Common use of Company Capitalization Clause in Contracts

Company Capitalization. (a) The authorized capital stock of Company consists solely of 290,000,000 shares of the Company Common Stock and 10,000,000 shares of the Company Preferred Stock, of which 200,000 shares are designated as 1995 Series Preferred Stock, par value $0.001 per share (the “Company 1995 Series Preferred Stock”), 3,500 shares are designated as 1998 Series A Preferred Stock, par value $0.001 per share (the “Company 1998 Series A Preferred Stock”), 1,000 shares are designated as 2003 Series A Preferred Stock, par value $0.001 per share (the “Company 2003 Series A Preferred Stock”), and 1,100 shares are designated as 2003 Series B Preferred Stock, par value $0.001 per share (the “Company 2003 Series B Preferred Stock” and together with the Company 1995 Series Preferred Stock, the Company 1998 Series A Preferred Stock, the Company 2003 Series A Preferred Stock and the Company 2003 Series B Preferred Stock, the “Company Preferred Stock”), and (i) 23,224,272 shares of the Company Common Stock are issued and outstanding as of October 10, 2006, (ii) no shares of Company 1995 Series Preferred Stock are issued and outstanding, (iii) no shares of Company 1998 Series A Preferred Stock are issued and outstanding, (iv) no shares of Company 2003 Series A Preferred Stock are issued and outstanding, (v) no shares of Company 2003 Series B Preferred Stock are issued and outstanding, and (vi) no shares of Company’s capital stock are being held in Company’s treasury. Part 2.3(a) of the Company Disclosure Letter sets forth a true, correct and complete list of the number of shares of the Company Common Stock held by each registered holder thereof as of October 10, 2006, and since such date Company has not issued any securities (including derivative securities) except for any shares of the Company Common Stock issued upon exercise of Company Options outstanding under the Company Stock Plans prior to such date. All outstanding shares of the Company Common Stock and the Company Preferred Stock were duly authorized and validly issued, and are fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, pre-emptive right, subscription right or any similar right under the provisions of Nevada Corporate Law, the Company Charter Documents or any Contract to which Company is a party or by which it is bound. There are no accrued and unpaid dividends with respect to any outstanding shares of capital stock of Company or any Company Subsidiary.

Company Capitalization. (a) The authorized capital stock of the Company consists solely of 290,000,000 1,000,000 shares of the Company Common Stock and 10,000,000 shares of the Company Preferred Stock, of which 200,000 378,189 shares (of which 42,500 are designated restricted shares as 1995 Series Preferred Stock, par value $0.001 per share (defined in the “Company 1995 Series Preferred Stock”), 3,500 shares are designated as 1998 Series A Preferred Stock, par value $0.001 per share (the “Company 1998 Series A Preferred Stock”), 1,000 shares are designated as 2003 Series A Preferred Stock, par value $0.001 per share (the “Company 2003 Series A Preferred Stock”), and 1,100 shares are designated as 2003 Series B Preferred Stock, par value $0.001 per share (the “Company 2003 Series B Preferred Stock” and together grant agreements with the Company 1995 Series Preferred Stock, the Company 1998 Series A Preferred Stock, the Company 2003 Series A Preferred Stock and the Company 2003 Series B Preferred Stock, the “Company Preferred Stock”), and (irespect thereto) 23,224,272 shares of the Company Common Stock are issued and outstanding as of October 10the date hereof, 2006and 162,589 shares of Company Preferred Stock, (i) of which 105,556 have been designated as Series A Preferred Stock, of which 105,556 shares are issued and outstanding as of the date hereof, (ii) no of which 32,033 have been designated as Series A-1 Preferred Stock, of which 7,033 shares of Company 1995 Series Preferred Stock are issued and outstandingoutstanding as of the date hereof, (iii) no of which 25,000 have been designated as Series A-2 Preferred Stock, of which 25,000 shares of Company 1998 Series A Preferred Stock are issued and outstandingoutstanding as of the date hereof, and (iv) no of which 25,000 have been designated as Series B Preferred Stock, of which 25,000 shares of Company 2003 Series A Preferred Stock are issued and outstandingoutstanding as of the date hereof. As of the date hereof, (v) no shares the Company Capital Stock is registered on the books and records of the Company 2003 Series B Preferred Stock are issued and outstanding, and (vi) no shares of Company’s capital stock are being as held by the Persons set forth in Company’s treasury. Part 2.3(aSection 2.02(a) of the Company Disclosure Letter Schedule, which further sets forth a trueas of the date hereof for each such Person the number, correct class and complete list series of Company Capital Stock registered on the books and records of the Company as held by such Person, the number of the applicable stock certificates issued by the Company representing such shares and the domicile address of such Person as reflected on the books and records of the Company Common Stock held by each registered holder thereof as of October 10, 2006, and since such date Company has not issued any securities (including derivative securities) except for any shares of the Company Common Stock issued upon exercise of Company Options outstanding under the Company Stock Plans prior to such dateCompany. All outstanding shares of the Company Common Capital Stock and the Company Preferred Stock were Warrants are duly authorized and authorized, validly issued, and are fully paid and nonassessable non-assessable, and are not subject to or issued in violation of any purchase option, call option, right of first refusal, pre-emptive right, subscription right or any similar right under the provisions of Nevada Corporate Lawpreemptive rights created by Legal Requirements, the Company Charter Documents Documents, or any Contract agreement to which the Company is a party or by which it is bound, except as set forth on Section 2.02(a) of the Disclosure Schedule. There Except as set forth on Section 2.02(a) of the Disclosure Schedule, there are no declared or accrued and but unpaid dividends with respect to any outstanding shares of Company Capital Stock. Other than the Company Capital Stock set forth in Section 2.02(a) of the Disclosure Schedule and this Section 2.02(a) above, the Company has no other capital stock of Company authorized, issued or any Company Subsidiaryoutstanding.

Company Capitalization. (a) The authorized capital stock of Company consists solely of 290,000,000 (i) 25,000,000 shares of the Company Common Stock, of which, as of September 30, 2000: (A) 9,489,760 shares were issued and outstanding (each, together with a preferred stock purchase right (the "Rights") issued pursuant to the Rights Agreement dated as of September 28, 1998, by and between Company and American Securities Transfer and Trust Inc. (the "Company Rights Agreement")), (B) 1,252,273 shares were reserved for future issuance pursuant to grants under Company's 1997 Employee Stock Purchase Plan, as amended (the "Company ESPP") or outstanding stock options, grants or awards (collectively, the "Stock Awards") granted pursuant to Company's 1995 Stock Option Plan, as amended, Company's Non-Qualified Stock Option Plan, as amended, Company's Incentive Stock Option Plan, as amended, and Company's 1999 Stock Option Plan (collectively, the "Option Plans"), (C) no shares were reserved for future issuance pursuant to outstanding warrants, and (D) 408,165 shares were issued and held in treasury, and (ii) 10,000,000 shares of the Company Preferred Stock, of which 200,000 shares are designated as 1995 Series Preferred Stock, par value $0.001 $ 0.05 per share (the “Company 1995 Series Preferred Stock”)share, 3,500 shares are designated of which none was issued and outstanding. Except as 1998 Series A Preferred Stockdescribed in this Section 4.3, par value $0.001 per share (the “Company 1998 Series A Preferred Stock”), 1,000 shares are designated as 2003 Series A Preferred Stock, par value $0.001 per share (the “Company 2003 Series A Preferred Stock”), and 1,100 shares are designated as 2003 Series B Preferred Stock, par value $0.001 per share (the “Company 2003 Series B Preferred Stock” and together with the Company 1995 Series Preferred Stock, the Company 1998 Series A Preferred Stock, the Company 2003 Series A Preferred Stock and the Company 2003 Series B Preferred Stock, the “Company Preferred Stock”), and (i) 23,224,272 shares of the Company Common Stock are issued and outstanding as date of October 10this Agreement, 2006, (ii) no shares of capital stock of Company 1995 Series Preferred Stock are issued and outstandingreserved for issuance for any other purpose. Since September 30, (iii) 2000, no shares of capital stock have been issued by Company 1998 Series A Preferred Stock except pursuant to agreements for which shares were adequately reserved at such date and which are issued and outstandingdisclosed under clause (B) of this subsection (a). Since September 30, (iv) no 2000, Company has not granted options for, or other rights to purchase or otherwise acquire, more than 25,000 shares of Company 2003 Series A Preferred Stock are Common Stock. Each of the issued and outstanding, (v) no shares of Company 2003 Series B Preferred Stock are issued and outstanding, and (vi) no shares of Company’s capital stock are being held in Company’s treasury. Part 2.3(a) of the Company Disclosure Letter sets forth a true, correct and complete list of the number of shares of the Company Common Stock held by each registered holder thereof as of October 10, 2006, and since such date Company has not issued any securities (including derivative securities) except for any shares of the Company Common Stock issued upon exercise of Company Options outstanding under the Company Stock Plans prior to such date. All outstanding shares of the Company Common Stock and the Company Preferred Stock were is duly authorized and authorized, validly issued, and are fully paid and nonassessable nonassessable, and has not subject to or been issued in violation of (nor are any purchase option, call option, right of first refusal, pre-emptive right, subscription right the authorized shares of capital stock subject to) any preemptive or any similar right under the provisions of Nevada Corporate Law, the Company Charter Documents rights or any Contract agreement to which Company is a party or by which it is bound. There are no accrued , and unpaid dividends with respect to any outstanding all such issued shares of capital stock owned by Company or a subsidiary of Company are owned free and clear of all security interests, liens, pledges, charges or other encumbrances of any Company Subsidiarynature whatsoever.

Company Capitalization. (a) The authorized capital stock of the Company consists solely of 290,000,000 150,000,000 shares of Common Shares and 5,000,000 shares of preferred stock, $0.001 par value per share, of the Company Common Stock and 10,000,000 shares of the Company Preferred Stock, of which 200,000 shares are designated as 1995 Series Preferred Stock, par value $0.001 per share (the “Company 1995 Series Preferred Stock”), 3,500 shares are designated as 1998 Series A Preferred Stock, par value $0.001 per share (. As of the “Company 1998 Series A Preferred Stock”), 1,000 shares are designated as 2003 Series A Preferred Stock, par value $0.001 per share (the “Company 2003 Series A Preferred Stock”), and 1,100 shares are designated as 2003 Series B Preferred Stock, par value $0.001 per share (the “Company 2003 Series B Preferred Stock” and together with the Company 1995 Series Preferred Stock, the Company 1998 Series A Preferred Stock, the Company 2003 Series A Preferred Stock and the Company 2003 Series B Preferred Stock, the “Company Preferred Stock”), and date of this Agreement (i) 23,224,272 shares of the Company 23,444,234 Common Stock are Shares were issued and outstanding as of October 10, 2006outstanding, (ii) no shares of Company 1995 Series Preferred Stock are were issued and outstanding, (iii) no shares 3,750,000 Common Shares were reserved for issuance pursuant to the Company Stock Plan, of Company 1998 Series A Preferred Stock which 2,038,061 Common Shares are issued and outstandingsubject to outstanding Options, (iv) no shares of Company 2003 Series A Preferred Stock are issued 3,087,500 Common Shares were reserved for issuance pursuant to outstanding Warrants and outstanding, (v) no shares of Company 2003 Series B Preferred Stock are issued and outstanding, and (vi) no shares of Company’s capital stock are being Common Shares were held in Company’s treasury. Part 2.3(a) the treasury of the Company Disclosure Letter sets forth a true, correct and complete list of the number of shares of the Company Common Stock held by each registered holder thereof as of October 10, 2006, and since such date Company has not issued any securities (including derivative securities) except for any shares of the Company Common Stock issued upon exercise of Company Options outstanding under the Company Stock Plans prior to such dateCompany. All outstanding shares of capital stock of the Company Common Stock have been, and all shares that may be issued pursuant to any Options or Warrants will be, when issued in accordance with the Company Preferred Stock were respective terms thereof, duly authorized and validly issued and are (or, in the case of shares that have not yet been issued, and are will be) fully paid and paid, nonassessable and free of preemptive rights. Except as set forth in this Section 3.05 and as otherwise set forth on Section 3.05 of the Company Disclosure Schedule, or for changes since the date of this Agreement resulting from the exercise of Options or Warrants outstanding on such date and disclosed on Section 3.05 of the Company Disclosure, there are not subject now, and at the Effective Time there will not be, any outstanding (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, (iii) options, warrants or other rights, agreements or arrangements to acquire from the Company, or issued in violation other obligations or commitments of the Company to issue, transfer or sell any purchase optioncapital stock, call option, right of first refusal, pre-emptive right, subscription right voting securities or any similar right under the provisions of Nevada Corporate Lawsecurities convertible into or exchangeable for capital stock or voting securities or other equity interests in, the Company Charter Documents or any Contract Subsidiary of the Company, (iv) restricted shares, restricted share units, stock appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, the Company, (v) voting trusts, proxies or other similar agreements or understandings to which the Company or any of its Subsidiaries is a party granting to any person or group of persons the right to elect, or to designate or nominate for election, a director to the Company Board or by which the Company or any of its Subsidiaries is bound with respect to the voting of any shares of capital stock of the Company or any of its Subsidiaries, (vi) contractual obligations or commitments of any character to which the Company or any of its Subsidiaries is a party or by which it the Company or any of its Subsidiaries is boundbound restricting the transfer of, or requiring the registration for sale of, any shares of capital stock of the Company or any of its Subsidiaries, or (vii) obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the capital stock of the Company. No capital stock of the Company is owned by any Subsidiary of the Company. There are no accrued commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Option as a result of the Merger. All outstanding Company Shares, all outstanding Options, and unpaid dividends with respect to any all outstanding shares of capital stock of each Subsidiary of the Company or any Company Subsidiaryhave been issued and granted in compliance with (i) all applicable securities Laws and other applicable Laws and (ii) all requirements set forth in applicable contracts.

Company Capitalization. (a) The entire authorized capital stock of the Company consists solely of 290,000,000 (i) 30,000,000 shares of the Company Common Stock and 10,000,000 shares of the Company Preferred Stock, of which 200,000 shares are designated as 1995 Series Preferred Stock, par value $0.001 0.25 per share (the “Company 1995 Series Preferred Stock”)share, 3,500 of which 2,333,647 shares are designated issued and 2,273,647 shares are outstanding as 1998 Series A Preferred Stockof the date hereof and (ii) 5,000,000 shares of preferred stock, par value $0.001 10.00 per share share, which the Board of Directors of the Company may designate from time to time in one or more series. Pursuant to action by the Board of Directors of the Company, 50,000 shares of preferred stock have been designated as the Company's Series C Cumulative Convertible Preferred Stock (the “Company 1998 "Series A C Preferred Stock”"), 1,000 which is convertible at the option of the holder. As of the date hereof, all of the previously outstanding shares are designated as 2003 of the Series A C Preferred Stock have been converted into Company Stock, par value $0.001 per share and therefore, there are no shares of the Series C Preferred Stock issued and outstanding. Independent Capital Trust, a Delaware business trust of which the Company owns <PAGE> all of its common securities, has issued and outstanding 40,207 of its trust common securities and has issued and outstanding 1,300,000 trust preferred securities (the “Company 2003 Series A "Trust Preferred Stock”Securities"), and 1,100 shares in each case as of the date hereof. The obligations evidenced by the trust preferred securities are designated guaranteed by the Company. The Company has issued all of its 8.5% subordinated debentures to Independent Capital Trust. Except as 2003 Series B Preferred Stock, par value $0.001 per share (the “Company 2003 Series B Preferred Stock” and together with the Company 1995 Series Preferred Stock, the Company 1998 Series A Preferred Stock, the Company 2003 Series A Preferred Stock and the Company 2003 Series B Preferred Stock, the “Company Preferred Stock”), and set forth on Schedule 3.02,there are no (i) 23,224,272 shares other outstanding equity securities of the Company Common Stock are issued and outstanding as of October 10, 2006any kind or character, (ii) no outstanding subscriptions, options, convertible securities, rights, warrants, calls or other agreements or commitments of any kind issued or granted by, or binding upon, the Company to (A) purchase or otherwise acquire any security of or equity interest in the Company or (B) issue any shares of, restricting the transfer of or otherwise relating to shares of Company 1995 Series Preferred Stock are its capital stock. All of the issued and outstanding, (iii) no shares of Company 1998 Series A Preferred Stock are issued and outstanding, (iv) no shares of Company 2003 Series A Preferred Stock are issued and outstanding, (v) no shares of Company 2003 Series B Preferred Stock are issued and outstanding, and (vi) no shares of Company’s capital stock are being held in Company’s treasury. Part 2.3(a) of the Company Disclosure Letter sets forth a true, correct and complete list of the number of shares of the Company Common Stock held by each registered holder thereof as of October 10, 2006, and since such date Company has not issued any securities (including derivative securities) except for any shares of the Company Common Stock issued upon exercise of Company Options outstanding under the Company Stock Plans prior to such date. All outstanding shares of the Company Common Stock and the Company Preferred Stock were have been duly authorized and authorized, validly issued, issued and are fully paid and nonassessable nonassessable, and have not subject to or been issued in violation of any purchase option, call option, right the securities laws of first refusal, pre-emptive right, subscription right the United States or any similar right under other applicable jurisdiction or in violation of the provisions preemptive rights of Nevada Corporate Law, the Company Charter Documents or any Contract to which Company is a party or by which it is boundperson. There are no accrued and unpaid dividends with respect to any outstanding shares of capital stock of Company or any Company Subsidiary.Section 3.03

Company Capitalization. (a) The authorized capital stock of the Company consists solely of 290,000,000 shares 1,200,000 common shares, $0.01 par value per share. As of the Company Common Stock and 10,000,000 shares of the Company Preferred StockSigning Date, of which 200,000 shares are designated as 1995 Series Preferred Stock, par value $0.001 per share (the “Company 1995 Series Preferred Stock”), 3,500 shares are designated as 1998 Series A Preferred Stock, par value $0.001 per share (the “Company 1998 Series A Preferred Stock”), 1,000 shares are designated as 2003 Series A Preferred Stock, par value $0.001 per share (the “Company 2003 Series A Preferred Stock”), and 1,100 shares are designated as 2003 Series B Preferred Stock, par value $0.001 per share (the “Company 2003 Series B Preferred Stock” and together with the Company 1995 Series Preferred Stock, the Company 1998 Series A Preferred Stock, the Company 2003 Series A Preferred Stock and the Company 2003 Series B Preferred Stock, the “Company Preferred Stock”), and (i) 23,224,272 shares of the Company Common Stock are 666,842 Shares were issued and outstanding as of October 10, 2006, and (ii) no there were 176,640 outstanding Company Stock Options to purchase shares of Company 1995 Series Preferred common stock granted under the plans and agreements applicable to such Company Stock are issued and outstanding, (iii) no shares of Company 1998 Series A Preferred Stock are issued and outstanding, (iv) no shares of Company 2003 Series A Preferred Stock are issued and outstanding, (v) no shares of Company 2003 Series B Preferred Stock are issued and outstanding, and (vi) no shares of Company’s capital stock are being held in Company’s treasuryOptions. Part 2.3(aSection 3.2(a) of the Company Disclosure Letter sets Schedule lists (i) the name, address and state of residence (as set forth a true, correct in the books and complete list records of the Company) of each holder of record of Shares as of the Signing Date; (ii) the number of Shares held by each such Person and the certificate numbers therefor; and (iii) with respect to each holder of Company Stock Options, the number of Company Stock Options held by such Person, the date(s) of issuance or grant, the exercise price(s) of such Company Stock Options, whether such Company Stock Options are “incentive stock options” under the Code, and the address and state of residence of such holder. All outstanding Shares are, and all shares which may be issued pursuant to the plans and agreements applicable to the Company Stock Options will be, when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and non-assessable and not issued in violation of, nor subject to, preemptive rights or similar rights and were or will be issued in compliance with all applicable state and federal securities laws or pursuant to valid exemptions therefrom. Except as set forth above and as contemplated by this Agreement, there are no outstanding (A) shares of capital stock or other voting securities of the Company, (B) securities of the Company Common Stock held by each registered holder thereof as convertible into or exchangeable or exercisable for shares of October 10capital stock or voting securities of the Company, 2006(C) options, warrants, restricted stock, restricted stock units, or other rights to acquire from the Company, and since no preemptive or similar rights, subscriptions or other rights, convertible securities, agreements, arrangements or commitments of any character, relating to the capital stock or voting securities of the Company obligating the Company to issue, register, transfer or sell, any capital stock, voting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company or obligating the Company to grant, extend or enter into any such date option, warrant, restricted stock units, subscription or other right, convertible security, agreement, arrangement or commitment or (D) no equity equivalents, interests in the ownership or earnings of the Company or other similar rights (the items in clauses (A), (B), (C) and (D) being referred to collectively as the “Company Securities”). Except as set forth on Section 3.2(a) of the Company Disclosure Schedule, the Company has not issued any securities (including derivative securities) except for never redeemed, repurchased or otherwise acquired any shares of the Company Common Stock issued upon exercise of Company Options outstanding under the Company Stock Plans prior its capital stock, nor does it have any obligation, commitments or arrangements to such date. All outstanding shares redeem, repurchase or otherwise acquire any of the Company Common Stock and Securities, including as a result of the Company Preferred Stock were duly authorized and validly issuedtransactions contemplated by this Agreement, and are fully paid and nonassessable and not subject or to provide funds to or issued make any investment (in violation the form of a loan, capital contribution or otherwise) in any purchase optionother Person. Except for the (i) Voting Agreement and (ii) Shareholders Agreement dated as of July 6, call option2000 among the Company’s shareholders, right as amended (the “Shareholders Agreement”), which will terminate according to its terms without further need for action by the parties thereto upon the consummation of first refusalthe Merger, pre-emptive right, subscription right there are no voting trusts or any similar right under the provisions of Nevada Corporate Law, the Company Charter Documents registration rights or any Contract other agreements or understandings to which the Company is a party or by which it is bound. There are no accrued and unpaid dividends with respect to any outstanding shares the voting or disposition of the capital stock of Company the Company. The execution and delivery of this Agreement by the Company, and the consummation of the Merger, do not and will not contravene, breach, conflict with, constitute a violation of, or require any Company Subsidiaryfurther action of any party under, the Shareholders Agreement.

Company Capitalization. (a) The authorized capital stock of the Company consists solely of 290,000,000 (i) thirty thousand (30,000) shares of the Company Common Stock and 10,000,000 shares of the Company Preferred Stock, $0.0001 par value, of which 200,000 shares are designated as 1995 Series Preferred Stock, par value $0.001 per share ten million seven hundred two thousand one hundred seventy-nine (the “Company 1995 Series Preferred Stock”), 3,500 shares are designated as 1998 Series A Preferred Stock, par value $0.001 per share (the “Company 1998 Series A Preferred Stock”), 1,000 shares are designated as 2003 Series A Preferred Stock, par value $0.001 per share (the “Company 2003 Series A Preferred Stock”), and 1,100 shares are designated as 2003 Series B Preferred Stock, par value $0.001 per share (the “Company 2003 Series B Preferred Stock” and together with the Company 1995 Series Preferred Stock, the Company 1998 Series A Preferred Stock, the Company 2003 Series A Preferred Stock and the Company 2003 Series B Preferred Stock, the “Company Preferred Stock”), and (i10,702,179) 23,224,272 shares of the Company Common Stock are issued and outstanding as of October 10June 30, 2006, 2004; and (ii) five million (5,000,000) shares of Preferred Stock, $0.0001 par value per share, of which no shares of Company 1995 Series Preferred Stock are issued and outstanding. Immediately prior to the initial Closing, there shall be authorized Three Million Seven Hundred Fifty Thousand (iii3,750,000) no shares of Company 1998 Preferred Stock, which are to be designated 8% Series C Convertible Preferred Stock, none of which are issued and outstanding prior to the Initial Closing. Although the Company's Amended and Restated Certificate of Incorporation sets forth the rights, preferences, privileges and restrictions of two series of Preferred Stock, designated Series A Preferred Stock are issued and outstanding, (iv) no shares of Company 2003 Series A Preferred Stock are issued and outstanding, (v) no shares of Company 2003 Series B Preferred Stock are issued and outstandingPreferred, and (vi) no shares of Company’s capital stock are being held in Company’s treasury. Part 2.3(a) of the Company Disclosure Letter sets forth a true, correct and complete list of the number of shares of has been allocated to such series, and the Company Common Stock held by each registered holder thereof as represents and warrants that it will not issue such series of October 10, 2006, and since such date Company has not issued any securities (including derivative securities) except for any shares of the Company Common Stock issued upon exercise of Company Options outstanding under the Company Stock Plans prior to such datePreferred Stock. All The outstanding shares of the Company Common Stock and the Company Preferred Stock were (a) have been duly authorized and validly issued, issued and (b) are fully paid and nonassessable nonassessable, with no personal liability attaching to the ownership thereof. The designations, powers, preferences, rights, qualifications, limitations and not subject to or restrictions in respect of the authorized capital stock of the Company are as stated in the Company's Certificate of Incorporation, as amended and currently in effect (including the Certificate of Designations), and all such designations, powers, preferences, rights, qualifications, limitations and restrictions are valid, binding and enforceable and in accordance with all applicable laws. The Conversion Shares and the Warrant Shares have been duly and validly reserved for issuance. The Shares, when issued in violation of any purchase option, call option, right of first refusal, pre-emptive right, subscription right or any similar right under compliance with the provisions of Nevada Corporate Lawthis Agreement, the Company Charter Documents Conversion Shares, when issued in compliance with the provisions of this Agreement and the Certificate of Designations, and the Warrant Shares, when issued in compliance with the provisions of the Class A Warrants or the Class B Warrants, as the case may be, will be duly authorized, validly issued, fully paid and nonassessable, no personal liability will attach to the ownership thereof, and will be free of any Contract liens or encumbrances and will be issued in compliance with applicable federal and state securities laws; provided, however, that the Shares, the Conversion Shares and the Warrant Shares may be subject to which Company restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is a party or by which it is bound. There are no accrued and unpaid dividends with respect to any outstanding shares of capital stock of Company or any Company Subsidiaryproposed.

Company Capitalization. (a) The authorized share capital stock of Company consists solely of 290,000,000 shares of the Company consists of 11,000,000 Class A Common Stock and 10,000,000 shares of the Company Preferred Stock, of which 200,000 shares are designated as 1995 Series Preferred StockShares, par value $0.001 per share (the “Company 1995 Series Preferred StockClass A Common Shares”), 3,500 shares are designated as 1998 Series A Preferred Stock969,691 Class B Common Shares, par value $0.001 per share (the “Company 1998 Series A Preferred StockClass B Common Shares”), 1,000 shares are designated as 2003 Series A Preferred Stock2,030,309 Class C Common Shares, par value $0.001 per share (the “Company 2003 Series Class C Common Shares”, and, together with the Class A Common Shares and Class B Common Shares, the “Shares”) and 500,000,000 Class A Preferred Stock”), and 1,100 shares are designated as 2003 Series B Preferred StockShares, par value $0.001 per share (the “Company 2003 Series B Preferred Stock” and together with the Company 1995 Series Preferred Stock, the Company 1998 Series A Preferred Stock, the Company 2003 Series A Preferred Stock and the Company 2003 Series B Preferred Stock, the “Company Preferred StockPreference Shares”). As of the date of this Agreement, and (i) 23,224,272 shares of the Company 9,489,407 Class A Common Stock are Shares were issued and outstanding as of October 10, 2006which 450,159 were Restricted Shares, (ii) no shares of Company 1995 Series Preferred Stock are 969,691 Class B Common Shares were issued and outstanding, (iii) no shares of Company 1998 Series A Preferred Stock are 2,030,309 Class C Common Shares were issued and outstanding, (iv) no shares of Company 2003 Series A Preferred Stock are Preference Shares were issued and outstanding, (v) no shares of Company 2003 Series B Preferred Stock are options to acquire 491,353 Class A Common Shares were issued and outstanding, and (vi) no shares bonds, debentures, notes or other instruments or evidence of Company’s capital stock are being held indebtedness having the right to vote (or convertible into, or exercisable or exchangeable for, securities having the right to vote) on any matters on which holders of Shares may vote were issued or outstanding. All outstanding Shares are, and all Shares which may be issued pursuant to the Company Equity Plans will be, when issued in Company’s treasuryaccordance with the respective terms thereof, duly authorized, validly issued, fully paid and non-assessable and not issued in violation of preemptive rights or similar rights. Part 2.3(aExcept as set forth above and in Section 2.2(a) of the Company Disclosure Letter sets forth a trueSchedule, correct and complete list except for changes resulting from the exercise, forfeiture or repurchase of stock options outstanding on the date hereof or from actions taken pursuant to Section 5.1 hereof, there are no outstanding (A) shares or other voting securities of the number of shares Company, (B) securities of the Company Common Stock held by each registered holder thereof as convertible into or exchangeable or exercisable for shares or other voting securities of October 10the Company, 2006(C) options, warrants, restricted stock, restricted stock units, or other rights to acquire from the Company, and since such date Company has not issued no preemptive or similar rights, subscriptions or other rights, convertible securities, agreements, arrangements or commitments of any character, relating to the capital stock or voting securities (including derivative securities) except for any shares of the Company Common Stock issued upon exercise of Company Options outstanding under obligating the Company Stock Plans prior to such date. All outstanding shares issue, register, transfer or sell, any capital stock, voting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company Common Stock and or obligating the Company Preferred Stock were duly authorized to grant, extend or enter into any such option, warrant, restricted stock units, subscription or other right, convertible security, agreement, arrangement or commitment, or (D) equity equivalents, interests in the ownership or earnings of the Company or other similar rights (the items in clauses (A), (B), (C) and validly issued(D) being referred to collectively as the “Company Securities”). Except as set forth in Section 2.2(a) of the Company Disclosure Schedule, none of the Company or its Subsidiaries has any obligation, commitments or arrangements to redeem, repurchase or otherwise acquire, or register sales of securities of, any of the Company Securities, including as a result of the transactions contemplated by this Agreement, or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Subsidiary or other Person. Except as set forth in Section 2.2(a) of the Company Disclosure Schedule, and except for agreements between the Company or a direct or indirect wholly owned Subsidiary on the one hand and another direct or indirect wholly owned Subsidiary on the other hand, there are fully paid and nonassessable and not subject no voting trusts or other agreements or understandings to or issued in violation of any purchase option, call option, right of first refusal, pre-emptive right, subscription right which the Company or any similar right under the provisions of Nevada Corporate Law, the Company Charter Documents or any Contract to which Company its Subsidiaries is a party or by which it is bound. There are no accrued and unpaid dividends with respect to any outstanding shares the voting or disposition of the capital stock of the Company. No Company or Subsidiary owns any Company Subsidiarycapital stock of the Company. The Shares are not represented by certificates issued by the Company.