitments (contingent or otherwise) pursuant any agreement to which the Company is a party; and (iii) free of any Liens created by the Company in respect thereof. All issued and outstanding shares of Common Stock (including the Purchased Shares) were issued in compliance with applicable Law. (e) No outstanding shares of Common Stock are subject to vesting or forfeiture rights or repurchase by the Company. There are no outstanding or authorized stock appreciation, dividend equivalent, phantom stock, profit participation or other similar rights with respect to the Company or any Subsidiary is required to issue any of its securities. (f) Seller Parties own 100% of the issued and outstanding shares of its Common Stock of the Company and the Purchased Shares constitute 100% of the authorized, issued, reserved for issuance or outstanding securities of the Company. There are no other securities of the Company outstanding other than the Purchased Shares. (g) All distributions, dividends, repurchases and redemptions of the capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership other equity interests) of the Company were undertaken in compliance with the charter, by-laws or any Subsidiary or any rights to participate in the equity or net income other organizational documents of the Company or then in effect, any Subsidiary. Except as set forth on Schedule 4.5 of agreement to which the Disclosure Schedule, there Company then was a party and in compliance with applicable Law. (h) There are no outstanding contractual obligations of the voting trusts, irrevocable proxies or other contracts or understanding to which Company or any Subsidiary is bound to (x) repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock securities of the Company or (y) vote, consent or dispose of any Subsidiary. Each outstanding share of securities in the Company. (i) The Company does not, directly or indirectly, have and has never had, any Subsidiaries or owned, beneficially or otherwise, any capital stock (or ownership interests) of each Subsidiary is duly authorizedother equity, validly issuedownership, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens profit sharing interests in any other than Permitted LiensPerson.

Capitalization. (a) The authorized capital stock of the Company consists solely of (a) 70,000,000 150,000,000 shares of Company Class A Common Stock, of which 50,199,874 shares are issued and outstanding on the date hereofpar value $.01 per share ("Class A Common Stock"), 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding 5,000,000 shares of Company Preferred Class B Common Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Planpar value $.01 per share ("Class B Common Stock"), and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock5,000,000 preferred shares, par value $.01 per share, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred 51,484,154 shares of Class A Common Stock, 1,627,933 shares of which 1,500,000 Class B Common Stock and no preferred shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Class A Common Stock and all of the outstanding shares of Company Preferred Class B Common Stock have been duly authorized and are validly issued, and are fully paid and nonassessable non-assessable, and free of not subject to any preemptive rightsright. All As of the issued date of this Agreement, the Company has reserved for issuance (1) 11,577,245 shares of Class A Common Stock and 476,214 shares of Class B Common Stock issuable upon exercise of Company Stock Options outstanding on the date hereof, (2) 12,046,244 shares of Class A Common Stock and 133,564 shares of Class B Common Stock issuable upon exercise of Warrants outstanding on the date hereof, and (3) 1,627,933 shares of Class A Common Stock issuable upon conversion of shares of Class B Common Stock outstanding on the date hereof. A true and correct list of all Company Stock Options and Warrants is set forth in Section 4.02 of the Company Disclosure Letter. Each of the outstanding shares of capital stock or other equity interests of each of the Company's Subsidiaries has been duly authorized and validly issued, and is fully paid and non-assessable and are owned, beneficially and of record, by a direct or indirect wholly owned Subsidiary of the Company free and clear of any Lien, and not subject to any preemptive right. There are no proxies with respect to any shares of any such Subsidiary. Other than with respect to the Subsidiaries of the Company, the Company does not own, directly or indirectly, (i) any capital stock or other equity securities of any corporation or (ii) any direct or indirect equity or ownership interest, including interests in partnerships and joint ventures, in any business. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or that are convertible or exchangeable into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter. (b) Except as set forth in Section 4.02(a), and except as may result from the exercise, prior to the consummation of the Merger, of Company Stock Options or Warrants outstanding on the date hereof, there are no outstanding (i) shares of capital stock or other voting securities of the Company, (ii) securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or other voting securities of the Company or its Subsidiaries, (iii) options, warrants, stock appreciation rights, or other rights to acquire from the Company or its Subsidiaries, or obligations of the Company or its Subsidiaries to issue or sell, any shares of capital stock or other voting securities of the Company or its Subsidiaries, or (iv) equity equivalent interests in the ownership or earnings of the Company or its Subsidiaries or other similar rights. (c) There are no voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party with respect to the voting of the shares of any capital stock of the Company or any of its Subsidiaries. (d) No agreement or other document to which the Company or any of its Subsidiaries is a party grants or imposes on any shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issuedany right, and preference, privilege or transfer restriction with respect to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with transactions contemplated hereby (including any preemptive rights and any other statutory or contractual rights of any stockholders of first refusal), except as set forth in the CompanyRestated Certificate. All shares of Company Common Stock subject to issuance that may be issued upon the exercise of the outstanding Company Stock Options described above or Warrants will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuablebe when issued, duly authorized, validly issued, fully paid paid, nonassessable and nonassessablefree of preemptive rights. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of its capital stock (of the Company or ownership interests) any of its Subsidiaries or to provide funds to, or to make any investment (in the form of a loan, capital contribution or otherwise) inin the Company, any Subsidiary of its Subsidiaries or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth . (ie) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock Section 4.02 of the Company or any Subsidiary. Each outstanding share Disclosure Letter sets forth a true and correct statement of capital stock (or ownership interests) the material terms and conditions of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted LiensNon-Plan Options.

Capitalization. (a) The authorized capital stock of the Company CCT II consists solely of (ai) 70,000,000 1,000,000,000 shares of Company CCT II Common Stock, of which 50,199,874 12,209,073.317 were outstanding as of the close of business on May 29, 2019 (the “Capitalization Date”) and (ii) 100,000,000 shares are issued and of preferred stock, par value $0.001 per share, of which none were outstanding as of the Capitalization Date. The authorized capital stock of FSIC III consists of (i) 550,000,000 FSIC III Common Shares, of which 288,369,022.948 were outstanding as of the close of business on the date hereofCapitalization Date and (ii) 50,000,000 shares of preferred stock, 2,215,657 par value $0.001 per share, of which none were outstanding as of the Capitalization Date. The authorized capital stock of FSIC IV consists of (i) 1,100,000,000 FSIC IV Common Shares, of which 31,408,671.647 were outstanding as of the close of business on the Capitalization Date and (ii) 50,000,000 shares have been reserved for issuance upon of preferred stock, par value $0.001 per share, of which none were outstanding as of the conversion Capitalization Date. (b) All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Applicable Common Stock and all of the outstanding shares of Company Preferred Stock Shares have been duly authorized and validly issued and are validly issuedfully paid, fully paid and nonassessable and free of preemptive rights, with no personal liability with respect to such Company attaching to the ownership thereof. All As of the date of this Agreement, no Indebtedness having the right to vote on any matters on which stockholders of such Company may vote (“CCT II Voting Debt”, “FSIC III Voting Debt” or “FSIC IV Voting Debt”, as applicable) is issued shares of Company Common Stock and all or outstanding. As of the issued shares of Company Preferred Stock were issuedCapitalization Date, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments except pursuant to which they are issuablesuch Company’s distribution reinvestment plan, duly authorized, validly issued, fully paid such Company does not have and nonassessable. Other than as set forth above, there are no is not bound by any outstanding subscriptions, options, warrants, convertible calls, rights, commitments or agreements of any character (“Rights”) calling for the purchase or issuance of, or the payment of any amount based on, any Applicable Common Shares, Voting Debt or any other equity securities or other agreements or commitments (contingent or otherwise) pursuant to which the of such Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person representing the right to purchase or otherwise receive any benefits Applicable Common Shares, Voting Debt or rights similar to any rights enjoyed by or accruing to the holders other equity securities of shares such Company. There are no obligations of capital stock (or ownership interests) of the such Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary its Consolidated Subsidiaries (i) to repurchase, redeem or otherwise acquire any shares of its capital stock (of such Company, Voting Debt or ownership interests) any equity security of such Company or its Consolidated Subsidiaries or any securities representing the right to provide funds topurchase or otherwise receive any shares of capital stock, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary Voting Debt or any other Person. Schedule 4.5 equity security of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and such Company or its Consolidated Subsidiaries or (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings pursuant to which the such Company or any Subsidiary of its Consolidated Subsidiaries is a party or by which it is bound or, could be required to the register shares of such Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock or other securities under the Securities Act. All of the Applicable Common Shares sold have been sold pursuant to an effective registration statement filed under the Securities Act or an appropriate exemption therefrom and in accordance with the Investment Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorizedAct and, validly issuedif applicable, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liensstate “blue sky” Laws.

Capitalization. The As of September 30, 1999, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 400,000,000 shares of Company Common Stock, Stock of which 50,199,874 20,998,334 shares are issued and outstanding on the date hereof, 2,215,657 and 1,758,144 shares have been are reserved for issuance upon the conversion exercise of outstanding options and (ii) 100,000,000 shares of preferred stock, none of which are issued and outstanding. Except as contemplated by this Agreement and pursuant to the Company's 1998 Stock Option Plan (the "Plan"), since September 30, 1999, the Company has not issued any capital stock. All of such issued and outstanding shares of Company Preferred Stock, 6,633,543 shares capital stock have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessableare nonassessable and have been offered, sold and issued by the Company in compliance with all applicable laws (including, without limitation, federal and state securities laws). Other than No shares of capital stock of the Company are subject to preemptive rights of the stockholders of the Company, and all shares of capital stock of the Company are free and clear of all liens, pledges, charges, security interests, encumbrances, options or rights of any kind ("Liens") imposed through the actions or failure to act of the Company. Except as set forth abovedisclosed in Schedule 3(C), as of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrips, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock of the Company, or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company; (ii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or ownership interestsin any agreement providing rights to security holders) that will be triggered by the issuance of the Preferred Shares or the Conversion Shares; (iii) there are no contracts, agreements or understandings between the Company and any person or entity granting such person or entity the right to require the Company to file a registration statement under the 1933 Act with respect to any securities of the Company or to require the Company to include any Subsidiary or any rights to participate in the equity or net income securities of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of in a registration statement filed under the Disclosure Schedule1933 Act, there are no outstanding contractual obligations of other than the registration rights granted to the underwriters in connection with the Company's initial public offering; and (iv) the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds is not a party to, or make nor does it have any investment (in the form of a loan, capital contribution or otherwise) inknowledge of, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case agreement with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted LiensCommon Stock.

Capitalization. The (a) As of the date of this Agreement, (i) the authorized capital stock shares of beneficial interest of the Company consists solely consist of (a) 70,000,000 shares of 300,000,000 Company Common Stock, of which 50,199,874 shares Shares and (ii) (A) 239,682,467 Company Common Shares are issued and outstanding on the date hereof(including 1,073,000 Company Common Shares underlying Company Equity Awards), 2,215,657 shares have been and (B) 2,673,228 Company Common Shares are reserved for future issuance upon pursuant to the conversion Company Equity Compensation Plan. (b) (i) All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been Shares are duly authorized and are authorized, validly issued, fully paid and nonassessable non-assessable and free no class or series of shares of beneficial interest of the Company is entitled to preemptive rights. All of the issued shares of ; (ii) all Company Common Stock and all of the issued shares of Company Preferred Stock were issuedShares reserved for future issuance as noted in Section 4.2(a)(ii)(B), and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will shall be, upon issuance on when issued in accordance with the terms and conditions specified in of the instruments Company Equity Compensation Plan and instruments, if any, pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, non-assessable and free of preemptive rights; and (iii) there are no subscriptionsoutstanding bonds, optionsdebentures, warrants, convertible securities notes or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) Indebtedness of the Company or any Company Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any rights to participate in the equity or net income matter on which holders of the Company or any Subsidiary. Except as set forth on Schedule 4.5 Common Shares may vote. (c) All of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (beneficial interest or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the each Company Subsidiary or any Subsidiary. Each outstanding share of capital stock (Company JV that is a real estate investment trust or ownership interests) of each Subsidiary is corporation, respectively, are duly authorized, validly issued, fully paid and nonassessablenon-assessable. All equity interests in each Company Subsidiary or Company JV that is a limited liability company or partnership are duly authorized and validly issued. The Company owns, directly or indirectly, all of the issued and is owned by the outstanding shares of beneficial interest or capital stock or other equity interests of each Company or another Subsidiary, free and clear of all Liens other than Permitted Liensrestrictions applicable under securities Laws and statutory or other Liens for Taxes which are not yet due or delinquent or the validity of which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP. (d) Other than the Company Equity Awards, there are no outstanding subscriptions, securities, options, restricted stock units, dividend equivalent rights, warrants, calls, rights, profits interests, share appreciation rights, phantom shares, convertible securities, rights of first refusal, preemptive rights or other similar rights, agreements, arrangements, undertakings or commitments of any kind to which the Company or any Company Subsidiary or any Company JV is a party or by which any of them is bound obligating the Company or any Company Subsidiary or any Company JV to (i) issue, deliver, transfer, sell or create, or cause to be issued, delivered, transferred, sold or created, additional shares of beneficial interest or capital stock or other equity interests, or phantom shares or other contractual rights, the value of which is determined in whole or in part by the value of any equity security of the Company or any Company Subsidiary or any Company JV, or securities convertible into or exchangeable for such shares of beneficial interest or capital stock or other equity interests, (ii) issue, grant, extend or enter into any such subscriptions, securities, options, restricted stock units, dividend equivalent rights, warrants, calls, rights, profits interests, share appreciation rights, phantom shares, convertible securities, rights of first refusal, preemptive rights or other similar rights, agreements, arrangements, undertakings or commitments, or (iii) redeem, repurchase or otherwise acquire any such shares of beneficial interest or capital stock or other equity interests of the Company or any Company Subsidiary or any Company JV. (e) Neither the Company nor any Company Subsidiary is a party to or bound by, any agreements or understandings concerning the voting (including voting trusts and proxies) of any shares of beneficial interest or capital stock or other equity interests of the Company or any Company Subsidiary. (f) Neither the Company nor any Company Subsidiary is under any obligation, contingent or otherwise, by reason of any contract to register the offer and sale or resale of any of its securities under the Securities Act.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 500,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 103,148,375 shares are issued and outstanding on outstanding; and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share, of which no shares are issued and outstanding; no shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Note and three (3) prior convertible promissory notes in favor of the Buyer: (a) prior convertible promissory note in favor of the Buyer dated November 14, 2011 in the amount of $35,000.00 for which 14,000,000 shares of common stock are presently reserved; (b) prior convertible promissory note in favor of the Buyer dated December 20, 2011 in the amount of $35,000.00 for which 14,650,000 shares of common stock are presently reserved and (c) prior convertible promissory note in favor of the Buyer dated March 5, 2012 in the amount of $30,000.00 for which 8,333,333 shares of common stock are presently reserved exercisable for, or convertible into or exchangeable for shares of Common Stock and 25,200,000 shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The (a) As of the date hereof, the authorized capital stock of the Company UCU consists solely of (a) 70,000,000 200,000,000 shares of Company UCU Common Stock, 20,000,000 shares of which 50,199,874 Class A Common Stock, par value $1.00 per share ("UCU Class A Stock") and 10,000,000 shares are of Preference Stock, without par value ("UCU Preference Stock"). As of March 31, 1999, (i) 92,015,496 shares of UCU Common Stock were issued and outstanding, (ii) 1,590,489 shares of UCU Common Stock were held in the treasury of UCU or by Subsidiaries of UCU, (iii) 9,783,779 shares of UCU Common Stock were reserved for issuance pursuant to the UCU employee plans and the UCU benefit arrangements, (iv) no shares of UCU Class A Stock were issued and outstanding on the date hereof, 2,215,657 and (v) no shares have been reserved for issuance upon the conversion of the UCU Preference Stock were issued and outstanding. Since such date, UCU has not issued any UCU Class A Stock. All outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP PlanUCU Common Stock are, and none are held in the treasury; and (b) 10,000,000 all shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company UCU Common Stock subject to issuance upon exercise of the outstanding Options described above will beas specified above, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorizedshall be, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and not subject to any preemptive rights. There are no obligations, contingent or otherwise, of UCU or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of UCU Common Stock. (b) Except as set forth in Section 4.05(a), there are no equity securities of any class of UCU, or any security exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding. Except as set forth in Section 4.05(a), there are no options, warrants, securities, calls, rights, commitments or agreements of any character to which UCU or any of its Subsidiaries is owned a party or by which any of them are bound obligating UCU or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of UCU or obligating UCU or any of its Subsidiaries to grant, extend, accelerate the Company vesting of or another Subsidiaryenter into any such option, free and clear warrant, equity security, call, right, commitment or agreement. There are no voting trusts or other agreements or understandings with respect to the shares of all Liens other than Permitted Lienscapital stock of UCU to which UCU is a party.

Capitalization. (i) The authorized capital stock of the Company consists solely of (a) 70,000,000 15,000,000 shares of Company Common StockStock and no shares of preferred stock. As of June 10, 1997, (1) 10,738,604 shares of which 50,199,874 shares Common Stock are issued and outstanding on the date hereofoutstanding, 2,215,657 (2) 148,586 shares have been of Common Stock are reserved for issuance upon pursuant to outstanding Options granted under the conversion Stock Plans and (3) 20,758 shares of Common Stock are held in the Company's treasury. All issued and outstanding shares of Company Preferred Stock, 6,633,543 shares Common Stock have been reserved for issuance under the Company Option Plansvalidly issued and are fully paid and nonassessable, 1,887,296 shares have been reserved for issuance under the terms and are not subject to, nor were they issued in violation of, any preemptive rights. Except as set forth in this Section 3.01(c) or in Section 3.01(c) of the Company ESP PlanDisclosure Letter, and none (i) there are held in no shares of capital stock of the treasury; Company authorized, issued or outstanding and (bii) 10,000,000 shares there are not as of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof, and at the Effective Time there will not be, any outstanding or authorized options, warrants, rights, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to Common Stock or any other shares of capital stock of the Company, pursuant to which the Company is or may become obligated to issue shares of Common Stock, any other shares of its capital stock or any securities convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of the capital stock of the Company. The Company has no authorized or outstanding bonds, debentures, notes or other indebtedness the holders of which have the right to vote (or convertible or exchangeable into or exercisable for securities having the right to vote) with the shareholders of the Company or any of its Subsidiaries on any matter ("Voting Debt"). (ii) Section 3.01(c)(ii) of the Company Disclosure Letter lists all of the Company's Subsidiaries. All of the outstanding shares of Company Common Stock and all capital stock of each of the outstanding shares of Company Preferred Stock Company's Subsidiaries have been duly authorized and are validly issued, are fully paid and nonassessable and free of non-assessable, are not subject to, nor were they issued in violation of, any preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased are owned, of record and beneficially, by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.liens, encumbrances, options or claims whatsoever, except as set forth in Section 3.01(c)(ii) of the Company Disclosure Letter. Except as set forth in Section 3.01(c)(ii) of the Company Disclosure Letter, no shares of capital stock of any of the Company's Subsidiaries are reserved for issuance and there are no outstanding or authorized

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 1,500,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 135,091,078 shares are issued and outstanding; and (ii) there are 10,000,000 class A and 10,000,000 class B shares of Preferred Stock; of which 2,076,324 are issued with a conversion rate of 10 common shares for each outstanding on preferred share; no authorized shares of Preferred Stock; no shares are reserved for issuance pursuant to the date hereofCompany's stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 7,756,563 shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights. to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company's Certificate of Incorporation as in effect on the date hereof ("Certificate of Incorporation"), free the Company's By­laws, as in effect on the date hereof (the "By-laws"), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company's Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. (a) The authorized capital stock of the Company consists solely of one hundred thousand (a100,000) 70,000,000 shares of Company Preferred Stock, one (1) share of Series A Preferred Stock and one hundred million (100,000,000) shares of Common Stock, . As of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 there (i) are no shares have been reserved for issuance upon of Preferred Stock issued and outstanding and (ii) is one (1) share of Series A Preferred Stock issued and outstanding. As of the conversion date hereof, there are 61,362,899 shares of Common Stock issued and outstanding. All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved Stock were duly authorized for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable non-assessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights clear of any stockholders of the Company. All shares of Company pre-emptive or similar rights. (b) Except for Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth aboveon Schedule 5.4(c), there are is no subscriptionsexisting option, optionswarrant, warrantscall, convertible securities stock appreciation, phantom stock, right or other agreements or commitments (contingent or otherwise) pursuant Contract of any character to which the Company is a party or any Subsidiary is required otherwise subject to issue any shares of its capital stock (or ownership interests) or any requiring, and there are no securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary outstanding that upon conversion, exercise or exchange would require, the issuance of any rights to participate in the equity or net income shares of capital stock of the Company or any Subsidiaryother securities convertible into, exchangeable for or evidencing the right to subscribe for, purchase or receive shares of capital stock of the Company. Except for the Share Repurchase Agreement or as set forth on Schedule 4.5 of 5.4(b), the Disclosure ScheduleCompany is not a party to, there are no outstanding contractual obligations or otherwise subject to, any shareholder agreements, registration rights agreements, voting trust, proxy or other Contract with respect to the voting, redemption, repurchase, sale, transfer or other disposition of the Company or any Subsidiary Stock. The Company has made available to repurchase, redeem or otherwise acquire Parent a true and correct copy of the Share Repurchase Agreement. (c) A true and complete list of all stockholders of the Company together with the number of shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Personheld by each stockholder is set forth on Schedule 5.4(b). Schedule 4.5 of the Disclosure Schedule 5.4(c) sets forth (i) the following information with respect to each Common Option (each, a “Company Award”) granted under the Company Option Plans outstanding as of the date of this Agreement: (A) the name of the recipient of the Company Award; (B) the number and class of shares of Company Stock subject to such Company Award; (C) the exercise price of all outstanding Options such Company Award; and (D) the date on which such Company Award was granted and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case following information with respect to the transfer or voting of any capital stock each Unpaid Cash Bonus pursuant to retention bonus award letters outstanding as of the Company or any Subsidiary. Each outstanding share date of capital stock this Agreement: (or ownership interestsA) the name of each Subsidiary is duly authorized, validly issued, fully paid the recipient of the Unpaid Cash Bonus and nonassessable, and is owned by (B) the Company or another Subsidiary, free and clear amount of all Liens other than Permitted Liensthe Unpaid Cash Bonus with respect to such recipient.

Capitalization. The Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale Information and the Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock of the Company consists solely of (a) 70,000,000 shares of Company Common Stock, of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly and validly authorized and issued and are validly issued, fully paid and nonassessable non-assessable and free of preemptive are not subject to any pre-emptive or similar rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased ; except as described in or expressly contemplated by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights Time of Sale Information and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure ScheduleProspectus, there are no outstanding contractual obligations rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds tosubsidiaries, or make any investment (in the form contract, commitment, agreement, understanding or arrangement of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, kind relating to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting issuance of any capital stock of the Company or any Subsidiary. Each such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Time of Sale Information and the Prospectus; and all the outstanding share shares of capital stock (or ownership interests) other equity interests of each Subsidiary is subsidiary of the Company have been duly authorized, and validly authorized and issued, are fully paid and nonassessable, non-assessable and is are owned directly or indirectly by the Company or another SubsidiaryCompany, free and clear of all Liens any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other than Permitted Liensclaim of any third party, except for (i) liens existing under the Amended and Restated Credit Agreement, dated November 17, 2006, by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and each of the lenders thereto, as amended by the First Amendment to Amended and Restated Credit Agreement, dated December 4, 2006, by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and each of the lenders thereto (together, the “Credit Agreement”) on the date hereof as set forth in the Registration Statement, the Time of Sale Information and the Prospectus, (ii) liens existing under the Credit Agreement, dated as of May 4, 2006 (the “DHS Credit Agreement”) among DHS Holding Company, DHS Drilling Company, and JPMorgan Chase Bank, N.A., as administrative agent, and each of the lenders thereto on the date hereof as set forth in the Registration Statement, the Time of Sale Information and the Prospectus and (iii) as set forth in Annex A and disclosed in the Registration Statement, the Time of Sale Information and the Prospectus.

Capitalization. (a) The authorized capital stock of the Company consists solely of (a) 70,000,000 2,500,000 shares of Company Common StockStock and no preferred stock. As of the date of this Agreement, (i) 1,305,148 shares of which 50,199,874 shares Company Common Stock are issued and outstanding on the date hereofoutstanding, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding (ii) no shares of Company Preferred StockCommon Stock are issued and held in the treasury of the Company, 6,633,543 and (iii) 59,526 shares have been of Company Common Stock are reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under Stock Plans in respect of option awards outstanding as of the terms date hereof. Section 3.4(a) of the Company ESP PlanDisclosure Letter sets forth, as of the date of this Agreement, (A) the number of Shares subject to, the holder of, the vesting schedule and exercise price of each outstanding Option, and none are held in (B) the treasury; number of Shares subject to, the holder of, and (b) 10,000,000 shares vesting schedule of each outstanding Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereofRestricted Share. All of the outstanding shares of Company Common Stock other than the Company’s Restricted Shares are, and all of the outstanding shares of Company Preferred Stock have been duly authorized Restricted Shares upon vesting (and are validly issuedall restrictions thereon lapse) will be, fully paid and nonassessable and free of preemptive rights. All of the issued all shares of Company Common Stock and all of the which may be issued shares of Company Preferred Stock were issued, and pursuant to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on when issued in accordance with the terms and conditions specified in of the instruments pursuant to which they are issuableOptions, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than Except as set forth abovein this Section 3.4(a) and for changes resulting from the exercise of the Options, the issuance of shares of Company Restricted Shares, or vesting of Company Restricted Shares outstanding as of the date hereof, there are no subscriptions(x) shares of capital stock of the Company authorized, issued or outstanding, (y) existing options, warrants, convertible securities preemptive rights or other agreements subscriptions relating to the issued or commitments (contingent or otherwise) pursuant to which unissued capital stock of the Company or any Subsidiary is required of its Subsidiaries, obligating the Company or any of its Subsidiaries to issue issue, transfer or sell any shares of its capital stock (or ownership interests) other equity interest in the Company or any of its Subsidiaries or securities convertible into or exchangeable for its capital stock (such share or ownership equity interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of obligating the Company or any Subsidiary of its Subsidiaries to grant, extend or enter into any rights to participate in the equity such option, warrant, call, subscription, or net income of the Company other similar instrument, or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no (z) outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire shares of its any Shares, or the capital stock (of the Company or ownership interests) of any Subsidiary or Affiliate of the Company or to provide funds to, or to make any investment (in the form of a loan, capital contribution or otherwise) in, in any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004entity. Except as set forth on Schedule 4.5 in Section 3.4(a) of the Company Disclosure ScheduleLetter, neither the Company nor any Subsidiary owns any Equity Interests or any capital stock or other equity interest in any other Person. (b) Upon consummation of the Merger, the only outstanding shares of capital stock of the Company will be owned by Parent and there will be no existing options, warrants, or other rights of any kind to purchase or otherwise acquire (directly or indirectly) any such shares of capital stock (subject to any consents or releases therefor from non-employee directors or employees of the Company which will be obtained by the Company prior to the Closing). (c) With respect to the Options, (i) each grant of Options was duly authorized no later than the date on which the grant of such Options was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including approval by the Company Board (or a duly constituted and authorized committee thereof), and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly delivered by the Company to the recipient, (ii) each such grant was made in accordance with the terms of the applicable Company Stock Plan, the Securities Act, the Exchange Act, and all other applicable Laws and rules or requirements or self-regulatory authorities, including the rules of the Nasdaq Stock Market, (iii) the per share exercise price of each Option was no less than the fair market value of a share of the Company Common Stock on the applicable Grant Date, and (iv) each such grant was properly accounted for in all material respects in accordance with the United States generally accepted accounting principles (“GAAP”) in the Financial Statements (including the related notes) of the Company and disclosed in all material respects in the Company SEC Documents in accordance with GAAP, the Exchange Act and all other applicable Laws. All Options and Company Restricted Shares may, by their terms, be treated in accordance with Section 2.3, without the requirement of any consent or release from the holders of such Options and Company Restricted Shares (other than consents or releases therefor from non-employee directors or employees of the Company which will be obtained by the Company prior to the Effective Time). Upon a change in control of the Company, all unvested Options and Company Restricted Shares shall automatically vest in full. (d) All of the outstanding shares of capital stock of each of the Subsidiaries are owned beneficially or of record by the Company, directly or indirectly, and all such shares were issued in compliance with applicable Laws, have been validly issued and are fully paid and nonassessable and are owned by either the Company or one of its Subsidiaries free and clear of any Encumbrances, except Permitted Encumbrances, or any other restrictions (including preemptive rights and any restriction on the right to vote, sell or otherwise dispose of such capital stock or other ownership interest). (e) Other than the Voting Agreement, there are no stockholders’ agreements, voting trusts or other agreements Contracts or understandings to which the Company or any Subsidiary of its Subsidiaries is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any the capital stock of the Company or any Subsidiaryof the Subsidiaries. Each Neither the Company nor any of its Subsidiaries has outstanding share bonds, debentures, notes or other obligations, the holders of capital stock which have the right to vote (or ownership interestswhich are convertible into or exercisable for securities having the right to vote) with the stockholders of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Lienssuch Subsidiary on any matter.

Capitalization. (1) The authorized share capital stock of the Company is US$100,100.00, and consists solely of 1,800,000,000 Class A Ordinary Shares and 200,000,000 Class B ordinary shares and 2,000,000 preferred shares. As of the date hereof, there are 711,552,082 Class A Ordinary Shares and 67,590,336 Class B ordinary shares outstanding. From the date hereof through the Closing Date, except pursuant to the Transaction Documents and the transactions contemplated hereby and thereby, the Company shall not have (ai) 70,000,000 issued, approved or agreed the issuance of any Ordinary Shares, or any securities convertible into or exchangeable or exercisable for Ordinary Shares (other than shares issued upon (A) the exercise of share options, share appreciation rights, restricted share units, restricted shares or other share-based awards issued pursuant either to the 2014 Equity Incentive Plan as filed as exhibit 4.22, or to the 2016 Equity Incentive Plan as filed as exhibit 4.32, to the Company’s Annual Report on Form 20-F for the year ended December 31, 2016 (the “Company Common Stock, of which 50,199,874 shares are issued and Share Option Plans”) outstanding on the date hereofof this Agreement or (B) the conversion of any portion of convertible bonds in the aggregate principal amount of US$150.0 million due December 30, 2,215,657 shares have been 2019, as such bonds are disclosed in the Company’s Annual Report on Form 20-F for the year ended December 31, 2016), (ii) reserved for issuance upon any Ordinary Shares or (iii) repurchased or redeemed, or approved or agreed the conversion repurchase or redemption of, any Ordinary Shares or any securities convertible into or exchangeable or exercisable for Ordinary Shares (other than surrender of Ordinary Shares in connection with conversions into American depositary shares (“ADSs”) by holders whose shareholdings are not equally divisible by eight (8), such number being the ratio of Class A Ordinary Shares to each ADS of the Company). As of the date hereof, there are (i) outstanding share options issued under the Company Share Option Plans to purchase an aggregate of 28,755,798 Ordinary Shares (each, a “Company Share Option”) and (ii) 65,936,660 Ordinary Shares reserved for issuance under the Company Share Option Plans. All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and validly issued and are validly issuedfully paid, fully paid and in accordance with applicable law, nonassessable and free of preemptive rights. All of the issued shares of Each Company Common Stock Share Option was granted in compliance with all applicable laws and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in of the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessableCompany Share Option Plans. Other than Except as set forth aboveelsewhere in this SECTION 2.1(c), there are no the Company does not have and is not bound by any outstanding subscriptions, bonds, debentures, notes, options, warrants, convertible calls, repurchase rights, commitments, agreements or other obligations of any character calling for the purchase or issuance of, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests)exercisable for, any Ordinary Share or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) other equity securities of the Company or any Subsidiary securities representing the right to purchase or otherwise receive any rights to participate in the equity or net income shares of the Company (including any rights plan or any Subsidiaryagreement). Except as set forth on Schedule 4.5 of The Company has disclosed in the Disclosure Schedule, there are no outstanding contractual obligations Company Reports all shares of the Company or any Subsidiary to repurchasethat have been purchased, redeem redeemed or otherwise acquire shares of its capital stock (acquired, directly or ownership interests) or to provide funds toindirectly, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan)since December 31, each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts 2013 and all dividends or other agreements distributions that have been declared, set aside, made or understandings to which the Company or any Subsidiary is a party or by which it is bound or, paid to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock shareholders of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Lienssince that date.

Capitalization. The (i) As of the date hereof, the authorized capital stock of the Company United consists solely of (aA) 70,000,000 100,000,000 shares of Company United Common Stock, of which 50,199,874 as July 31, 2016, 76,379,927 shares are issued were outstanding, and outstanding on (B) 50,000,000 shares of preferred stock with par value of $1.00 per share (“United Preferred Stock”), as of the date hereof, 2,215,657 none of which are outstanding. As of the date hereof, except as set forth in its Disclosure Schedule, United does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares have been of United Common Stock, United Preferred Stock or any other equity securities of United or any of its Subsidiaries or any securities representing the right to purchase or otherwise receive any shares of United Common Stock, United Preferred Stock or other equity securities of United or any of its Subsidiaries. As of the date hereof, United had 3,038,784 shares of United Common Stock, which are issuable and reserved for issuance upon the conversion exercise of the issued and United Stock Options. The outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company United Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid issued and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issuedoutstanding, fully paid and nonassessable. Other than as set forth above, there are and subject to no subscriptions, options, warrants, convertible securities or other agreements or commitments preemptive rights (contingent or otherwise) pursuant to which the Company or and were not issued in violation of any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interestspreemptive rights), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and . (ii) Upon the aggregate number approval of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants toUnited Certificate Amendment, the Company ESP Plan shares of United Common Stock to be issued in exchange for shares of Cardinal Common Stock in the current “Offering Period” (as such term is defined Merger, when issued in accordance with the Company ESP Plan)terms of this Agreement, each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is will be duly authorized, validly issued, fully paid and nonassessable, with no personal liability attaching to the ownership thereof, subject to no preemptive rights and is owned by authorized for trading on the Company or another Subsidiary, free and clear of all Liens other than Permitted LiensNASDAQ.

Capitalization. The authorized capital stock of the Company AccuVal consists solely -------------- entirely of (a) 70,000,000 2,800 shares of Company Common Stockcommon stock, of which 50,199,874 a total of 200 shares are issued and outstanding on the date hereofoutstanding, 2,215,657 and of which 100 shares have been reserved for issuance upon the conversion are owned beneficially and of the issued record by Gronik and outstanding 100 shares are owned beneficially and of record by ▇▇▇▇▇▇▇, and no other entity or individual owns either beneficially or of record any other equity interest of AccuVal. The authorized capital stock of LiquiTec consists entirely of 2,800 shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stockcommon stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, a total of which 1,500,000 200 shares are issued and outstanding outstanding, and of which 100 shares are owned beneficially and of record by Gronik and 100 shares are owned beneficially and of record by ▇▇▇▇▇▇▇, and no other entity or individual owns either beneficially or of record, any other equity interest of LiquiTec. On the date of this Agreement each Shareholder has, and on the date hereof. All Closing Date each Shareholder will have, good and marketable title to that number of shares of capital stock of the outstanding Companies set forth in this Section 2.3, free and clear of any and all Liens, which shares of Company Common Stock do and shall constitute collectively all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free the Companies' capital stock. On the date of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth abovethis Agreement, there are no subscriptionsno, and on the Closing Date, there will be no, options, warrants, convertible securities calls, commitments, conversion privileges or preemptive or other rights or agreements or commitments (contingent or otherwise) pursuant outstanding to which the Company or purchase any Subsidiary is required to issue any of shares of its the Companies' capital stock (or ownership interests) or any securities convertible into or exchangeable for its shares of the Companies' capital stock (or ownership interests)obligating the Companies to grant, extend, or enter into any such option, warrant, call, right, commitment, conversion privilege or other right or agreement. There is otherwise required to give any Person the no voting agreement, right to receive any benefits of first refusal or rights similar other restriction (other than normal restrictions on transfer under applicable federal and state securities laws) applicable to any rights enjoyed by or accruing to of the holders Companies' outstanding securities. Each share of shares each of the Companies' capital stock has been duly authorized and validly issued, is fully paid and nonassessable (or ownership interestsexcept as set forth in Section 180.0622(2)(b) of the Company Wisconsin Statutes), is not subject to any right of rescission, and has been offered, issued, sold and delivered by the Companies in compliance with all registration or qualification requirements (or applicable exemptions therefrom) of applicable federal and state securities laws, other laws and requirements set forth in applicable agreements or instruments. The Companies are not under any obligation to register under the Securities Act, any of its presently outstanding securities or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly securities that may be subsequently issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.

Capitalization. (i) The authorized capital stock of the Company FNB consists solely of (ai) 70,000,000 200,000 shares of Company FNB Preferred Stock, $10.00 par value, 51,500 of which has been designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series A,” and (ii) 150,000,000 shares of FNB Common Stock, par value $2.50 per share. As of the close of business on the Capitalization Date, there were 11,424,390 shares of FNB Common Stock outstanding and 51,500 shares of FNB Preferred Stock outstanding. In addition, Treasury holds a warrant, dated February 13, 2009, to purchase 2,207,143 shares of FNB Common Stock at an exercise price of $3.50 per share. Since the Capitalization Date and through the date of this Agreement, except in connection with the transactions contemplated hereby, including the transactions described in the Recitals, FNB has not (i) issued or authorized the issuance of any shares of FNB Capital Stock, or any securities convertible into or exchangeable or exercisable for shares of FNB Capital Stock, (ii) reserved for issuance any shares of FNB Capital Stock or (iii) repurchased or redeemed, or authorized the repurchase or redemption of, any shares of FNB Capital Stock. As of the close of business on the Capitalization Date, other than in respect of the TARP Warrant and awards outstanding under or pursuant to the FNB Benefit Plans in respect of which 50,199,874 an aggregate of 1,235,276 shares are issued and outstanding on the date hereof, 2,215,657 shares of FNB Common Stock have been reserved for issuance upon the conversion issuance, no shares of FNB Capital Stock were reserved for issuance. All of the issued and outstanding shares of Company Preferred FNB Capital Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. None of the outstanding shares of FNB Capital Stock or other securities of FNB or any of its Subsidiaries was issued, sold or offered by FNB or any of its Subsidiaries in violation of the Securities Act or the securities or blue sky laws of any state or jurisdiction, or any applicable securities laws in the relevant jurisdictions outside of the United States. No Voting Debt of FNB is issued and outstanding. As of the close of business on the Capitalization Date, except as set forth elsewhere in this Section 4.03(c) and for the TARP Warrant and 366,542 FNB Stock Options outstanding, FNB does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of FNB Capital Stock or any other equity securities of FNB or Voting Debt or any securities representing the right to purchase or otherwise receive any shares of FNB Capital Stock (including any rights plan or agreement). Each FNB Stock Option (i) was granted in compliance with all applicable Laws and all of the terms and conditions of the FNB United Corp. 1993 Stock Compensation Plan or the FNB United Corp. 2003 Stock Compensation Plan (the “FNB Stock Plans”), as applicable, (ii) has an exercise or reference price equal to or greater than the fair market value of a share of FNB Common Stock at the close of business on the date of such grant, (iii) has a grant date identical to or following the date on which the FNB Board or compensation committee actually awarded such FNB Stock Option, (iv) otherwise is exempt from or complies with Section 409A of the Code so that the recipient of such FNB Stock Option is not subject to the additional taxes and interest pursuant to Section 409A of the Code and (v) except for disqualifying dispositions, qualifies for the tax and accounting treatment afforded to such FNB Stock Option in FNB’s Tax Returns and FNB’s financial statements, respectively. (ii) The authorized capital stock of Merger Sub consists of 100 shares of common Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stockpar value $0.001 per share, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 100 shares are issued and outstanding on the date hereofoutstanding. All of the outstanding shares of Company Merger Sub common stock are owned of record and beneficially by FNB. (iii) The shares of FNB Common Stock and all of the outstanding to be issued in exchange for shares of Company Preferred Granite Stock have been duly authorized and are validly issuedin the Merger, fully paid and nonassessable and free of preemptive rights. All of the when issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance accordance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuableof this Agreement, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is will be duly authorized, validly issued, fully paid and nonassessable, will be listed on a NASDAQ stock market, will have the same rights as every other share of FNB Common Stock and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Lienswill not be subject to preemptive rights.

Capitalization. (a) The authorized capital stock of the Company DISH consists solely of: (i) 3,200,000,000 shares of DISH Common Stock, consisting of (aA) 70,000,000 1,600,000,000 shares of Company DISH Class A Common Stock, of which 50,199,874 shares are 295,424,040 were issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion as of the issued and outstanding Capitalization Date, (B) 800,000,000 shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred DISH Class B Common Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are 238,435,208 were issued and outstanding on as of the date hereofCapitalization Date, and (C) 800,000,000 shares of DISH Class C Common Stock, none of which were outstanding as of the Capitalization Date; and (ii) 20,000,000 shares of preferred stock, par value $0.01 per share, none of which were outstanding as of the Capitalization Date. All of the outstanding shares of Company DISH Common Stock have been, and all shares of DISH Common Stock reserved for issuance pursuant to the DISH Equity Plans will be when issued, duly authorized and validly issued, and are, or will be when issued, fully paid and non-assessable. Other than shares of DISH Common Stock reserved for issuance pursuant to the DISH Equity Plans and set forth in Section 3.5(b) or for shares reserved in connection with the transactions contemplated by this Agreement, there are no shares of DISH Common Stock or other equity interests in DISH reserved for issuance as of the date of this Agreement. (b) Except as set forth in DISH’s Organizational Documents in effect as of the date of this Agreement or the DISH Equity Plans or award agreements thereunder: (i) none of the outstanding shares of Company Preferred DISH Common Stock have been duly authorized and are validly issuedis entitled or subject to any preemptive right, fully paid and nonassessable and free right of preemptive rights. All repurchase, right of participation or any similar right; (ii) none of the issued outstanding shares of Company DISH Common Stock is subject to any right of first refusal or any similar right; (iii) there are no bonds, debentures, notes or other Indebtedness of DISH issued and all outstanding having the right to vote (or convertible or exercisable or exchangeable for securities having the right to vote) on any matters on which stockholders of DISH may vote, other than the DISH Convertible Notes; and (iv) there is no Contract to which DISH or any DISH Subsidiary is a party relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or from granting any option or similar right with respect to), any shares of DISH Common Stock. Except as set forth in the DISH Equity Plans or award agreements thereunder, DISH is not under any obligation, nor is it bound by any Contract pursuant to which it will become obligated, to repurchase, redeem or otherwise acquire any outstanding shares of DISH Common Stock or other securities. (c) As of the issued Capitalization Date: (i) 29,727,278 shares of Company Preferred DISH Common Stock were issued, and subject to issuance pursuant to outstanding DISH Options; (ii) 242,627 shares of DISH Common Stock were subject to issuance pursuant to outstanding DISH RSU Awards; (iii) 51,949,967 shares were reserved for future issuance pursuant to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders DISH Equity Plans; (iv) 150,096,700 shares were reserved for future issuance upon conversion of the Company. All DISH Convertible Notes; and (v) 92,057,400 shares of Company Common Stock subject to were reserved for future issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than DISH Warrants. (d) Except as set forth abovein this Section 3.5, as of the Capitalization Date, there are no subscriptionswas no: (i) outstanding subscription, optionsoption, warrantscall, convertible securities warrant or other agreements right (whether or commitments (contingent or otherwisenot currently exercisable) pursuant to which acquire any shares of the Company capital stock, restricted stock unit, stock-based performance unit, shares of phantom stock, stock appreciation right, profit participation right or any Subsidiary other right that is required linked to, or the value of which is based on or derived from, the value of any shares of capital stock of DISH other than the DISH Convertible Notes and the DISH Warrants; (ii) outstanding security, instrument, bond, debenture or note that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of DISH; or (iii) stockholder rights plan (or similar plan commonly referred to as a “poison pill”) or Contract under which DISH is or may become obligated to sell or otherwise issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Lienssecurities.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of (ai) 70,000,000 150,000,000 shares of Company Common Stock, of which 50,199,874 93,649,589 shares are issued and outstanding on outstanding, no shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Notes and the Warrants) exercisable for, or convertible into or exchangeable for shares of Common Stock and 30,833,333 shares are reserved for issuance upon the conversion of the issued Notes and outstanding the Additional Notes (as defined in Section 4(l)) and exercise of the Warrants (subject to adjustment pursuant to the Company’s covenant set forth in Section 4(h) below); (ii) 5,100,000 shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Class A Convertible Preferred Stock, of which 1,500,000 5,100,000 shares are issued and outstanding on the date hereofoutstanding; and (iii) 5,100,000 shares of Class B Convertible Preferred Stock, of which 5,100,000 shares are issued and outstanding. All of the such outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issuedcapital stock are, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to upon issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as set forth abovedisclosed in Schedule 3(c), as of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act (except the Registration Rights Agreement) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, free the Warrants, the Conversion Shares or Warrant Shares. The Company has furnished to the Buyer true and clear correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive or Chief Financial Officer on behalf of the Company as of the Closing Date.

Capitalization. The (a) As of the date hereof, the entire authorized capital stock of the Company ▇▇▇▇▇▇▇ XX consists solely of (a) 70,000,000 950,000,000 shares of Company stock. The entire authorized capital stock of ▇▇▇▇▇▇▇ XX consists of 750,000,000 shares of ▇▇▇▇▇▇▇ XX Common Stock, 199,999,000 shares of which 50,199,874 ▇▇▇▇▇▇▇ XX Preferred Stock and 1,000 shares are of ▇▇▇▇▇▇▇ XX Convertible Preferred Stock. (b) As of the close of business on June 1, 2017, there were 18,116,951.7349 shares of ▇▇▇▇▇▇▇ XX Common Stock issued and outstanding on outstanding, no shares of ▇▇▇▇▇▇▇ XX Preferred Stock issued and outstanding, and 1,000 shares of the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion ▇▇▇▇▇▇▇ XX Convertible Preferred Stock issued and outstanding. All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock ▇▇▇▇▇▇▇ XX Shares have been duly authorized and are validly issued, fully paid paid, and nonassessable and free non-assessable. Except as set forth in this Agreement pursuant to the REIT Merger, there are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require ▇▇▇▇▇▇▇ XX to issue, sell, or otherwise cause to become outstanding any additional amounts of preemptive rightsits capital stock except with respect to the ▇▇▇▇▇▇▇ XX Convertible Preferred Stock. All of the ▇▇▇▇▇▇▇ XX Shares to be issued shares in the REIT Merger, when so issued in accordance with the terms of Company Common Stock and all of the issued shares of Company Preferred Stock were this Agreement, will have been duly authorized, validly issued, fully paid, and to the extent purchased by the Company or transferred, have been so purchased or transferred, non-assessable and will be issued in compliance with any preemptive rights and any applicable securities Laws. Except as set forth in this Section 4.2, there is no other statutory or contractual rights outstanding capital stock of any stockholders of the Company. ▇▇▇▇▇▇▇ XX. (c) All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on shares of capital stock of each of the terms and conditions specified in the instruments pursuant to which they ▇▇▇▇▇▇▇ XX Subsidiaries that is a corporation are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) All equity interests in each of the Company ▇▇▇▇▇▇▇ XX Subsidiaries that is a partnership or limited liability company, including ▇▇▇▇▇▇▇ XX OP, are duly authorized and validly issued. (d) Neither ▇▇▇▇▇▇▇ XX nor any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any ▇▇▇▇▇▇▇ XX Subsidiary is a party to or bound by which it is bound or, to any Contracts concerning the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting (including voting trusts and proxies) of any capital stock of the Company ▇▇▇▇▇▇▇ XX or any Subsidiaryof the ▇▇▇▇▇▇▇ XX Subsidiaries. Each outstanding share Neither ▇▇▇▇▇▇▇ XX nor any ▇▇▇▇▇▇▇ XX Subsidiary has granted any registration rights on any of its capital stock (stock. ▇▇▇▇▇▇▇ XX does not have a “poison pill” or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Lienssimilar stockholder rights plan.

Capitalization. The (a) As of the date hereof, the authorized capital stock of the Company consists solely of (ai) 70,000,000 4,500,000,000 shares of Company Common Stockcommon stock, par value $0.001 per share, of which 50,199,874 3,687,483,646 shares are issued and outstanding on as of the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding shares of Company Preferred Stockand, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (bii) 10,000,000 shares of Company Preferred Stockpreferred stock, par value $0.001 per share, of which 3,000,000 are reserved for issuance 50,000 shares designated as Series B Cumulative A Super Voting Preferred Convertible Preferred Stock, of which 1,500,000 shares Stock are issued and outstanding on as of the date hereof. All Set forth on Schedule 4.06(a) is a true, correct and complete list of the outstanding each holder of shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) equity interests of the Company and the number of shares or any Subsidiary or any rights to participate in the other equity or net income interests held by each such holder as of the Company or any Subsidiarydate hereof. Except as set forth on Schedule 4.5 4.06(a), as of the Disclosure Scheduledate hereof, there are no other shares of common stock, preferred stock or other equity interests of the Company authorized, reserved, issued or outstanding. (b) With respect to each Company Warrant, Schedule 4.06(b) sets forth, as of the date hereof, the name of the holder of such Company Warrant, the number of vested and unvested shares of Company Stock covered by such Company Warrant, the date of grant, the cash exercise price per share of such Company Warrant and the applicable expiration date. (c) Except as set forth on Schedule 4.06(b), there are (i) no subscriptions, calls, options, warrants, rights or other securities convertible into or exchangeable or exercisable for shares of Company Stock or other equity interests of the Company, or any other Contracts to which the Company is a party or by which the Company is bound obligating the Company to issue or sell any shares of capital stock of, other equity interests in or debt securities of, the Company and (ii) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in the Company. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any securities or equity interests of the Company. Except as set forth on Schedule 4.06(c), there are no outstanding bonds, debentures, notes or other Indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter for which the Company Stockholders may vote. As of the date hereof, the Company is not party to any stockholders agreement, voting agreement or registration rights agreement relating to its equity interests. (d) The outstanding shares of capital stock or other equity interests of the Company’s Subsidiaries (i) have been duly authorized and validly issued and are fully paid and nonassessable, (ii) were issued in compliance in all material respects with applicable Law and (iii) were not issued in breach or violation of any preemptive rights or Contract. As of the date hereof, there are (A) no subscriptions, calls, rights or other securities convertible into or exchangeable or exercisable for the equity interests of any of the Company’s Subsidiaries (including any convertible preferred equity certificates), or any other Contracts to which any of the Company’s Subsidiaries is a party or by which any of the Company’s Subsidiaries is bound obligating such Subsidiaries to issue or sell any shares of capital stock of, other equity interests in or debt securities of, such Subsidiaries, and (B) no equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in any of the Company’s Subsidiaries. As of the date hereof, there are no outstanding contractual obligations of any of the Company or any Subsidiary Company’s Subsidiaries to repurchase, redeem or otherwise acquire shares any securities or equity interests of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004Company’s Subsidiaries. Except as set forth on Schedule 4.5 of the Disclosure Schedule4.06(d), there are no stockholders’ agreementsoutstanding bonds, voting trusts debentures, notes or other agreements or understandings to which the Company or Indebtedness of any Subsidiary is a party or by which it is bound or, to of the Company’s KnowledgeSubsidiaries having the right to vote (or convertible into, between or among stockholdersexchangeable for, in each case with respect securities having the right to vote) on any matter for which such Subsidiaries’ stockholders may vote. Except as forth on Schedule 4.06(d), none of the Company’s Subsidiaries is party to any stockholders agreement, voting agreement or registration rights agreement relating to the transfer or voting equity interests of any capital stock of the Company’s Subsidiaries. (e) The Company is the direct or any Subsidiary. Each indirect owner of, and has good and marketable direct or indirect title to, all the issued and outstanding share shares of capital stock (or ownership interests) equity interests of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiaryits Subsidiaries, free and clear of all Liens Liens, other than Permitted Liens. There are no options or warrants convertible into or exchangeable or exercisable for the equity interests of any of the Company’s Subsidiaries. (f) Schedule 4.06(f) (the “Allocation Schedule”) sets forth, as of the date hereof, a true and complete list of (i) all Company Stockholders and Company Convertible Noteholders, (ii) the number of shares of Company Common Stock held by each such Person (on an as-converted basis with respect to the Company Preferred Stock and the Company Convertible Notes) and (iii) the portion of the total Merger Consideration allocable to each such Person based on the estimated Merger Consideration set forth therein.

Capitalization. The (a) As of the date and time of execution of this Agreement, the authorized capital stock of the Company consists solely of CNI (a) 70,000,000 shares of Company Common Stock, of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under which are referred to hereinafter as the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and "CNI Shares") consists of: (bi) 10,000,000 shares of Company Preferred CNI Common Stock, 1,173,333 of which are issued and outstanding; and (ii) 5,000,000 shares of preferred stock, of which 3,000,000 are reserved for issuance as 762,000 shares of Series B Cumulative Convertible A Preferred Stock (the "Series A Preferred Stock, of which 1,500,000 shares ") are issued and outstanding on outstanding, 561,375 shares of Series B Preferred Stock (the date hereof"Series B Preferred Stock") are issued and outstanding, and 450,101 shares of Series C Preferred Stock (the "Series C Preferred Stock") are issued and outstanding. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock CNI Shares have been duly authorized and are validly issued, are fully paid and paid, nonassessable and free and clear of any mortgage, pledge, security interest, encumbrance, lien, claim or charge of any kind or right of others of whatever nature ("Liens"), preemptive rightsrights or other restrictions with respect thereto and are owned of record and beneficially by Seller. All of the issued There are no securities outstanding which are convertible into or exercisable or exchangeable for shares of Company Common Stock and all capital stock of the issued shares of Company Preferred Stock were issuedCNI, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptionsoutstanding options, optionsrights, contracts, warrants, convertible securities subscriptions, conversion rights or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is CNI may be required to purchase, redeem, issue or sell any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements securities of CNI or understandings to which the Company or in any Subsidiary is a party or by which it is bound or, way relating to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer issuance or voting of any capital stock or other securities of CNI. (b) As of the Company date and time of execution of this Agreement, the authorized capital stock of CLC consists of 10,000 shares of CLC Common Stock, 1,000 of which are issued and outstanding (the "CLC Shares"). All of the CLC Shares have been validly issued, are fully paid, nonassessable and free of any Liens, preemptive rights or any Subsidiaryother restrictions with respect thereto and are owned of record and beneficially by Seller. Each There are no securities outstanding share which are convertible into or exercisable or exchangeable for shares of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessableCLC, and is owned by there are no outstanding options, rights, contracts, warrants, subscriptions, conversion rights or other agreements or commitments pursuant to which CLC may be required to purchase, redeem, issue or sell any shares of capital stock or other securities of CLC or in any way relating to the Company issuance or another Subsidiary, free and clear voting of all Liens any capital stock or other than Permitted Lienssecurities of CLC.

Capitalization. (a) The authorized capital stock of the Company MMLC II consists solely of (ai) 70,000,000 200,000,000 shares of Company MMLC II Common Stock, of which 50,199,874 23,959,371 were outstanding as of the close of business on July 10, 2025 (the “MMLC II Capitalization Date”) and (ii) 1,000,000 shares are issued and of preferred stock, par value $0.001 per share, of MMLC II (“MMLC II Preferred Stock”), of which no shares were outstanding as of the close of business on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion MMLC II Capitalization Date. All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock MMLC II capital stock have been duly authorized and validly issued and are validly issuedfully paid, fully paid and nonassessable and free of preemptive rights, with no personal liability with respect to MMLC II attaching to the ownership thereof. All As of the date of this Agreement, no Indebtedness having the right to vote on any matters on which stockholders of MMLC II may vote (“Voting Debt”) is issued shares of Company Common Stock and all or outstanding. As of the issued shares of Company Preferred Stock were issuedMMLC II Capitalization Date, MMLC II does not have and to the extent purchased is not bound by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities calls, rights, commitments or other agreements of any character (“Rights”) calling for the purchase or commitments (contingent issuance of, or otherwise) pursuant to which the Company or payment of any Subsidiary is required to issue amount based on, any shares of its MMLC II capital stock (stock, Voting Debt or ownership interests) any other equity securities of MMLC II or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person representing the right to purchase or otherwise receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of MMLC II capital stock (stock, Voting Debt or ownership interests) other equity securities of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any SubsidiaryMMLC II. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no outstanding contractual obligations of the Company MMLC II or any its Consolidated Subsidiary (i) to repurchase, redeem or otherwise acquire any shares of MMLC II capital stock, Voting Debt or any equity security of MMLC II or its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Consolidated Subsidiary or any securities representing the right to purchase or otherwise receive any shares of MMLC II capital stock, Voting Debt or any other Person. Schedule 4.5 equity security of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and MMLC II or its Consolidated Subsidiary or (ii) pursuant to which MMLC II or its Consolidated Subsidiary is or could be required to register shares of MMLC II’s capital stock or other securities under the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004Securities Act. Except as set forth on Schedule 4.5 All of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any MMLC II capital stock sold has been sold pursuant to private placements exempt from the registration requirements of the Securities Act and in material compliance with the Investment Company or any Subsidiary. Each Act and, if applicable, state “blue sky” Laws. (b) All of the issued and outstanding share shares of capital stock (or ownership interests) other equity securities of each the Consolidated Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is of MMLC II are owned by the Company MMLC II, directly or another Subsidiaryindirectly, free and clear of any Liens, and all Liens of such shares or equity securities are duly authorized and validly issued and are fully paid, nonassessable (in respect of corporate entities) and free of preemptive rights. The Consolidated Subsidiary of MMLC II has not or is not bound by any outstanding Rights calling for the purchase or issuance of, or the payment of any amount based on, any shares of capital stock or any other than Permitted Liensequity security or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security.

Capitalization. (a) The authorized capital stock of the Company consists solely of (ai) 70,000,000 150,000,000 shares of Company Common Stock, 45,226,806 of which 50,199,874 shares are were issued and outstanding on February 8, 2007 (the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion “Capitalization Date”) (none of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none which are held in treasury of the treasury; Company) and (bii) 10,000,000 40,000,000 shares of Company Preferred Stockpreferred stock, no ascribed or par value per share, none of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are was issued and or outstanding on the date hereofof this Agreement. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been Company’s capital stock are duly authorized and are authorized, validly issued, fully paid and paid, nonassessable and free of preemptive rights. All As of the issued Capitalization Date, 6,423,522 shares of Company Common Stock were reserved for future issuance pursuant to outstanding Stock Options, restricted stock awards and all purchase rights granted pursuant to the Company Option Plans, of which 6,418,085 were subject to outstanding Stock Options, 5,437 were subject to purchase rights in respect of the issued current offering period under the ESPP, and no shares were subject to outstanding restricted stock awards. At the Closing, the aggregate number of shares of Company Preferred Stock were issued, and to the extent purchased by capital stock of the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights issued and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance outstanding and issuable upon exercise of outstanding Stock Options, restricted stock awards or purchase rights shall be equal to or less than the outstanding Options described above will be, upon issuance on aggregate number of issued or issuable shares of capital stock of the terms and conditions specified Company set forth in the instruments this Section 4.2(a) or as permitted by Parent pursuant to which they are issuableSection 6.1 hereof. As of the date hereof, duly authorized, validly issued, fully paid and nonassessable. Other other than as set forth abovepursuant to the Company Option Plans, there are no subscriptions, existing (i) options, warrants, convertible securities calls, subscriptions or other rights, convertible securities, agreements or commitments (contingent or otherwise) pursuant to which of any character obligating the Company or any Subsidiary is required of its Subsidiaries to issue issue, transfer or sell any shares of its capital stock (or ownership interests) other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for its capital stock such shares or equity interests, (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interestsii) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiaryof its Subsidiaries or (iii) voting trusts or similar agreements to which the Company is a party with respect to the voting of the capital stock of the Company. Each Section 4.2(a) of the Company Disclosure Schedule sets forth the following information with respect to each Stock Option outstanding share as of the Capitalization Date: (i) the name of the Stock Option recipient; (ii) the number of shares of Common Stock subject to such Stock Option; (iii) the exercise or purchase price of such Stock Option; (iv) the date on which such Stock Option was granted; (v) the extent to which such Stock Option is vested and/or exercisable and whether the exercisability of or right to repurchase of such Stock Option will be accelerated in any way by the Merger and the extent of acceleration; and (vi) whether such Stock Option is a non-qualified stock option or an incentive stock option. All outstanding shares of Common Stock, all Stock Options and all outstanding shares of capital stock (or ownership interests) of each Subsidiary is duly authorizedhave been issued and granted in compliance in all respects with applicable Laws. (b) All of the outstanding shares of capital stock or equivalent equity interests of each of the Company’s Subsidiaries are owned of record and beneficially, validly issueddirectly or indirectly, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens liens, pledges, security interests or other encumbrances. (c) Neither the Company nor any of its Subsidiaries directly or indirectly owns any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, trust or other entity, other than Permitted Liensa Subsidiary of the Company.

Capitalization. The authorized (a) Schedule 3.04(a) sets forth the authorized, issued and outstanding shares of capital stock of each Company Entity (other than the Company) and any other outstanding equity securities of each Company Entity (other than the Company), together with the record and beneficial owner of each of such equity securities. Schedule 3.04(a) sets forth the authorized, issued and outstanding shares of capital stock of the Company consists solely as of (a) 70,000,000 shares the date hereof and any other outstanding equity securities of the Company Common Stock, as of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon including the conversion Shares and the Options, together with the record and beneficial owner of each of such equity securities. Seller owns, and at the Closing will own, 100% of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under capital stock of the Company Option Plans, 1,887,296 shares have been reserved for issuance under Company. (b) All of the terms equity securities of each of the Company ESP Plan, and none are held in the treasury; and Entities (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and including all of the outstanding shares of Company Preferred Stock Shares and , to the extent applicable, the Options) have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issuednonassessable, and to the extent purchased by the Company or transferred, have been so purchased or transferred, were not issued in compliance with violation of any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than applicable securities Laws. (c) Except as set forth aboveon Schedule 3.04(c) and except for the Options, there are no outstanding subscriptions, options, warrants, calls, convertible securities, exchangeable securities or other agreements rights or commitments (contingent or otherwise) pursuant Contracts to which any Company Entity is a party or otherwise bound or subject (whether or not currently exercisable) (i) involving or relating to (A) the Company issue, transfer, exchange, sale or any Subsidiary is required to issue registration for sale of any shares of its capital stock (stock, partnership interests or other equity or ownership interests) interests of any Company Entity or any securities convertible into or exchangeable for its capital stock (such shares, partnership interests or other equity or ownership interests), (B) the grant, extension or is otherwise required entering into of any such subscription, option, warrant, call, convertible securities, exchangeable security or other right or Contract, (C) the redemption or other acquisition of any such shares of capital stock, partnership interests or other equity or ownership interests, (D) making any payment to give any Person the right to receive any benefits value of which is derived from or rights similar to any rights enjoyed by calculated based on the value, or accruing to changes in the holders of shares value, of capital stock (stock, partnership interests or other equity or ownership interestsinterests of any Company Entity, or (E) the grant of the Company or any Subsidiary or any rights to participate in the equity appreciation rights, participations, phantom equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds tosimilar rights, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number granting any preemptive or antidilutive or similar rights with respect to any security of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the any Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004Entity. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no stockholders’ agreements, voting trusts or other agreements or understandings to which the any Company or any Subsidiary Entity is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer voting or voting registration of the capital stock, partnership interests or other equity or ownership interests of any Company Entity or, except as set forth on Schedule 3.04(c), that restrict any Person from purchasing, selling, pledging or otherwise disposing of any capital stock, partnership interests or other equity or ownership interests of any Company Entity. The Optionholder Consideration Schedule when delivered as part of the Pre-Closing Statement will be correct and complete. The Optionholder Payment Amounts and the Option Consideration set forth in the Optionholder Consideration Schedule have been determined in accordance with the terms of each Option and the Truco Holdco Inc. 2014 Equity Incentive Plan (“EIP”). Effective as of the Closing, all Options will be cancelled and terminated in accordance with the terms of the Plan and the Contract pursuant to which each such Option was awarded or granted. (d) Except as set forth on Schedule 3.04(d), since the Lookback Date, no Company Entity has issued or repurchased any shares of its capital stock or partnership interests (other than in connection with the exercise, settlement, cancellation, termination, repurchase or vesting of Options in accordance with their respective terms) or any securities convertible into or exercisable for any shares of its capital stock or partnership interests. (e) The Options were granted under the EIP. Schedule 3.04(e)(i) sets forth, for each Option outstanding as of the date of this Agreement, (i) the number of shares of common stock of the Company or any Subsidiarysubject thereto, (ii) the exercise price of such Option and (iii) the date on which such Option was granted. Each Correct and complete copies of the written agreements pursuant to which the outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorizedOptions were granted have been made available to Purchasers. Except as set forth on Schedule 3.04(e)(ii), validly issued, fully paid and nonassessable, and is owned by there are no Contracts to which the Company is a party relating to or another Subsidiary, free and clear affecting the Options or obligating the Company to accelerate the vesting of all Liens other than Permitted Liensany Option as a result of the transactions contemplated by this Agreement (whether alone or upon the occurrence of any additional or subsequent events).

Capitalization. The (a) As of the date of this Agreement, the authorized share capital stock of the Company consists solely of 8,000,000,000 Class A Shares and 2,000,000,000 Class B Shares. As of the date of this Agreement, (ai)(A) 70,000,000 shares of Company Common Stock, of which 50,199,874 shares 41,084,851 Class A Shares are issued and outstanding on outstanding, (B) 20,000,000 Class A Shares are reserved and available for issuance pursuant to share-based compensation awards granted under the Company’s SpiderMan Share Incentive Plan (the “Company ESOP”) and (ii) 204,526,627 Class B Shares are issued and outstanding. Except as set forth in this Section 3.03(a) and other than the VP Convertible Note, as of the date hereofof this Agreement, 2,215,657 shares have been no Securities were issued, reserved for issuance upon the conversion or outstanding and no securities of the any of its Subsidiaries convertible into or exchangeable or exercisable for any Securities were issued and or are outstanding. All outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP PlanOrdinary Shares are, and none are held in the treasury; and (b) 10,000,000 all such shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are that may be issued and outstanding on prior to the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above hereof will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuablewhen issued, duly authorized, validly issued, fully paid and nonassessablenon-assessable and not subject to preemptive rights. Other than Except for any obligations pursuant to this Agreement, Sale I Shares SPA, or as otherwise set forth aboveabove in this Section 3.03(a) and other than pursuant to the VP Convertible Note or Company ESOP, as of the date of this Agreement, there are no subscriptions, options, warrants, convertible securities options or other agreements or commitments (contingent or otherwise) pursuant rights to which acquire from the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests)Company, or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) other obligation of the Company or to issue, any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Scheduleadditional Securities, and there are no outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire shares of its capital stock any Securities. (or ownership interestsb) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 All of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts capital or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) securities of each Subsidiary is duly authorizedowned by the Company, directly or indirectly, free and clear of any Encumbrance. All of the issued equity securities of each Subsidiary of the Company are validly issued, fully paid and nonassessablenon-assessable, and is owned were issued in compliance with the applicable registration and qualification requirements of Applicable Laws. (c) There are no preemptive rights, registration rights, rights of first offer, rights of first refusal, tag-along rights, director appointment rights, governance rights, veto rights or other similar rights with respect to the Securities of the Company that have been granted to any Person. (d) After giving effect to the transactions contemplated herein and in the Sale I Shares SPA, the Sale II Shares shall represent (i) 2.29% of the total outstanding share capital of, and (ii) 0.15% of the total voting power represented by the total outstanding share capital of, the Company, in each case on a fully diluted basis (including, for the avoidance of doubt, all shares issuable under Company or another Subsidiary, free and clear of all Liens other than Permitted LiensESOP).

Capitalization. The authorized capital stock of the Company consists solely of (a) 70,000,000 shares of Company Common StockState Auto Financial consists, of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 of an aggregate of 105,000,000 shares have been reserved for issuance upon the conversion consisting of (a) 100,000,000 shares of common stock, no par value, of which 38,866,955 shares are duly and validly issued and outstanding, each of which shares is fully paid and nonassessable, (b) 2,500,000 shares of Class A Preferred Stock, no par value, none of which shares issued and outstanding and (c) 2,500,000 shares of Class B Preferred Stock, no par value, none of which shares are issued and outstanding. As of the date hereof, 68% of such issued and outstanding shares of Company common stock are owned beneficially and of record by State Auto Mutual. Upon issuance, each share of Class A Preferred Stock, 6,633,543 shares have been reserved for issuance under Stock will benefit from the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms Terms and Conditions of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares Class A Preferred Stock attached to form of Company Class A Preferred Stock, Stock Certificate attached hereto as EXHIBIT A. As of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof, (i) except for this Agreement, the Put Agreement and as set forth in Part A of SCHEDULE I hereto, there are no outstanding Equity Rights with respect to State Auto Financial and (ii) except as set forth in Part B of SCHEDULE I hereto, there are no outstanding obligations of State Auto Financial or any of its Subsidiaries to repurchase, redeem, or otherwise acquire any shares of capital stock of State Auto Financial nor are there any outstanding obligations of State Auto Financial or any of its Subsidiaries to make payments to any Person, such as "phantom stock" payments, where the amount thereof is calculated with reference to the fair market value or equity value of State Auto Financial or any of its Subsidiaries. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Class A Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferredhereunder will, have been when so purchased or transferredpurchased, in compliance with any preemptive rights be duly and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms validly issued and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issuedoutstanding, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.

Capitalization. (a) The authorized capital stock of the Company consists solely of of: (ai) 70,000,000 shares of Company Common Stock300,000,000 Shares, of which 50,199,874 shares are 58,563,592 Shares were issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion as of the issued and outstanding shares close of Company Preferred Stockbusiness on December 31, 6,633,543 shares have been reserved for issuance under 2024 (the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan“Measurement Time”), and none are held in the treasury; and (bii) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 no shares were or are issued and outstanding on as of the Measurement Time or the date hereofof this Agreement. As of the Measurement Time, no Shares are held by the Company as treasury stock. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock Shares have been duly authorized and are validly issued, and are fully paid and nonassessable (and free were not issued in violation of any preemptive rightsrights or the DGCL). All Except for Shares held by the Company as treasury stock, there are no Shares held by any of the Acquired Companies. None of the Acquired Companies is under any obligation, or is bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding Shares or other securities of the Company (including any Company Equity Awards, except issuances pursuant to the forfeiture conditions of such Company Equity Awards or the cashless exercise or Tax withholding provisions of or authorizations related to such Company Equity Awards as in effect as of the date of this Agreement). (b) As of the Measurement Time: (i) 2,465,007 Shares are reserved for future issuance under the Company’s Amended and Restated 2020 Employee Stock Purchase Plan (the “Company ESPP”); (ii) 1,786,658 Shares are subject to issuance or delivery pursuant to Company RSU Awards granted and outstanding as of the Measurement Time under the Company Equity Plans (in the case of performance-vesting Company RSU Awards, assuming deemed achievement of maximum performance); (iii) 1,075,628 Shares are subject to issuance or delivery upon the exercise of Company Options granted and outstanding as of the Measurement Time under the Company Equity Plans; and (iv) no Company Equity Awards are outstanding other than those granted under the Company Equity Plans and the Company ESPP and referenced in the preceding clauses (i) through (iii). (c) Except (A) as set forth in Section 3.2(a) and Section 3.2(b), (B) for Shares issued following the Measurement Time pursuant to the exercise or vesting of Company Equity Awards outstanding as of the Measurement Time pursuant to the terms of such awards as of the Measurement Time and (C) shares of Company Common Stock and all capital stock, voting securities or other equity interests of the issued shares of Company Preferred Stock were issued, and to the extent purchased Company’s Subsidiaries that are held by the Company or transferredanother Acquired Company, have been so purchased as of the date of this Agreement there is no: (i) outstanding capital stock, equity security or transferred, in compliance with any preemptive rights and any other statutory equity interest or contractual rights equity-based compensation award of any Acquired Company; (ii) security, award or right convertible into or exercisable for any security, interest or award described in clause (i); (iii) any subscription, option, call, warrant, right, agreement, arrangement or undertaking of any kind (whether or not currently exercisable) to which any Acquired Company is a party or by which any Acquired Company is bound obligating any Acquired Company to issue, transfer or sell or cause to be issued, transferred or sold any security, interest, award or right described in the foregoing clauses (i) or (ii); or (iv) outstanding bond, debenture, note or other debt security of the Company having the right to vote (or any debt security convertible into, or exercisable for exchangeable for, equity securities having the right to vote) on any matters on which stockholders of the CompanyCompany may vote. All shares dividends or other distributions on the Shares that have been authorized or declared prior to the date of this Agreement have been paid in full (except to the extent such dividends have been publicly announced and are not yet due and payable). There are no voting trusts or other agreements or understandings to which any Acquired Company Common Stock subject is a party with any third Person with respect to issuance upon exercise the voting of capital stock or other equity interests of any Acquired Company. (d) All outstanding Shares, options, warrants, equity-based compensation awards (whether payable in equity, cash or otherwise) and other securities of the outstanding Options described above Acquired Companies have been issued and granted in compliance in all material respects with all applicable securities laws and other applicable Laws, including Section 409A of the Code. All Shares that may be issued pursuant to any Company Equity Awards or as contemplated or permitted by this Agreement will be, upon issuance on when issued in accordance with the respective terms and conditions specified in the instruments pursuant to which they are issuablethereof, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities nonassessable (and not issued in violation of any preemptive rights or other agreements or commitments the DGCL). (contingent or otherwisee) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interestsSection 3.2(e) of the Company or any Subsidiary or any rights to participate in the equity or net income Disclosure Letter sets forth, as of the Measurement Time, with respect to each Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth Equity Award: (i) the number and exercise price name of all outstanding Options and the award holder; (ii) whether the aggregate Company Equity Award is a Company RSU Award or a Company Option (and denoting each Company RSU Award that is subject to performance-based vesting conditions); (iii) the number of participants in, and Shares subject to the aggregate amount contributed award (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” case of performance-vesting Company RSU Awards, assuming deemed achievement of maximum performance); and (as such term is defined in iv) the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, exercise price applicable to the Company’s Knowledgeaward, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liensif applicable.

Capitalization. (i) The authorized share capital, option plans and issuance, warrant issuance and any other equity securities (including securities convertible into or exchangeable for equity securities) of the Company (the “Company Capitalization”) as of the date hereof is as set forth in Schedule D-1 of this Agreement, which includes (A) the aggregate number of issued and outstanding shares of capital stock of the Company consists solely (including the Ordinary Shares and each series of convertible preferred shares (athe “Preferred Shares”)) 70,000,000 and (B) the aggregate number of ordinary shares of issuable under all outstanding options, all outstanding warrants and all other outstanding securities or obligations which, by their terms, whether directly or indirectly, may be exercisable or exchangeable for, convertible into, or require the Company Common Stockto issue, of which 50,199,874 shares are Ordinary Shares. All issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the Ordinary Shares and all issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and Shares are validly issued, fully paid and nonassessable and free of preemptive rights. All non-assessable. (ii) Upon effectiveness of the issued shares of Company Common Stock Closing and all of the issued shares of Company Preferred Stock were issued, and after giving effect to the extent purchased Offering, the transactions contemplated by this Agreement and other related transactions, the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above Capitalization will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than be as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments in Schedule D-2 of this Agreement. (contingent or otherwiseiii) pursuant to which All outstanding shares of capital stock of the Company or any Subsidiary is required to issue any shares of its capital (including Ordinary Shares and Preferred Shares), all outstanding awards under the Company’s stock option plans, all other outstanding warrants and other equity securities (or ownership interests) or any including securities convertible into or exchangeable for its capital stock (or ownership interests)equity securities) of the Company, or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of and all outstanding shares of capital stock (or ownership interests) of each of the Company Company’s subsidiaries and consolidated affiliates (each a “Subsidiary” and collectively “Subsidiaries”) have been issued and granted in compliance with (x) all applicable Securities Laws and other applicable laws and (y) all requirements set forth in applicable plans or contracts, without violation of any Subsidiary preemptive rights, rights of first refusal or any rights to participate in the equity or net income of the Company or any Subsidiaryother similar rights. Except as set forth on in Schedule 4.5 of the Disclosure ScheduleD-1 and Schedule D-2, there are as applicable, no outstanding contractual obligations equity securities of the Company are or may become required to be issued by reason of any notes, bonds or other debt securities, or any Subsidiary to repurchaseoption, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts warrant or other agreements or understandings to which the Company is a party. “Securities Laws” means the Securities Act, the Securities Exchange Act of 1934, as amended, the listing rules of, or any Subsidiary is a party listing agreement with the New York Stock Exchange and any other applicable law regulating securities or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Lienstakeover matters.

Capitalization. (a) The authorized capital stock of the Company consists solely of (ai) 70,000,000 108,000,000 Common Shares, of which (A) 104,999,999 shares of Company have been designated as Standard Common Stock, of which, as of the date of this Agreement, 59,646,097 shares are issued and outstanding, (B) one (1) share has been designated as Special Common Voting Stock, of which, as of the date of this Agreement, one (1) share is issued and outstanding and (C) no Common Shares were held in the treasury of the Company, (ii) 19,353,592 Preferred Shares, of which 50,199,874 (A) 19,353,591 shares have been designated as Series A-1 Preferred Stock, of which, as of the date of this Agreement, 19,353,591 shares are issued and outstanding on and (B) one (1) share has been designated Special A-1 Voting Stock, of which, as of the date hereofof this Agreement, 2,215,657 one (1) share is issued and outstanding. (b) Section 2.2(b) of the Disclosure Schedule sets forth a complete and accurate list, as of the date of the Agreement, of the registered holders of capital stock of the Company, showing the number of shares have been reserved of capital stock, and the class or series of such shares, held by each registered holder and (for issuance upon shares other than Common Shares) the conversion number of Common Shares (if any) into which such shares are convertible. Section 2.2(b) of the Disclosure Schedule also indicates all outstanding Common Shares that constitute restricted stock or that are otherwise subject to a repurchase or redemption right, indicating the name of the applicable registered holder, the vesting schedule (including any acceleration provisions with respect thereto), and the repurchase price payable by the Company. All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms capital stock of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and validly issued and are validly issued, fully paid and nonassessable and free of preemptive rightsnonassessable. All of the issued and outstanding shares of Company Common Stock and all capital stock of the Company have been offered, issued shares of Company Preferred Stock were issued, and to the extent purchased sold by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders applicable Laws. (c) Section 2.2(c) of the CompanyDisclosure Schedule sets forth a complete and accurate list, as of the date of this Agreement of: (i) all Company Stock Plans, indicating for each Company Stock Plan the number of Common Shares issued to date under such Company Stock Plan, the number of Common Shares subject to outstanding Company Options under such Company Stock Plan and the number of Common Shares reserved for future issuance under such Company Stock Plan and (ii) all holders of outstanding Company Options, indicating with respect to each Company Option, the Company Stock Plan under which it was granted, the number of Common Shares subject to such Company Option, the exercise price, the date of grant, and the vesting schedule (including any acceleration provisions with respect thereto). The Company has provided or made available to the Buyer complete and accurate copies of all Company Stock Plans, forms of all stock option agreements evidencing Company Options. All of the shares of capital stock of the Company Common Stock subject to issuance upon exercise of the outstanding Company Options described above will be, upon issuance on pursuant to the exercise of such instruments and in accordance with the terms and conditions specified in the instruments pursuant to which they are issuablethereof, duly authorized, validly issued, fully paid and nonassessable. Other than As of immediately prior to the Effective Time and after giving effect to Section 1.7, there will be no outstanding Company Options. (d) Except as set forth abovein this Section 2.2 or in Section 2.2 of the Disclosure Schedule, there are (i) no subscriptionsPerson has any subscription, optionsright, warrantswarrant, option, convertible securities security or other agreements or commitments such right (contingent or otherwise) pursuant to which purchase or acquire any shares of capital stock of the Company from the Company, or to the knowledge of the Company, from any Subsidiary is required stockholders of the Company (ii) the Company has no obligation (contingent or otherwise) to issue any subscription, right, warrant, option, convertible security or other such right, or to issue or distribute to holders of any shares of its capital stock any evidences of indebtedness or assets of the Company, (iii) the Company has no obligation (contingent or ownership interestsotherwise) to purchase, redeem or otherwise acquire any securities convertible into or exchangeable for shares of its capital stock or any interest therein or to pay any dividend or to make any other distribution in respect thereof, and (iv) there are no outstanding or ownership interests)authorized stock appreciation, phantom stock or is otherwise required to give any Person the right to receive any benefits or similar rights similar to any rights enjoyed by or accruing with respect to the holders of shares of capital stock Company. (or ownership interestse) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 in Section 2.2(e) of the Disclosure Schedule, there are is no outstanding contractual obligations of agreement, written or oral, between the Company or and any Subsidiary to repurchase, redeem or otherwise acquire shares holder of its capital stock (or ownership interests) or to provide funds tosecurities, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the best of the Company’s Knowledgeknowledge, between or among stockholdersany holders of its securities, in each case with respect relating to the sale or transfer (including agreements relating to rights of first refusal, co-sale rights or voting “drag-along” rights), registration under the Securities Act, or voting, of any the capital stock of the Company. (f) To the Company’s knowledge, there is no claim against the Company by any Person that seeks to assert: (i) ownership or rights to ownership of any Subsidiary. Each outstanding share shares of capital stock Company stock; (ii) any rights of a stockholder, including any option, preemptive rights or ownership interestsrights to notice or to vote; (iii) any rights under the certificate of each Subsidiary is duly authorizedincorporation or by-laws of the Company, validly issuedas amended to date; or (iv) any claim that his, fully paid and nonassessable, and is owned her or its shares have been wrongfully repurchased by the Company or another Subsidiary, free and clear of all Liens other than Permitted LiensCompany.

Capitalization. (a) The authorized capital stock of the Company Buyer consists solely of (a) 70,000,000 200,000,000 shares of Company Buyer Common Stock, of which 50,199,874 shares are issued Stock and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding 5,000,000 shares of Company Buyer Preferred Stock, 6,633,543 $0.001 par value per share (“Buyer Preferred Stock”). As of the close of business on the Business Day prior to the date of this Agreement, there were (i) 20,167,997 shares have been of Buyer Common Stock and no shares of Buyer Preferred Stock outstanding and (ii) no shares of Buyer Stock held in treasury. (b) Section 4.3(b) of the Buyer Disclosure Schedule sets forth a complete and accurate list, as of the date of this Agreement, of: (i) all Buyer Stock Plans, indicating for each Buyer Stock Plan the number of shares of Buyer Stock issued to date under such Buyer Stock Plan and how many of such shares are subject to, and the terms, of restriction, the number of Buyer Options under such Buyer Stock Plan and the number of shares of Buyer Stock reserved for future issuance under such Buyer Stock Plan; (ii) all holders of outstanding Buyer Options, indicating with respect to each Buyer Option the Company Option PlansBuyer Stock Plan under which it was granted, 1,887,296 the number of shares have been reserved for issuance under of Buyer Stock subject to such Buyer Option, the terms exercise price, the date of the Company ESP Plangrant, and none are held in the treasuryvesting schedule (including any acceleration provisions with respect thereto); and (biii) 10,000,000 all holders of Buyer RSUs, indicating with respect to each Buyer RSU, the Buyer Stock Plan under which it was granted, the number of shares of Company Preferred Stockcapital stock, and the class or series of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stocksuch shares, of which 1,500,000 shares are issued and outstanding on subject to such Buyer RSU, the date hereofof issuance, the expiration date and any other material terms thereof. All of the outstanding shares of Company Common Stock and all capital stock of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock Buyer subject to issuance upon exercise of the outstanding Buyer Options described above and Buyer RSUs will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuablethe exercise of such instruments, duly authorized, validly issued, fully paid paid, non-assessable and nonassessable. Other than free of all preemptive rights. (c) Except as set forth abovein Section 4.3(b) or Section 4.3(c) of the Buyer Disclosure Schedule, (i) there are no subscriptionsEquity Interests of any class of the Buyer, or any security exchangeable into or exercisable for such Equity Interests, issued, reserved for issuance or outstanding, (ii) there are no options, warrants, convertible securities equity securities, calls, rights, commitments or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary Buyer is a party or by which it the Buyer is bound orobligating the Buyer to issue, exchange, transfer, deliver or sell, or cause to the Company’s Knowledgebe issued, between exchanged, transferred, delivered or among stockholderssold, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share additional shares of capital stock or other Equity Interests of the Buyer or any security or rights convertible into or exchangeable or exercisable for any such shares or other Equity Interests, or obligating the Buyer to grant, extend, otherwise modify or amend or enter into any such option, warrant, Equity Interest, call, right, commitment or agreement, (iii) the Buyer has no obligation (contingent or ownership interestsotherwise) to issue any subscription, warrant, option, convertible security or other such right, or to issue or distribute to holders of each Subsidiary is duly authorized, validly issued, fully paid and nonassessableany Equity Interests of the Buyer any evidences of Indebtedness or assets of the Buyer, and is owned by (iv) the Company Buyer has no obligation (contingent or another Subsidiaryotherwise) to purchase, free and clear of all Liens redeem or otherwise acquire any Equity Interests or to pay any dividend or to make any other than Permitted Liensdistribution in respect thereof.

Capitalization. The authorized capital stock of the Company consists solely of (a) 70,000,000 255,000,000 Shares, 5,000 shares of Company Class B Common Stock, par value .001 per share ("CLASS B STOCK") and 2,500,000 shares of preferred stock, par value $.01 per share ("PREFERRED STOCK"). As of July 9,1999, (i) 185,266,429 Shares were issued and outstanding, all of which 50,199,874 shares are were validly issued, fully paid and nonassessable, (ii) 89,902 Shares were held in the treasury of the Company, (iii) 2,000,000 Shares were authorized for future issuance (with respect to which options to acquire Shares were issued and outstanding on outstanding) pursuant to employee stock options or stock incentive rights granted pursuant to the date hereofCompany's stock op- tion plans, 2,215,657 shares have been (iv) 3,949,099 Shares were reserved for issuance upon the exercise of Warrants, (v) 3,833,333 Shares were reserved for issuance upon the conversion of the Company's 8% Convertible ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, (▇▇) no shares of Class B Common Stock were issued and outstanding outstanding; and (vii) no shares of Company Preferred StockStock were issued and outstanding. Except as set forth in Section 3.03 of the Disclosure Schedule or as otherwise contemplated by this Agreement, 6,633,543 shares have been reserved for issuance under there are no options, warrants or other rights, agreements, arrangements or commitments of any character relating to the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms issued or unissued capital stock of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by or any Subsidiary or obligating the Company or transferredany Subsidiary to issue or sell any shares of capital stock of, have been so purchased or transferredother equity interests in, in compliance with the Company or any preemptive rights and any other statutory or contractual rights of any stockholders of the CompanySubsidiary. All shares of capital stock of the Company Common Stock and any Subsidiary subject to issuance upon exercise of the outstanding Options described above will beas aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares of its capital stock (of the Company or ownership interests) any Subsidiary or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liensperson.

Capitalization. (a) The authorized capital stock of the Company consists solely of (ai) 70,000,000 2,000,000 shares of Company Voting Common Stock, no par value ("Voting Common") (ii) 1,000,000 shares of which 50,199,874 Non-Voting Common Stock, no par value ("Non-Voting Common") and (iii) 0 shares of preferred stock, ("Preferred Stock"). As of December 20, 2004, (i)1,050,000 shares of Voting Common are issued and outstanding on the date hereofoutstanding, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, all of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable nonassessable, (ii) 0 shares of Non-Voting Common are issued and free outstanding, all of preemptive rights. All which are validly issued, fully paid and nonassessable, (iii) 0 shares of Preferred Stock are issued and outstanding, all of which are validly issued, fully paid and nonassessable, (iv) no shares of the issued Company's Common Stock are held in the treasury of the Company, (v) no shares of Company the Company's Common Stock are held by the Subsidiaries, and all (vi) 0 shares of the issued shares Company's Common Stock are reserved for future issuance pursuant to outstanding warrants, stock options and convertible instruments. Except as set forth in this Section 2.3, there are no options, warrants or other rights, agreements, arrangements or commitments of Company Preferred Stock were issued, and any character relating to the extent purchased by issued or un-issued capital stock of the Company or transferredany Subsidiary or obligating the Company or any Subsidiary to issue or sell any shares of capital stock of, have been so purchased or transferredother equity interests in, in compliance with the Company or any preemptive rights and any other statutory or contractual rights of any stockholders of the CompanySubsidiary. All shares of Company the Company's Common Stock subject to issuance upon exercise of the outstanding Options described above will beas aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares of its the Company's Common Stock or any capital stock (or ownership interests) of any Subsidiary or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Personperson. Schedule 4.5 All outstanding shares of the Disclosure Schedule sets forth Company's Common Stock, all outstanding stock options to purchase Common Stock, and all outstanding shares of capital stock of each subsidiary of the Company have been issued and granted in compliance with (i) the number and exercise price of all outstanding Options and applicable U.S. securities laws, (ii) the aggregate number of participants inall applicable non-U.S. securities laws, (iii) all other applicable Laws (as defined below) and the aggregate amount contributed (and not otherwise withdrawniv) by such participants toall requirements set forth in applicable contracts, the Company ESP Plan except in the current “Offering Period” case of clause (as such term is defined in the Company ESP Planii), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts (iii) or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, (iv) to the Company’s Knowledge, between or among stockholders, extent that any such noncompliance would not result in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. a Material Adverse Effect. (b) Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and each such share is owned by the Company or another Subsidiary, Subsidiary free and clear of all Liens security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company's or any Subsidiary's voting rights, charges and other than Permitted Liensencumbrances of any nature whatsoever.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 90,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 34,313,114 shares are issued and outstanding on outstanding; and (ii) 10,000,000 shares of Preferred Stock, $0.00 1 par value per share, of which no shares are issued and outstanding; no shares are reserved for issuance pursuant to the date hereofCompany's stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Note and three (3) prior convertible promissory notes in favor of the Buyer : (a) prior convertible promissory note in favor of the Buyer dated March 20, 2013 in the amount of $32,500.00 for which 2,300,000 shares of Common Stock are presently reserved and (b) prior convertible promissory note in favor of the Buyer dated April 4, 20 13 in the amount of $15,500.00 for which 2,410,000 shares of Common Stock are presently reserved and (c) prior convertible promissory note in favor of the Buyer dated June 3, 3013 in the amount of $32,500.00 for which 8,090,000 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 12,200,000 shares are reserved for issuance upon the conversion of the issued and Note . All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth above, there No shares of capital stock of the Company are no subscriptions, options, warrants, convertible securities subject to preemptive rights or any other agreements or commitments (contingent or otherwise) pursuant to which similar rights of the shareholders of the Company or any Subsidiary is required liens or encumbrances imposed through the actions or failure to issue act of the Company. As of the effective date of this Agreement , (i) there are no outstanding options, warrant s, scrip, rights to subscribe for, puts, calls, rights of first refusal , agreements, understandings, claims or other commitments or rights of any shares of its capital stock (character whatsoever relating to, or ownership interests) securities or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti- dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company's Certificate of Incorporation as in effect on the date hereof ("Certificate of Incorporation"), free the Company's By-Laws, as in effect on the date hereof (the "By-laws"), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company's Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. (a) The authorized capital stock Equity Interests of the Company consists solely consist of (a) 70,000,000 25,000,000 shares of Company Common Stock and 6,000,000 shares of preferred stock, no par value (“Preferred Stock, ”). As of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 , (i) 3,969,560 shares have been reserved for issuance upon the conversion of the Common Stock were issued and outstanding shares of Company Preferred Stockoutstanding, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, all of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are were validly issued, fully paid and nonassessable non-assessable and free were not issued in violation of any preemptive rights. All , (ii) 2,526,313 shares of Common Stock were held in the treasury of the issued Company, (iii) 184,658 shares of Company Common Stock and all were issuable upon exercise of outstanding stock options or restricted stock units granted pursuant to the issued Company Stock Plans, and (iv) no shares of Company Preferred Stock were issuedissued and outstanding. (b) Except as set forth in Section 4.03(a) (and the outstanding Equity Interests, including stock options and restricted stock units, underlying the numbers of shares of Common Stock referenced therein) there are no (i) outstanding Equity Interests in the Company or securities exercisable or exchangeable for or convertible into any Equity Interests of the Company or any of its Subsidiaries, (ii) outstanding options, warrants, rights or contracts relating to the extent purchased issued or unissued Equity Interests of the Company or any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue or sell any Equity Interests in the Company or any of its Subsidiaries, (iii) outstanding stock appreciation rights, stock awards, restricted stock, restricted stock awards, performance units, phantom stock, profit participation or similar rights with respect to the Company, any of its Subsidiaries or any of their respective Equity Interests (collectively, “Company Rights”) or obligation of the Company or any of its Subsidiaries to issue or sell any such Company Right, or (iv) voting trusts, proxies or other contracts with respect to the voting of any Equity Interests of the Company or any of its Subsidiaries or giving any person any preemptive rights with respect to any future issuance of securities by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. its Subsidiaries. (c) All shares of Company Common Stock subject to issuance upon exercise of under the outstanding Options described above will beCompany Stock Plans, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessablenonassessable and not subject to preemptive rights. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire shares any Equity Interests of the Company or any of its capital stock (or ownership interests) Subsidiaries or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary person. (d) The Company does not have outstanding any bonds, debentures, notes or any other Person. Schedule 4.5 similar obligations the holders of which have the right to vote (or convertible into or exercisable or exchangeable for securities having the right to vote or other Equity Interests of the Disclosure Schedule sets forth (iCompany) with the number and exercise price stockholders of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is of its Subsidiaries on any matter (“Company Voting Debt”). (e) Section 4.03(e) of the Company Disclosure Letter sets forth a party true and complete list of each current or by which it is bound orformer Company Employee, officer, director, consultant or other service provider of the Company who holds a Company Equity Award under the Company Stock Plans as of the date hereof, together with the number of shares of Common Stock subject to such Company Equity Awards, the date of grant of such Company Equity Awards, the exercise price of the Company Options, the vesting schedule for such Company Equity Awards and whether or not such Company Equity Awards are intended to qualify as “incentive stock options” within the meaning of Section 422(b) of the Code. Each Company Option has an exercise price at least equal to the fair market value of the Common Stock on a date no earlier than the date of the corporate action authorizing the grant and no Company Option has had its exercise date or grant date delayed or “backdated.” All Company Equity Awards have been issued in compliance with the Securities Act and, to the Company’s Knowledgeknowledge, between or among stockholders, in each case with respect any applicable state blue sky laws. The Company has Made Available to the transfer or voting of any capital stock AcquisitionCo true and complete copies of the Company Stock Plans and the forms of all stock award agreements evidencing the Company Equity Awards. On and after the Effective Time, no Company Employee, officer, director, consultant or other service provider of the Company shall have any right under the Company Stock Plans to purchase Common Stock, or any Subsidiary. Each outstanding share other Equity Interest in, the Company, Parent, AcquisitionCo, the Surviving Corporation or any of capital stock (their respective Affiliates or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted LiensSubsidiaries.

Capitalization. (i) The authorized capital stock of the Company UDS consists solely of (aA) 70,000,000 250,000,000 shares of Company UDS Common Stock (each of which includes one UDS Right), of which, as of May 1, 2001, 71,524,496 shares were issued and outstanding, 2,234,812 shares were held in the GSOP and 17,116,837 shares were held in treasury and (B) 25,000,000 shares of preferred stock, par value $0.01 per share, of UDS ("UDS Preferred Stock," together with the UDS Common Stock, the "UDS Capital Stock"), of which 50,199,874 no shares are issued and outstanding on outstanding. From May 1, 2001 to the date hereofof this Agreement, 2,215,657 no shares of UDS Capital Stock have been issued except pursuant to employee and director stock plans of UDS in effect as of the date hereof (the "UDS Stock Plans"). Except pursuant to the terms of options, stock and restricted units issued pursuant to UDS Stock Plans and outstanding as of the date hereof or issued thereafter as expressly permitted hereby, and pursuant to the UDS Rights, UDS does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of UDS Capital Stock or any other equity securities of UDS or any securities of UDS representing the right to purchase or otherwise receive any shares of UDS Capital Stock. As of May 1, 2001, no shares of UDS Capital Stock were reserved for issuance, except for 12,525,465 shares of UDS Common Stock reserved for issuance upon the conversion exercise of stock options pursuant to the UDS Stock Plans and in respect of the employee and director savings, compensation and deferred compensation plans described in the UDS 2000 10-K, and no shares of UDS Common Stock reserved for issuance in connection with the UDS Rights Agreement. UDS has no Voting Debt issued or outstanding. (ii) Except for immaterial amounts of directors' qualifying shares in foreign Subsidiaries of UDS, UDS owns, directly or indirectly, all of the issued and outstanding shares of Company Preferred Stockcapital stock or other equity ownership interests of each Subsidiary of UDS, 6,633,543 shares have been reserved for issuance under the Company Option Plansfree and clear of any liens, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Planpledges, charges, encumbrances and none are held in the treasury; and security interests whatsoever (b) 10,000,000 shares of Company Preferred Stock"Liens"), of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding such shares of Company Preferred Stock have been or equity ownership interests are duly authorized and validly issued and are validly issuedfully paid, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and with no personal liability attaching to the extent purchased ownership thereof. No Subsidiary of UDS has or is bound by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities calls, commitments or other agreements of any character calling for the purchase or commitments (contingent or otherwise) pursuant to which the Company or issuance of any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interestsany other equity security of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Subsidiary. Section 4.2(b)(ii) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the UDS Disclosure Schedule sets forth (i) the number and exercise price a list of all outstanding Options and (ii) the aggregate number each material investment of participants inUDS in any corporation, and the aggregate amount contributed (and not otherwise withdrawn) by such participants tojoint venture, the Company ESP Plan partnership, limited liability company or other entity other than its Subsidiaries, which, individually or taken together in the current “Offering Period” aggregate, would be considered a Significant Subsidiary if such investment constituted control of such entity (as such term is defined in the Company ESP Planeach a "Non-Subsidiary Affiliate"), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 150,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 138,066,309 shares are issued and outstanding on outstanding; and (ii) 10,000,000 authorized shares of Preferred Stock, $0.01 par value per share; (iii) 425,000 shares of Series A Preferred Stock, no shares issued or outstanding; 32,000,000 shares are presently reserved for issuance pursuant to the date hereofCompany’s two notes with ▇▇▇▇▇ Enterprises, 2,215,657 Inc., no shares have been are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 11,500,000 shares are reserved for issuance upon the conversion of the issued Note. The Company and the Investor understand that at this time there are not enough shares of Common Stock to effectuate the requested reserve. Upon the effective date of A Definitive 14C increasing the authorized shares to at least 500,000,000 and the filing of an amendment to the Company’s certificate of Incorporation authorizing said increase in the number of authorized shares of Common Stock, the reserve shall go into effect. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. (a) The total authorized capital stock of the Company consists solely of (a) 70,000,000 10,000 shares of Company Common Stockcommon stock, no par value, 900 shares of which 50,199,874 shares are issued and outstanding on as of the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued this Agreement and outstanding 100 shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none which are held in the treasury; treasury of the Company. There are no shares of capital stock of the Company of any other class authorized, issued or outstanding. The Stockholders and their respective fully diluted ownership interests and Proportionate Interests in the Company are listed on Exhibit A attached hereto. --------- (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All Each share of the outstanding shares of Company Common Capital Stock and all of the outstanding shares of Company Preferred Stock have been is (i) duly authorized and are validly issued, issued and was issued in compliance with all federal and state laws; (ii) fully paid and nonassessable and free of preemptive and similar rights. All ; and (iii) free and clear of all liens, pledges, security interests, claims or other encumbrances and restrictions on voting and transfer other than restrictions on transfer imposed by Federal and state securities laws. (c) The Company has reserved 100 shares of common stock (the "Option Shares") for issuance to officers, directors, employees and consultants ------------- of the issued Company pursuant to the Company Stock Plan. The Company Stock Plan has been duly adopted by the Company's Board of Directors (the "Board") and approved ----- by the Company's stockholders. 84 Company Options, each of which is currently exercisable for one Option Share, are currently outstanding, no shares of common stock have been issued upon the exercise of any Company Common Stock Options and all of the issued 16 shares of Company Preferred Stock were issued, and to the extent purchased by are available for future issuance under the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the CompanyStock Plan. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than Except as set forth abovein the prior sentence and except pursuant to this Agreement, there are currently no subscriptions, options, warrants, convertible securities or other agreements or commitments outstanding (contingent or otherwisei) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its any capital stock of the Company, (ii) options, warrants or ownership interests), other rights to purchase or is otherwise required subscribe to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary securities convertible into or any rights to participate in the equity or net income exchangeable for capital stock of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds toCompany, or make any investment (in the form of a loaniii) contracts, capital contribution or otherwise) incommitments, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts understandings, arrangements, calls or other agreements or understandings claims of any kind to which the Company or any Subsidiary is a party or by which it is bound or, relating to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting issuance of any capital stock of the Company or any SubsidiaryCompany. (d) Each Optionee's Option Shares vest and become exercisable as set forth on Exhibit A attached thereto. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.---------

Capitalization. The (a) Immediately prior to giving effect to the transactions contemplated hereby, the authorized capital stock of the Company consisted of (i) 8,000 shares of Common Stock of which 5,756 shares were issued and outstanding, (ii) 3,437 shares of Convertible Preferred Stock, of which no shares were issued and outstanding and (iii) 3,437 shares of Redeemable Preferred Stock, of which no shares were issued and outstanding. As of the Closing and after giving effect to the transactions contemplated hereby, the authorized capital stock of the Company consists solely of (ai) 70,000,000 8,000 shares of Company Common Stock, of which 50,199,874 2,158.500 shares are issued and outstanding on the date hereofoutstanding, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding (ii) 3,437 shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 3,436.099 shares are issued and outstanding on and (iii) 3,437 shares of Redeemable Preferred Stock, of which no shares are issued and outstanding. The relative rights, preferences and other provisions relating to the date hereof. All Convertible Preferred Stock, the Redeemable Preferred Stock and the Common Stock are as set forth in the Articles of Incorporation, and such rights and preferences are valid and enforceable in accordance with their terms under the laws of the State of Illinois. Except as contemplated by the Transaction Documents, there are no outstanding subscriptions, options, warrants, commitments, preemptive rights, agreements, arrangements or commitments of any kind relating to the issuance or sale of, or outstanding securities convertible into or exercisable or exchangeable for, any shares of capital stock of any class or other equity interests of the Company. Except as provided herein, the Company Common Stock has no obligation to purchase, redeem, or otherwise acquire any of its capital stock or any interests therein, and has not redeemed any shares of its capital stock in the past three (3) years. As of the Closing, and after giving effect to the transactions contemplated hereby, all of the outstanding shares of capital stock of the Company Preferred Stock will have been duly and validly authorized and are issued, fully paid and non-assessable, and will have been offered, issued, sold and delivered in compliance with applicable federal and state securities laws without giving rise to preemptive rights of any kind. The Company has duly and validly authorized and reserved (A) 273.516 shares of Common Stock (subject to adjustment) for issuance in connection with awards granted or exercised under the Stock Option Plan, (B) 3,436.099 shares of Common Stock and 3,436.099 shares of Redeemable Preferred Stock (subject to adjustment), all for issuance upon conversion of the Convertible Preferred Stock, and (C) 210.016 shares of Common Stock (subject to adjustment) for issuance upon exercise of the Warrants, and the shares of Common Stock so issued will, upon such grant, exercise or conversion, be validly issued, fully paid and nonassessable and free of preemptive rightsnon-assessable. All As of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issuedClosing, and after giving effect to the extent purchased by the Company transactions contemplated hereby, other than rights set forth herein or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuableArticles of Incorporation, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth abovethe Registration Rights Agreement or the Stockholders' Agreement, there are (1) no subscriptionspreemptive rights, optionsrights of first refusal, warrants, convertible securities put or other agreements call rights or commitments (contingent obligations or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or anti-dilution rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer issuance, sale or redemption of the Company's capital stock or any interests therein, (2) no rights to have the Company's capital stock registered for sale to the public in connection with the laws of any jurisdiction and (3) no documents, instruments or agreements relating to the voting of any capital stock the Company's voting securities or restrictions on the transfer of the Company or any Subsidiary. Each outstanding share Company's capital stock. (b) Immediately prior to the Closing, the Stockholders are the sole record and beneficial owners of capital stock (or ownership interests) the shares of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another SubsidiaryCommon Stock set forth opposite their names on Exhibit A attached hereto, free and clear of all Liens any Claims including Claims of spouses, former spouses and other family members. After giving effect to the transactions contemplated hereby, the Common Stock and the Convertible Preferred Stock will be held as set forth on Section 2.4(b) of the -7- Disclosure Schedule free and clear of any Claims (other than Permitted Liensrestrictions imposed by securities laws applicable to unregistered securities generally).

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 400,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 185,165,210 shares are issued and outstanding on outstanding; and (ii) 100,000,000 shares of Preferred Stock, $0.001 par value per share, of which no shares are issued and outstanding; 21,775,412 shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 36,144,757 shares have are reserved for issuance pursuant to securities (other than the Note and a prior convertible promissory note in favor of the Buyer dated July 19, 2010 in the original principal amount of $50,000.00, which principal amount was increased to $55,000.00 by Amendment No.1 to said note dated February 7, 2011, which principal amount has now been reduced to $33,000.00) exercisable for, or convertible into or exchangeable for shares of Common Stock and 11,074,197 shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, 57,920,169outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. (a) The authorized capital stock of the Company consists solely of 280,000,000 shares of common stock, no par value per share, of which 150,000,000 shares have been designated as Company Class A Stock and 130,000,000 shares have been designated as Company Class B Stock. As of June 23, 2000, there were outstanding: (a1) 70,000,000 32,724,324 shares of Company Common Stock, Class A Stock (which amount includes 184,000 shares of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion restricted stock of the issued and outstanding Company); (2) 55,356,010 shares of Company Preferred Class B Stock, 6,633,543 ; and (3) employee and director stock options to purchase an aggregate of 3,132,832 shares have been reserved for issuance under the of Company Option Plans, 1,887,296 Class A Stock. All shares have been reserved for issuance under the terms of capital stock of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares outstanding as of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock hereof have been duly authorized and validly issued and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Companynonassessable. All shares of Company Common Class A Stock subject to issuance issuable upon exercise of the outstanding Options described above will beemployee or director stock options have been duly authorized and, upon issuance on when issued in accordance with the terms thereof, will be validly issued and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, will be fully paid and nonassessable. Other than . (b) Except as set forth abovein this Section 5.05 and for changes since June 23, 2000 resulting from the exercise of employee or director stock options outstanding on such date, there are no subscriptionsoutstanding (i) shares of capital stock or voting securities of the Company, options, warrants, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities or other agreements or commitments (contingent or otherwise) pursuant to which of the Company or (iiiA options or other rights to acquire from the Company or other obligation of the Company to issue, any Subsidiary is required to issue any shares of its capital stock (stock, voting securities or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) voting securities of the Company or any Subsidiary or any rights (the items in clauses (i), (ii) and (iii) being referred to participate in collectively as the equity or net income of the Company or any Subsidiary"COMPANY SECURITIES"). Except as set forth on Schedule 4.5 of the Disclosure Schedule, there There are no outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any SubsidiarySecurities. Each outstanding share Without limiting the generality of capital stock (or ownership interests) of each Subsidiary is duly authorizedthe foregoing, validly issued, fully paid and nonassessable, and is owned by neither the Company nor any of its Subsidiaries has adopted a shareholder rights plan or another Subsidiary, free and clear of all Liens other than Permitted Lienssimilar plan or arrangement.

Capitalization. (A) The authorized capital stock of the Company consists solely of (a) 70,000,000 40,000,000 shares of Company Common Stock, par value $0.01 per share, 13,306,206 shares of which 50,199,874 shares are issued and outstanding on the date hereofoutstanding, 2,215,657 and 10,000,000 shares of Preferred Stock, none of which are issued and outstanding. All such issued shares have been reserved for issuance upon the conversion of the duly issued in accordance with applicable laws, including federal and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereofstate securities laws. All of the outstanding shares of Company Common Stock and all capital stock of the outstanding shares of Company Preferred Stock and each Subsidiary have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rightsnonassessable. All dividends and other distributions declared with respect to the issued and outstanding shares of the capital stock of the Company have been paid or distributed. (B) The certificates representing the Common Stock to be delivered to the Investor pursuant hereto, both at the Closing and otherwise, and the signatures on the endorsements thereof or stock powers delivered therewith, will be valid and genuine. The stock certificates, endorsements, stock powers and other documents to be delivered to the Investor on the Closing Date or subsequent thereto will transfer to and vest in the Investor good, valid and indefeasible title to the Common Stock to be issued hereunder, free and clear of any adverse claims of any other person, including without limitation any Encumbrance. (C) No stock transfer taxes or other similar taxes are or will be required to be paid by the Investor with respect to the transfer of any of the Common Stock as provided herein. (D) Except as provided in clause (A) above, the SEC Filings (as defined herein) or on Schedule 2.2, as of the Closing Date and except for (i) warrants to purchase an aggregate of 1,000,000 shares of Company Common Stock issued to Joint Energy Development II Limited Partnership and all Enron Capital & Trade Resources Corp. and (ii) options to purchase an aggregate of the issued 1,194,654 shares of Company Common Stock under the Company's 1997 Incentive Plan, there will be no outstanding (1) shares of Common Stock or Preferred Stock were issued, and to the extent purchased by the Company ("Capital Stock") or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders voting securities of the Company. All ; (2) securities of the Company convertible into or exchangeable for shares of Company Common Capital Stock subject to issuance upon exercise or voting securities of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities Company; or (3) options or other agreements rights to acquire from the Company, or commitments (contingent or otherwise) pursuant to which other obligations of the Company to issue, any Capital Stock, voting securities, or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (Capital Stock or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) voting securities of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there Company. (E) There are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem redeem, or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 existing securities of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 450,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 89,211,890 shares are issued and outstanding on outstanding; and (ii) there are no authorized shares of Preferred Stock; no shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Note and a prior convertible promissory note in favor of the Buyer dated August 8, 2012 in the amount of $47,500.00 for which 166,100,000 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 66,400,000 shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 75,000,000 shares of Company Common Stockcommon stock, $0.001 par value per share, of which 50,199,874 34,133,745 shares are issued and outstanding on outstanding. Except as disclosed in the date hereofCompany’s SEC Documents, 2,215,657 no shares have are reserved for issuance pursuant to the Company’s stock option plans that has not been previously disclosed to Buyer, no shares are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of common stock and 32,500,000 shares are reserved for issuance upon the conversion of the issued and Note (subject to adjustment pursuant to the Company’s covenant set forth in Section 4(f) below). All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as set forth abovedisclosed in the SEC Documents, as of the effective date of this SPA, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has filed in its SEC Documents true and correct copies of the Company’s certificate of incorporation as in effect on the date hereof, free the Company’s by-laws, as in effect on the date hereof, and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for common stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The As of the date hereof, the authorized capital stock of the Company OPLI consists solely of (ai) 70,000,000 100,000,000 shares of Company OPLI Common Stock and (ii) 1,000,000 shares of preferred stock, par value $0.001 per share (the “OPLI Preferred Stock”). As of the date hereof and as of immediately prior to the Closing, (i) 10,441,251 shares of which 50,199,874 shares OPLI Common Stock are issued and outstanding, (ii) no shares of OPLI Preferred Stock are issued and outstanding, and (ii) no shares of OPLI Common Stock are held by OPLI in its treasury. As of the Closing Date, the authorized capital stock of OPLI shall consist of (i) 200,000,000 shares of OPLI Common Stock and (ii) 1,000,000 shares of OPLI Preferred Stock. After giving effect to the issuance of the OPLI Common Stock to the shareholders of the Company pursuant to the Merger, the shareholders of OPLI (those OPLI shareholders immediately prior to the Effective Time) will own 10% of the shares of OPLI Common Stock issued and outstanding and the shareholders of the Company (those Company shareholders immediately prior to at the Effective Time) will own the remaining 90% of such shares, where each such figure is calculated on a fully diluted basis (except that it excludes up to 34,709,208 shares of OPLI Common Stock issuable to the holders of the Company Convertible Notes upon conversion thereof (excluding the Contingent Securities). As of the date hereof, 2,215,657 the Merger Sub has 100 ordinary shares have been issued and outstanding. EXECUTION COPY Other than as set forth above or on Schedule 2.3 hereto, no shares of capital stock or other voting or non-voting securities of OPLI are issued, reserved for issuance upon the conversion of the issued and or outstanding. All outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms capital stock of the Company ESP Plan, and none OPLI are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable and not subject to or issued in violation of any Purchase Right, right of first refusal, preemptive right, subscription right or any similar right under any provision of the applicable corporate laws of the State of Delaware, the OPLI Charter Documents, or any Contract to which OPLI is a party or otherwise bound. Other than Except as contemplated by this Agreement or as set forth aboveon Schedule 2.3, there are no subscriptionsoral and/or written, direct and/or indirect options, warrants, rights, convertible securities or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which OPLI is a party or by which it is bound; (a) obligating OPLI to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other agreements or commitments (contingent or otherwise) pursuant to which the Company equity interests in, or any Subsidiary is required to issue security convertible or exercisable for or exchangeable into any shares of its capital stock of or other equity interest in, OPLI, (b) obligating OPLI to issue, grant, extend or ownership interestsenter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to that give any Person the right to receive any benefits economic benefit or rights right similar to any or derived from the economic benefits and rights enjoyed by or accruing occurring to the holders of shares of the capital stock (or ownership interests) of OPLI. As of the Company or any Subsidiary or any rights to participate in date of this Agreement, but excepting the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure ScheduleMerger, there are no outstanding contractual obligations of the Company or any Subsidiary OPLI to repurchase, redeem or otherwise acquire any shares of its capital stock (or ownership interests) or to provide funds toof OPLI. To OPLI’s Knowledge, the offer and sale of all capital stock, convertible securities, rights, warrants, or make any investment (in options of OPLI issued prior to the form of a loanClosing complied with all applicable federal and state securities laws and OPLI has not been notified by the Commission, capital contribution or otherwise) inFINRA, any Subsidiary state securities commission or any other Person. Schedule 4.5 Governmental Authority of the Disclosure Schedule sets forth (i) the number absence of compliance by OPLI with any federal and exercise price state securities laws or other Legal Requirements. No shareholder has a matured and/or unmatured right of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” rescission or claim for Damages with respect thereto. The Can-▇▇▇▇ Shares (as such term is defined in the Company ESP Plan)below) are owned, each calculated as beneficially and of May 21record, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there by OPLI and are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issuedissued and outstanding, fully paid and nonassessable, non-assessable and is owned by the Company or another Subsidiary, are free and clear of all Liens any restrictions on transfer or other Encumbrances (other than Permitted Liensany restrictions under applicable state or federal securities laws).

Capitalization. The Black Warrior has authorized capital stock of the Company consists solely of (a) 70,000,000 12,500,000 shares of Company Common StockStock of which, as of which 50,199,874 shares are issued and outstanding on the date hereof, 2,215,657 there are 2,964,785 shares have been reserved for issuance upon issued and outstanding, and (b) 2,500,000 shares of preferred stock of which, as of the conversion date hereof, there are no shares issued and outstanding . All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, Common Stock were duly and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are validly issued and outstanding on the date hereofare fully paid and non-assessable. All None of the outstanding shares of Company Common Stock and all has been issued in violation of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory of the current or contractual rights of any past stockholders of Seller. As of the Company. All date hereof, Black Warrior has reserved for issuance (i) an aggregate of 760,000 shares of Company Common Stock issuable on issuance of stock options to employees, officers, directors and other persons, and the Board of Directors of Black Warrior has approved amendments to the plans in respect of such options to increase the shares available thereunder to an aggregate of 1,260,000 shares of Common Stock, subject to issuance upon the approval of the shareholders of Black Warrior, and (ii) an aggregate of 1,707,250 shares of Common Stock issuable on the exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptionswarrants, options, warrants, or of convertible securities or other agreements or commitments than those listed in (contingent or otherwisei) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiaryabove. Except as set forth on Schedule 4.5 of the Disclosure Schedule2.7 or described above in (i) and (ii), there are no outstanding contractual obligations options, warrants or rights to subscribe for, or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of the Company capital stock of Black Warrior or any Subsidiary contracts, commitments, understandings or arrangements by which Black Warrior is or may be obligated to repurchase, redeem or otherwise acquire issue additional shares of its capital stock (or ownership interests) or to provide funds tooptions, warrants, or make rights to purchase or acquire any investment (in the form additional shares of a loan, its capital contribution or otherwise) in, any Subsidiary or any other Personstock. Schedule 4.5 All of the Disclosure Schedule sets forth (i) Common Stock issued on the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure ScheduleWarrants will be fully paid, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid non-assessable and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liens.any

Capitalization. The authorized capital stock of the Company consists solely of (a) 70,000,000 shares The authorized share capital of Company Common Stock, A consists of which 50,199,874 shares are issued and outstanding on one single quota of €100,000. As of the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion single quota of the Company A is issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Planoutstanding, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, is validly issued, fully paid and nonassessable. Other than as set forth aboveThe authorized share capital of Company B consists of two quotas, there of which one equal to €54,100 and fully owned free from any Encumbrances by Seller A and one equal to €45,900 fully owned by Econergy Italy PV2 Spa (“Econergy”). As of the date hereof, two quotas of Company B are issued and outstanding, all of which are validly issued, fully paid and nonassessable. The authorized share capital of Company C consists of 1 share of Common Stock. As of the date hereof, 1 share of Common Stock are issued and outstanding, all of which are validly issued, fully paid and nonassessable. None of the issued and outstanding ordinary shares or shares of Common Stock of Each Company was issued in violation of any preemptive rights. There are no subscriptions, options, warrants, convertible securities or other agreements rights, agreements, arrangements or commitments (contingent of any character relating to the Shares or otherwise) obligating either the Sellers or Each Company to issue or sell any Shares, or any other interest in, each Company, except for the Encumbrance over the shares of Company C in favor of CDB pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing long-term loan facilities that will be released to the holders of shares of capital stock (or ownership interestsClosing. Except as Disclosed in Section 3.04(a) of the Company or any Subsidiary or any rights Disclosure Schedule with respect to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Scheduleshareholders agreement with Econergy, there are no outstanding contractual obligations of the each Company or any Subsidiary to repurchase, redeem or otherwise acquire any ordinary shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 Company A Shares constitute all of the Disclosure Schedule sets forth issued and outstanding share capital of Company A (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants inas determined on a fully diluted basis), and Company B Shares constitute 54.1% of the aggregate amount contributed (issued and not otherwise withdrawn) by such participants to, the outstanding share capital of Company ESP Plan in the current “Offering Period” B (as such term is defined in the Company ESP Plandetermined on a fully diluted basis), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect case, which are owned of record and beneficially by Seller A free and clear of all Encumbrances. Company C Shares constitute all of the issued and outstanding share capital of Company C (as determined on a fully diluted basis) that are owned of record and beneficially by Seller B subject only to the transfer or voting Encumbrance in favor of CDB as described above. Upon consummation of the transactions contemplated by this Agreement and registration of the Shares in the name of the Purchaser in the share records of the Company, the Purchaser, assuming it shall have purchased the Shares for value in good faith and without notice of any adverse claim, will own all the issued and outstanding share capital stock of Company A and Company C and 54.1% of the Company or any Subsidiary. Each issued and outstanding share capital of capital stock Company B (or ownership interests) of in each Subsidiary is duly authorizedcase, validly issued, as determined on a fully paid and nonassessable, and is owned by the Company or another Subsidiarydiluted basis), free and clear of all Liens Encumbrances except for the Encumbrance in favor of CDB as described above. Upon consummation of the Transactions, the Shares will be fully paid and nonassessable. Except as Disclosed in section 3.04 (a) of the Disclosure Schedule with respect to the shareholders agreement with Econergy, there are no voting trusts, shareholder agreements, proxies or other than Permitted Liensagreements or understandings in effect with respect to the voting or transfer of any of the Shares, and there are no obligations to provide additional equity contributions in any form whatsoever, or subscribe any further capital increase or other issuance of financial instruments (debt or equity). (b) The share register of each Company and the information available on the competent companies’ register accurately records: (i) the name and address of each Person owning Shares and (ii) the certificate number of each certificate evidencing share capital issued by such Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization. (a) The authorized capital stock of the Company consists solely of (ai) 70,000,000 75,000,000 shares of common stock, par value $.001 per share (the "Common Stock"), of which 4,086,400 shares are issued and outstanding, and (ii) 5,181 shares of Convertible Preferred Stock, without par value (the "Convertible Preferred Stock"), with rights and preferences as set forth in the Articles of Incorporation, as amended, of the Company, of which 3,776 are issued and outstanding. As of the Closing Date, the authorized capital stock of the Company shall consist of (i) 75,000,000 shares of Common Stock, of which 50,199,874 4,086,400 shares are shall be issued and outstanding prior to the Closing Date, (ii) 5,181 shares of Class A Convertible Preferred Stock, without par value (the "Class A Preferred Stock"), with rights and preferences as set forth in the Amended Articles, of which 3,776 shall be issued and outstanding, and (iii) 50,000 shares of the Class B Preferred Stock, with rights and preferences as set forth in the Amended Articles, none of which shall be issued and outstanding. All shares of Common Stock and Class A Preferred Stock outstanding have been validly issued and are fully paid and nonassessable. Except as set forth on Schedule 2.2(a), there are no statutory or contractual pre-emptive --------------- rights, rights of first refusal, antidilution rights or any similar rights held by any party with respect to the date hereofissuance of the Class B Preferred Stock as provided for herein. The holders of the requisite percentage of outstanding shares of the Convertible Preferred Stock have adopted and approved the Amended Articles. (b) The Company has not granted, 2,215,657 or agreed to grant or issue, any options, warrants or rights to purchase or acquire from the Company any shares of capital stock of the Company, there are no securities outstanding or committed to be issued by the Company or any Subsidiary which are convertible into or exchangeable for any shares of capital stock or other securities of the Company, and there are no contracts, commitments, agreements, understandings, arrangements or restrictions as to which the Company is a party, or by which it is bound, relating to any shares of capital stock or other securities of the Company, whether or not outstanding except for (i) the shares of Class B Preferred Stock to be issued pursuant to this Agreement, (ii) shares of the Class A Preferred Stock to be issued in payment of the dividends on such Class A Preferred Stock, (iii) the conversion privileges of the holders of (A) the Class A Preferred Stock, with respect to which an aggregate of 2,517,333 shares of Common Stock have been reserved for issuance upon such conversion and (B) the conversion Class B Preferred Stock to be issued pursuant to this Agreement, with respect to which an aggregate of the issued and outstanding 1,666,667 shares of Company Preferred Stock, 6,633,543 shares Common Stock have been reserved for issuance under upon such conversion, and (iv) such options, warrants and other rights with respect to capital stock of the Company Option Plansset forth on Schedule 2.2(b). --------------- Except as set forth on Schedule 2.2(b), 1,887,296 all such shares have been duly reserved --------------- for issuance, have been duly and validly authorized and upon issuance under in accordance with the terms of the Company ESP Planrespective instruments, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, be validly issued, fully paid and nonassessable. Other than as set forth above. (c) The Class B Preferred Stock that is being purchased by the Purchaser, there are no subscriptionswhen issued, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants insold, and delivered in accordance with the aggregate amount contributed (terms of this Agreement for the consideration expressed herein, will be duly and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid paid, and nonassessable, and is owned by the Company or another Subsidiary, will be free and clear of all Liens restrictions on transfer other than Permitted Liensrestrictions on transfer under this Agreement and under applicable state and federal securities laws. As of the Closing Date, the Common Stock issuable upon conversion of the Class B Preferred Stock being purchased under this Agreement shall have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Amended Articles, will be duly and validly issued, fully paid, and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under applicable state and federal securities laws.

Capitalization. The (a) As of the date hereof, the authorized capital stock of the Company OSI consists solely of 15,020,000 shares, of which (ai) 70,000,000 1,000,000 shares of Company have been designated as Class A Preferred Stock, (ii) 20,000 shares have been designated as Class B Preferred Stock, par value $0.01 per share (“Class B Preferred Stock”), (iii) 10,000,000 shares have been designated as Class A Common Stock, and (iv) 4,000,000 shares have been designated as Class B Common Stock, par value $0.01 per share (“Class B Common Stock”). Of such authorized shares, as of which 50,199,874 shares the date hereof, there are issued and outstanding (1) 1,000,000 shares of Class A Preferred Stock, (2) no shares of Class B Preferred Stock, (3) 4,016,100 shares of Class A Common Stock and (4) no shares of Class B Common Stock. No shares of OSI Common Stock or OSI Preferred Stock are issued and held in the treasury of OSI, and no other class or series of capital stock of OSI is issued or outstanding. All issued and outstanding shares of capital stock of OSI have been duly authorized, validly issued, fully paid and are nonassessable and were issued in compliance with applicable Laws or pursuant to valid exemptions therefrom. (b) Except as set forth on Schedule 2.2(b), and except for shares of OSI Common Stock issuable upon conversion of the OSI Preferred Stock, there are no outstanding rights (either preemptive or other), options, warrants, units, Contracts, commitments, understandings, agreements or arrangements of any kind to which OSI or any of the OSI Subsidiaries is a party to by which any of them is bound (i) obligating OSI or any of the OSI Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, (1) additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, OSI or (2) any bonds, debentures, notes or other indebtedness of OSI having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of OSI Common Stock or OSI Preferred Stock may vote, (ii) obligating OSI or any of the OSI Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, Contract, commitment, understanding, agreement or arrangement, (iii) that give any Person the right to receive any economic benefit or right similar to, or derived from, the economic benefits and rights occurring to holders of OSI Common Stock or OSI Preferred Stock or (iv) obligating OSI, FCB or any of the OSI Subsidiaries to repurchase, redeem or otherwise acquire any capital stock or other securities. Schedule 2.2(b) sets forth, as of the date hereof, 2,215,657 a list of each outstanding and unexercised stock unit, warrant and option exercisable or convertible for shares have been reserved of OSI Common Stock or OSI Preferred Stock and the grant date, exercise or conversion price, number of shares of OSI Common Stock or OSI Preferred Stock issuable upon exercise or conversion thereof, vesting schedule and underlying plan, if any, of each such outstanding and unexercised stock unit, warrant and option. (c) Schedule 2.2(c) contains a true and correct copy of OSI’s book entry ledger reflecting the record holders of OSI’s Class A Common Stock and Class A Preferred Stock and the number of shares held by each as of the date of this Agreement. Each of such holders is the owner of record of the number of shares of OSI Class A Common Stock and OSI Class A Preferred Stock set forth opposite the name of each holder on Schedule 2.2(c). (d) Except as set forth in Schedule 2.2(d), there are no voting trusts, voting agreements, proxies or other agreements, instruments or understandings with respect to the voting of the capital stock of OSI to which OSI or, to the Knowledge of OSI, any of its stockholders is a party. (e) OSI has reserved, and at all times from and after the date hereof to the Effective Time will keep reserved, free from preemptive rights, out of its authorized but unissued shares of OSI Common Stock, sufficient shares of Class B Common Stock solely for issuance upon the purpose of effecting the conversion of the issued and outstanding shares of Company Class A Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, Stock and none are held in the treasury; and (b) 10,000,000 sufficient shares of Company Preferred Stock, Class A Common Stock to provide for the conversion of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding all Stock Units into shares of Company Class A Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments Stock. (contingent or otherwisef) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 2.2(e), other than the issuance of OSI Common Stock upon the conversion of Stock Units, since the OSI Balance Sheet Date, OSI has not declared or paid any dividend or distribution in respect of any capital stock or other securities of OSI, and neither OSI nor any of the Disclosure ScheduleOSI Subsidiaries has issued, there are no outstanding contractual obligations sold, repurchased, redeemed or otherwise acquired any capital stock of or other equity interest in OSI, and their respective Boards of Directors or similar governing bodies have not authorized any of the Company foregoing. (g) As of the date hereof, neither OSI nor any of the OSI Subsidiaries has entered into any commitment, arrangement or any Subsidiary agreement, or are otherwise obligated, to repurchasecontribute capital, redeem loan money or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make additional investments in any investment (in the form of a loan, capital contribution OSI Subsidiary or otherwise) in, any Subsidiary OSI Minority Entity or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by other than any such participants tocommitment, the Company ESP Plan arrangement or agreement in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as ordinary course of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case business consistent with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Lienspast practice.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 500,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 42,962,540 shares are issued and outstanding on outstanding; and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share, of which no shares are issued and outstanding; no shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Note and three (3) prior convertible promissory notes in favor of the Buyer: (a) prior convertible promissory note in favor of the Buyer dated July 17, 2012 in the amount of 37,500.00, the principal of which is now reduced to $7,500.00; (b) prior convertible promissory note in favor of the Buyer dated September 13, 2012 in the amount of $42,500.00; an aggregate total of 15,000,000 shares of Common Stock are presently reserved for the two aforementioned prior convertible promissory notes; and (c) prior convertible promissory note in favor of the Buyer dated October 19, 2012 in the amount of $32,500.00 for which 3,000,000 shares of Common Stock are presently reserved) exercisable for, or convertible into or exchangeable for shares of Common Stock and 47,000,000 shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The 1 (a) As of the Effective Date, the authorized capital stock of the Company consists solely of (a) 70,000,000 10,000,000 shares of Company Common Stock, of which 50,199,874 1,000,000 shares are issued and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 1,000,000 authorized shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 zero shares are issued and outstanding outstanding. (b) Except as set forth on the date hereof. All of Schedule 4.5(b), all the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and validly issued and are validly issued, fully paid and nonassessable non-assessable, and free of preemptive rights. All were issued in accordance with the registration or qualification requirements of the Securities Act and any relevant state securities Laws or pursuant to valid exemptions therefrom and were not issued in violation of the pre-emptive rights of any Person or any Contract that was not duly waived or applicable Law by which the Company was bound as the time of the issuance. There are no shares of Company Common Stock and all or any other equity security of the Company issuable upon conversion or exchange of any issued and outstanding security of the Company nor are there any rights, options outstanding or other agreements to acquire shares of Company Preferred Stock were issued, and to the extent purchased by or any other equity security of the Company nor is the Company contractually obligated to purchase, redeem or transferred, have been so purchased or transferred, in compliance with otherwise acquire any of its outstanding shares that would survive the Closing. No Company Stockholder is entitled to any preemptive or similar rights and to subscribe for shares of capital stock of the Company that would survive the Closing. There are no declared or accrued but unpaid dividends with respect to any other statutory or contractual rights shares of any stockholders capital stock of the Company. All . (c) Schedule 4.5(c) sets forth a complete and accurate list of (i) all issued and outstanding shares of Company Common Stock subject to issuance upon exercise capital stock of the outstanding Options described above will beCompany, upon issuance on identifying the terms name of the registered holder thereof, the class and/or series of shares held, and conditions specified in the instruments pursuant to which they are issuable, duly number of shares of each such class or series held. No other capital stock or other equity interests of the Company is authorized, validly issued, fully paid and nonassessableissued or outstanding. Other than as set forth above, there There are no subscriptions, options, warrants, convertible securities or other agreements rights, agreements, arrangements, or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary member or other equity holder of the Company is required a party or by which any such party is bound obligating the Company or the member or equity holder of the Company to issue grant, issue, or sell any capital stock or any other equity interest in the Company. (d) The Company has no commitment or obligation of any character, either firm or conditional, written or oral, to issue, deliver or sell, or repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, under offers, stock option agreements, stock bonus agreements, stock purchase plans, incentive compensation plans, warrants, calls, conversion rights, or otherwise, any shares of its the capital stock or other securities of the Company. There are no securities of the Company (including any options or ownership interestswarrants) issued, reserved for issuance, or outstanding. (e) There is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any capital stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for its any capital stock or other securities of the Company; (iii) Contract under which the Company is or ownership interests), may become obligated to sell or is otherwise required to give issue any Person of the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 securities of the Disclosure Schedule sets forth Company; or (iiv) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) other right held by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 any Person to acquire or receive any capital stock or other securities of the Disclosure ScheduleCompany. The Company does not have any other outstanding stock appreciation rights, there phantom stock, performance based stock or equity rights or similar stock or equity rights or obligations. The Company does not have any outstanding debt securities which grant the holder thereof any right to vote on, or veto, any actions by the Company. (f) There are no stockholders’ agreements, voting trusts trusts, pooling agreements or other agreements Contracts, arrangements or understandings to which in respect of the Company voting of any of the shares of capital stock of the Company. At or before the Effective Time, any Subsidiary is a party rights of any holder or by which it is bound or, to prospective holder of the Company’s Knowledgesecurities to cause such securities to be registered under the Securities Act, between or among stockholdersand any information rights, in each case with respect voting rights, rights of co sale, rights to maintain equity percentage, rights of first refusal and the transfer or voting like that may exist for the benefit of any such holder or prospective holder shall have been terminated. (g) As a result of the Merger, Parent will be the sole record and beneficial holder of all issued and outstanding capital stock of the Company and all rights to acquire or receive any Subsidiary. Each outstanding share shares of capital stock (of the Company, whether or ownership interests) not such shares of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by capital stock of the Company or another Subsidiary, free and clear of all Liens other than Permitted Liensare outstanding.

Capitalization. (a) The authorized share capital stock of the Company consists solely is US$120,000 divided into 1,200,000,000 Shares of a par value of US$0.0001 each, comprising of (ai) 70,000,000 840,000,000 Class A Ordinary Shares, (ii) 240,000,000 Class B Ordinary Shares and (iii) 120,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the Company Common StockBoard may determine in accordance with Article 9 of the articles of association of the Company. As of the close of business in New York City on July 31, of which 50,199,874 shares 2025, (A) 433,223,191 Class A Ordinary Shares are issued and outstanding on the date hereofoutstanding, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, all of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable non-assessable, (B) 73,973,970 Class B Ordinary Shares are issued and free outstanding, all of which have been duly authorized and are validly issued, fully paid and non-assessable, and (C) 19,674,986 Class A Ordinary Shares are issued to the Depositary and reserved for future issuance pursuant to the outstanding Company Options (and for the avoidance of doubt are not included in the number of issued and outstanding Class A Ordinary Shares set forth in the foregoing clause (A)). (b) Except for the Company Options referred to in Section 3.03(a) and rights under the Control Documents, there are no restricted shares, restricted share units, options, warrants, preemptive rights, conversion rights, redemption rights, share appreciation rights, repurchase rights, convertible debt, other convertible instruments or other rights, agreements, arrangements or commitments of any character issued by any Group Company relating to the issued or unissued share capital of any Group Company or obligating any Group Company to issue, transfer or sell or cause to be issued, transferred or sold any Equity Securities of any Group Company or any securities or obligations convertible or exchangeable into or exercisable for, or giving any person a right to subscribe for or acquire, any securities of any Group Company and no securities or obligations evidencing such rights are authorized, issued or outstanding. All There are no outstanding contractual obligations of any Group Company to repurchase, redeem or otherwise acquire any Equity Securities of any Group Company. The Company has not issued and does not have outstanding any bonds, debentures, notes or other obligations that provide the holders thereof with the right to vote (or are convertible into or exchangeable or exercisable for securities having the right to vote) on any matter on which the shareholders of the issued shares of Company Common Stock and all may vote. (c) Section 3.03(c) of the issued shares Company Disclosure Schedule sets forth the following information with respect to each Company Option outstanding as of the date of this Agreement: (i) the name of holder of such Company Preferred Stock were issued, and Option (only to the extent purchased such holder is a Management Party or his or her Affiliate); (ii) the number of Class A Ordinary Shares subject to such Company Option; (iii) the exercise or purchase price of such Company Option; (iv) the date on which such Company Option was granted; (v) the vesting status of such Company Option; and (vi) the date on which such Company Option expires. The grant of each such outstanding Company Option was validly made and properly approved by the Company Board (or transferred, have been so purchased a duly authorized committee or transferred, subcommittee thereof) in compliance with any preemptive rights the terms of the relevant Company Share Plan, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules and any regulations of the NASDAQ Stock Market LLC (“NASDAQ”) and all other statutory applicable Laws. Except as set forth in Section 3.03(c) of the Company Disclosure Schedule or contractual rights otherwise provided in this Agreement, there are no commitments or agreements of any stockholders character to which any Group Company is bound obligating such Group Company to accelerate or otherwise alter the vesting of any Company Option as a result of the Company. Transactions. (d) All shares of Company Common Stock Shares subject to issuance upon due exercise of the outstanding Options described above will bea Company Option, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessablenon-assessable. The Company has made available to Parent accurate and complete copies of (i) the Company Share Plan pursuant to which the Company has granted the Company Options that are currently outstanding, and (ii) the form of award agreement evidencing such Company Options. There are no award agreements evidencing any Company Options with terms that are materially different from those set forth in the form of award agreement that has been made available to Parent. (e) The outstanding shares, share capital or registered capital, as the case may be, of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid (except for any registered capital not due for payment) and non-assessable, and the portion of the outstanding shares, share capital or registered capital, as the case may be, of each of the Company’s Subsidiaries and such other entities listed or referred to in Section 3.01(b) of the Company Disclosure Schedule that is owned by any Group Company is owned by such Group Company free and clear of all Liens, other than the Controlled Entities to the extent they are subject to their respective Control Documents. Such Group Company has the unrestricted right to vote, and (subject to limitations imposed by applicable Law and the applicable constitutional documents) to receive dividends and distributions on, all such Equity Securities. The outstanding shares, share capital or registered capital, as the case may be, of each of the Company’s Subsidiaries is not subject to any outstanding obligations of any Group Company requiring the registration under any securities Law for sale of such shares, share capital or registered capital, as the case may be. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure ScheduleControl Documents, there are no outstanding contractual obligations of the any Group Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth Company’s Subsidiaries. (if) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, Except for the Company ESP Share Plan in the current “Offering Period” (as such term is defined disclosed in the Company ESP Plan)SEC Reports, each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which neither the Company nor any of its Subsidiaries makes or adopts any Subsidiary is a party option plans or by which it is bound oremployee incentive plans or reserves any shares, to the Company’s Knowledgeregistered capital or share capital for any directors, between officers, employees or among stockholders, in each case with respect to the transfer or voting consultants of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted LiensGroup Company.

Capitalization. (a) The authorized capital stock of the Company consists solely of (a) 70,000,000 15,000,000 shares of Company Common Stock, no par value, and 500,000 shares of which 50,199,874 shares are issued and outstanding on Preferred Stock, par value $10.00 per share (the "Preferred Stock"). At the date hereof, 2,215,657 there were (i) 4,523,975 shares have been of Company Common Stock issued and outstanding and an equal number of shares of Company Common Stock reserved for issuance upon exercise of Rights under the conversion Rights Agreement, (ii) 37,167 shares of Company Common Stock issuable upon the exercise of outstanding Company Stock Options (all of which are presently vested and exercisable) pursuant to the Option Plans, and (iii) no shares of Preferred Stock issued or outstanding. All of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares Stock have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, (and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding any shares of Company Common Stock and all of issued upon the outstanding shares exercise of Company Preferred Stock have been Options will be) duly authorized and validly issued and are validly issued(or will be) fully paid, fully paid and nonassessable and free of preemptive rights. All Except as set forth above or in Section 3.2(a) of the issued Company's disclosure schedule delivered to Parent concurrently with the execution of this Agreement (the "Company Disclosure Schedule"), as of the date hereof, there are not and, as of the Effective Time there will not be, any shares of Company Common Stock Stock, Preferred Stock, or other capital stock issued and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company outstanding or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities calls, commitments or other agreements of any character calling for the purchase or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares issuance of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests)of the Company, or is otherwise required to give including any Person securities representing the right to purchase or otherwise receive any benefits Company Common Stock or rights similar to any rights enjoyed by Preferred Stock. (b) The Company owns, directly or accruing to indirectly, all of the holders of issued and outstanding shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares each of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiarysubsidiaries, free and clear of any liens, charges, encumbrances, adverse rights or claims and security interests whatsoever ("Liens"), and all Liens of such shares are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. None of the Company's subsidiaries has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any security of such subsidiary, including any securities representing the right to purchase or otherwise receive any shares of capital stock or any other than Permitted Liensequity security of such subsidiary. (c) Disclosed in Section 3.2(c) of the Company Disclosure Schedule is a true and complete list of all outstanding Company Stock Options as of the date hereof, the exercise price therefor, and the holder thereof.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 2,500,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 443,015,464 shares are issued and outstanding on outstanding; and (ii) 15,000,000 shares of Preferred Stock, $0.001 par value per share, of which 6,454,322 shares are issued and outstanding; no shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans, 2,215,657 no shares have been are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 105,386,417 shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth aboveNo shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The authorized capital stock of the Company consists solely of (a) 70,000,000 40,000,000 shares of Company Class A Common Stock, 1,000,000 shares of which 50,199,874 shares are issued Company Class B Common Stock and outstanding on the date hereof, 2,215,657 shares have been reserved for issuance upon the conversion of the issued and outstanding 2,000,000 shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms . As of the Company ESP Plan, and none are held in the treasury; and date hereof: (ba) 10,000,000 5,245,212 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares Class A Common Stock are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and outstanding, all of the outstanding shares of Company Preferred Stock have been which are duly authorized and are authorized, validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued nonassessable; (b) 294,100 shares of Company Class B Common Stock are issued and outstanding, all of the issued which are duly authorized, validly issued, fully paid and nonassessable; (c) no shares of Company Preferred Stock were are issued and outstanding; (d) 1,754,588 shares of Company Class A Common Stock are reserved for issuance upon the exercise of outstanding Company Stock Options granted to the Company's officers, directors and employees pursuant to the Plans; (e) no shares of Company Class A Common Stock are reserved for issuance upon the exercise of outstanding warrants; 796,788 shares of Company Class A Common Stock and no shares of Company Class B Common Stock are held in the treasury of the Company; and (f) 1,852,213 shares of Company Class A Common Stock are reserved for issuance under the Plans. The foregoing representation and warranty and each other representation and warranty of the Company related to the Company Class B Common Stock assume that no shares of Company Class B Common Stock have been, or will be, prior to the Effective Time, converted into shares of Company Class A Common Stock. There are no bonds, debentures, notes or other Debt or, other than the capital stock and options described in this Section 3.3, securities of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote. Schedule 3.3 sets forth the ownership of the capital stock or other equity interests of each Acquired Corporation other than the Company that is not wholly owned, directly or indirectly, by the Company. Except as set forth in the preceding sentences of this Section 3.3 or in Schedule 3.3, as of the date hereof, no shares of capital stock or other voting securities of the Company are issued, reserved for issuance or outstanding and no shares of capital stock or other voting securities of the Company will be issued or become outstanding after the date hereof other than upon exercise of the Company Stock Options outstanding as of the date hereof. No warrants related to securities of the Company are outstanding. Except as set forth in this Section 3.3 or in Schedule 3.3, there are no options, stock appreciation rights, warrants or other rights, Contracts, arrangements or commitments of any character (collectively, "Options") relating to the extent purchased by issued or unissued capital stock of any of the Acquired Corporations, or obligating any of the Acquired Corporations to issue, grant or sell any shares of capital stock of, or other equity interests in, or securities convertible into equity interests in, the Company or transferredany of its Subsidiaries. Since December 31, have been so purchased 2004, the Company has not issued any shares of its capital stock or transferredOptions in respect thereof, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders except (x) upon the conversion of the securities or the exercise of the options referred to above and (y) with respect to issuances of shares of capital stock pursuant to the Company's 1999 Non-Employee Director Stock and Stock Option Plan, as set forth on Schedule 3.3. The Company has delivered to Parent, with respect to each Option granted by any Acquired Corporation, as of the date of this Agreement, information regarding the identity of the grantee, the number of Options subject to the grant, the exercise/conversion price and expiration date and, if applicable, the stock option plan under which it was issued. All shares of Company Common Capital Stock subject to issuance upon exercise of the outstanding Options as described above will bewill, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, be duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there The provisions of Section 2.6(a) are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which effective and do not conflict with the Company or Plans and, as of the Effective Time, all outstanding Company Stock Options will be terminated by virtue of the Merger and each holder of a Company Stock Option shall cease to have any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests)rights with respect thereto, or is otherwise required to give any Person other than the right to receive any benefits or rights similar to any rights enjoyed by or accruing to receive, in respect of each such terminated Company Stock Option, the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any SubsidiaryOption Consideration. Except as set forth on in Schedule 4.5 3.3, none of the Disclosure Schedule, there are no outstanding contractual obligations of the Company Acquired Corporations has any Contract or any Subsidiary other obligation to repurchase, redeem or otherwise acquire any shares of its Company Capital Stock or other stock of the Company or any capital stock (or ownership interests) of any of the Company's Subsidiaries, or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, in any Subsidiary of the Company's Subsidiaries or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, nonassessable and is each such share owned by any of the Company or another Subsidiary, Acquired Corporations is free and clear of all Liens Encumbrances other than Permitted LiensEncumbrances. None of the outstanding equity securities or other securities of any of the Acquired Corporations was issued in violation of the Securities Act or any other Legal Requirement. Except as set forth on Schedule 3.3, none of the Acquired Corporations owns, or has any Contract or other obligation to acquire, any equity securities or other securities of any Person (other than Subsidiaries of the Company) or any direct or indirect equity or ownership interest in any other business. Except as set forth on Schedule 3.3, none of the Acquired Corporations is or has ever been a general partner of any general or limited partnership.

Capitalization. The a) Immediately prior to the Closing, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 1,500,000 shares of Company Common Stock, of which 50,199,874 (A) 401,000 shares are issued and outstanding on the date hereofoutstanding, 2,215,657 (B) 100,000 shares have been are reserved for issuance upon the conversion exercise of options issued or authorized for issuance under the Company's Management Incentive Program (the "Incentive Program"), (D) 100,000 shares are reserved for issuance upon the exercise of warrants issued to Merlin, and (E) no shares (other than as provided in this Section 3.6(a) and the Conversion Shares and Warrant Shares) are reserved for issuance upon the conversion, exchange or exercise of the Company's Preferred Stock or any other security, and (ii) 1,500,000 shares of Preferred Stock, all of which are designated as "Series A Convertible Preferred Stock". b) Except for options to purchase 100,000 shares of Common Stock issued and outstanding under the Incentive Program, and warrants to purchase 100,000 shares of Common Stock issued to Merlin, and the Warrants there are no outstanding options, warrants, rights (including conversion or preemptive rights, anti-dilution rights and rights of first refusal), proxy or stockholder agreements, or other agreements of any kind (whether oral or written, contingent or otherwise) relating to the issuance, conversion, registration, voting, sale or transfer of any shares of capital stock or other securities of the Company or obligating the Company or any other person or entity to purchase or redeem any such capital stock or other securities. c) All issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, are fully paid and nonassessable and free of preemptive rights. All of the were issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights all applicable laws concerning the issuance of securities. The Conversion Shares and any other statutory or contractual rights the Warrant Shares have been duly and validly reserved for issuance. The Company Issued Shares and the Warrant Shares, when issued in compliance with the provisions of any stockholders this Agreement, the Conversion Shares, when issued in compliance with the provisions of the Company. All shares Certificate of Company Common Stock subject to issuance upon exercise Designation and the Warrant Shares, when issued in compliance with the provisions of the outstanding Options described above Warrant Certificates, will be, upon issuance on the terms have been duly authorized and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, will be fully paid and nonassessable, will have been issued in compliance with all applicable laws concerning the issuance of securities, and is owned by the Company or another Subsidiary, will be free and clear of all Liens other than Permitted Liensany Encumbrances; the Merlin Transferred Shares were issued in compliance with the provisions of the Certificate of Designations, will have been duly authorized and validly issued, were fully paid and nonassessable; provided, however, that the Securities may be subject to restrictions on transfer under applicable securities laws and the Stockholders Agreement. The issuance and sale of the Securities were not, are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. d) The Company has delivered to the Investors its current capitalization table, a true and complete copy of which is attached hereto as Schedule 3.6, which sets forth the name of each holder of securities of the Company (including, without limitation, options issued under the Incentive Program) and the type and number of securities held by each such holder, both immediately prior to and immediately after the Closing (giving effect to the transactions contemplated hereby).

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 100,000,000 (authorized shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 43,626,598 shares are issued and outstanding on outstanding; and (ii) 10,000,000 authorized shares of Preferred Stock, $0.001 par value per share, of which no shares are issued and outstanding; 6,750,000 shares are reserved for issuance pursuant to the date hereofCompany’s stock incentive plans, 2,215,657 shares have been are potentially issuable for issuance pursuant to securities (though the Company agrees to maintain the Reserved Amount as defined in the Note (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 18,600,000 shares are reserved for issuance upon the conversion of the issued and Note. All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than as set forth above, there No shares of capital stock of the Company are no subscriptions, options, warrants, convertible securities subject to preemptive rights or any other agreements or commitments (contingent or otherwise) pursuant to which similar rights of the stockholders of the Company or any Subsidiary is required liens or encumbrances imposed through the actions or failure to issue act of the Company. As of the effective date of this Agreement, (i) there are approximately 22,389,123 warrants, and no outstanding options, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any shares of its capital stock (character whatsoever relating to, or ownership interests) securities or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) except as disclosed in the Company’s periodic reports filed under the 1934 Act (as defined below) (the “SEC Reports”), there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorizedthere are no anti-dilution, validly issued, fully paid but there are price adjustment provisions contained in certain debentures and nonassessable, and is owned warrants issued by the Company or another Subsidiarythat will be triggered by the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Articles of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The (a) As of the date of this Agreement, the authorized share capital stock of the Company consists solely of 8,000,000,000 Class A Shares and 2,000,000,000 Class B Shares. As of the date of this Agreement, (ai)(A) 70,000,000 shares of Company Common Stock, of which 50,199,874 shares 33,777,159 Class A Shares are issued and outstanding on outstanding, (B) 20,000,000 Class A Shares are reserved and available for issuance pursuant to share-based compensation awards granted under the Company’s SpiderMan Share Incentive Plan (the “Company ESOP”), (C) convertible note of principal value of US$15,000,000 is issued for which a maximum number of 1,491,646 Class A Shares can be converted pursuant to the convertible note, and (ii) 200,000,001 Class B Shares are issued and outstanding. Except as set forth in this Section 3.03(a), as of the date hereofof this Agreement, 2,215,657 shares have been no Securities were issued, reserved for issuance upon the conversion or outstanding and no securities of the any of its Subsidiaries convertible into or exchangeable or exercisable for any Securities were issued and or are outstanding. All outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP PlanOrdinary Shares are, and none are held in the treasury; and (b) 10,000,000 all such shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are that may be issued and outstanding on prior to the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above hereof will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuablewhen issued, duly authorized, validly issued, fully paid and nonassessablenon-assessable and not subject to preemptive rights. Other than Except for any obligations pursuant to this Agreement or as otherwise set forth aboveabove in this Section 3.03(a) and other than pursuant to the Company ESOP, as of the date of this Agreement, there are no subscriptions, options, warrants, convertible securities options or other agreements or commitments (contingent or otherwise) pursuant rights to which acquire from the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests)Company, or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) other obligation of the Company or to issue, any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Scheduleadditional Securities, and there are no outstanding contractual obligations of the Company or any Subsidiary of its Subsidiaries to repurchase, redeem or otherwise acquire shares of its capital stock any Securities. (or ownership interestsb) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 All of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts capital or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) securities of each Subsidiary is duly authorizedowned by the Company, directly or indirectly, free and clear of any Encumbrance. All of the issued equity securities of each Subsidiary of the Company are validly issued, fully paid and nonassessablenon-assessable, and is owned by were issued in compliance with the applicable registration and qualification requirements of Applicable Laws. (c) There are no preemptive rights, registration rights, rights of first offer, rights of first refusal, tag-along rights, director appointment rights, governance rights, veto rights or other similar rights with respect to the Securities or the securities of any Subsidiary of the Company that have been granted to any Person (other than the Company or another any Subsidiary). (d) After giving effect to the Investment, free the Issued Shares shall represent (i) 0.97% of the total outstanding share capital of, and clear (ii) 1.16% of the total voting power represented by the total outstanding share capital of, the Company, in each case on a fully diluted basis (including, for the avoidance of doubt, all Liens other than Permitted Liensshares issuable under Company ESOP and convertible note).

Capitalization. (a) The authorized capital stock of the Company consists solely of (a) 70,000,000 1,000,000 shares of Company Class A Common Stock, par value $0.01 per share, of which 50,199,874 306,126 shares are issued and outstanding, and 1,000,000 shares of Class B Common Stock, par value $0.01 per share, of which 2,683 shares are issued and outstanding on (together, the date hereof"Common Stock"), 2,215,657 and 1,000,000 shares of preferred stock, par value $0.01 per share, 500,000 shares of which have been reserved for issuance upon designated as Series A 8% Convertible Preferred Stock (the conversion "Preferred Stock") as provided in Article Fourth, Section A, Paragraph 4(c) of the issued and outstanding Company's Certificate of Incorporation (the "Certificate"). 80,379 shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares Stock are issued and outstanding outstanding. The Sellers listed on Exhibit A hereto are the date hereof. All only stockholders of the outstanding shares of Company Common Stock and Company, the Shares constitute all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All capital stock of the issued shares of Company Common Stock and the information contained in Exhibit A is otherwise complete and accurate in all of the issued shares of Company Preferred Stock were issuedrespects. Except as disclosed on Schedule 2.2, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the has no outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Other than as set forth above, there are no subscriptions, options, warrants, convertible securities or other agreements agreements, arrangements or commitments (contingent of any kind for or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing relating to the holders of issuance or sale of, any shares of capital stock (or ownership interests) other equity interests of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any SubsidiaryCompany. Except as set forth on Schedule 4.5 of the Disclosure Schedule2.2, there are no outstanding contractual obligations of the Company is not subject to or bound by any Subsidiary obligation to repurchasepurchase, redeem redeem, or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary Shares or any other Person. Schedule 4.5 equity securities of the Disclosure Schedule sets forth Company. All of the Shares have been duly and validly authorized and issued and are fully paid and non-assessable. (ib) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule2.2, there are no stockholders’ agreementspreemptive rights, voting trusts rights of first refusal, put or other agreements call rights or understandings to which the Company obligations or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case anti dilution rights with respect to the transfer issuance, sale or voting of any capital stock redemption of the Company Shares, or any Subsidiary. Each outstanding share agreements relating to the voting or restricting the transfer of the Company's shares of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liensrights set forth in the Certificate, the Stockholders' Voting Agreement dated as of December 24, 2001 and the Stock Restriction Agreement dated as of December 24, 2001. There are no rights to have the Company's shares of capital stock registered for sale to the public pursuant to the laws of any jurisdiction, other than rights set forth in the Registration Rights Agreement dated as of December 24, 2001.

Capitalization. The As of the date hereof, the authorized capital stock of the Company consists solely of of: (ai) 70,000,000 50,000,000 shares of Company Common Stock, $0.001 par value per share, of which 50,199,874 12,506,732 shares are issued and outstanding on outstanding, no shares are reserved for issuance pursuant to the date hereofCompany’s stock option plans; and (ii) 5,000,000 shares of preferred stock, 2,215,657 $0.001 par value per share of which no shares have been are issued and outstanding; no shares are reserved for issuance pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of Common Stock and 1,109,399 shares are reserved for issuance upon the conversion of the issued and Note (subject to adjustment pursuant to the Company’s covenant set forth in Section 4(g) below). All of such outstanding shares of Company Preferred Stockcapital stock are, 6,633,543 shares have been reserved for or upon issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding on the date hereof. All of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been duly authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. All of the issued shares of Company Common Stock and all of the issued shares of Company Preferred Stock were issued, and to the extent purchased by the Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights and any other statutory or contractual rights of any stockholders of the Company. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will be, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable. Other than No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as set forth abovedisclosed in Schedule 3(c), as of the effective date of this Agreement, (i) there are no subscriptions, outstanding options, warrants, convertible scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or other agreements or commitments (contingent or otherwise) pursuant to which the Company or any Subsidiary is required to issue any shares of its capital stock (or ownership interests) or any securities rights convertible into or exchangeable for its capital stock (or ownership interests), or is otherwise required to give any Person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or ownership interestsarrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or another Subsidiaryin any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), free the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and clear the terms of all Liens other than Permitted Lienssecurities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

Capitalization. The (a) Immediately prior to the consummation of the transactions contemplated hereunder, the authorized capital stock of the Company consists solely of (a) 70,000,000 1,400 shares of Company Common Stock, no par value per share (the “Stock”) of which 50,199,874 1,228.49 shares of Stock are issued and outstanding on (which such amounts include the date hereof, 2,215,657 shares have been reserved for issuance issuable upon the conversion of the issued and outstanding shares of Company Preferred Stock, 6,633,543 shares have been reserved for issuance under the Company Option Plans, 1,887,296 shares have been reserved for issuance under the terms exercise of the Company ESP Plan, and none are held in the treasury; and (b) 10,000,000 shares of Company Preferred Stock, of which 3,000,000 are reserved for issuance as Series B Cumulative Convertible Preferred Stock, of which 1,500,000 shares are issued and outstanding Stock Options on the date hereofClosing Date). All The beneficial and record ownership of the outstanding shares of Company Common Stock and all of the outstanding shares of Company Preferred Stock have been is set forth on Schedule 3.4(a) attached hereto. All outstanding shares of Stock (i) are duly authorized and are authorized, validly issued, fully paid and nonassessable (ii) were not issued in violation of any pre-emptive rights or federal or state securities laws and free (iii) are not subject to preemptive rights created by statute, the Certificate of preemptive rights. All Incorporation or By-Laws of the issued Company or any agreement or document to which the Company is a party or by which it is bound. As of the date of this Agreement and after giving effect to the exercise any such Company Stock Options on or before the Closing, fifty (50) shares of Company Common Stock and all were reserved for issuance upon the exercise of the issued shares of options to purchase Company Preferred Common Stock were issued, and granted pursuant to the extent purchased by Company’s 2004 Stock Incentive Plan (the “Company or transferred, have been so purchased or transferred, in compliance with any preemptive rights Option Plan”) under which options are outstanding for an aggregate of zero (o) shares and any other statutory or contractual rights of any stockholders of the Companyunder which thirty-two (32) shares are available for grant. All shares of Company Common Stock subject to issuance upon exercise of the outstanding Options described above will beas aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. Other than Except as set forth above, as of the date of this Agreement no shares of Stock, other equity securities, partnership interests or similar ownership interests or other voting securities of the Company or any securities exchangeable or convertible into or exercisable for such capital stock, other equity securities, partnership interests or similar ownership interests or other voting securities of the Company, were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights with respect to shares of Stock. There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of the Company may vote. Except as set forth above, there are no subscriptionssecurities, partnership interests or similar ownership interests, options, warrants, convertible securities calls, rights (including preemptive rights) or other commitments, understandings, arrangements, agreements or commitments contracts (contingent either written or otherwiseoral) pursuant of any kind to which the Company is a party, or any Subsidiary by which the Company is required bound, obligating the Company to issue issue, deliver or sell, or cause to be issued, delivered or sold, any shares of its capital stock or other securities of the Company or obligating the Company to issue, grant, extend, accelerate the vesting of or enter into any such security, partnership interest or similar ownership interest, option, warrant, call, right, commitment, understanding, arrangement, agreement or contract (either written or ownership interests) oral). The Company has never repurchased, redeemed or otherwise acquired or caused the repurchase, redemption or acquisition of any shares of capital stock or other securities of the Company, and there are no amounts owed or which may be owed to any person by the Company as a result of any repurchase, redemption or acquisition of any shares of Stock or other securities of the Company. There is no claim or basis for such a claim to any portion of the Merger Consideration except as provided in Section 2.2 or Schedule 2.2 hereto by any current or former shareholder, option holder or warrant holder of the Company, or any other person. There are no registration rights and there are no voting trusts, proxies or agreements or understandings with respect to any equity security of any class of securities of the Company. All outstanding options to purchase Company Common Stock were issued pursuant to the Company Option Plan. Schedule 3.4 hereto sets forth a true and complete list of the holders of outstanding Company Stock Options and lists for each outstanding Company Stock Option, as of the date of this Agreement, (i) the number of shares of Company Common Stock subject to such outstanding Company Stock Option, (ii) the exercise price of such option, (iii) the number of shares as to which such option will have vested, (iv) the vesting schedule for such option and whether the exercisability of such option will be accelerated in any way by the transactions contemplated by this Agreement or for any other reason, and (v) indicates the extent of acceleration, if any. (b) Since its date of incorporation, the Company has not owned, directly or indirectly, any equity securities, or options, warrants or other rights to acquire equity securities, or securities convertible into or exchangeable for its capital stock (or ownership interests)equity securities, of any other corporation, or is otherwise required to give any Person the right to receive partnership interest in any benefits general or rights similar to any rights enjoyed by limited partnership or accruing to the holders of shares of capital stock (or ownership interests) of the Company or any Subsidiary or any rights to participate in the equity or net income of the Company or any Subsidiary. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire shares of its capital stock (or ownership interests) or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary or any other Person. Schedule 4.5 of the Disclosure Schedule sets forth (i) the number and exercise price of all outstanding Options and (ii) the aggregate number of participants in, and the aggregate amount contributed (and not otherwise withdrawn) by such participants to, the Company ESP Plan in the current “Offering Period” (as such term is defined in the Company ESP Plan), each calculated as of May 21, 2004. Except as set forth on Schedule 4.5 of the Disclosure Schedule, there are no stockholders’ agreements, voting trusts or other agreements or understandings to which the Company or any Subsidiary is a party or by which it is bound or, to the Company’s Knowledge, between or among stockholders, in each case with respect to the transfer or voting of any capital stock of the Company or any Subsidiary. Each outstanding share of capital stock (or ownership interests) of each Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and is owned by the Company or another Subsidiary, free and clear of all Liens other than Permitted Liensunincorporated joint venture.