Common use of Capitalization Clause in Contracts

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rights.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares [ ] shares of Common Stock, of which [ ] shares are issued and outstanding, (ii) 0 Shares [ ] shares are issued and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, [ ] shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and, [ ] shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company's covenant set forth in Section 4(h) below); and (ii) 5,000,000 shares of preferred stock, of which 44,630 shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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 ("Articles of Incorporation"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares 150,000,000 shares of Common Stock, of which [ ] shares are issued and outstanding, (ii) 0 Shares no shares are issued and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Convertible Securities and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and [ ] shares are reserved for issuance upon conversion of the Convertible Securities and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company's covenant set forth in Section 4(h) below); and (ii) 20,000,000 shares of preferred stock, of which no shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Convertible Securities, the Warrants, the Conversion Shares or Warrant 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 ("Articles of Incorporation"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 200,000,000 shares of Common Stock, $0.001 par value per share, of which 70,864,772 shares are issued and outstanding, (ii) 0 Shares ; no shares are issued and held in the treasury of reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 4,545,455 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and Note (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants subject to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company’s covenant set forth in Section 4(g) below). All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in the SEC Documents and in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares70,000,000 Shares of common stock and 30,000,000 shares of undesignated preferred stock. As of the date hereof, (i) 5,220,936 10,078,838 Shares are issued and outstanding, all of which are duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights, (ii) 0 Shares no shares of preferred stock of the Company are issued or outstanding and held in (iii) 692,358 shares of Common Stock are issuable on exercise of outstanding stock options granted pursuant to the treasury Company's Plans, and (iv) 15,950 shares of Common Stock are issuable upon exercise of warrants (the "Warrants"). Except as set forth above, no shares of capital stock or other equity securities of the Company are issued or outstanding. There are no bonds, debentures, notes or other indebtedness or other 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. Except as contemplated by this Agreement, there are no shareholder, voting trust, or other agreements or understandings to which the Company or any of its Subsidiaries is a party or to which any of them are bound, or, to the knowledge of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise any irrevocable proxies, relating to the voting of outstanding Options granted under any shares of the capital stock or other equity securities of the Company Option Plans (or any of its Subsidiaries. Except as hereinafter defined) (iv) 11,000 Shares set forth in this Section or in the Company Disclosure Schedule, there are reserved for issuance upon exercise of certain individual no options, warrants or other rights relating to the capital stock options granted to employees and directors of the CompanyCompany or any Subsidiary obligating the Company or any Subsidiary to issue or sell any shares of capital stock of, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockor other equity interests in, the Company or any Subsidiary. All shares of Common Stock subject to issuance as aforesaid, upon issuance on the outstanding Shares are, terms and all shares which may be issued conditions specified in the instruments pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof which they are issuable, will be, be duly authorized, validly issued, fully paid and nonassessable. There are no bondscommitments, debenturesunderstandings, notes restrictions or other indebtedness having general voting rights (or convertible into securities having such rights) ("Voting Debt") of arrangements obligating the Company to purchase, redeem or acquire, nor is the Company party to any of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2agreement granting preemptive or registration rights relating to, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsCompany.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares40,000,000 shares of Common Stock. As of the date hereofof this Agreement, (i) 5,220,936 25,039,621 shares of Common Stock are issued, 19,685,398 shares of Common Stock are outstanding, 5,354,223 shares of Common Stock are held as treasury shares, and 13,425 Restricted Shares are issued and outstanding, and (ii) 0 Shares are issued a sufficient number of shares of Common Stock were reserved for issuance pursuant to the Option Plans and held in the treasury ESPP. All of the outstanding shares of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual ’s capital stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares of Common Stock which may be issued pursuant to the exercise of outstanding Options will be, when issued in accordance with the respective terms thereof will beand 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 option, call option, right of first refusal, preemptive right, subscription right or any similar right. There are is 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 of its Subsidiaries Company Subsidiary issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) for Options to purchase 2,967,365 shares of Common Stock and 2,100 RSUs or as set forth above, and (cin Section 4.3(a) for the transactions contemplated by this Agreement, as of the date hereofCompany Disclosure Schedule, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, kind relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, Company Subsidiary obligating the Company or any of its Subsidiaries Company Subsidiary to 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 any of its Subsidiaries Company Subsidiary or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries Company Subsidiary to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (ii) there are no outstanding agreements, arrangements, undertakings, or commitments of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any Common Stock or the capital stock of the Company or any Company Subsidiary or any Affiliate of the Company, and (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, Company Subsidiary or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of entity. Neither the Company nor any Company Subsidiary has outstanding or other authorized any phantom stock or any stock appreciation, profit participation or similar rights. No shares of Common Stock are owned by any Company Subsidiary.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As 150,000,000 shares of the date hereofCommon Stock, (i) 5,220,936 Shares of which 74,162,895 shares are issued and outstanding, (ii) 0 Shares 9,300,000 shares are issued and held in the treasury of reserved for issuance pursuant to the Company’s stock option plans, (iii) 421,550 Shares and, 66,537,105 shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company’s covenant set forth in Section 4(h) below). All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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 (“Articles of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As 20,000,000 shares of the date hereofCommon Stock, of which (i) 5,220,936 Shares 8,632,826 shares are validly issued and outstanding, (ii) 0 Shares no shares are issued and held in the treasury of the Companytreasury, and (iii) 421,550 Shares 915,190 shares are reserved for issuance upon exercise of outstanding existing Company Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares defined below). No shares of Common Stock are reserved for issuance upon exercise held by any Subsidiary. Each outstanding share of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, Common Stock is duly authorized, validly issued, fully paid and nonassessable, and has not been issued in violation of any preemptive or similar rights. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) Other than as set forth above, in Schedule 2.3 and (c) for the transactions as contemplated by this Agreement, as of the date hereof, Option Agreements: (i) there are no shares outstanding subscriptions, options, warrants, puts, calls, agreements, understandings, claims or other commitments of capital stock any type relating to the issuance, sale, repurchase or transfer by the Company of any Common Stock or other securities of the Company authorized(the "Company Options"), issued or outstandingby the Company or any Subsidiary of any securities of a Subsidiary, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions outstanding securities which are convertible into or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to issue, transfer or sell or cause to be issued, transferred or sold exchangeable for any shares of capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any Subsidiary, and (iii) neither the Company nor any Subsidiary has any obligation of its Subsidiaries any kind to repurchase, redeem or otherwise acquire issue any Shares, or additional shares of capital stock or other securities to pay for or repurchase any shares of capital stock or other securities of any Subsidiary or any predecessor thereof. The Primary Shares being delivered herewith have been duly authorized, validly issued, fully paid and nonassessable, are being delivered free and clear of all claims, liens, encumbrances and security interests, and are eligible for NASDAQ NMS trading without further consents or actions other than registration with the Securities and Exchange Commission (the "Commission") thereof pursuant to the Registration Rights Agreement. The shares of Common Stock which will be issued upon exercise of the Company or any subsidiary or affiliate Options have been authorized and reserved for issuance, and when issued and delivered in accordance with the terms of the Company applicable Option Agreement, will be validly issued, fully paid and nonassessable and will be eligible for NASDAQ NMS trading without further consents or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, actions other than those required in registration thereof pursuant to the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsRegistration Rights Agreement.

Capitalization. (a) The authorized capital stock of the ---------------------------- Company consists of 7,500,000 Shares17,000,000 shares of Company Common Stock. As of the date hereofNovember 10, 1998, (ia) 5,220,936 Shares are 6,010,795 shares of Company Common Stock were issued and outstanding, all of which were validly issued, fully paid and nonassessable and were issued free of preemptive (iior similar) 0 Shares are issued rights and (b) 1,105,300 shares of Company Common Stock were held in the treasury of the Company. Except for options issued pursuant to the Stock Option Agreement, no Options have been granted and no Shares have been issued and the total number of Options outstanding as of the date of this Agreement is 153,500. Except (iiii) 421,550 Shares are reserved for issuance upon as set forth above and (ii) as a result of the exercise of Options, there are outstanding Options granted under the Company Option Plans (as hereinafter definedA) (iv) 11,000 Shares are reserved for issuance upon exercise no shares of certain individual capital stock options granted to employees and directors or other voting or non-voting securities of the Company, (B) no securities of the Company convertible into or exchangeable for shares of capital stock or voting or non-voting securities of the Company, (C) no options, warrants or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock, non-voting securities, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company and (vD) 200,000 Shares are reserved for issuance upon exercise no equity equivalents, interests in the ownership or earnings of outstanding warrants to purchase common stockthe Company or other similar rights (collectively, "Company Securities"). All the outstanding Shares areExcept as set forth above, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There there are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) ("Voting Debt") outstanding obligations of the Company or any of its Subsidiaries issued and outstandingsubsidiaries to repurchase, redeem or otherwise acquire any Company Securities. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there There are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing other options, warrants, calls, preemptive rights, subscriptions warrants or other rights, agreements, arrangements or commitments of any character, character relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating subsidiaries to which the Company or any of its Subsidiaries subsidiaries is a party. All shares of Company Common Stock subject to issueissuance as aforesaid, transfer or sell or cause upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be duly authorized, validly issued, transferred fully paid and nonassessable and free of preemptive (or sold any shares of capital stock or Voting Debt of, or other equity interest in, similar) rights. Except as disclosed in Schedule 3.3 to the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interestsDisclosure Letter, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or subsidiaries to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, subsidiary or any other entity entity. Each of the outstanding shares of capital stock of each of the Company's subsidiaries is duly authorized, validly issued, fully paid and (iv) there nonassessable and all such shares are no equity equivalents, interests in owned by the ownership Company or earnings another wholly owned subsidiary of the Company as set forth in Schedule 3.3 to the Company Disclosure Letter and are owned free and clear of all security interests, liens, claims, pledges, agreements, limitations in voting rights, charges or other similar rightsencumbrances of any nature whatsoever, except where the failure to own such shares free and clear is not, individually or in the aggregate, likely to have a Material Adverse Effect. Disclosed in Schedule 3.3 to the Company Disclosure Letter is a list of the subsidiaries and affiliates of the Company which evidences, among other things, the percentage of capital stock or other equity interests owned by the Company, directly or indirectly, in such subsidiaries or associated entities.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 6 billion shares of Common Stock, $0.001 par value per share, of which approximately 4,581,060,559 shares are issued and outstanding, ; and (ii) 0 Shares shares of Preferred Stock, no par value per share, of which no shares are issued and held in the treasury of the Companyoutstanding. Except as disclosed on Schedule 3(c) hereof, (iii) 421,550 Shares no shares are reserved for issuance upon exercise of outstanding Options granted under pursuant to the Company Option Plans (Company’s stock option plans. Except as hereinafter defined) (iv) 11,000 Shares disclosed in the SEC Documents no shares are reserved for issuance upon exercise pursuant to securities exercisable for, or convertible into or exchangeable for shares of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockCommon Stock. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for As of the transactions contemplated by effective date of this Agreement, and except as of disclosed in the date hereofSEC Documents, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock capitalization of the Company consists of 7,500,000 Shares. As as of the date -------------- hereof, (i) 5,220,936 Shares are including the authorized capital stock, the number of shares issued and outstanding, (ii) 0 Shares are issued the number of shares issuable and held in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise pursuant to the Company's stock option plans, the number of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are shares issuable and reserved for issuance upon exercise pursuant to securities exercisable for, or convertible into or exchangeable for any shares of certain individual capital stock options granted and the number of Adjustment Shares to employees and directors of the Company, and (v) 200,000 Shares are be reserved for issuance upon exercise as required by Section 1(c) hereof and the number of outstanding warrants Warrant Shares to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to upon the exercise of the Warrants is set forth on Schedule 3(c). All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock have been, or ------------- upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth aboveon Schedule 3(c), and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized(including ------------ the Initial Shares, issued the Adjustment Shares and the Warrant Shares) are subject to preemptive rights or outstandingany other similar rights of the stockholders of the Company or any liens or encumbrances. Except for the Securities and as disclosed in Schedule 3(c), as of the date of this Agreement, (iii) there are no existing outstanding ------------- options, warrants, callsscrip, preemptive rightsrights to subscribe to, subscriptions or other rights, agreements, arrangements calls or commitments of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiariessubsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries subsidiaries, and (ii) there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to repurchaseregister the sale of any of its or their securities under the Securities Act (except the Registration Rights Agreement). Except as set forth on Schedule -------- 3(c), redeem there are no securities or otherwise acquire instruments containing antidilution or similar ---- provisions that will be triggered by the issuance of the Securities in accordance with the terms of this Agreement or the Warrants and the holders of the securities and instruments listed on such Schedule 3(c) have waived any Shares------------- rights they may have under such antidilution or similar provisions in connection with the issuance of the Securities in accordance with the terms of this Agreement or the Warrants. The Company has made available to the Purchaser true and 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 all other instruments and agreements governing securities convertible into or exercisable or exchangeable for capital stock of the Company Company, except for stock options granted under any employee benefit plan or any subsidiary or affiliate director stock option plan of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsCompany.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares ___________ shares of Common Stock, of which __________ shares are issued and outstanding, (ii) 0 Shares __________ shares are issued and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, __________ shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and __________ shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company's covenant set forth in Section 4(h) below); and (ii) ______ shares of preferred stock, of which _______ shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreementin SCHEDULE 3(C), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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 ("ARTICLES OF INCORPORATION"), the Company's By-laws, as in effect on the date hereof (the "BY-LAWS"), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock capitalization of the Company consists of 7,500,000 Shares. As as of the date hereofhereof is as set forth on Schedule 3(c). Except as disclosed in Schedule 3(c), (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares no shares are reserved for issuance upon exercise of outstanding Options granted under pursuant to the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares Company’s stock option plans and no shares are reserved for issuance upon exercise pursuant to securities exercisable for, or convertible into or exchangeable for shares of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockCommon Stock. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Shares or the Warrants. 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock the holders thereof in respect thereto. The Company shall provide each Buyer with a written update of this representation signed by the Company’s Chief Executive Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightseach Closing Date.

Capitalization. As of the date hereof, and except for issuances of Common Stock pursuant to Buyer's Amended and Restated Employee and Director Stock Plan, the equity capitalization of Buyer is as set forth in the balance sheet of Buyer included in Buyer's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1997 (a) The authorized capital the "1997 FORM 10-Q"). At the Closing Date, all of the outstanding shares of stock of the Company consists Buyer will be duly and validly issued, fully paid and non-assessable and not subject to any preemptive rights of 7,500,000 Sharesother shareholders. As of the date hereof, except as set forth in Buyer's Annual Report on Form 10-K for the year ended December 31, 1996 (ithe "1996 FORM 10-K"), the 1997 Form 10-Q and Buyer's Proxy Statement dated April 14, 1997 in respect of Buyer's annual meeting of shareholders held on May 16, 1997 (the "1997 PROXY STATEMENT" and collectively, the "CURRENT SEC REPORTS") 5,220,936 Shares are issued and outstandingpursuant to Buyer's Amended and Restated Employee and Director Stock Plan, (iiA) 0 Shares except as set forth in SCHEDULE 7.(c), there are issued and held in no outstanding securities or indebtedness convertible into, exchangeable for, or carrying the treasury right to acquire, Common Stock or other equity securities of the CompanyBuyer, or subscriptions, warrants, options, rights, or other arrangements or commitments obligating Buyer to issue or dispose of any Common Stock or other equity securities or any ownership therein, (iiiB) 421,550 Shares are reserved for issuance upon exercise there is no agreement or arrangement restricting the voting or transfer of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise any equity securities of certain individual stock options granted to employees and directors of the CompanyBuyer, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iiiC) there are no outstanding contractual obligations obligations, commitments, understandings or arrangements of the Company Buyer or any of its Subsidiaries to repurchase, redeem or otherwise acquire acquire, require or make any Shares, payment in respect of any shares of equity securities of Buyer or capital stock such Subsidiary. As of the Company or any subsidiary or affiliate of date hereof, except as contemplated by the Company or Registration Rights Agreement to provide funds to make any investment (be entered into by Buyer and Seller in the form of a loanExhibit K (the "REGISTRATION RIGHTS AGREEMENT") and the Amended and Restated Investor Rights Agreement dated as of February 23, capital contribution or otherwise) in any such subsidiary1996 among Buyer, Seller and the other than those required in parties thereto (the ordinary course of business of such subsidiaries"INVESTOR RIGHTS AGREEMENT"), or any other entity and (iv) there are no equity equivalents, interests in the ownership agreements or earnings arrangements to which any of the Company Buyer or its Subsidiaries is a party pursuant to which Buyer is or could be required to register shares of Common Stock or other similar rightssecurities under the Securities Act of 1933 (the "SECURITIES ACT").

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 (A) 30,000,000 Common Shares and (B) 5,000,000 shares of preferred stock (the "Preferred Shares"). As of the date hereof, (i) 5,220,936 5,745,599 Common Shares are issued and outstanding, (ii) 0 no shares of Preferred Shares are issued and held in the treasury of the Companyoutstanding, and (iii) 421,550 no more than 1,400,000 Common Shares are reserved for future issuance pursuant to outstanding Company Options, pursuant to which options to purchase 733,000 shares are exercisable as of the date hereof and options to purchase zero (0) shares become exercisable on or after that date at prices below the Per Share Price. No other capital stock of the Company is authorized or issued other than shares that may be issued upon the exercise of outstanding Options options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 1994 Plan. All issued and outstanding Common Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstandingnon-assessable. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and in the Company Securities Filings (cas hereinafter defined) for filed prior to the transactions date of this Agreement or as otherwise contemplated by this Agreement, as of the date hereof, (i) there are no outstanding rights, subscriptions, warrants, puts, calls, unsatisfied preemptive rights, options or other agreements of any kind relating to any of the outstanding, authorized but unissued shares of the capital stock or any other security of the Company, and there is no authorized or outstanding security of any kind convertible into or exchangeable for any such capital stock or other security. Except as disclosed in the Company authorizedSecurities Filings filed prior to the date of this Agreement, issued or outstanding, (ii) there are no existing optionsobligations, warrantscontingent or other, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries Subsidiary to repurchase, redeem or otherwise acquire any Shares, shares of Common Shares or the capital stock of the any Company or any subsidiary or affiliate of the Company Subsidiary or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, Company Subsidiary or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsentity.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares [ ] shares of Common Stock, of which [ ] shares are issued and outstanding, (ii) 0 Shares [ ] shares are issued and held in the treasury of reserved for issuance pursuant to the Company’s stock option plans, [ ] shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and, [ ] shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company’s covenant set forth in Section 4(h) below); and (ii) [ ] shares of preferred stock of which no shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of August 7, 2019, the authorized capital stock of the Company consists of 7,500,000 Shares. As 500,000,000 shares of the date hereofCommon Stock, (i) 5,220,936 Shares of which approximately 121,241,213 shares are issued and outstanding, (ii) outstanding and 0 Shares are issued and held shares of Preferred Stock authorized. Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 6,000,000 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti- dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company at the date hereof consists of 7,500,000 Shares. As (a) 10,000,000 shares of the date hereofCommon Stock, (i) 5,220,936 Shares 4,606,184 of which shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (vb) 200,000 Shares 5,000,000 shares of Preferred Stock, of which 500,000 are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. All of the issued and outstanding shares of the Company's capital stock have been duly authorized and validly issued and are fully paid and non-assessable and all securities previously issued and sold by the Company were issued and sold in compliance with applicable Federal and state securities laws. Except (a) as disclosed on Schedule 3.2, (b) as set forth abovein the Disclosure Schedule, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no other shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries subsidiaries or securities convertible into or exchangeable for such shares have been issued or equity interestsreserved for issuance, or obligating and except as contemplated by the Company or any of its Subsidiaries to grantFinancing Documents, extend or enter into any such option(a) no subscription, warrant, calloption, subscription convertible security or other right, agreement, arrangement right (contingent or commitment, (iiiotherwise) there are no outstanding contractual obligations to purchase or acquire any shares of capital stock of the Company or any of its Subsidiaries subsidiaries is authorized or outstanding, (b) there is not any commitment or offer of the Company or any of its subsidiaries to repurchaseissue any subscription, warrant (other than the Warrants), option, convertible security or other such right to issue or distribute to holders of any shares of its indebtedness or assets of the Company or any of its subsidiaries, (c) neither the Company nor any of its subsidiaries has any obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any Sharesshares of its capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof, and (d) there are no restrictions on the transfer of the Company's capital stock other than those arising from Federal and state securities laws. Except as contemplated by this Agreement, no person or entity is entitled to (x) any preemptive or similar right with respect to issuance of any capital stock of the Company, or (y) any rights with respect to the registration of any capital stock of the Company or any subsidiary or affiliate under the Securities Act of 1933, as amended (the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rights"Securities Act").

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares [ ] shares of Common Stock, of which [ ] shares are issued and outstanding, (ii) 0 Shares no shares are issued and held in the treasury of reserved for issuance pursuant to the Company’s stock option plans, 1,500,000 shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and [ ] shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company’s covenant set forth in Section 4(h) below); and (ii) 50,000,000 shares of preferred stock, of which no shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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 (“Articles of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date of this Agreement, the authorized capital stock of the Company consists of 7,500,000 (i) 60,000,000 Class A Shares with a nominal or par value of USD$1.00 each, of which approximately 5,426,381 shares are issued and outstanding or otherwise reserved for issuance pursuant to securities (other than the Converted Shares. As ) exercisable for, or convertible into or exchangeable for shares of Class A Shares, and (ii) 40,000,000 Class B Ordinary Shares with a nominal or par value of USDS1.00 each (the “Class B Shares”), of which 22,437,754 shares are issued and outstanding or otherwise reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for shares of Class B Shares, provided that (A) the Company acting by its board of directors shall have power to purchase and/or redeem any or all of such shares and to increase or reduce the said capital of the date hereofCompany and to sub-divide or consolidate the said shares or any of them subject to the provisions of the Cayman Islands Company Law (2016 Revision) (as amended) (“Company Law”) and the articles of association (the “Articles”) of the Company and to issue all or any part of its capital whether original, purchased, redeemed, increased or reduced with or without any preference, priority or special privilege or subject to any restrictions whatsoever and so that unless the conditions of issue shall otherwise expressly provide every issue of shares whether stated to be ordinary, preference or otherwise shall be subject to the powers on the part of the Company hereinbefore provided, (B) the holders of Class A Shares are entitled to one vote for each such share and Class A shares are not redeemable at the option of the holders and not convertible into shares of any other class; and (C) the holders of Class B Shares are entitled to ten votes for each such share and the Class B shares are not redeemable at the option of the holders but convertible into Class A Shares at any time after the issuance at the option of the holders on 1 to 1 basis. Except as described above, upon the consummation of the transactions contemplated hereby, (i) 5,220,936 Shares there are issued and outstandingno outstanding options, warrants, 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 rights convertible into or exchangeable for any shares of capital stock of the Company or any 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) 0 Shares there are issued no agreements or arrangements 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 for the registration rights provisions contained herein) and held in the treasury of the Company, (iii) 421,550 Shares there are reserved for issuance upon exercise of outstanding Options granted under no anti-dilution or price adjustment provisions contained in any security issued by the Company Option Plans (as hereinafter definedor in any agreement providing rights to security holders) (iv) 11,000 Shares are reserved for that will be triggered by the issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockor the Converted Shares. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no No shares of capital stock of the Company authorized, issued are subject to preemptive rights or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or any other rights, agreements, arrangements or commitments similar rights of any character, relating to the issued or unissued capital stock stockholders of the Company or any of its Subsidiaries, obligating Lien imposed through the Company actions or any of its Subsidiaries failure to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations act of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsCompany.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 500,000,000 shares of Common Stock, of which approximately 24,666,182 shares are issued and outstanding, ; and (ii) 0 Shares 10,000,000 shares of blank check preferred stock, of which -0- are issued and held outstanding. Except as disclosed in the treasury of SEC Documents (plus EMA shares), no shares are reserved for issuance pursuant to the Company’s stock option plans, 773,020 shares are reserved for issuance pursuant to securities (iiiother than the Note and any other convertible promissory note issued to the Buyer) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 1,600,000 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized share capital of Shire as of the -------------- date of this Agreement is (Pounds)10,000,000 divided into 200,000,000 Ordinary Shares. At the close of business on July 20, 1999 (i) 143,509,230 Ordinary Shares were issued and (ii) the board of directors of Shire were generally and unconditionally authorized to allot relevant securities up to a nominal amount of (Pounds)2,361,070 and no other share capital was issued or reserved for issuance. All such Ordinary Shares of Shire are, and all Ordinary Shares reserved for issuance will be, when issued, duly authorized, validly issued and fully paid and not subject to preemptive rights other than as required by law or the LSE rules. The Ordinary Shares to be issued in the Merger will not be subject to preemption from existing shareholders of Shire. Except as set forth above, as of the date of this Agreement, there are not any Equity Equivalents of any of Shire or any of its Subsidiaries (including, without limitation, any option, warrant, right to subscribe, call or commitment of any kind or character whatsoever requiring the issuance, sale or transfer by Shire or any of its Subsidiaries of any shares of their capital stock of the Company consists of 7,500,000 Sharesor any securities convertible into or exchangeable or exercisable for such capital stock). As of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of not any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company Shire or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or shares of capital stock of the Company Shire or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there its Subsidiaries. There are no equity equivalents, interests in the ownership or earnings outstanding SARs with respect to Shire. Shire has delivered to Xxxxxxx a complete list of the Company or other similar rightsall outstanding indebtedness of Shire and its Subsidiaries.

Capitalization. (a) The As of June 7, 2019, the authorized capital stock of the Company consists of 7,500,000 Shares. As 500,000,000 shares of the date hereofCommon Stock, (i) 5,220,936 Shares of which approximately 114,813,022 shares are issued and outstanding, (ii) outstanding and 0 Shares are issued and held shares of Preferred Stock authorized. Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 2,500,000 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are 34,000,000 shares of common stock, $0.01 par value per share, of which 12,484,644 shares were issued and outstandingoutstanding on June 30, 2001, and (ii) 0 Shares 23,000,000 shares of preferred stock, $0.01 par value per share, none of which are issued or outstanding. All of the outstanding shares of capital stock of the Company and held in its Subsidiaries have been duly authorized and validly issued and are fully paid and nonassessable. The Company has no outstanding stock appreciation rights, phantom stock or similar rights. All outstanding shares of capital stock or other equity interests of the treasury Subsidiaries of the Company are owned by the Company or a direct or indirect wholly-owned Subsidiary of the Company, (iii) 421,550 Shares are reserved free and clear of all liens, pledges, charges, encumbrances, claims and options of any nature. Except for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All 2,457,706 Company Shares issued pursuant to the outstanding 1997 Stock Incentive Plan, the Amended and Restated 1998 Stock Incentive Plan and the 1999 Non-Employee Director Stock Option Plan and 801,220 Company Shares are, and all shares which may to be issued pursuant to the exercise of outstanding Options when issued in accordance with 1999 Employee Stock Purchase Plan (collectively, the respective terms thereof will be"Company Option Plans") and warrants to purchase 1,370,056 Company Shares, duly authorized, validly issued, fully paid and nonassessable. There there are no bondsoutstanding or authorized options, debentureswarrants, notes or other indebtedness having general voting calls, rights (including preemptive rights), commitments or convertible into securities having such rights) ("Voting Debt") any other agreements of any character which the Company or any of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2is a party to, (b) as set forth aboveor may be bound by, and (c) for the transactions contemplated by this Agreementrequiring it to issue, as of the date hereoftransfer, (i) there are no grant, sell, purchase, redeem or acquire any shares of capital stock or any of its securities or rights convertible into, exchangeable for, or evidencing the Company authorizedright to subscribe for, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments any shares of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries. Upon consummation of the Merger, obligating the Company Warrants shall convert into Substitute Warrants which will entitle the holder to purchase a number of Parent Shares equal to the number of Company Shares issuable upon exercise of the Company Warrants immediately prior to the Effective Time multiplied by the Exchange Ratio. There are no stockholder agreements, voting trusts or any other agreements or understandings to which the Company is a party or to which it is bound relating to the voting of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company. No existing rights with respect to the registration of Company Shares under the Securities Act, including, but not limited to, demand rights or piggy-back registration rights, shall apply with respect to any subsidiary Parent Shares issuable in connection with the Merger or affiliate upon exercise of Substitute Options or Substitute Warrants. The Company has provided to Parent a list, as of June 30, 2001 of the outstanding options and warrants to acquire Company Shares, the name of the holder of such option or warrant, the exercise price of such option or warrant, the number of shares as to provide funds to make any investment (in which such option or warrant will have vested at such date and whether the form exercisability of a loan, capital contribution such option or otherwise) warrant will be accelerated in any way by the transactions contemplated by this Agreement and the extent of acceleration, if any, and any adjustments to such subsidiary, other than those required in options or warrants resulting from the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings consummation of the Company transactions contemplated by this Agreement. Since June 30, 2001 no options or other similar rightswarrants have been issued or accelerated or had their terms modified.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As 10,000,000 shares of the date hereofpreferred stock, (i) 5,220,936 Shares are $0.001 par value per share, none of which is issued and outstanding, (ii) 0 Shares are issued and held in the treasury 90,000,000 shares of the CompanyCommon Stock, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, 35,026,384 shares are issued and outstanding, 4,831,900 shares are reserved for issuance pursuant to the Company’s stock option and purchase plans and 10,750,000 shares are reserved for issuance pursuant to warrants exercisable for shares of Common Stock (isubject to increase to cover the anti-dilution provisions associated therewith). All of such outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and nonassessable. Except as specified in Section 3.1(g) of the Disclosure Letter, no securities of the Company are entitled to preemptive or similar rights, and no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as specified in Section 3.1(g) of the Disclosure Letter, there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, callsscrip rights to subscribe to, preemptive rights, subscriptions or other rights, agreements, arrangements calls or commitments of any charactercharacter whatsoever relating to, relating or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to the issued subscribe for or unissued capital stock acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of its SubsidiariesCommon Stock, obligating or securities or rights convertible or exchangeable into shares of Common Stock. Except as specified in Section 3.1(g) of the Disclosure Letter, the issue and sale of the Securities will not, immediately or with the passage of time, obligate the Company or any of its Subsidiaries to issue, transfer or sell or cause to be issued, transferred or sold any issue shares of capital stock or Voting Debt of, Common Stock or other equity interest in, the Company or securities to any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, Person (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required the Investors) and will not result in a right of any holder of Company securities to adjust the ordinary course of business of exercise, conversion, exchange or reset price under such subsidiariessecurities (including, without limitation, under any anti-dilution or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsprovisions).

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are the authorized, issued and outstanding, (ii) 0 Shares are issued and held in the treasury outstanding capital stock of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise Company is as set forth on Schedule 4.3 hereto and no other shares of outstanding Options granted under capital stock of the Company Option Plans (will be outstanding as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockClosing Date. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) Other than as set forth above, and (c) for the transactions contemplated by this Agreementon Schedule 4.3 hereto, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, and (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating are obligated to register the Company or sale of any of its Subsidiaries or their securities under the Securities Act (except pursuant to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rights.Convertible Notes,

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares75,000,000 Shares and 20,000,000 shares of preferred stock, par value $0.01 per share ("Preferred Stock"). As of the date hereofclose of business on March 6, (i) 5,220,936 1998, 22,516,996 Shares are were issued and outstanding, (ii) 0 excluding 619,435 Shares are in treasury. As of the close of business on March 6, 1998 there were no shares of Preferred Stock issued and held in outstanding. The Company has no shares reserved for issuance, except that, as of March 6, 1998, there were 2,087,119 Shares reserved for issuance pursuant to outstanding Options or other awards under the treasury Option Plans and there were 75,000 shares of the CompanyJunior Participating Preferred Stock, (iii) 421,550 Shares are Series A, reserved for issuance upon exercise of outstanding Options granted under the Preferred Share Purchase Rights (the "Rights") issued pursuant to the Rights Agreement dated as of February 24, 1997 between the Company Option Plans and American Stock Transfer & Trust Company, as Rights Agent (the "Rights Agreement"). The Company has no options to purchase Shares outstanding other than as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon set forth on Schedule 4.03. Since March 6, 1998, the Company has not issued any shares of capital stock except pursuant to the exercise of certain individual stock options granted to employees and directors Options outstanding as of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stocksuch date. All of the outstanding Shares are, and all shares Shares which may be issued pursuant to the exercise of outstanding Options will be, when issued in accordance with the respective terms thereof will bethereof, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, above or for the Rights or as set forth on Schedule 4.03 and (c) except for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, convertible securities, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating and neither the Company or nor any of its Subsidiaries is obligated to grant, extend or enter into any such option, warrant, call, subscription or other right, convertible security, agreement, arrangement or commitment. Except as set forth in Section 2.09 and as set forth on Schedule 4.03, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to (i) repurchase, redeem or otherwise acquire any Shares, Shares or the capital stock of the Company or any subsidiary of its Subsidiaries or affiliate of the Company or to (ii) provide funds to or make any investment in (in the form of a loan, capital contribution or otherwise) in any such subsidiary, entity other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsa wholly-owned Subsidiary.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are the authorized, issued and outstanding, (ii) 0 Shares are issued and held in the treasury outstanding capital stock of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise Company is as set forth on Schedule 4.3 hereto and except as set forth on Schedule 4.3 no other shares of outstanding Options granted under capital stock of the Company Option Plans (will be outstanding as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockClosing Date. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) Other than as set forth above, and (c) for the transactions contemplated by this Agreementon Schedule 4.3 hereto, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, and (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating are obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the Securities Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Convertible Bridge Notes or Conversion Shares. The Company or any of its Subsidiaries has furnished to repurchase, redeem or otherwise acquire any Shares, or capital stock Purchaser true and correct copies of the Company Company’s Corporate Documents, and the terms of all securities convertible into or any subsidiary or affiliate exercisable for Common Stock and the material rights of the Company or to provide funds to make any investment (holders thereof in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsrespect thereto.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares 75,000,000 shares of Common Stock, of which 29,058,366 shares are issued and outstanding, (ii) 0 Shares no shares are issued and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, 14,741,250 shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 45,000,000 shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company's covenant set forth in Section 4(h) below); and (ii) 100,000 shares of preferred stock, of which no shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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 ("Articles of Incorporation"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of August 10, 2020, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 150,000,000 shares of Common Stock, of which approximately 120,932,409 shares are issued and outstanding, ; and (ii) 0 Shares 50,000,000 shares of preferred stock, of which 632,477 are issued and held outstanding. Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 8,000,000 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 500,000,000 shares of Common Stock, of which approximately 125,199,633 shares are issued and outstanding, ; and (ii) 0 Shares 1,000,000 shares of preferred stock, of which 262,908 are issued and held outstanding (consisting of 262,800 shares of Series A and 108 shares of Series B). Except as disclosed in the treasury SEC Documents and for up to 78,222,222 reserved for third parties, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities exclusive of the Companyshares reserved for the Buyer and for securities issued by the Company prior to the date of this Agreement (other than the Note and any other convertible promissory note issued to the Buyer) exercisable for, (iii) 421,550 Shares or convertible into or exchangeable for shares of Common Stock and 28,833,967 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares 300,000,000 shares of Common Stock, of which [ ] shares are issued and outstanding, (ii) 0 Shares [ ] shares are issued and held in the treasury of reserved for issuance pursuant to the Company’s stock option plans, [ ] shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and, 42,500,000 shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company’s covenant set forth in Section 4(h) below); and (ii) [ ] shares of preferred stock of which [ ] shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares25,000,000 shares of Company Common Stock and 5,000,000 shares of preferred stock, par value U.S.$.001 per share (the "COMPANY PREFERRED STOCK"). As At the close of the date hereofbusiness on July 31, 2000: (i) 5,220,936 Shares are 17,798,165 shares of Company Common Stock were issued and outstandingoutstanding (excluding shares held by the Company in its treasury), (ii) 0 Shares are issued 6,576,142 shares of Company Common Stock were reserved for issuance under the Stock Option Plans and held in the treasury of the Companyother arrangements, (iii) 421,550 Shares are reserved for issuance upon exercise no shares of Company Preferred Stock were issued and outstanding Options granted under the Company Option Plans (as hereinafter defined) and (iv) 11,000 Shares are reserved for issuance upon exercise 1,139,107 shares of certain individual stock options granted to employees and directors of Company Common Stock were held by the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockCompany in its treasury. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no outstanding shares of capital stock of the Company authorizedhave been duly authorized and validly issued and are fully paid and nonassessable. Except as set forth in Section 5.3(a) of the Company Disclosure Schedule, issued or outstanding, (ii) there are no existing outstanding or authorized options, warrants, calls, preemptive rights, subscriptions or other rightssubscriptions, agreements, arrangements or commitments claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to the issued or unissued shares of capital stock or other equity interests of the Company or any of its Subsidiaries, obligating pursuant to which the Company or any of its Subsidiaries is or may become obligated to issueissue shares of its capital stock or other equity interests or any securities convertible into, transfer exchangeable for, or sell or cause evidencing the right to be issuedsubscribe for, transferred or sold any shares of the capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations interests of the Company or any of its Subsidiaries (each an "ISSUANCE OBLIGATION"). There are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any Sharesoutstanding securities of the Company. The Company has no authorized or outstanding bonds, debentures, notes or capital stock other indebtedness the holders of which have the right to vote (or convertible or exchangeable into or exercisable for securities the holders of which have the right to vote) with the stockholders of the Company on any matter ("VOTING DEBT"). Except as set forth in Section 5.3(a) of the Company Disclosure Schedule, there are no restrictions of any kind which prevent or restrict the payment of dividends by the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity its Subsidiaries and (iv) there are no equity equivalentslimitations or restrictions on the right to vote, interests in the ownership sell or earnings otherwise dispose of the Company such capital stock or other similar rightsownership interests.

Capitalization. (a) The authorized capital stock capitalization of the Company consists of 7,500,000 Shares. As as of the date hereof, (i) 5,220,936 Shares are including the authorized capital stock, the number of shares issued and outstanding, (ii) 0 Shares are issued the number of shares issuable and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, the number of shares issuable and reserved for issuance pursuant to securities (iiiother than the Preferred Shares and Warrants) 421,550 Shares are exercisable or exchangeable for, or convertible into, any shares of capital stock and the number of shares to be reserved for issuance upon conversion of the Preferred Shares and exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockWarrants is set forth on SCHEDULE 3(D). All the of such outstanding Shares areshares of capital stock have been, and all shares which may be issued pursuant to the exercise of outstanding Options when issued or upon issuance in accordance with the respective terms thereof of any such warrants, options or preferred stock, will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company (including the Preferred Shares, the Conversion Shares and the Warrant Shares) are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the stockholders of the Company or any of its Subsidiaries issued and outstandingliens or encumbrances. Except (a) as disclosed on Schedule 3.2, (b) for the Securities and as set forth above, and (c) for the transactions contemplated by this Agreementon SCHEDULE 3(D), as of the date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, callsscrip, preemptive rightsrights to subscribe to, subscriptions or other rights, agreements, arrangements calls or commitments of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiariessubsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries subsidiaries, and (ii) there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to repurchaseregister the sale of any of its or their securities under the Securities Act (except the Registration Rights Agreement). Except as set forth on SCHEDULE 3(D), redeem (i) there are no securities or otherwise acquire any Sharesinstruments containing Antidilution or similar provisions that will be triggered by the issuance of the Securities in accordance with the terms of this Agreement, the Statement of Designation or capital stock the Warrants, (ii) there are no outstanding securities or instruments of the Company or any subsidiary of its subsidiaries which contain any redemption or affiliate similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to redeem a security of the Company or any of its subsidiaries, and (iii) the Company does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement. The Company has furnished to provide funds to make any investment the Purchasers true and 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 all other instruments and agreements governing securities convertible into or exercisable or exchangeable for capital stock of the Company. The Statement of Designation, in the form attached hereto, will be duly filed prior to Closing with the Secretary of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings State of the Company or other similar rightsState of Texas and, upon the issuance of the Preferred Shares in accordance with the terms hereof, each Purchaser shall be entitled to the rights set forth therein.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are the authorized, issued and outstanding, (ii) 0 Shares are issued and held in the treasury outstanding capital stock of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise Company is as set forth on Schedule 4.3 hereto and except as set forth on Schedule 4.3 no other shares of outstanding Options granted under capital stock of the Company Option Plans (will be outstanding as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockClosing Date. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) Other than as set forth above, and (c) for the transactions contemplated by this Agreementon Schedule 4.3 hereto, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, and (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating are obligated to register the Company or sale of any of its Subsidiaries or their securities under the Securities Act (except pursuant to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Convertible Notes or Conversion Shares. The Company or any of its Subsidiaries has furnished to repurchase, redeem or otherwise acquire any Shares, or capital stock Purchaser true and correct copies of the Company Company's Corporate Documents, and the terms of all securities convertible into or any subsidiary or affiliate exercisable for Common Stock and the material rights of the Company or to provide funds to make any investment (holders thereof in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsrespect thereto.

Capitalization. (a) The authorized capital stock of the Company consists Company, as of 7,500,000 SharesJune 10, 2015, consisted of 100,000,000 shares of Common Stock, of which 21,198,411 shares were issued and outstanding and 5,000,000 shares of blank check Preferred Stock, none of which are currently designated. As All of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury outstanding shares of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, Common Stock have been duly authorized, validly issued, fully paid paid, and nonassessable. As of June 10, 2015, options to purchase an aggregate of 1,205,295 shares of Common Stock and restricted stock units with respect to an aggregate of 635,424 shares of Common Stock were outstanding. Except as disclosed in or contemplated by the SEC Documents, the Company does not have outstanding any options to purchase, or any preemptive rights or other rights to subscribe for or to purchase, any securities or obligations convertible into, or any contracts or commitments to issue or sell, shares of its capital stock or any such options, rights, convertible securities or obligations other than options and restricted stock units granted under the Company’s stock option plans. There 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 of its Subsidiaries issued and outstanding. Except The issuance and sale of the Shares and Warrants will not obligate the Company to issue shares of Common Stock or other securities to any Person (aother than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the Company’s knowledge, between or among any of the Company’s stockholders except as disclosed on Schedule 3.2, (b) as set forth above, in SEC documents. The Company’s Amended and (c) for the transactions contemplated by this AgreementRestated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), as in effect on the date hereof, and the Company’s Second Amended and Restated Bylaws, as amended (i) there the “Bylaws”), as in effect on the date hereof, are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating each filed as exhibits to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsSEC Documents.

Capitalization. (aExcept as disclosed on Schedule 3(c) The attached hereto, as of the date hereof, the authorized capital stock of the Company consists Company, and number of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are shares issued and outstanding, (ii) 0 Shares are issued and held is as set forth in the treasury of Company’s most recent periodic report filed with the Company, (iii) 421,550 Shares SEC. Except as disclosed in the SEC Documents no shares are reserved for issuance upon exercise of outstanding Options granted under pursuant to the Company Option Plans (Company’s stock option plans. Except as hereinafter defined) (iv) 11,000 Shares disclosed in the SEC Documents no shares are reserved for issuance upon exercise pursuant to securities exercisable for, or convertible into or exchangeable for shares of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockCommon Stock. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for As of the transactions contemplated by effective date of this Agreement, and except as of disclosed in the date hereofSEC Documents, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities, notes or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of any of the Securities. The Company has furnished to the Purchaser true and correct copies of the Company’s Certificate or Articles of Incorporation as in effect on the date hereof (“Formation Documents”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock and the material rights of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (holders thereof in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsrespect thereto.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares(i) 25,000,000 shares of Common Stock, $0.001 par value per share and (ii) 5,000,000 shares of Preferred Stock, $0.001 par value per share. As of the date hereofClosing Date, there are (iy) 5,220,936 Shares are 3,160,000 shares of Common Stock issued and outstanding, (ii) 0 Shares all of which are issued and held in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable and (z) no shares of Preferred Stock issued and outstanding. In addition, there are 925,000 shares of Common Stock reserved for issuance pursuant to outstanding options and warrants. There are no bonds, debentures, notes shares of any class or other indebtedness having general voting rights (series of preferred stock issued or convertible into securities having such rights) ("Voting Debt") outstanding. All of the securities issued by the Company or any of its Subsidiaries have been issued in accordance with all applicable federal and outstandingstate securities laws. Except (a) as disclosed on Schedule 3.2, (b) Other than as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing other options, warrants, calls, preemptive rights, subscriptions commitments or other rights, agreements, arrangements or commitments agreements of any charactercharacter to which the Company is a party or by which the Company is bound or obligating the Company to issue, relating deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, commitment or agreement, arrangement or commitment, (iii) there . There are no outstanding contractual obligations preemptive rights or rights of first refusal or similar rights which are binding on the Company permitting any person to subscribe for or purchase from the Company shares of its capital stock pursuant to any provision of law, the Company’s Certificate of Incorporation as in effect on the date hereof (the “Certificate of Incorporation”) or the Company’s By-laws, as in effect on the date hereof (the “By-laws”) or by agreement or otherwise. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Securities as described in this Agreement and the Offering Memo. True and correct copies of the Company or any subsidiary or affiliate Company’s Certificate of Incorporation and By-laws are available to the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsSubscriber upon request.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are the authorized, issued and outstanding, (ii) 0 Shares are issued and held in the treasury outstanding capital stock of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise Company is as set forth on Schedule 4.3 hereto and except as set forth on Schedule 4.3 no other shares of outstanding Options granted under capital stock of the Company Option Plans (will be outstanding as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockClosing Date. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) Other than as set forth above, and (c) for the transactions contemplated by this Agreementon Schedule 4.3 hereto, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, and (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating are obligated to register the Company or sale of any of its Subsidiaries or their securities under the Securities Act (except pursuant to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Convertible Note or Conversion Shares. The Company or any of its Subsidiaries has furnished to repurchase, redeem or otherwise acquire any Shares, or capital stock Purchaser true and correct copies of the Company Company's Corporate Documents, and the terms of all securities convertible into or any subsidiary or affiliate exercisable for Common Stock and the material rights of the Company or to provide funds to make any investment (holders thereof in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsrespect thereto.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 14,991,000,000 shares of Common Stock, of which approximately 12,189,293,609 shares are issued and outstanding, ; and (ii) 0 Shares 5,000,000 shares of preferred stock, of which 13 are issued and held outstanding. Except as disclosed in the treasury of the CompanySEC Documents, (iii) 421,550 Shares no shares are reserved for issuance upon exercise of outstanding Options granted under pursuant to the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares Company’s stock option plans, no shares are reserved for issuance upon exercise pursuant to securities (other than the Note and any other convertible promissory note issued to the Buyer) exercisable for, or convertible into or exchangeable for shares of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockCommon Stock. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Company Note or any of its Subsidiaries to repurchase, redeem or otherwise acquire any the Conversion Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rights.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held Except as disclosed in the treasury of SEC Documents and in Schedule 3(c), no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and sufficient shares are reserved for issuance upon exercise conversion of outstanding Options granted under the Company Option Plans Note (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees required by the Note and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stocktransfer agent share reserve letter). All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in the SEC Documents and in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. Shares were reserved for issuance pursuant to outstanding Options and 2,672,300 Shares were reserved for issuance in respect of future grants of Options, and (aiii) The authorized no shares of Preferred Stock were issued and outstanding. All outstanding Shares are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth in this Section 4.02(a) or as disclosed in the Company SEC Documents or in Section 4.02(a) of the Company Disclosure Schedule, there are no outstanding subscriptions, options, warrants, calls, rights, commitments or any other agreements to which the Company is a party or by which the Company is bound which obligate the Company to (i) issue, deliver or sell or cause to be issued, delivered or sold any additional Shares or any other capital stock of the Company consists of 7,500,000 Shares. As of or any other securities convertible into, or exercisable or exchangeable for, or evidencing the date hereofright to subscribe for, (i) 5,220,936 any such Shares are issued and outstanding, or (ii) 0 purchase, redeem or otherwise acquire any Shares are issued and held in the treasury any other capital stock of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All Shares subject to issuance as aforesaid, upon issuance on the outstanding Shares are, terms and all shares which may be issued conditions specified in the instruments pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof which they are issuable, will be, be duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries subsidiaries to repurchase, redeem or otherwise acquire any Shares, Shares or any capital stock of the Company or any such subsidiary or affiliate of the Company or to provide funds to to, or make any investment (in the form of a loan, capital contribution or otherwise) in in, any such subsidiary, subsidiary (other than those required in a wholly owned subsidiary of the ordinary course of business of such subsidiaries, Company) or any other entity Person. Each outstanding share of capital stock of each of the Company's subsidiaries is duly authorized, validly issued, fully paid and (iv) there nonassessable and each such share owned by the Company and its subsidiaries is free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company's or such other subsidiary's voting rights, charges and other encumbrances of any nature whatsoever, except for liens arising by operation of law that are no equity equivalents, interests not in the ownership or earnings of the Company or other similar rightsaggregate material.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and sufficient shares are reserved for issuance upon exercise conversion of outstanding Options granted under the Company Option Plans Note (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees required by the Note and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stocktransfer agent share reserve letter). All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no No shares of capital stock of the Company authorizedare 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 disclosed in the SEC Documents, issued or outstandingas of the effective date of this Agreement, (iii) except as disclosed on Schedule 3(c), there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock the holders thereof in respect thereto. The Company shall provide the Buyer with a written certification of this representation signed by the Company’s Chief Executive on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares 100,000,000 shares of Common Stock, of which { } shares are issued and outstanding, (ii) 0 Shares { } shares are issued and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, { } shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and, 24,476,923 shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company's covenant set forth in Section 4(h) below); and (ii) { } shares of preferred stock of which { } shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, the Company has (i) 5,220,936 28,783,929 Ordinary Shares are issued and outstanding, which includes 5,582,328 Ordinary Shares issued to the Depositary to facilitate future issuance of ADSs upon exercise of options under the Company’s Incentive Plan, (ii) 0 14,188,400 Ordinary Shares are issued and held in the treasury issuable pursuant to any outstanding Equity Securities exercisable or exchangeable for, or convertible into, any capital shares of the Company or pursuant to the Company’s Incentive Plan, and (iii) 421,550 243 Ordinary Shares available for issuance under the Company’s Incentive Plan. All of the issued and outstanding Ordinary Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable and free of preemptive rights of any Persons and similar rights and were issued in compliance with all applicable securities Laws. There Other than the Company’s Incentive Plan, there are no bondsoutstanding options, debentureswarrants, notes rights to subscribe to, calls or other indebtedness having general voting commitments of any character whatsoever relating to, or securities, rights (or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any Equity Securities of the Company, or Contracts by which the Company or any Subsidiary is or may become bound to issue additional Equity Securities of the Company, or securities having such rights) ("Voting Debt") or rights convertible or exchangeable into Equity Securities of the Company. None of the Company or its Subsidiaries is subject to any obligation (contingent or otherwise) to purchase or otherwise acquire or retire any of its Subsidiaries issued and outstandingoutstanding Equity Securities. Except (a) as disclosed on Schedule 3.2, (b) in the SEC Filings and except as set forth above, and (c) for the transactions contemplated by provided in this Agreement, as of no Person has the date hereof, (i) there are no shares of capital stock right to require the Company to register any Equity Securities of the Company authorizedwith the SEC or any other Governmental Authority, issued whether on a demand or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions piggy-back basis or other rights, agreements, arrangements or commitments in connection with the registration of any character, relating to the issued or unissued capital stock securities of the Company for its own account or any for the account of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsPerson.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares20 million shares of Common Stock, of which 10,556,755 shares were issued and outstanding as of the close of business on May 22, 2002, and 5 million shares of preferred stock, no shares of which are outstanding. As All of the issued and outstanding shares of capital stock of the Company have been validly issued, and are duly authorized, fully paid, non-assessable and free of preemptive rights. Except as set forth on Schedule 3.02(a), as of the date hereof, there are no outstanding (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) convertible into or exchangeable for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock or voting securities of the Company authorized, issued or outstandingCompany, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions warrants or other rights, agreements, arrangements or commitments of any character, relating rights to the issued or unissued capital stock of acquire from the Company or any of its Subsidiaries, obligating or obligations of the Company or any of its Subsidiaries to issue, transfer any capital stock, voting securities or sell securities convertible into or cause to be issued, transferred or sold any shares of exchangeable for capital stock or Voting Debt ofvoting securities of the Company or (iii) equity equivalents, interests in the ownership or other equity interest in, earnings of the Company or any of its Subsidiaries or securities convertible into or exchangeable for such other similar rights (including stock appreciation rights) (collectively, "Company Securities"). No shares or equity interests, or obligating of capital stock of the Company have been issued by the Company since May 22, 2002, except pursuant to any exercise of options or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there warrants described in Schedule 3.02(a). There are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or shares of capital stock of the Company or any subsidiary Company Securities. There are no stockholder agreements, voting trusts or affiliate of other agreements or understandings to which the Company or any of its Subsidiaries is a party or to provide funds which it is bound relating to make the voting of any investment (in the form shares of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings stock of the Company or other similar rightsCompany. Schedule 3.02(a) sets forth information as of the date hereof regarding the exercise price, date of grant, term and number of shares underlying each outstanding option and warrant to acquire capital stock of the Company.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held Except as disclosed in the treasury of the CompanySEC Documents, (iii) 421,550 Shares no shares are reserved for issuance upon exercise of outstanding Options granted under pursuant to the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares Company’s stock option plans, no shares are reserved for issuance upon exercise pursuant to securities (other than the Note) exercisable for, or convertible into or exchangeable for shares of certain individual stock options granted to employees Common Stock and directors of the Company, and (v) 200,000 Shares are sufficient shares shall be reserved for issuance upon exercise conversion of outstanding warrants to purchase common stockthe Note (as required by the Note and transfer agent share reserve letter). All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstandingnon-assessable. Except (a) as disclosed on Schedule 3.2, (b) as set forth abovein the SEC Documents, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorizedare 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 disclosed in the SEC Documents, issued or outstandingas of the effective date of this Agreement, (iii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of March 1, 2019, the authorized capital stock of the Company consists of 7,500,000 Shares. As 500,000,000 shares of the date hereofCommon Stock, (i) 5,220,936 Shares of which approximately 114,218,092 shares are issued and outstanding, (ii) outstanding and 0 Shares are issued and held shares of Preferred Stock authorized. Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 2,000,000 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. Section 2.2 of the Company Disclosure Schedule sets forth the capitalization of the Company as of the date of this Agreement, including the identity of each legal holder (a) The authorized of capital stock of the Company consists and the number and class or series of 7,500,000 Sharescapital stock held by each and (b) the issued and outstanding Options. As All of the date hereofissued and outstanding shares of capital stock of the Company have been duly authorized and were validly issued and are fully paid and nonassessable and has not been issued in violation of any preemptive or other similar right or the Securities Act or of any other applicable securities or other Law or Regulation of any jurisdiction. Each of the holders set forth on Section 2.2 of the Company Disclosure Schedule has good and valid title to, and owns of record the shares of capital stock of the Company or Options, as applicable, set forth across such holder’s name on such schedule, free and clear of any Liens. Except for this Agreement (or the other documents and instruments to be executed and delivered pursuant hereto) or as set forth in Section 2.2 of the Company Disclosure Schedule, the Company (i) 5,220,936 Shares are has not issued and outstandingsecurities convertible into or exchangeable or exercisable for any equity securities of the Company, (ii) 0 Shares has not issued options, warrants or other rights to purchase or subscribe to any equity securities of the Company or securities that are issued and held in the treasury convertible into or exchangeable or exercisable for any equity securities of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise is not party to any Contract relating to the issuance, sale or transfer of outstanding Options granted under the Company Option Plans (as hereinafter definedA) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors any equity securities of the Company, (B) any such securities convertible into or exchangeable or exercisable for any equity securities of the Company or (C) any such options, warrants or other rights to purchase or subscribe to any equity securities of the Company or securities that are convertible into or exchangeable or exercisable for any equity securities of the Company and (viv) 200,000 Shares has not issued any equity equivalents, restricted stock units, phantom stock ownership interests, equity appreciation rights, profit participation rights or similar rights with respect to any equity securities of the Company. Except as set forth in Section 2.2 of the Company Disclosure Schedule, (i) there are reserved for issuance upon exercise of outstanding warrants to 15 NY\7370590.17 no voting trusts, proxies, agreements, purchase common stock. All the outstanding Shares areagreements, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will beredemption agreements, duly authorizedacquisition agreements, validly issuedstockholders agreements, fully paid and nonassessable. There are no bondsmanagement agreements, debenturespledge agreements, notes buy-sell agreements or other indebtedness having general voting rights (similar agreements or convertible into understandings with respect to any equity securities having such rights) ("Voting Debt") of the Company or any of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2or which restrict or grant any right, (b) as set forth above, and (c) for preference or privilege with respect to the transactions contemplated by this Agreement, as transfer of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries and (ii) the Company has not declared any dividend or other rights to repurchase, redeem or otherwise acquire distributions in respect of any Shares, or capital stock equity securities of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsCompany.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As 200,000,000 shares of the date hereofCommon Stock, (i) 5,220,936 Shares of which 75,000,000 shares are issued and outstanding, (ii) 0 Shares shares are issued and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, 5,761,904 shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 116,111,111 shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company's covenant set forth in Section 4(h) below). All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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 ("Articles of Incorporation"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares1,000,000,000 shares of Common Stock, par value $0.001 per share, and 10,000,000 shares of Preferred Stock, par value $0.001 ("Preferred Stock") of which 260,273,921 shares of Common Stock and zero shares of Preferred Stock are issued and outstanding. All of such outstanding shares have been validly issued and are fully paid and nonassessable. No shares of Common Stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. As of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, callsscrip, preemptive rightsrights to subscribe to, subscriptions or other rights, agreements, arrangements calls or commitments of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiariessubsidiaries, obligating or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries subsidiaries or options, warrants, scrip, rights to repurchasesubscribe to, redeem calls or otherwise acquire commitments of any Sharescharacter whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any subsidiary of its subsidiaries, (ii) there are no outstanding debt securities and (iii) there are no agreements or affiliate of arrangements under which the Company or any of its subsidiaries is obligated to provide funds register the sale of any of their securities under the Securities Act (except pursuant to make any investment (in the form of a loan, capital contribution or otherwiseRegistration Rights Agreement) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in outstanding registration statements and there are no outstanding comment letters from the ownership SEC or earnings any other regulatory agency. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Convertible Debentures as described in this Agreement. The Company has furnished to the Buyer true and correct copies of the Company's Articles of Incorporation, as amended and as in effect on the date hereof (the "Articles of Incorporation"), and the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto other similar rightsthan stock options issued to employees and consultants.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are the authorized, issued and outstanding, (ii) 0 Shares are issued and held in the treasury outstanding capital stock of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise Company is as set forth on Schedule 4.3 hereto and except as set forth on Schedule 4.3 no other shares of outstanding Options granted under capital stock of the Company Option Plans (will be outstanding as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockClosing Date. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) ("Voting Debt") No shares of capital stock of the Company are subject to preemptive rights or similar rights of the stockholders of the Company (other than those rights in favor of holders of the Preferred Stock) or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) Other than as set forth above, and (c) for the transactions contemplated by this Agreementon Schedule 4.3 hereto, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, and (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating are obligated to register the Company or sale of any of its Subsidiaries or their securities under the Securities Act (except pursuant to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Securities. The Company or any of its Subsidiaries has furnished to repurchase, redeem or otherwise acquire any Shares, or capital stock Purchaser true and correct copies of the Company Company’s Corporate Documents, and the terms of all securities convertible into or any subsidiary or affiliate exercisable for Common Stock and the material rights of the Company or to provide funds to make any investment (holders thereof in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsrespect thereto.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are the authorized, issued and outstanding, (ii) 0 Shares are issued and held in the treasury outstanding capital stock of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise Company is as set forth on Schedule 4.3 hereto and except as set forth on Schedule 4.3 no other shares of outstanding Options granted under capital stock of the Company Option Plans (will be outstanding as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockClosing Date. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) Other than as set forth above, and (c) for the transactions contemplated by this Agreementon Schedule 4.3 hereto, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, and (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating are obligated to register the Company or sale of any of its Subsidiaries or their securities under the Securities Act (except pursuant to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Convertible Debentures or Conversion Shares. The Company or any of its Subsidiaries has furnished to repurchase, redeem or otherwise acquire any Shares, or capital stock Purchaser true and correct copies of the Company Company's Corporate Documents, and the terms of all securities convertible into or any subsidiary or affiliate exercisable for Common Stock and the material rights of the Company or to provide funds to make any investment (holders thereof in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsrespect thereto.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares25,000,000 shares of Common Stock. As At the close of the date hereofbusiness on March 18, 1998, (i) 5,220,936 Shares are 12,214,473 shares of Common Stock were issued and outstanding, (ii) 0 Shares are issued no shares of Common Stock were held by the Company in its treasury and held in the treasury of the Company, (iii) 421,550 Shares are 2,722,548 shares of Common Stock were reserved for issuance upon exercise of outstanding Options granted under the options to purchase shares of Common Stock ("Company Option Plans (as hereinafter definedStock Options") (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted issued pursuant to employees and directors of the Company, 's stock option plans and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. Except as set forth above, as of the date of this Agreement, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, Company are duly authorized, validly issued, fully paid and nonassessablenonassessable and not subject to preemptive rights. There are no bonds, debentures, notes or other indebtedness of the Company having general voting rights the right to vote (or convertible into into, or exchangeable for, securities having such the right to vote) on any matters on which stockholders of the Company may vote. Except as set forth above, as of the date of this Agreement, there are not any securities, options, warrants, calls, rights) ("Voting Debt") , commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated subsidiaries is a party or by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or which any of its Subsidiaries, them is bound obligating the Company or any of its Subsidiaries subsidiaries to issue, transfer deliver or sell sell, or cause to be issued, transferred delivered or sold any sold, additional shares of capital stock or Voting Debt of, or other equity interest in, voting securities of the Company or of any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, subsidiaries or obligating the Company or any of its Subsidiaries subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, subscription or other right, commitment, agreement, arrangement or commitment, (iii) there are no undertaking. There is not any outstanding contractual obligations of the Company or any of its Subsidiaries subsidiaries (i) to repurchase, redeem or otherwise acquire any Shares, or shares of capital stock of the Company or (ii) to vote or to dispose of any subsidiary or affiliate shares of the Company or to provide funds to make capital stock of any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsCompany's subsidiaries.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares ___________ shares of Common Stock, of which __________ shares are issued and outstanding, (ii) 0 Shares __________ shares are issued and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, __________ shares are reserved for issuance pursuant to securities (iiiother than the Notes and the Warrants) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and __________ shares are reserved for issuance upon conversion of the Notes and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company's covenant set forth in Section 4(h) below); and (ii) ______ shares of preferred stock, of which _______ shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Notes, the Warrants, the Conversion Shares or Warrant 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 ("Articles of Incorporation"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of: 2,000,000,000 shares of 7,500,000 Shares. As Common Stock, of the date hereof, (i) 5,220,936 Shares which approximately 17,523,673 shares are issued and outstanding, (ii) 0 Shares and 50,000,000 shares of Preferred Stock, of which 600 shares are issued and held outstanding. Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note and any other promissory note issued to the Buyer) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 13,333,333 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock and the material rights of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (holders thereof in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsrespect thereto.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 100,000,000 shares of Class A Common Stock, $0.0010.001 0.001par value per share, of which 23,571,344 shares are issued and outstanding, ; (ii) 0 Shares 16,110,500 shares of Class B Common Stock, $0.001 par value per share, of which 16,110,500 shares are issued and held in the treasury of the Company, outstanding; and (iii) 421,550 Shares 1,000,000 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 Company’s stock option plans, 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 671,642 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and Note (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants subject to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company’s covenant set forth in Section 4(g) below). All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (ivii) there are no equity equivalentsanti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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”), interests the Company’s By-laws, as in effect on the ownership date hereof (the “By-laws”), and the terms of all securities convertible into or earnings exercisable for Common Stock of the Company or other similar rightsand 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 securities of the Acquired Company consists of 7,500,000 10,000 shares of common stock, no par value per share, of which 2,000 shares are issued and outstanding and constitute the Shares, and 35 shares of Series A Preferred Stock, having a stated value of $10,000 per share, of which 35 shares are issued and outstanding and owned legally and beneficially by Seller. As The resolution of the Board of Directors of GIDI Holdings, Inc. fixing the voting powers, designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations, or restrictions thereof, of the Series A Preferred Stock is attached hereto as ANNEX A (the "Resolution"). Pursuant to a recapitalization of the Acquired Company, Seller acquired such shares of Series A Preferred Stock in consideration for its contribution to capital of the Acquired Company of Seller's right to payment of $350,000 of the outstanding indebtedness owing by the Acquired Company to Seller (the "Intercompany Debt") and Seller then contributed its right to payment of the outstanding balance of the Intercompany Debt to the Acquired Company as additional paid-in capital, all of which is so reflected as of the date hereofhereof on the respective books and records of the Acquired Company and Seller. Except for the Intercompany Debt so contributed, (i) 5,220,936 Shares are no Intercompany Debt has been incurred or is outstanding. All of the outstanding equity securities of the Acquired Company have been duly authorized and validly issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessablenonassessable and free of preemptive and similar rights. There are no bondscontracts, debenturescommitments, notes agreements, obligations, options, or other indebtedness having general voting rights (relating to the issuance, sale, or convertible into transfer of any equity securities having such rights) ("Voting Debt") or other securities of the Company or any of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2Acquired Company, (b) except as set forth above, and (c) for the transactions contemplated by in this Agreement. The Acquired Company does not own, as of the date hereofor have any contract, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rightscommitments, agreements, arrangements or commitments of any characterobligations, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or Voting Debt ofoptions, or other rights to acquire, any equity interest in, the Company securities or other securities of any person or any of its Subsidiaries direct or securities convertible into indirect equity or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) ownership interest in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsbusiness.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 1,000,000,000 shares of Common Stock, of which approximately 116,140,159 shares are issued and outstanding, ; and (ii) 0 Shares 5,000,000 shares of preferred stock, of which approximately 5,944.5 are issued and held in the treasury of outstanding. Except No shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note and any other convertible promissory note issued to the Buyer) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 125,000,000 shares (initially) are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for As of the transactions contemplated by effective date of this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock capitalization of the Company consists of 7,500,000 Shares. As as of the date hereof, (i) 5,220,936 Shares are including the authorized capital stock, the number of shares issued and outstanding, (ii) 0 Shares are issued the number of shares issuable and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, the number of shares issuable and reserved for issuance pursuant to securities (iiiother than the Preferred Shares and Warrants) 421,550 Shares are exercisable or exchangeable for, or convertible into, any shares of capital stock and the number of shares to be reserved for issuance upon conversion of the Preferred Shares and exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockWarrants is set forth on SCHEDULE 3(D). All the of such outstanding Shares areshares of capital stock have been, and all shares which may be issued pursuant to the exercise of outstanding Options when issued or upon issuance in accordance with the respective terms thereof of any such warrants, options or preferred stock, will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company (including the Preferred Shares, the Conversion Shares and the Warrant Shares) are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the stockholders of the Company or any of its Subsidiaries issued and outstandingliens or encumbrances. Except (a) as disclosed on Schedule 3.2, (b) for the Securities and as set forth above, and (c) for the transactions contemplated by this Agreementon SCHEDULE 3(D), as of the date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, callsscrip, preemptive rightsrights to subscribe to, subscriptions or other rights, agreements, arrangements calls or commitments of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiariessubsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries subsidiaries, and (ii) there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to repurchaseregister the sale of any of its or their securities under the Securities Act (except the Registration Rights Agreement). Except as set forth on SCHEDULE 3(D), redeem (i) there are no securities or otherwise acquire any Sharesinstruments containing antidilution or similar provisions that will be triggered by the issuance of the Securities in accordance with the terms of this Agreement, the Certificate of Designation or capital stock the Warrants, (ii) there are no outstanding securities or instruments of the Company or any subsidiary of its subsidiaries which contain any redemption or affiliate similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to redeem a security of the Company or any of its subsidiaries, and (iii) the Company does not have any stock appreciation rights or "phantom stock" plans or agreements or any similar plan or agreement. The Company has furnished to provide funds to make any investment the Purchasers true and 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 all other instruments and agreements governing securities convertible into or exercisable or exchangeable for capital stock of the Company. The Certificate of Designation, in the form attached hereto, will be duly filed prior to Closing with the Secretary of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings State of the Company or other similar rightsState of Delaware and, upon the issuance of the Preferred Shares in accordance with the terms hereof, each Purchaser shall be entitled to the rights set forth therein.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 100,000,000 shares of Common Stock, of which approximately 5,371,771 shares are issued and outstanding, ; and (ii) 0 Shares 30,000,000 shares of preferred stock, of which 54,631,771 are issued and held outstanding. Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 9,995,456 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti- dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized As of the filing of its most recent Form 20-F, the outstanding capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares are issued and 17,414,861 common shares outstanding, (ii) 0 Shares are issued par value $0.001, and held other than as disclosed in the treasury of Company’s filings, there are no shares reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 12,000,000 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for As of the transactions contemplated by effective date of this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrantsscrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. When requested, the Company will furnish to the Buyer true and 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 securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock or other capitalization of the Company consists of 7,500,000 Shares. As of and the date hereofCorporate Guarantors, (i) 5,220,936 Shares are issued and outstandingas applicable, (ii) 0 Shares are issued and held is set forth in the treasury of the Company, (iii) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockSchedule 6.4 attached hereto. All the of such outstanding Shares are, and all shares which may be issued pursuant to the exercise or other securities of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, each Credit Party are validly issued, fully paid and nonassessable. There are no bondsnon-assessable and have been issued in compliance with all foreign, debentures, notes federal and state securities laws and none of such outstanding shares or other indebtedness having general voting securities were issued in violation of any preemptive rights (or convertible into similar rights to subscribe for or purchase securities. As of the Effective Date, no shares of capital stock or other securities having such rights) ("Voting Debt") of the Company or the Corporate Guarantors are subject to preemptive rights or any other similar rights or any Claims or Encumbrances suffered or permitted by Company or the Corporate Guarantors. The Company’s Common Stock is currently quoted by OTC Markets on the Pink Sheets under the trading symbol “INVT”. The Company has received no notice, either oral or written, with respect to the continued eligibility of the Common Stock for quotation on the Principal Trading Market, and the Company has maintained all requirements on its Subsidiaries issued and outstandingpart for the continuation of such quotation. Except (a) as disclosed on Schedule 3.2, in the “Public Documents” (bas hereinafter defined) as set forth above, and (c) except for the transactions contemplated by Securities to be issued pursuant to this Agreement, as of the date hereof, : (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, callsscrip, preemptive rightsrights to subscribe to, subscriptions or other rights, agreements, arrangements calls or commitments of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, obligating or Contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issueissue additional shares of capital stock of the Company or any of its Subsidiaries, transfer or sell options, warrants, scrip, rights to subscribe to, calls or cause to be issuedcommitments of any character whatsoever relating to, transferred or sold securities or rights convertible into, any shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries; (ii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other Contracts or instruments evidencing indebtedness of the Company or any of its Subsidiaries, or other equity interest in, by which the Company or any of its Subsidiaries is or securities convertible into may become bound; (iii) there are no outstanding registration statements with respect to the Company or exchangeable for such shares the Corporate Guarantors or equity interests, any of their securities; (iv) there are no agreements or obligating arrangements under which the Company or any of its Subsidiaries is obligated to grant, extend or enter into register the sale of any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, of their securities under the Securities Act (iiiexcept pursuant to this Agreement); (v) there are no outstanding contractual financing statements securing obligations of filed in connection with the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment Assets; (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (ivvi) there are no equity equivalents, interests in securities or instruments containing anti-dilution or similar provisions that will be triggered by this Agreement or any related agreement or the ownership consummation of the transactions described herein or earnings therein; and (vii) there are no outstanding securities or instruments of the Company which contain any redemption or similar provisions, and there are no Contracts by which the Company is or may become bound to redeem a security of the Company. The Company has furnished to the Buyer true, complete and correct copies of: each of the Company and the Corporate Guarantors’ respective articles of incorporation (including any certificates of designation, is applicable), bylaws, operating agreement, partnership agreement, certificate of organization or similar organizational and governing documents (the “Organizational Documents”). Except for the Organizational Documents or as disclosed in the Public Documents, there are no other shareholder agreements, voting agreements or other similar rightsContracts of any nature or kind that restrict, limit or in any manner impose Obligations on the governance of any Credit Party.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 3,700,000,000 shares of Common Stock, of which 56,485,972 shares are issued and outstanding; and, (ii) 0 Shares except as set forth in Schedule 3(c), no shares are issued and held in the treasury of reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and a suitable amount of shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and Note (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants subject to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company’s covenant set forth in Section 4(g) below). All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no No shares of capital stock of the Company authorized, issued are subject to preemptive rights or outstandingany 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, (iii) Except as set forth in Schedule 3 (c)(i), there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) except as set forth in Schedule 3 (c)(ii [for those convertible debentures with the Xxxxx Xxxxx Foundation and Motivated Minds, LLC, dated October 18, 2012, and the Securities Purchase Agreement with Ascendiant Capital, Inc., as amended, dated October 18, 2012, along with registration rights agreements of same date, and that Securities Purchase Agreement with GCA Strategic Investment Fund Ltd. dated April 2_, 2013 , and those Securities Purchase Agreements dated April 2_, 2013, July 1, 2013, August 15, 2013, and August 23, 2013, with Xxxxx Enterprises, Inc., and that convertible note dated June 26, 2013 with JMJ Financial] there are no agreements or other equity interest in, arrangements 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) Except as set forth in Schedule 3 (c)(iii), there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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”), the Company’s Bylaws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exchangeable exercisable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, the authorized capital stock LBC consists of (i) 5,220,936 Shares 200,000,000 shares of Common Stock, of which 25,674,092 shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares no shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares pursuant to LBC's stock option plans, no shares are reserved for issuance upon exercise pursuant to securities exercisable for, or convertible into or exchangeable for shares of certain individual common stock options granted to employees and directors of the Company, and (vii) 200,000 Shares 1,000,000 shares of preferred stock, of which no shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockissued and outstanding. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of LBC are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the Company shareholders of LBC or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingLBC. Except (a) as otherwise disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the effective date hereofof this Agreement, (i) there are no outstanding options, warrants, 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 rights convertible into or exchangeable for any shares of capital stock of the Company authorizedLBC or any of its Subsidiaries, issued or outstandingarrangements by which LBC or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of LBC or any of its Subsidiaries, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions agreements or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company under which LBC or any of its Subsidiaries is obligated to issue, transfer or sell or cause to be issued, transferred or sold any shares register the sale of capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or their securities convertible into or exchangeable for such shares or equity interests, or obligating under the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by LBC (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital restricted stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightshereunder.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares20,000,000 Shares and 1,000,000 shares of preferred stock, no par value ("Company Preferred Stock"). As of the date hereof, (ia) 5,220,936 4,256,555 Shares are issued and outstanding, all of which are validly issued, fully paid and nonassessable, (iib) 0 no Shares are issued and held in the treasury of the Company, (iiic) 421,550 no Shares are held by any Subsidiary, and (d) 606,492 Shares are reserved for future issuance upon exercise of pursuant to outstanding Options employee stock options or stock incentive rights granted under pursuant to the Company Stock Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors Plans. As of the Companydate hereof, no shares of Company Preferred Stock are issued and outstanding. Except as set forth in this Section 4.03 and Section 4.03 of the Disclosure Schedule, and except for the rights (vthe "Rights") 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise Rights Agreement, dated as of outstanding Options when September 17, 1998 (the "Rights Agreement"), between the Company and ChaseMellon Shareholder Services, L.L.C., as rights agent, there are no options, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or any Subsidiary or obligating the Company or any Subsidiary to issue or sell any shares of capital stock of, or other equity interests in, the Company or any Subsidiary. All Shares subject to issuance as aforesaid, upon issuance on the terms and conditions specified in accordance with the respective terms thereof instruments pursuant to which they are issuable, will be, be duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries Subsidiary to repurchase, redeem or otherwise acquire any Shares, Shares or any capital stock of the Company or any subsidiary or affiliate of the Company Subsidiary or to provide funds to to, or make any investment (in the form of a loan, capital contribution or otherwise) in in, any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, Subsidiary or any other entity person. Each outstanding share of capital stock of each Subsidiary is duly authorized, validly issued, fully paid and (iv) there are no equity equivalentsnonassessable, interests in the ownership or earnings of and each such share is owned by the Company or another Subsidiary free and clear of all 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 similar rightsencumbrances of any nature whatsoever.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 150,000,000 shares of Common Stock, $0.001 par value per share, of which 122,591,301 shares are issued and outstanding, ; and (ii) 0 Shares 10,000,000 authorized shares of Preferred Stock, $0.01 par value per share; (iii) 425,000,000 shares of Series A Preferred Stock, of which 87,501shares are issued and held in the treasury of outstanding; no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 26,000,000 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for As of the transactions contemplated by effective date of this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held Except as disclosed in the treasury of SEC Documents and Schedule 3(c), no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and sufficient shares are reserved for issuance upon exercise conversion of outstanding Options granted under the Company Option Plans Note (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees required by the Note and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stocktransfer agent share reserve letter). All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in the SEC Documents and Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 Articles 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 as described on Schedule 3(c) the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As 50,000,000 shares of the date hereofCommon Stock and 5,000,000 shares of preferred stock; as of November 30, (i) 5,220,936 Shares are 1998 there were 17,802,649 shares of Common Stock and 382,794 shares of preferred stock issued and outstanding, (ii) 0 Shares are issued ; and held in 9,723,138 shares of Common Stock and no shares of preferred stock were reserved for issuance to persons other than the treasury Investors. All of the outstanding shares of the Company, (iii) 421,550 Shares 's Common Stock and preferred stock have been validly issued and are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth abovein SCHEDULE 2.1(c), no shares of capital stock are entitled to preemptive rights; and there are as of November 30, 1998 outstanding options for 2,078,895 shares of Common Stock and no outstanding warrants for shares of Common Stock (excluding the Warrants). The Company's issued and outstanding preferred stock is, and (c) for will be, in all respects junior to the transactions contemplated by this AgreementDebentures. Except as set forth in SCHEDULE 2.1(c), as of the date hereof, (i) there are no other scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights exchangeable for or convertible into, any shares of capital stock of the Company, or contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, callsscrip, preemptive rightsrights to subscribe to, subscriptions or other rights, agreements, arrangements or commitments to purchase or acquire, any shares, or securities or rights convertible or exchangeable into shares, of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating Company. Except where such information has been clearly set forth in the Company or any of its Subsidiaries to 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 inSEC Documents (as defined below), the Company or any agrees to update the information contained in the preceding sentences of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries this Section 2.1(c) and in SCHEDULE 2.1(c) in a certificate delivered to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iiieach Investor on a quarterly basis. Attached hereto as EXHIBIT 2.1(c)(i) there are no outstanding contractual obligations is a true and correct copy of the Company or any Company's Certificate of its Subsidiaries to repurchaseIncorporation (the "CHARTER"), redeem or otherwise acquire any Sharesas in effect on the date hereof, or capital stock and attached hereto as EXHIBIT 2.1(c)(ii) is a true and correct copy of the Company or any subsidiary or affiliate of Company's By-Laws, as in effect on the Company or to provide funds to make any investment date hereof (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rights"BY-LAWS").

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 300,000,000 shares of Common Stock, of which 46,811,165 shares are issued and outstanding, ; and (ii) 10,000,000 shares of preferred stock, $0.001 par value per share, of which 0 Shares shares are issued and held outstanding. Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 1,060,606 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, in the SEC Documents and (c) for to the transactions contemplated by this AgreementBuyer in writing prior to the date hereof, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares 50,000,000 shares of Common Stock, of which 27,334,663 shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares 14,047,480 shares are reserved for issuance upon exercise pursuant to securities (other than the Debentures and the Warrants) exercisable for, or convertible into or exchangeable for shares of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, Common Stock; and (vii) 200,000 Shares 10,000,000 shares of preferred stock, of which no series or class has been designated and no shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockissued and outstanding. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as As of the date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Company Debentures, the Warrants, the Additional Shares or any of its Subsidiaries to repurchase, redeem the Conversion Shares or otherwise acquire any Warrant Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rights.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 20,000,000,000 shares of Common Stock, $0.00001 par value per share, of which 6,052,367,975 shares are issued and outstanding, ; and (ii) 0 Shares 500,000,000 shares of preferred stock, $0.00001 par value per share, of which 42,394,372 shares are issued and held outstanding. Except as disclosed in the treasury of SEC Documents, no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (iiiother than the Note) 421,550 Shares exercisable for, or convertible into or exchangeable for shares of Common Stock and 570,494,186 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The authorized capital stock capitalization of the Company consists of 7,500,000 Shares. As as of the date hereofhereof is set forth on Schedule 4(c), (i) 5,220,936 Shares are including the authorized capital stock, the number of shares issued and outstanding, (ii) 0 Shares are issued the number of shares issuable and held in reserved for issuance pursuant to the treasury Company's stock option plans, the number of shares issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock. All of such outstanding shares of the Company's capital stock have been, (iii) 421,550 Shares are reserved for or upon issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth aboveon Schedule 4(c), and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized(including the Shares and the Warrant Shares) or any of the Subsidiaries are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances. Except for the Securities and as disclosed in Schedule 4(c), issued or outstandingas of the date of this Agreement, (iii) there are no existing outstanding options, warrants, callsscrip, preemptive rightsrights to subscribe to, subscriptions or other rights, agreements, arrangements calls or commitments of any character, character whatsoever to which the Company or any of its Subsidiaries is a party relating to the issued issuance by the Company or unissued any of its Subsidiaries of securities or rights convertible into or exercisable or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofsuch Subsidiaries, and (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the Securities Act (except pursuant to Section 5(h) hereof). Except as set forth on Schedule 4(c), there are no securities or instruments containing anti-dilution or similar provisions that may be triggered by the issuance of the Securities in accordance with the terms of this Agreement or the Warrants and the holders of the securities and instruments listed on such Schedule 4(c) have waived any rights they may have under such anti-dilution or similar provisions in connection with the issuance of the Securities in accordance with the terms of this Agreement or the Warrants. The Company has made available to each Purchaser true and 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 all other instruments and agreements governing securities convertible into or exercisable or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or Company, except for stock options granted under any subsidiary or affiliate benefit plan of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsCompany.

Capitalization. (a) The authorized capital stock capitalization of the Company consists of 7,500,000 Shares. As as of the date hereof, (i) 5,220,936 Shares are including the authorized capital stock, the number of shares issued and outstanding, (ii) 0 Shares are issued the number of shares issuable and held in the treasury of reserved for issuance pursuant to the Company's stock option plans, the number of shares issuable and reserved for issuance pursuant to securities (iiiother than the Preferred Shares) 421,550 Shares are exercisable for, or convertible into or exchangeable for any shares of capital stock and the number of shares to be reserved for issuance upon exercise conversion of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued or otherwise pursuant to the exercise Preferred Shares is set forth in Section 3(c) of the Disclosure Letter. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock have been, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There No shares of the authorized and unissued capital stock of the Company (including the Conversion Shares) are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the stockholders of the Company or any of its Subsidiaries issued and outstandingliens or encumbrances. Except (a) as disclosed on Schedule 3.2, (b) for the Securities and the Note and as set forth above, and (cin Section 3(c) for of the transactions contemplated by this AgreementDisclosure Letter, as of the date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grantor their securities under the Securities Act (except the Registration Rights Agreement and the Registration Rights Agreement, extend or enter into any such optiondated as of January 25, warrant1999, call, subscription or other right, agreement, arrangement or commitment, between the Company and the Purchaser (the "JANUARY REGISTRATION RIGHTS AGREEMENT")) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders). There are no securities or instruments containing antidilution or similar provisions that will be triggered by the issuance of the Securities in accordance with the terms of this Agreement or the Articles of Amendment. The Company has furnished to the Purchaser true and 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 all other instruments and agreements to which the Company is a party governing securities convertible into or any of its Subsidiaries to repurchase, redeem exercisable or otherwise acquire any Shares, or exchangeable for capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required agreements under the Company's option and stock plans for its directors, officers and employees in the ordinary course of business of accordance with such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsplans.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of: 170,000,000 shares of 7,500,000 Shares. As Common Stock, of the date hereof, (i) 5,220,936 Shares which approximately 8,465,211 shares are issued and outstanding; and 5,000,000 shares of Preferred Stock, (ii) par value $0.0001 per share, of which 0 Shares shares are issued and held outstanding. Except as disclosed in the treasury SEC Documents (as defined below), no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than upon conversion of the CompanyNote or exercise of the Warrant) exercisable for, (iii) 421,550 Shares or convertible into or exchangeable for shares of Common Stock and 984,576 shares are reserved for issuance upon conversion of the Note, exercise of outstanding Options granted under the Company Option Plans Warrant, or issuance of additional Commitment Fee Shares in connection with a Discounted Issuance in accordance with Section 4(o) of this Agreement (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued including any adjustments thereto pursuant to the exercise Transaction Documents, the “Reserved Amount”). All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for in the transactions contemplated by this AgreementSEC Documents, as of the effective date hereofof this Agreement, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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 the SEC Documents true and 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 securities convertible into or exercisable for Common Stock of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock and the material rights of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (holders thereof in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsrespect thereto.

Capitalization. (a) The authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereofExcept as disclosed in Schedule 3(c), (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held in the treasury of the Company, (iii) 421,550 Shares no shares are reserved for issuance upon exercise of outstanding Options granted under pursuant to the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares Company's stock option plans, no shares are reserved for issuance upon exercise pursuant to securities (other than the Securities) exercisable for, or convertible into or exchangeable for shares of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockCommon Stock. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There No shares of capital stock of the Company are no bonds, debentures, notes subject to preemptive rights or any other indebtedness having general voting similar rights (or convertible into securities having such rights) ("Voting Debt") of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of its Subsidiaries issued and outstandingthe Company. Except (a) as disclosed on in Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement3(c), as of the date hereofEffective Date, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of each Note, Warrants, 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 ("Certificate of Incorporation"), the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightseach Closing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, of: (i) 5,220,936 Shares 90,000,000 shares of Common Stock, no par value per share, of which, as of January 31, 2012, 44,484,821 shares are issued and outstanding, ; and (ii) 0 Shares 20,000,000 shares of Preferred Stock, no par value per share, of which no shares are issued and held in the treasury of the Company, (iii) 421,550 Shares outstanding; 6,003,686 shares are reserved for issuance upon exercise of outstanding Options granted under the Company Option Plans (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted to employees and directors conversion of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stockNote. All the of such outstanding Shares shares of capital stock are, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof or upon issuance will be, duly authorized, validly issued, fully paid and nonassessablenon-assessable. There 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. As of the effective date of this Agreement, (i) there are no bondsoutstanding options, debentureswarrants, notes scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other indebtedness having general voting commitments or rights (of any character whatsoever relating to, or securities or rights convertible into securities having such rights) ("Voting Debt") or exchangeable for the reserved shares of capital stock, that are the subject of this agreement, of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no is or may become bound to issue additional shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to issue, transfer or sell or cause to be issued, transferred or sold any shares register the sale of capital stock or Voting Debt of, or other equity interest in, the Company or any of its Subsidiaries or their securities convertible into or exchangeable for such shares or equity interests, or obligating under the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, 1933 Act and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in 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”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company or any and the material rights of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock 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 or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. (a) The As of the date hereof, the authorized capital stock of the Company consists of 7,500,000 Shares. As of the date hereof, (i) 5,220,936 Shares 50,000,000 shares of Common Stock, of which 38,038,112 shares are issued and outstanding, (ii) 0 Shares 1,290,000 shares are issued and held in the treasury of reserved for issuance pursuant to the Company’s stock option plans, (iii) 421,550 Shares 2,000,000 shares are reserved for issuance pursuant to a settlement of a lawsuit, and 50,000 shares are reserved for issuance upon conversion of the Debentures and exercise of outstanding Options granted under the Company Option Plans Warrants (as hereinafter defined) (iv) 11,000 Shares are reserved for issuance upon exercise of certain individual stock options granted subject to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise of outstanding warrants to purchase common stock. All the outstanding Shares are, and all shares which may be issued adjustment pursuant to the exercise Company’s covenant set forth in. Section 4(h) below); and (ii) 10,000,000 shares of preferred stock, of which no shares are issued and outstanding. All of such outstanding Options when issued in accordance with the respective terms thereof shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. There 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 of its Subsidiaries issued and outstanding. Except (a) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no No shares of capital stock of the Company authorizedare subject to preemptive rights or any other similar rights of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as disclosed in Schedule 3(c), issued or outstandingas of the effective date of this Agreement, (iii.) there are no existing outstanding options, warrants, scrip, rights to subscribe for, puts, calls, preemptive rights, subscriptions or other rightsrights of first refusal, agreements, arrangements understandings, claims or other commitments or rights of any charactercharacter whatsoever relating to, relating to the issued or unissued securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, obligating or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue, transfer or sell or cause to be issued, transferred or sold any issue additional shares of capital stock of the Company or Voting Debt ofany of its Subsidiaries, (ii) there are no agreements or other equity interest in, arrangements under which the Company or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating is obligated to register the Company or sale of any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, their securities under the 1933 Act (except the Registration Rights Agreement) and (iii) there are no outstanding contractual obligations anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Debentures, the Warrants, the Conversion Shares or Warrant 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”), the Company’s By-laws, as in effect on the date hereof (the “Bylaws” ), and the terms of all securities 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 any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock Chief Financial Officer on behalf of the Company or any subsidiary or affiliate as of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightsClosing Date.

Capitalization. The Company is authorized to issue Two Hundred Million (a200,000,000) The authorized capital shares of common stock and as of December 31, 2009, the Company had Ninety-Four Million, Five Hundred Thirty-Three Thousand, Four Hundred Sixty-Seven (94,533,467) issued and outstanding shares of common stock. No shares of Common Stock are entitled to preemptive or similar rights, nor is any holder of the Common Stock entitled to preemptive or similar rights arising out of any agreement or understanding with the Company consists by virtue of 7,500,000 Shares. As any of the date hereof, (i) 5,220,936 Shares are issued and outstanding, (ii) 0 Shares are issued and held Transaction Documents. Except as disclosed in the treasury Company’s SEC Filings (available free of charge on the SEC’s website – xxx.xxx.xxx), there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or, except as a result of the purchase and sale of the Debentures and the Warrants hereunder, securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings, or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. To the knowledge of the Company, except as specifically disclosed in the Company’s SEC Filings, no Person (iiias defined below) 421,550 Shares are reserved for issuance upon exercise of outstanding Options granted beneficially owns (as determined pursuant to Rule 13d-3 promulgated under the Company Option Plans Securities Exchange Act of 1934, as amended (as hereinafter definedthe “Exchange Act”)) (iv) 11,000 Shares are reserved for issuance or has the right to acquire by agreement with or by obligation binding upon exercise of certain individual stock options granted to employees and directors of the Company, and (v) 200,000 Shares are reserved for issuance upon exercise beneficial ownership of outstanding warrants to purchase common stockin excess of 5% of the Common Stock. All Except as specifically disclosed in the outstanding Shares areCompany’s SEC Filings, and all shares which may be issued pursuant to the exercise of outstanding Options when issued in accordance with the respective terms thereof will be, duly authorized, validly issued, fully paid and nonassessable. There there are no bonds, debentures, notes agreements or other indebtedness having general voting rights (or convertible into securities having such rights) ("Voting Debt") of arrangements under which the Company or any Subsidiary is obligated to register the sale or resale of its Subsidiaries issued and outstandingany of their securities under the Securities Act. Except A “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (aor an agency or subdivision thereof) as disclosed on Schedule 3.2, (b) as set forth above, and (c) for the transactions contemplated by this Agreement, as of the date hereof, (i) there are no shares of capital stock of the Company authorized, issued or outstanding, (ii) there are no existing options, warrants, calls, preemptive rights, subscriptions or other rights, agreements, arrangements or commitments entity of any character, relating to the issued or unissued capital stock of the Company or any of its Subsidiaries, obligating the Company or any of its Subsidiaries to 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 any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment, (iii) there are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or capital stock of the Company or any subsidiary or affiliate of the Company or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any such subsidiary, other than those required in the ordinary course of business of such subsidiaries, or any other entity and (iv) there are no equity equivalents, interests in the ownership or earnings of the Company or other similar rightskind.