Common use of Capital Structure Clause in Contracts

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt").

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares50,000,000 shares of Company Common Stock, par value $0.05 per share, and no shares of which 69,773,183 Shares were outstanding as of preferred stock. At the close of business on September 11March 25, 19972000, and 50,000,000 (a) 13,826,268 shares of Preferred StockCompany Common Stock were issued and outstanding, par value one-thousandth of one dollar ($.001b) per share (the "Preferred Shares"), of which no shares of Company Common Stock were outstanding as held by the Company in its treasury, (c) 2,530,474 shares of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares Common Stock were reserved for issuance, except that, as issuance pursuant to outstanding Stock Option Plans and (d) 252,260 shares of September 11, 1997, there Company Common Stock were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Employee Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Purchase Plan. Each Except as set forth above or in the Filed Company SEC Documents, at the close of the outstanding business on March 25, 2000, no shares of capital stock or other voting securities of each the Company were issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all shares which may be issued pursuant to the Stock Option Plans will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to preemptive rights. There are no bonds, debentures, notes or indirect wholly-owned subsidiary other indebtedness of the Company, free and clear Company having the right to vote (or convertible into securities having the right to vote) on any matters on which shareholders of any lien, pledge, security interest, claim or other encumbrancethe Company may vote. Except as set forth above or in the Company Disclosure Letteras contemplated herein, there are no preemptive or other outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company is a party, or sell by which it is bound, obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or obligating the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock or other securities of the Company. Except for the Stockholders Agreement contemplated hereby, there are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities capital stock of the Company or any Company. All of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the outstanding capital stock of the Company's subsidiaries is owned by the Company nor (other than directors' qualifying shares), directly or indirectly, free and clear of any of its Subsidiaries has outstanding any bondspledge, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt").claim,

Capital Structure. The authorized capital stock capitalization of the Company consists of 500,000,000 Sharesis set forth on Schedule 3.03 in the Company Disclosure Letter. Except as set forth therein, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, issuable, reserved for issuance or outstanding. The Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of Israel, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or on Schedule 3.03 in the Company Disclosure LetterLetter or as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, there are no preemptive bonds, debentures, notes or other outstanding rightsIndebtedness (as defined in Section 3.16 below) of the Company or any Company Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Shares or the shares of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, conversion rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, redemption rightsstock-based performance units, repurchase rightscommitments, agreementsContracts, arrangements or commitments undertakings of any kind to issue which the Company or sell any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company or of any Company Subsidiary. The Company is not a party to any agreement granting any securityholder of the Company the right to cause the Company to register shares of the capital stock or other securities of the Company or any held by such securityholder. The stockholder list provided to the Parent is a current stockholder list, and such list accurately reflects all of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities the issued and outstanding shares of the Company or any Securities as at the date of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")this Agreement.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 40,000,000 shares of Preferred StockCommon Stock and 5,000,000 shares of preferred stock, par value one-thousandth of one dollar ($.001) .01 per share (the "Preferred SharesStock"). At the time of execution of this Agreement, (i) 14,644,054 shares of which Common Stock were issued and outstanding, (ii) no shares of Preferred Stock were outstanding as issued and outstanding, (iii) no shares of Common Stock were held by the Company in its treasury or by any of the close Company's subsidiaries, and (iv) 2,556,785 shares of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there Common Stock were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (Plans. Except as set forth above, at the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each time of the outstanding execution of this Agreement, no shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all shares which may be issued pursuant to the Stock Plans will be, when issued, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to preemptive rights. There are not any bonds, debentures, notes or indirect wholly-owned subsidiary other indebtedness or securities of the CompanyCompany having the right to vote (or convertible into, free and clear or exchangeable for, securities having the right to vote) on any matters on which shareholders of any lien, pledge, security interest, claim or other encumbrancethe Company may vote. Except as set forth above or and in Section 4.1(c) of the Company Disclosure LetterSchedule, there are no preemptive or other outstanding rightsnot any securities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its subsidiaries is a party or by which any of them is bound obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or of any of its subsidiaries or obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding rights, commitments, agreements, arrangements or undertakings of any kind obligating the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock or other voting securities of the Company or any of its Subsidiaries subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the type described in the two immediately preceding sentences. The Company or any of its Subsidiaries, has delivered to Parent complete and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders correct copies of the Stock Plans and all forms of Company on any matter ("Voting Debt")Options. Section 4.1(c) of the Disclosure Schedule sets forth a complete and accurate list of all Company Options outstanding as of the date of this Agreement and the exercise price of each outstanding Company Option.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 3,000,000,000 shares of Company Common Stock, 75,000,000 shares of preferred stock, $0.01 par value per share (the “Company Preferred Stock”), and 600,000,000 excess shares, $0.01 par value per share (the “Excess Shares, of which 69,773,183 Shares were outstanding as of ”). At the close of business on September 11January 17, 19972007, and 50,000,000 (a) 156,968,775.0187 shares of Preferred StockCompany Common Stock were issued and outstanding, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), all of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect whollyfree of preemptive rights, (b) 2,872,743 shares of Company Common Stock were reserved for issuance pursuant to Deferred Share Awards granted under the Company’s 2004 Omnibus Long-owned subsidiary Term Incentive Plan (the “Company Stock Plan”), (c) no shares of Company Preferred Stock were issued and outstanding, and (d) no Excess Shares were issued and outstanding. As of the Companydate of this Agreement, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except except as set forth above or in above, no shares of stock of the Company Disclosure Letteror options, warrants, convertible or exchangeable securities or other rights to purchase stock of the Company are issued, reserved for issuance or outstanding. There are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which the Company’s stockholders may vote. As of the date of this Agreement, except as set forth above, there are no preemptive or other outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell any or create, or cause to be issued, delivered or sold or created, additional shares of capital stock or other voting or equity securities or interests of the Company or of any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking relating to the voting of stock or equity securities or interests of the Company or any of its Subsidiaries. As of the date of this Agreement, other than pursuant to this Agreement, there are no outstanding contractual obligations or rights of the Company or any of its Subsidiaries to register or repurchase, redeem or otherwise acquire, vote, dispose of or otherwise transfer or register pursuant to any securities Laws any shares of stock or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities equity interests of the Company or any of its Subsidiaries, and . There are no securities agreements or obligations evidencing such rights are authorized, issued or outstanding. Neither understandings to which the Company nor is a party with respect to the voting of any shares of its Subsidiaries has outstanding any bondsCompany Common Stock and, debentures, notes or other obligations to the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders Knowledge of the Company, as of the date of this Agreement, there are no third party agreements or understandings with respect to the voting of any shares of Company on any matter ("Voting Debt")Common Stock.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 50,000,000 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 5,000,000 shares of Preferred Stock, par value one-thousandth $.0001 per share. As of one dollar March 13, 1998, ($.001i) per share 6,703,880 Shares were issued and outstanding, (ii) no Shares were held by the "Preferred Shares")Company or by any of the Company's subsidiaries, (iii) 525,000 Shares were reserved for issuance upon the exercise of Company Options pursuant to the Option Plan, of which no shares Company Options to Purchase 330,150 Shares were outstanding as of the close of business on September 11outstanding, 1997. All of the outstanding (iv) 75,000 Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares were reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Company Warrants, and (v) no shares of Preferred Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares were issued, reserved for issuance pursuant to the Western Save Planor outstanding. Each of the outstanding Except as set forth above, no shares of capital stock or other equity or voting securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all Shares which may be issued pursuant to the Company Options or the Company Warrants will, when issued, be duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to preemptive rights. There are not any bonds, debentures, notes or indirect wholly-owned subsidiary other indebtedness or securities of the CompanyCompany having the right to vote (or convertible into, free and clear or 12 exchangeable for, securities having the right to vote) on any matters on which stockholders of any lien, pledge, security interest, claim or other encumbrancethe Company may vote. Except as set forth above or in Section 4.1(c) of the Company Disclosure LetterSchedule, there are no preemptive or other outstanding rightsnot any securities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its subsidiaries is a party or by which any of them is bound obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or of any of its subsidiaries or obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Section 4.1(c) of the Disclosure Schedule also sets forth a true and correct list of the Company Options which are outstanding as of the date hereof, which list sets forth, for each holder of a Company Option, the number of Shares subject thereto, the exercise price and the expiration date thereof. There are no outstanding rights, commitments, agreements, arrangements or undertakings of any kind obligating the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire or dispose of any shares of capital stock or other equity or voting securities of the Company or any of its Subsidiaries subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither type described in the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")two immediately preceding sentences.

Capital Structure. The authorized number of shares and type of all authorized, issued and outstanding capital stock of the Company consists of 500,000,000 SharesCompany, of which 69,773,183 Shares were outstanding as of the close of business on September 11Platinum Beijing, 1997Platinum Hong Kong and PRC Sub, and 50,000,000 all shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares capital stock reserved for issuance pursuant to under the Company's 1993 Stock ’s various option and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Planincentive plans is specified on Schedule 2.01(c). Each of the outstanding Except as set forth in Schedule 2.01(c), no shares of capital stock or other equity securities of each the Existing Company Entities are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenot subject to preemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness or other securities of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters. Except as set forth in Schedule 2.01(c), there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the stockholders Existing Company Entities are a party or by which they are bound obligating any Existing Company Entity to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company on or obligating the Company to issue, grant, extend or enter into any matter such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of the Company. There are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company common stock or other securities under the Securities Act of 1933, as amended and the rules and regulations promulgated thereunder ("Voting Debt")the “Securities Act”) or other agreements or arrangements with or among any security holders of the Company with respect to securities of the Company.

Capital Structure. (a) The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred StockCommon Stock and 5,000,000 shares of preferred stock, no par value one-thousandth of one dollar ($.001) per share (the "Preferred SharesStock"), of which no shares were outstanding as . As of the close date of business on September 11this Agreement, 1997. All of the outstanding Shares have been duly authorized and are (i)(A) authorized, validly issued, fully paid and nonassessablenonassessable and free of preemptive (or similar) rights and (B) no shares of Preferred Stock were issued or outstanding; (ii) 210,000 shares of Common Stock are issuable upon the exercise of the Company Stock Options (with an average exercise price of $0.5167 per share). The Except as set forth above and except for the up to 50,000 shares of Common Stock to be issued by Company has no Shares or Preferred Shares reserved for issuance, except thatpursuant to the Settlement Agreement, as of September 11the date of this Agreement, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding no shares of capital stock or other voting securities of each Company are issued, reserved for issuance or outstanding. As of the Company's Subsidiaries date of this Agreement, there are no outstanding bonds, debentures, notes or other indebtedness or securities of Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of Company may vote. Except as set forth in this Section 3.3 or in Section 3.3 of the Company Disclosure Letter, there are not and at the Effective Time there will not be, any securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Company or the Subsidiary is a party or by which either of them is bound relating to the issued or unissued capital stock of Company or the Subsidiary, or obligating Company or the Subsidiary to issue, deliver, transfer, grant or sell any shares of capital stock of, or other equity or voting interests in, or securities convertible into or exchangeable or exercisable for any capital stock or other equity or voting interests in, Company or the Subsidiary or obligating Company or the Subsidiary to issue, grant, extend or enter into any such option, warrant, agreement, arrangement or undertaking. All shares of Common Stock subject to issuance upon exercise of Company Stock Options as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable and owned by a direct free of preemptive (or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancesimilar) rights. Except as set forth above or in Section 3.3 of the Company Disclosure Letter, there are no preemptive not any outstanding obligations of Company or other outstanding rightsthe Subsidiary to repurchase, optionsredeem or otherwise acquire, warrantsor make any payment in respect of, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable forthe Subsidiary, or giving to provide funds to or make any Person investment (in the form of a right to subscribe for loan, capital contribution or acquireotherwise) in, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")person.

Capital Structure. The authorized capital stock (a) As of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as date of the close Charter Documents of business on September 11Interxion that are currently in effect (being 20 January 2012), 1997Interxion’s registered share capital amounted to EUR 20,000,000, and 50,000,000 divided into 200,000,000 ordinary shares of Preferred Stock, with a par value one-thousandth of one dollar ($.001) per ten eurocents each. Interxion is therefore authorised to increase its share (the "Preferred Shares"), capital up to an amount of which no shares were outstanding as EUR 20,000,000. As of the close date hereof, Interxion’s total issued share capital amounts to EUR 6,937,465.32, divided into 69,374,653 ordinary shares with a par value of business on September 11ten eurocents each and 1 fractional share with a par value of two eurocents. As of the date hereof, 1997Interxion has a conditional share capital of EUR 13,062,536.68. All of the outstanding issued Interxion Shares have been duly authorized authorised and are validly issued, fully paid and nonassessablenon-assessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Other than Interxion Shares reserved for issuance pursuant to out of Interxion’s conditional share capital for the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares purpose of satisfying entitlements under Interxion Share Plans, Interxion has no shares resolved or reserved for issuance pursuant to the Western Save Plan. Each out of the outstanding shares of its conditional share capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbranceauthorised share capital. Except as set forth above or in the Company Disclosure Letterabove, there are no preemptive pre-emptive or other outstanding rights, options, warrants, conversion rights, restricted stock units, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements arrangements, calls, commitments or commitments rights of any kind that obligate Interxion or any of its subsidiaries to issue or sell any shares of capital stock or other securities of the Company Interxion or any of its Subsidiaries subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person person a right to subscribe for or acquire, any securities of the Company Interxion or any of its Subsidiariessubsidiaries, and no securities or obligations evidencing such rights are authorizedauthorised, issued or outstanding. Neither Upon any issuance of any Interxion Shares in accordance with the Company nor terms of an Interxion Share Plan, such Interxion Shares will be duly authorised, validly issued, fully paid and non-assessable and free and clear of any of its Subsidiaries has lien, charge, pledge, security interest, claim or other encumbrance. Interxion does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company Interxion Shareholders on any matter ("Voting Debt")matter.

Capital Structure. The As of the date of this Agreement, the authorized capital stock of the Company Parent consists of 500,000,000 Shares80,000,000 shares of Parent Common Stock, $0.0001 par value, and 20,000,000 shares of preferred stock at $0.0001 par value, of which 69,773,183 Shares were approximately 10,862,067 shares of Parent Common Stock will be issued and outstanding as of the close date of business on September 11this Agreement and no shares of Parent Common Stock are issuable upon the exercise of outstanding warrants, 1997convertible notes, and 50,000,000 shares of Preferred Stockoptions and otherwise. Except as set forth above, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other equity securities of each the Parent are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Parent are, and all shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable nonassessable, not subject to preemptive rights, and owned by a direct or indirect wholly-owned subsidiary issued in compliance with all applicable state and federal laws concerning the issuance of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancesecurities. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness or other securities of the holders of which have Parent having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which shareholders of the Company on Parent may vote. Except as set forth above, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any matter ("Voting Debt")kind to which the Parent or any of its subsidiaries is a party or by which any of them is bound obligating the Parent or any its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity securities of the Parent or any of its subsidiaries or obligating the Parent or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity securities of the Parent or any of its subsidiaries or obligating the Parent or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Parent or any of its subsidiaries to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of the Parent or any of its subsidiaries.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares20,000,000 shares of Company Common Stock. As of May 28, 2004 (i) 6,282,274 shares of Company Common Stock are issued and outstanding, all of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The nonassessable and free of preemptive rights, (ii) 2,789,848 shares of Company has no Shares or Preferred Shares Common Stock are held in the treasury of the Company, (iii) 898,924 shares of Company Common Stock are subject to outstanding Company Stock Options and 320,877 additional shares of Company Common Stock are authorized and reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for future issuance pursuant to the Company's 1993 Company Stock Option Plan, and Incentive Plan (the "iv) 278,985 shares of Company Common Stock Plan") and 500,000 Shares are reserved for issuance in connection with the Company Rights issued pursuant to the Western Save PlanRights Agreement dated as of December 13, 1995, between the Company and Boatmen's Trust Company (as amended, the "Rights Agreement"). Each There are not any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Common Stock may vote ("Voting Company Debt"). Schedule 3.2(a) of the Company Disclosure Schedule sets forth a true and complete list of the outstanding Company Stock Options with the exercise prices thereof, the name of the holder thereof, the number of options that are vested and the number of Shares into which the outstanding Company Stock Options may be exercised. Except as set forth above or on Schedule 3.2(a) of the Company Disclosure Schedule, there are no options, warrants, convertible securities, subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights, agreements, arrangements or commitments (contingent or otherwise) of any character issued or authorized by the Company or any Subsidiary 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 options, warrants, convertible or exchangeable securities, subscriptions or other securities equity interests in, the Company or any Subsidiary or any Voting Company Debt. All shares of each of Company Common Stock subject to issuance as aforesaid, upon issuance on the Company's Subsidiaries is terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenonassessable. Except as set forth above or in on Schedule 3.2(a) of the Company Disclosure LetterSchedule, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares of its Subsidiaries Company Common Stock or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities other capital stock of the Company or any Subsidiary or to pay any dividend or make any other distribution in respect thereof or to provide funds to, or make any investment (in the form of its Subsidiariesa loan, and no securities capital contribution or obligations evidencing such rights are authorizedotherwise) in, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")Person.

Capital Structure. The (a) As of the date hereof, the authorized capital stock of the Company Buyer consists of 500,000,000 Sharesshares of common stock, of which 69,773,183 Shares were outstanding as .001 par value. As of the close of business on September 11Closing, 1997, and 50,000,000 13,500 shares of Preferred Stock, par value one-thousandth common stock were issued and outstanding. Schedule 4.9 is the shareholder list of one dollar ($.001) per share (Buyer at the "Preferred Shares"), time of which no Closing. No shares of common stock were outstanding as of held by the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessableBuyer in its treasury. The Company Buyer has no Shares outstanding stock options, stock appreciation rights, phantom units, profit participation or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant similar rights with respect to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save PlanBuyer. Each of the outstanding No shares of capital stock or other equity or voting securities of each the Buyer are reserved for issuance or are outstanding. All of the Company's Subsidiaries is issued and outstanding shares of capital stock of the Buyer are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear have not been issued in violation of any lienpreemptive rights or in violation of state or federal securities laws, pledge, security interest, claim or other encumbranceand there are no preemptive rights with respect thereto. No capital stock has been issued by the Buyer since the Buyer Balance Sheet Date. Except as set forth above or in above, as of the Company Disclosure Letter, date hereof there are no preemptive outstanding or other outstanding rightsauthorized securities, options, warrants, conversion calls, rights, stock appreciation rightscommitments, redemption rights, repurchase preemptive rights, agreements, arrangements arrangements, or commitments undertakings of any kind to issue which the Buyer is a party, or sell by which it is bound, obligating the Buyer to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other equity or voting securities of, or other ownership interests in, the Buyer or obligating the Buyer to issue, grant, extend, or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement, or undertaking. There are not as of the Company date of this Agreement and there will not be at the Closing Date any shareholder agreements, voting trusts or other agreements or understandings to which the Buyer is a party or by which it is bound relating to the voting of any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities shares of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders capital stock of the Company on any matter ("Voting Debt")Buyer.

Capital Structure. The authorized capital stock of the Company Square C consists of 500,000,000 Shares50,000 ordinary shares, all of which 69,773,183 Shares were outstanding are issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of Square C are issued, reserved for issuance or outstanding. Except as disclosed in the Square C Disclosure Letter, Square C is the sole record and beneficial owner of all of the issued and outstanding capital stock of each of its subsidiaries. All outstanding shares of the Company's Subsidiaries is capital stock of Square C and each of its subsidiaries are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the jurisdiction in which such entity was organized, free and clear the organizational documents of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company such entity or any of its Subsidiaries Contract to which Square C is a party or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Square C or any of its subsidiaries having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Square C Stock or the stockholders capital stock of any of its subsidiaries may vote (“Voting Square C Debt”). As of the Company on date of this Agreement, there are not any matter options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Square C or any of its subsidiaries is a party or by which any of them is bound ("a) obligating Square C or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Square C or any of its subsidiaries or any Voting Square C Debt")., (b) obligating Square C or any of its subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of Square C or of any of its subsidiaries. As of the date of this Agreement, there are not any outstanding contractual obligations of Square C to repurchase, redeem or otherwise acquire any shares of capital stock of Square C.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 250,000,000 Shares, of which 69,773,183 18,923,774 Shares were outstanding as of the close of business on September 11March 26, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 19971999. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11March 26, 19971999, there were 4,827,730 380,000 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan share option program (the "Stock Plan") ). The Company Disclosure Schedule contains a correct and 500,000 complete list of each outstanding option to purchase Shares reserved for issuance pursuant to under the Western Save PlanStock Plan (each a "Company Option"), including the holder, date of grant, exercise price and number of Shares subject thereto. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim claim, third party interest or other encumbrance. Except as set forth above or in the Company Disclosure Letterabove, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding, except that certain stockholders (or partners, as applicable) in Subsidiaries have preemptive rights in such Subsdiaries. Neither the The Company nor any of its Subsidiaries has does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")matter.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, 6,000,000 shares of which 69,773,183 Shares were outstanding as of Company Common Stock. At the close of business on September 11November 13, 1997, and 50,000,000 1998 (i) 2,228,000 shares of Preferred StockCompany Common Stock were issued and outstanding, par value one-thousandth of one dollar ($.001ii) per share (the "Preferred Shares"), of which no shares of Company Common Stock were held by the Company in its treasury, (iii) 625,000 shares of Company Common Stock were subject to issuance pursuant to outstanding options to purchase shares of Company Common Stock. Except as of set forth above at the close of business on September 11November 13, 1997. All of the outstanding Shares have been duly authorized and are validly issued1998, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company were issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all shares which may be issued pursuant to Company Options will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to preemptive rights. There are no bonds, debentures, notes or indirect wholly-owned subsidiary other indebtedness of the Company, free and clear Company outstanding having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of any lien, pledge, security interest, claim or other encumbrancethe Company may vote. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company is a party, or sell by which it is bound, obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or obligating the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock or other securities of the Company. As of the date of this Agreement, and except as contemplated by this Agreement, there are no shareholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of capital stock of the Company. All of the outstanding capital stock of the Company's subsidiaries is owned by the Company, directly or indirectly, free and clear of any Lien (as defined in Section 3.1(d)) or any of its Subsidiaries other limitation or restriction (including any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a restriction on the right to subscribe for vote or acquiresell the same, any except as may be provided as a matter of law). There are no securities of the Company or any of its Subsidiariessubsidiaries convertible into or exchangeable for, no options or other rights to acquire from the Company or its subsidiaries, and no securities other contract, understanding, arrangement or obligations evidencing such rights are authorizedobligation (whether or not contingent) providing for the issuance or sale, issued directly or outstanding. Neither the Company nor indirectly, of, any of its Subsidiaries has outstanding any bonds, debentures, notes capital stock or other ownership interests in, or any other equity securities of, any subsidiary of the Company. As of the date of this Agreement, there are no outstanding contractual obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on or its subsidiaries to repurchase, redeem or otherwise acquire any matter ("Voting Debt")outstanding shares of capital stock or other ownership interests in any subsidiary of the Company.

Capital Structure. (a) The authorized capital stock of the Company consists of 500,000,000 Shares, 100,000,000 shares of which 69,773,183 Shares were outstanding as of Stock. At the close of business on September 11December 21, 19971998, 6,852,889 shares of Stock were issued and outstanding, and 50,000,000 401,902 shares of Preferred StockStock were reserved for issuance pursuant to outstanding options or warrants to purchase shares of Stock which have been granted to directors, par value one-thousandth officers, or employees of one dollar the Company or others ($.001) per share (the "Preferred SharesCompany Stock Options"). Except as set forth above, of which no shares were outstanding as of at the close of business on September 11December 21, 1997. All of the outstanding Shares have been duly authorized and are validly issued1998, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other equity securities of each the Company were issued, reserved for issuance, or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all shares which may be issued pursuant to any outstanding Company Stock Options will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth in Section 4.2 of the Disclosure Schedule, no bonds, debentures, notes, or other indebtedness of the Company or any Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which the shareholders of the Company or any Subsidiary may vote are issued or outstanding. Except as disclosed in Section 4.2 of the Disclosure Schedule, all the outstanding shares of capital stock of each Subsidiary have been validly issued and are fully paid and nonassessable and are owned by a direct or indirect wholly-owned subsidiary of the Company, by one or more Subsidiaries, or by the Company and one or more such Subsidiaries, free and clear of any lien, pledge, security interest, claim or other encumbranceall Liens. Except as set forth above or in Section 4.2 of the Disclosure Schedule, neither the Company Disclosure Letternor any Subsidiary has any outstanding option, there are no preemptive warrant, subscription, or other outstanding rightsright, optionsagreement, warrantsor commitment which (i) obligates the Company or any Subsidiary to issue, conversion rightssell or transfer, stock appreciation rightsrepurchase, redemption rightsredeem, repurchase rights, agreements, arrangements or commitments to issue otherwise acquire or sell vote any shares of the capital stock or other securities of the Company or any Subsidiary, (ii) restricts the transfer of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities shares of stock of the Company or any of its SubsidiariesSubsidiary, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have (iii) grants the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders participate in any equity appreciation of the Company on or any matter ("Voting Debt")Subsidiary.

Capital Structure. The authorized issued and outstanding shares of capital stock of the Company consists consist of 500,000,000 Shares, 9,118,564 shares of which 69,773,183 Shares were common stock and 150,000 shares of Series A Preferred Stock. The authorized number of shares of common stock is 24,000,000 shares and the authorized number of shares of Series A Preferred Stock is 6,000,000 shares. All outstanding as shares of capital stock of the close of business on September 11Company are duly authorized, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant granted outstanding options and warrants to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant purchase up to the Western Save Plan. Each of the outstanding 2,665,734 shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancecommon stock. Except as set forth above or disclosed in the Company Disclosure Letterthis paragraph and in SCHEDULE 3.04, (i) there are no preemptive outstanding options, stock subscription agreements, warrants or other outstanding rightsrights permitting or requiring the Company or others to purchase, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements redeem or commitments to issue or sell acquire any shares of capital stock or other equity securities of the Company or to pay any dividend or make any other distribution in respect thereof; (ii) there are no securities issued or outstanding which are convertible into or exchangeable for any of its Subsidiaries the foregoing and there are no contracts, commitments or understandings, whether or not in writing, to issue or grant any securities such option, warrant, right or obligations convertible or exchangeable into security; (iii) no shares of stock or exercisable forother securities of the Company are reserved for issuance for any purpose; (iv) there are no voting trusts or other contracts, commitments, understandings, arrangements or giving restrictions of any Person kind with respect to the ownership, voting or transfer of shares of stock or other securities of the Company, including without limitation, any preemptive rights, rights of first refusal, proxies or similar rights; and (v) no person holds a right to subscribe for or acquire, require the Company to register any securities of the Company under the Act or to participate in any such registration. All issuances by the Company of its Subsidiariessecurities were (A) exempt from registration under the Securities Act of 1933, as amended, and no any applicable state securities or obligations evidencing such rights are authorizedlaws, issued or outstandingand (B) in compliance with all state and federal laws and regulations. Neither The designations, powers, preferences, rights, qualifications, limitations and restrictions in respect of each class and series of authorized capital stock of the Company nor any are or will be at Closing as set forth in the Company's Certificate of its Subsidiaries has outstanding any bondsIncorporation and the Certificates of Designation filed with the Delaware Secretary of State, debenturestrue, notes or other obligations the holders accurate and complete copies of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of been delivered by the Company on any matter ("Voting Debt")to PPD, and all such designations, powers, preferences, rights, qualifications, limitations and restrictions are valid, binding and enforceable and in accordance with all applicable laws.

Capital Structure. The authorized capital stock Company Shares and the Convertible Promissory Notes are the only outstanding securities of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each the Company are issued, reserved for issuance or outstanding. Section 2.03 of the Company's Subsidiaries is Company Disclosure Letter sets forth a complete and accurate list of all stockholders of the Company and Advanced Microsensors Corporation indicating the number of Company Shares and shares of Advanced Microsensors Corporation, as applicable, held by each stockholder. All outstanding shares of the capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and owned by not subject to or issued in violation of any purchase option, call option, preemptive right, subscription right or any similar right under any applicable law, the Company Constituent Instruments or any Contract (as defined in Section 2.05) to which the Company is a direct party or indirect wholly-owned subsidiary otherwise bound. Except for the Convertible Promissory Notes, there are not any bonds, promissory notes, notes or other Indebtedness (as defined in Section 2.21) of the CompanyCompany having the right to vote (or convertible into, free and clear or exchangeable for, securities having the right to vote) on any matters on which holders of any lien, pledge, security interest, claim or other encumbranceCompany Shares may vote (“Voting Company Debt”). Except as set forth above above, or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, not any options, warrants, conversion rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, redemption rightsstock-based performance units, repurchase rightscommitments, agreementsContracts, arrangements or commitments undertakings of any kind to issue which the Company is a party or sell any by which it is bound (a) obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other securities equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Voting Company Debt (other than the Advanced Microsensors Corporation employee stock option plan, a copy of its Subsidiaries which is annexed to the Company Disclosure Letter), (b) obligating the Company to issue, grant, extend or enter into any securities such option, warrant, call, right, security, commitment, Contract, arrangement or obligations convertible undertaking or exchangeable into (c) that give any person the right to receive any economic benefit or exercisable forright similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company. There are no agreements to which the Company is a party or by which it is bound with respect to the voting (including without limitation voting trusts or proxies), registration under the Securities Act, or giving any Person a right sale or transfer (including without limitation agreements relating to subscribe for preemptive rights, rights of first refusal, co-sale rights or acquire, “drag along” rights) of any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstandingother than as set forth in the Investors’ Rights Agreement (defined in Section 4.01(b)). Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders All of the issued and outstanding Company on any matter ("Voting Debt")Shares were issued in compliance with applicable federal and state securities laws.

Capital Structure. The authorized capital stock of the Company Cantix consists of 500,000,000 Shares50,000 ordinary shares, $1.00 par value, of which 69,773,183 Shares were outstanding one (1) ordinary share is issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of Cantix are issued, reserved for issuance or outstanding. Cantix is the sole record and/or beneficial owner of all of the issued and outstanding capital stock of each of its Subsidiaries. All outstanding shares of the Company's capital stock of Cantix and each of its Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities applicable corporate laws of the Company British Virgin Islands (or the applicable corporate laws governing each of the Subsidiaries), the Cantix Constituent Instruments, the Subsidiary Constituent Instruments or any Contract to which Cantix or any of its Subsidiaries is a party or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Cantix or any of its Subsidiaries having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Cantix Shares or the stockholders capital stock of any of its Subsidiaries may vote (“Voting Cantix Debt”). Except as set forth above, as of the Company on date of this Agreement, there are not any matter options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Cantix or any of its Subsidiaries is a party or by which any of them is bound ("a) obligating Cantix or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Cantix or any of its Subsidiaries or any Voting Cantix Debt"), (b) obligating Cantix or any of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of Cantix or of any of its Subsidiaries. As of the date of this Agreement, there are not any outstanding contractual obligations of Cantix to repurchase, redeem or otherwise acquire any shares of capital stock of Cantix.

Capital Structure. The authorized capital stock of the Company consists solely of 500,000,000 Shares(a) 10,000,000 shares of common stock, par value $.01 per share, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 19977,004,705 are issued and outstanding, and 50,000,000 (b) 1,000,000 shares of Preferred Stockpreferred stock, par value one-thousandth of one dollar ($.001) 1.00 per share (the "Preferred Shares")share, of which no shares were outstanding as of the close of business on September 11, 1997none are issued and outstanding. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive employment, executive termination or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell similar agreements providing for the issuance of any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstandingCompany. Neither the Company nor any of its Subsidiaries has outstanding any No bonds, debentures, notes or other obligations the holders instruments or evidence of which have indebtedness having the right to vote (or convertible into into, or exercisable for or exchangeable for, securities having the right to vote) with on any matters on which the Company's stockholders may vote (the "Company Voting Debt") are issued or outstanding. Except as set forth in this Section 4.5, there are outstanding: (a) no Shares, Company Voting Debt or other voting securities of the Company; (b) no securities of the Company convertible into, or exchangeable or exercisable for, Shares, Company Voting Debt or other voting securities of the Company; and (c) no options, warrants, calls, puts, rights (including, without limitation, preemptive rights), commitments or agreements to which the Company is a party or by which it is bound, in any case obligating the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Company Voting Debt or other voting securities of the Company, or obligating the Company to grant, extend or enter into any such option, warrant, call, put, right, commitment or agreement. There are not any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any Shares that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company on any matter ("Voting Debt")Company.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has 100 membership units issued and outstanding. Except as set forth above, no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. Except as specified in the Company Disclosure Letter, the Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in this Section 3.03 and in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Shares or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares50,000 shares, of which 69,773,183 Shares were outstanding which, 10,000 shares are issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of the Company are issued, reserved for issuance or outstanding. Except as set forth on SCHEDULE 3.03 hereto, the company is the sole record and beneficial owner of all of the issued and outstanding capital stock of each of its Subsidiaries- All outstanding shares of the Company's capital stock of the Company and each of its Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Company, free and clear of applicable corporation law or any lien, pledge, security interest, claim contract to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in the Company Disclosure Letteron SCHEDULE 3.03 hereto, there are no preemptive not any bonds, debentures, notes or other outstanding rightsindebtedness of Company or any of its subsidiaries having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of ordinary shares of the Company or any capital stock of its subsidiaries may vote ("VOTING COMPANY DEBT"). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, conversion rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, redemption rightsstock-based performance units, repurchase rightscommitments, agreementsContracts, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its Subsidiaries is a party or by which any of them is bound (i) obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other securities equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable forVoting Company Debt, or giving any Person a right to subscribe for or acquire, any securities of (ii) obligating the Company or any of its SubsidiariesSubsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither occurring to holders of the capital stock of the Company nor or of any of its Subsidiaries has subsidiaries. Except as set forth in SCHEDULE 3.03 hereto, as of the date of this Agreement, there are not any outstanding any bonds, debentures, notes or other contractual obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on to repurchase, redeem or otherwise acquire any matter ("Voting Debt")shares of capital stock of the Company.

Capital Structure. The As of the date of this Agreement the authorized capital stock of the Company consists of 500,000,000 Shares12,000,000 shares of common stock, par value $1.00 per share, of which 69,773,183 Shares were outstanding as 3,049,089 are issued and outstanding. As of the close date of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and this Agreement there are validly issued, fully paid and nonassessable395,000 Company Stock Options outstanding. The Company has Disclosure Schedule sets forth the name of each grantee of outstanding Company Stock Options, the number of Company Stock Options held by each grantee, and the exercise prices of each of such options. Except as set forth above, no Shares shares of the capital stock or Preferred Shares reserved for issuanceother equity securities of the Company are issued, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Planor outstanding. Each of the All outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is Company are, and all shares will be, when issued, duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenot subject to preemptive rights. Except as set forth above or in the Company Disclosure Letterabove, there are no preemptive no: (i) shares of Company Common Stock issuable pursuant to the Stock Plans; (ii) outstanding bonds, debentures, notes or other indebtedness or shares of the Capital Stock or other securities of the Company having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) on any matters on which stockholders of the Company may vote; and (iii) outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or of any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. The only outstanding indebtedness for borrowed money of the Company and its Subsidiaries is set forth on the Company Disclosure Schedule. Except as set forth in the Company Disclosure Schedule, and except for the Company Stock Options listed therein: (x) there are no outstanding contractual obligations, commitments, understandings or arrangements of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire or make any securities or obligations convertible or exchangeable into or exercisable for, or giving payment in respect of any Person a right to subscribe for or acquire, any securities shares of capital stock of the Company or any of its Subsidiaries, and (y) to the knowledge of the Company, there are no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any irrevocable proxies with respect to shares of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders capital stock of the Company on or any matter Subsidiary of the Company. Except as set forth in the Company Disclosure Schedule and Exhibit B hereto, there are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities under the Securities Act of 1933, as amended (the "Voting DebtSecurities Act"), or other agreements or arrangements with or (to the Company's knowledge) among any security holders of the Company with respect to securities of the Company.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Sharesis as set forth in the Cap Table Schedule 3.01(c). Except as set forth therein, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other equity securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenot subject to preemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness or other securities of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which shareholders of the Company may vote other than as set forth in the Cap Table. There are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or obligating the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking other than as set forth in the Cap Table. The outstanding indebtedness for borrowed money of the Company is set forth on Schedule 3.02(c) of the Disclosure Schedule. Other than as set ---------------- forth in the Cap Table, there are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any matter payment in respect of any shares of capital stock of the Company. Schedule 3.01(c) of the Disclosure Schedule sets forth ---------------- the ownership of the capital stock of the Company. There are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities under the Securities Act of 1933, as amended (the "Voting DebtSecurities Act")) or other agreements or arrangements with or among any security holders of the Company with respect to securities of the Company, other than as set forth in the Cap Table.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares20,000,000 shares of Company Common Stock. As of May 28, 2004 (i) 6,282,274 shares of Company Common Stock are issued and outstanding, all of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The nonassessable and free of preemptive rights, (ii) 2,789,848 shares of Company has no Shares or Preferred Shares Common Stock are held in the treasury of the Company, (iii) 898,924 shares of Company Common Stock are subject to outstanding Company Stock Options and 320,877 additional shares of Company Common Stock are authorized and reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for future issuance pursuant to the Company's 1993 Company Stock Option Plan, and Incentive Plan (the "iv) 278,985 shares of Company Common Stock Plan") and 500,000 Shares are reserved for issuance in connection with the Company Rights issued pursuant to the Western Save PlanRights Agreement dated as of December 13, 1995, between the Company and Boatmen’s Trust Company (as amended, the “Rights Agreement”). Each There are not any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Company Common Stock may vote (“Voting Company Debt”). Schedule 3.2(a) of the Company Disclosure Schedule sets forth a true and complete list of the outstanding Company Stock Options with the exercise prices thereof, the name of the holder thereof, the number of options that are vested and the number of Shares into which the outstanding Company Stock Options may be exercised. Except as set forth above or on Schedule 3.2(a) of the Company Disclosure Schedule, there are no options, warrants, convertible securities, subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights, agreements, arrangements or commitments (contingent or otherwise) of any character issued or authorized by the Company or any Subsidiary 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 options, warrants, convertible or exchangeable securities, subscriptions or other securities equity interests in, the Company or any Subsidiary or any Voting Company Debt. All shares of each of Company Common Stock subject to issuance as aforesaid, upon issuance on the Company's Subsidiaries is terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenonassessable. Except as set forth above or in on Schedule 3.2(a) of the Company Disclosure LetterSchedule, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any shares of its Subsidiaries Company Common Stock or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities other capital stock of the Company or any Subsidiary or to pay any dividend or make any other distribution in respect thereof or to provide funds to, or make any investment (in the form of its Subsidiariesa loan, and no securities capital contribution or obligations evidencing such rights are authorizedotherwise) in, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")Person.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, 70,000,000 shares of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, Common Stock and 50,000,000 5,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) .01 per share (the "Preferred Shares"), of which no shares were outstanding as share. As of the close of business on September 11January 7, 19972008, (i) there were issued and outstanding 26,733,552 shares of Common Stock, (ii) no shares of Preferred Stock were outstanding, and (iii) options, issued pursuant to the Company Stock Plans, to purchase an aggregate of 2,135,303 shares of Common Stock as set forth in Section 4.2 of the Disclosure Schedule and exercisable at the prices set forth therein. All of the outstanding Shares have been shares of Common Stock are duly authorized and are validly issuedissued and outstanding, fully paid and nonassessable. The Company has no Shares non-assessable and are not subject to or Preferred Shares reserved for issuanceissued in violation of any purchase option, except thatcall option, as right of September 11first refusal, 1997preemptive right, there were 4,827,730 Shares reserved for issuance pursuant to subscription right or any similar right under any provision of the MBCA, the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant ’s articles of incorporation or bylaws or any contract to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in which the Company Disclosure Letter, there are no preemptive is or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements was a party or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstandingotherwise bound. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into into, or exercisable for or exchangeable for, securities having the right to vote) with the stockholders shareholders of the Company or any such Subsidiary on any matter matter. Except as otherwise set forth in this Section 4.2, the Company has no outstanding stock or securities convertible into or exchangeable for any shares of its equity securities, or any outstanding rights ("Voting Debt"either preemptive or other and including any “phantom stock rights”, stock appreciation rights, stock-based performance units, commitments, contracts, arrangements or undertakings of any kind) to subscribe for or to purchase or the value of which is based on, or any outstanding options or warrants for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any outstanding calls, commitments or claims of any character relating to, any equity securities or any stock or securities convertible into or exchangeable for any equity securities of the Company or any of its Subsidiaries. The Company does not have outstanding any stock purchase rights or similar “poison pill” securities which grant the holders thereof any rights upon the acquisition of a specified percentage of the Shares. The Company is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its equity securities or any convertible securities, rights or options of the type described in the preceding sentence (except for the withholding of shares of Common Stock in connection with Taxes payable in respect of the exercise of Options). Since January 7, 2008, except as permitted by this Agreement, the Company has not (i) issued any shares of capital stock except in connection with the exercise of securities referred to above or (ii) issued or granted any options, warrants, or securities convertible into or exercisable for shares of its capital stock.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 Twenty Million (20,000,000) shares of Preferred Company Common Stock. There are One Million (1,000,000) shares of Common Stock outstanding. Except as set forth above, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other equity securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenot subject to preemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness or other securities of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which shareholders of the Company on may vote. The Company Disclosure Schedule sets forth the outstanding Capitalization of the Company. Except as set forth above, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any matter kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or obligating the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Other than the Company Stock Options and Company Warrants, there are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of the Company. There are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities under the Securities Act of 1933, as amended (the "Voting DebtSecurities Act")) or other agreements or arrangements with or among any securityholders of the Company with respect to securities of the Company.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares20,000,000 shares of Company Common Stock and 1,000,000 shares of preferred stock, of which 69,773,183 Shares were outstanding as of par value $.50 per share (the "COMPANY PREFERRED STOCK"). At the close of business on September 11the date hereof, 1997, and 50,000,000 (i) 4,880,368 shares of Preferred StockCompany Common Stock were issued and outstanding, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), all of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned free of preemptive rights, (ii) no shares of Company Common Stock were held by a direct the Company in its treasury, (iii) no shares of Company Common Stock or indirect wholly-owned subsidiary Company Preferred Stock were reserved for issuance pursuant to outstanding options or warrants to purchase, and (iv) no shares of the Company, free and clear of any lien, pledge, security interest, claim Company Preferred Stock were issued or other encumbranceoutstanding. Except as set forth above above, no shares of capital stock were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights, phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any capital stock of the Company Disclosure Letter, there ("STOCK EQUIVALENTS"). There are no preemptive outstanding bonds, debentures, notes or other outstanding rightsindebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which the Company's stockholders may vote. There are no securities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or the Company Subsidiary is a party or by which any of them is bound obligating the Company or the Company Subsidiary to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, or evidencing any right to subscribe for, additional shares of capital stock or other voting securities or Stock Equivalents of the Company or the Company Subsidiary or obligating the Company or the Company Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding rights, commitments, agreements or undertakings of any kind obligating the Company or the Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock or other voting securities of the Company or any of its Subsidiaries the Company Subsidiary or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither type described in the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")two immediately preceding sentences.

Capital Structure. The authorized capital stock of the Company consists solely of 500,000,000 Shares10,000,000 shares of Common Stock, of which 69,773,183 Shares 5,135,516 shares were issued and outstanding as of the close of business on September 11January 27, 19972006. Since such date, and 50,000,000 the Company has not issued any shares of Preferred Common Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares shares of Common Stock have been duly authorized and validly issued and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares shares of Common Stock reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 issuance other than 50,000 Shares reserved for issuance pursuant to the Company's 1993 ’s Amended and Restated 2001 Stock and Incentive Option Plan (the "“Stock Plan") ”). There are no options to purchase Common Stock or other awards granted under the Stock Plan or rights outstanding in respect of securities of the Company or any of its Subsidiaries under any other Company Benefit Plan (collectively, “Company Options and 500,000 Shares reserved for issuance pursuant to the Western Save PlanAwards”). Each of the outstanding shares of capital stock or other securities of each of the Company's ’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by the Company or by a direct or indirect wholly-wholly owned subsidiary Subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbranceencumbrance (collectively, “Liens”). Except as set forth above or in for the Company Disclosure LetterTop-Up Options, there are no preemptive or other outstanding rights, options, warrants, rights, conversion rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, redemption rights, repurchase rights, agreementscalls, stock-based performance units, commitments, Contracts, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its Subsidiaries is a party or by which any of them is bound (i) obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, shares of capital stock or other securities equity interests in, or any security convertible into, or exercisable or exchangeable for, any capital stock of or other equity interest in, the Company or any of its Subsidiaries or any securities Voting Debt, (ii) obligating the Company or obligations any of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of shares of capital stock of or other equity interests in, or any security convertible into, or exercisable or exchangeable into or exercisable for, any capital stock of or giving other equity interest in, the Company or any Person of its Subsidiaries or any Voting Debt, and no such obligations, instruments or securities are authorized, issued or outstanding. There are no voting trusts or other arrangements or understandings to which the Company or any of its Subsidiaries is a right party with respect to subscribe for the voting of any capital stock of or acquire, any securities of other equity interest in the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the The Company nor any of its Subsidiaries has does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("“Voting Debt"”). The Company does not own, directly or indirectly, any voting interest that may require a filing by Parent or any of its affiliates under the Hxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the “HSR Act”). Exhibit 21 to the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2005, includes all of the Subsidiaries of the Company that, as of the date of this Agreement are “Significant Subsidiaries” (as defined in Rule 1-02 of Regulation S-X of the SEC).

Capital Structure. The authorized capital stock of the Company ----------------- consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 40,000,000 shares of Preferred Stockcommon stock, $.01 par value one-thousandth of one dollar ($.001) per share (the "Preferred SharesCompany Common Stock"), and 2,000,000 shares of which preferred stock, $.01 par value ("Company Preferred Stock"). At the date hereof, 10,252,844 Company Shares were issued and outstanding and no shares of Company Preferred Stock were outstanding as issued and outstanding. In addition, at the date hereof, an aggregate of the close 1,114,930 shares of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there Common Stock were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock under various employee and Incentive Plan (the "Stock Plan") director plans and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each agreements of the outstanding Company all as accurately described in all material respects in Section 3.1(c) of the Company Disclosure Letter. Except as -------------- set forth above, no shares of capital stock or other equity or voting securities of each the Company are reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is duly authorizedCompany are, and all such shares issuable upon the exercise of stock options will be, validly issued, fully paid and nonassessable and owned not subject to preemptive rights. No capital stock has been issued by a direct the Company since July 14, 1998, to the date hereof, other than shares of Company Common Stock issued pursuant to options outstanding on or indirect wholly-owned subsidiary prior to such date in accordance with their terms at such date. Except pursuant to stock option plans of the Company, free and clear Company described in Section 3.1(l) of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure LetterLetter -------------- (collectively, the "Company Stock Plans"), there are no preemptive outstanding or other outstanding rightsauthorized securities, options, warrants, conversion calls, rights, stock appreciation rightscommitments, redemption rights, repurchase preemptive rights, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its subsidiaries is a party, or by which any of them is bound, obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other equity or voting securities of of, or other ownership interests in, the Company or any of its Subsidiaries subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of obligating the Company or any of its Subsidiariessubsidiaries to issue, and no securities grant, extend or obligations evidencing enter into any such rights are authorizedsecurity, issued option, warrant, call, right, commitment, agreement, arrangement or outstandingundertaking. Neither Except as set forth in Section 3.1(c) of the Company nor Disclosure Letter, all of which shall be -------------- terminated without cost to the Company by the Effective Time of the Merger, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company. There are no restrictions on the Company with respect to voting the stock of any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")subsidiaries.

Capital Structure. The authorized share capital stock of the Company consists of 500,000,000 Shares, 2,500,000,000,000 ordinary shares of which 69,773,183 Shares were outstanding 11,495,000 ordinary shares are issued and outstanding. Except as set forth herein, no shares or other voting securities of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and Company are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to or outstanding. Except as specified in the Company's 1993 Stock Company Disclosure Letter, the Company is the sole record and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each beneficial owner of all of the issued and outstanding shares or capital stock of each Company Subsidiary. All outstanding shares of capital stock or other securities of the Company and each of the Company's Subsidiaries is Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the British Virgin Islands, free and clear of the Company Constituent Instruments or any lienContract (as defined in Section 3.05) to which the Company is a party or otherwise bound, pledge, security interest, claim or other encumbranceexcept as set forth in the Company Disclosure Letter. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Shares or the stockholders shares or common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth herein, as of the date of this Agreement, there are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares or other equity interests in, or any security convertible or exercisable for or exchangeable into any shares or capital stock or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the shares or capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. Except as set forth in the Company Disclosure Letter, as of the date of this Agreement, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of Parent. Notwithstanding the foregoing, any capital stock of the Company not exchanged under this Agreement will continue to remain outstanding and owned by any non-executing Shareholder who has not executed the counterpart signature page of this Agreement, until such Shareholder and Parent agree to the terms of such a transfer or exchange.

Capital Structure. The As of the date of this Agreement, the authorized capital stock of the Company consists of 500,000,000 Shares20,000,000 shares, all of which 69,773,183 Shares were outstanding as are shares of Company Common Stock. At the close of business on September 11November 20, 1997, and 50,000,000 1998: (i) 7,699,981 shares of Preferred Stock, par value one-thousandth Company Common Stock were issued and outstanding; (ii) 600,000 shares of one dollar ($.001) per share (Company Common Stock were reserved for issuance in connection with the "Preferred Shares")Company Stock Option Plan, of which 227,150 shares are available for the exercise of currently outstanding Company Stock Options; Company Stock Options are vested and presently exercisable for an aggregate of 76,850 Shares; (iii) 406,400 shares of Company Common Stock were held in treasury; and (iv) no shares bonds, debentures, notes or other instruments or evidence of 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 the Company stockholders may vote ("Company Voting Debt") were outstanding as of the close of business on September 11, 1997issued or outstanding. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, Company Common Stock are validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim are not subject to preemptive or other encumbrancesimilar rights. Except as set forth above or in Section 3.2 of the Disclosure Schedule: (i) no securities of the Company Disclosure Letterare convertible into or exchangeable or exercisable for shares of capital stock, there are no preemptive Company Voting Debt or other outstanding rightsvoting securities of the Company; and (ii) no stock awards, options, warrants, conversion calls, rights (including stock purchase or preemptive rights), stock appreciation rightscommitments or agreements to which the Company is a party or by which it is bound, redemption rightsin any case obligate the Company to issue, repurchase rightsdeliver, sell, purchase, redeemed or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of its capital stock, any Company Voting Debt or other voting securities or securities convertible into or exchangeable or exercisable for voting securities of the Company, or obligate the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as set forth in Section 3.2 of the Disclosure Schedule there are not, as of the date of this Agreement, and there will not be on the date of the Company Stockholders' Meeting, any stockholder agreements, arrangements voting trusts or commitments other agreements or understandings to issue which the Company is a party or sell by which it is bound relating to the voting of any shares of the capital stock or other securities of the Company which will limit in any way the solicitation of proxies by or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities on behalf of the Company from, or any the casting of its Subsidiariesvotes by, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")with respect to the Merger.

Capital Structure. The authorized capital stock of the ----------------- Company consists of 500,000,000 Shares, 1,000,000 shares of which 69,773,183 Shares were outstanding as Company Common Stock. As of the close date of business on September 11this Agreement, 1997, and 50,000,000 there are (i) 388,474 shares of Preferred StockCompany Common Stock issued and outstanding, par value one-thousandth (ii) 6,086 shares of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares Common Stock reserved for issuance pursuant to certain private investors for an aggregate consideration of $140,000; (iii) no shares of Company Common Stock held in the treasury of the Company or held by any Subsidiary of the Company's 1993 ; and (iv) 89,758 shares of Company Common Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each upon exercise or conversion of outstanding securities of the outstanding Company ("Prior Securities"). Section 3.1 (c) of the Disclosure Schedule contains a list of all Prior Securities, including a description of their terms. Except as set forth above, no shares of capital stock or other equity securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all shares which may be issued pursuant to the Prior Securities will be when issued, duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary and, except as described in Section 3.1(c) of the CompanyDisclosure Schedule, free and clear of any lienare not subject to preemptive rights. There are no outstanding bonds, pledgedebentures, security interest, claim notes or other encumbranceindebtedness or other securities of the Company having the right to vote on any matters on which stockholders of the Company may vote. Except as set forth above or in the Company Disclosure Letterabove, there are no preemptive or other outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its Subsidiaries is a party, or by which any of them is bound, obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or of any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire or make any securities payment in respect of or obligations convertible measured or exchangeable into determined based on the value or exercisable for, or giving market price of any Person a right to subscribe for or acquire, any securities shares of capital stock of the Company or any of its SubsidiariesSubsidiaries and, and to the knowledge of the Company, there are no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any irrevocable proxies with respect to shares of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders capital stock of the Company on or any matter Subsidiary of the Company. Except as provided in Section 3.1(c) of the Disclosure Schedule, there are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities under the Securities Act of 1933, as amended (the "Voting DebtSecurities Act").

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 75,000,000 shares of Preferred StockCommon Stock and 5,000,000 shares of preferred stock, par value one-thousandth of one dollar ($.001) .01 per share (the "Preferred SharesStock"). At the time of execution of this Agreement, (i) 37,711,424 shares of Common Stock were issued and outstanding, including associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the Rights Agreement, dated as of April 15, 1996 (the "Rights Agreement"), of which between the Company and Continental Stock Transfer and Trust Company, as Rights Agent (the "Rights Agent"), (ii) no shares of Preferred Stock were outstanding as issued and outstanding, (iii) 2,343,900 shares of Common Stock were held by the Company in its treasury or by any of the close Company's subsidiaries, and (iv) 5,003,136 shares of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there Common Stock were 4,827,730 Shares reserved for issuance pursuant to outstanding Company Options. Except as set forth above, at the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each time of the outstanding execution of this Agreement, no shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all shares which may be issued pursuant to the Stock Plans will be, when issued, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to preemptive rights. Other than the Shares, there are not any bonds, debentures, notes or indirect wholly-owned subsidiary other indebtedness or securities of the CompanyCompany having the right to vote (or convertible into, free and clear or exchangeable for, securities having the right to vote) on any matters on which shareholders of any lien, pledge, security interest, claim or other encumbrancethe Company may vote. Except as set forth above or and in Section 4.1(c) of the Company Disclosure LetterSchedule, there are no preemptive or other outstanding rightsnot any securities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its subsidiaries is a party or by which any of them is bound obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or of any of its subsidiaries or obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding rights, commitments, agreements, arrangements or undertakings of any kind obligating the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock or other voting securities of the Company or any of its Subsidiaries subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither type described in the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or two immediately preceding sentences (other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) than in connection with the stockholders exercise of outstanding Company Options). The Company has delivered to Parent complete and correct copies of the Stock Plans and all forms of Company on any matter ("Voting Debt")Options. Section 4.1(c) of the Disclosure Schedule sets forth a complete and accurate list of all Company Options outstanding as of the date of this Agreement and the exercise price of each outstanding Company Option.

Capital Structure. The As of the date of this Agreement, the authorized capital stock of the Company Parent consists of 500,000,000 Shares100,000,000 shares of Parent Common Stock, $0.0001 par value, and 10,000,000 shares of preferred stock at $0.0001 par value, of which 69,773,183 Shares were approximately 49,632,222 shares of Parent Common Stock will be issued and outstanding as of the close date of business on September 11this Agreement and no shares of Parent Common Stock are issuable upon the exercise of outstanding warrants, 1997convertible notes, and 50,000,000 options and otherwise. As of the date hereof, there are approximately 330 shareholders of the Parent Common Stock issued and outstanding. Immediately prior to the Closing, pursuant to Section 1.08 of the Agreement, there shall be an approximate 124.1:1 reverse split of shares of Preferred StockParent Common Stock issue and outstanding. Except as set forth above, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other equity securities of each the Parent are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Parent are, and all shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable nonassessable, not subject to preemptive rights, and owned by a direct or indirect wholly-owned subsidiary issued in compliance with all applicable state and federal laws concerning the issuance of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancesecurities. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness or other securities of the holders of which have Parent having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which shareholders of the Company on Parent may vote. Except as set forth above, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any matter ("Voting Debt")kind to which the Parent or any of its subsidiaries is a party or by which any of them is bound obligating the Parent or any its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity securities of the Parent or any of its subsidiaries or obligating the Parent or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity securities of the Parent or any of its subsidiaries or obligating the Parent or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Parent or any of its subsidiaries to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of the Parent or any of its subsidiaries.

Capital Structure. (a) The authorized capital stock of the Company consists of 500,000,000 Shares, 300,000,000 shares of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, Common Stock and 50,000,000 100,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) .01 per share (the "Preferred Shares"), of which no shares were outstanding as share. As of the close of business on September 11October 20, 19972006, (i) 39,926,087 shares of Common Stock were issued and outstanding (including 93,700 outstanding shares of Common Stock that are comprised of Restricted Stock, issued pursuant to the Company Stock Plans), (ii) no shares of Preferred Stock were outstanding (iii) Options, issued pursuant to the Company Stock Plans, to purchase an aggregate of 2,012,259 shares of Common Stock, were outstanding and (iv) Performance Share Awards, granted pursuant to the Company Stock Plans, in respect of 211,275 shares of Common Stock, were outstanding. All of the outstanding Shares have been duly authorized and shares of Common Stock are validly issuedissued and outstanding, fully paid and nonassessablenon-assessable and free from any statutory or contractual preemptive rights. The Except as otherwise set forth in this Section 3.2, as of the date of this Agreement, the Company has no Shares outstanding stock or Preferred Shares reserved securities convertible into or exchangeable for issuanceany shares of its equity securities, or any outstanding rights to subscribe for or to purchase, or any outstanding options for the purchase of, or any agreements providing for or otherwise obligating the Company with respect to the issuance of any equity securities or any stock or securities convertible into or exchangeable for any equity securities of the Company. As of the date of this Agreement, the Company is not subject to any obligation to repurchase, redeem or otherwise acquire any shares of its equity securities or any convertible securities, rights or options of the type described in the preceding sentence. From October 20, 2006 to the date of this Agreement, the Company has not (i) issued any shares of Common Stock except in connection with the conversion, exercise or settlement of any Options or Performance Share Awards and (ii) issued or granted any options, warrants or securities convertible into or exercisable for shares of its Common Stock. Section 3.2(a) of the Disclosure Schedule sets forth a complete list of the holders and the respective exercise prices of the Options, the holders of the Restricted Stock and the holders of Performance Share Awards, each as of October 20, 2006. Since October 20, 2006 to the date of this Agreement, there have been no changes to the information set forth in Section 3.2(a) of the Disclosure Schedule, except thatas a result of the conversion, as exercise or settlement of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to any Options or Performance Share Awards. To the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letterknowledge, there are no preemptive voting trusts, proxies, shareholder rights plans or other outstanding rightsarrangements relating to the issuance, optionssale, warrantsvoting, conversion rightstransfer, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements ownership or commitments other rights with respect to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")Company.

Capital Structure. The authorized capital stock (a) Section 3.03(a) of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as Disclosure Letter sets forth all of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (Membership Interests in the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997Company together with each holder thereof. All of the outstanding Shares have been Membership Interests are duly authorized and are validly issuedissued and not subject to or issued in violation of any purchase option, fully paid and nonassessable. The Company has no Shares call option, right of first refusal, preemptive right, subscription right or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each any similar right under any provision of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorizedDelaware Limited Liability Company Act, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure LetterCertificate of Formation, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company LLC Agreement or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right Contract to subscribe for or acquire, any securities of which the Company is a party or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders Company or any of which have the Company Subsidiaries having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) on any matters on which holders of the Membership Interests or equity interests in a Company Subsidiary, as applicable, may vote (“Voting Company Debt”). As of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional membership interests or other equity interests in, or any security convertible or exercisable for or exchangeable into any membership interest or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt or (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking. There are no other agreements to which the Company or any Company Subsidiary is a party, or among the holders of the Membership Interests, with respect to the stockholders voting of the Membership Interests. There are no outstanding contractual obligations of the Company on or any matter ("Voting Debt")Company Subsidiary to repurchase, redeem or otherwise acquire membership interests or other equity interests of the Company or any Company Subsidiary.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, 50,000 ordinary shares of which 69,773,183 Shares were outstanding 1,000 shares are issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. Except as specified in the Company Disclosure Letter, the Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the British Virgin Islands, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in this section 3.03 and in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock or the stockholders common stock of any Company Subsidiary may vote ("Voting Company Debt"). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. Except as set forth in the Company Disclosure Letter, as of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of Parent.

Capital Structure. The (a) Section 3.03(a)(i) of the Company Disclosure Schedule sets forth (i) all of the authorized capital stock or other equity interests of the Company consists and (ii) the number of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares each class or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares series of capital stock or other securities of each equity interests in the Company that are issued and outstanding, together with the record or beneficial owners thereof and whether such shares or other equity interests are subject to vesting or forfeiture. The capital stock or other equity interests of the Company's Subsidiaries is Company have been duly authorized, are validly issued, issued and are fully paid and nonassessable and owned by a direct or indirect whollynon-owned subsidiary assessable. The shares of Company Common Stock reflected on Section 3.03(a)(i) of the Company Disclosure Schedule are the only outstanding securities of the Company, free and clear all of any lien, pledge, security interest, claim or other encumbrancewhich are uncertificated. Except as set forth above or in for this Agreement, the Stockholder Agreement and the Company Disclosure LetterSAFEs, there are no preemptive or other outstanding rights, options, warrants, subscriptions, puts, calls, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements rights or agreements or commitments of any character (including any stockholder rights plan or similar plan commonly referred to as a “poison pill”) relating to the authorized and issued, unissued or treasury shares of capital stock, or other equity or voting interests, of the Company, and the Company is not committed to issue or sell any shares of the foregoing. The capital stock or other securities equity interests of the Company have not been issued in violation of any applicable Laws or the organizational documents of the Company. The Company does not have any of its Subsidiaries debt securities outstanding that have voting rights or any securities are exercisable or obligations convertible into, or exchangeable into or exercisable redeemable for, or giving that give any Person a right to subscribe for or acquire, any securities capital stock or other equity interests of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither (except for the Company nor SAFEs). There are no obligations, contingent or otherwise, to repurchase, redeem (or establish a sinking fund with respect to redemption) or otherwise acquire any of its Subsidiaries has outstanding any bonds, debentures, notes capital stock or other obligations equity interests of the holders Company. There are no shares of which have the right to vote (capital stock or convertible into other equity or exercisable for securities having the right to vote) with the stockholders voting interests of the Company reserved for issuance. The Company has not issued any shares of capital stock or other equity or voting interests under the Company Incentive Plan. Except as set forth on Section 3.03(a)(ii) of the Company Disclosure Schedule, there are no voting trusts, shareholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any matter ("Voting Debt")of the equity interests of the Company. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to the capital stock of, or other equity or voting interests in, the Company.

Capital Structure. (a) The authorized capital stock total authorized, issued and outstanding Units of the Company consists Company, the name of 500,000,000 Shares, each holder thereof and the number of which 69,773,183 Shares were outstanding as Units held by each such holder are set forth on Section 5.02(a) of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as Disclosure Schedules. The Purchased Units constitute all of the close of business on September 11, 1997issued and outstanding Equity Interests in the Company. All of the outstanding Shares Units are duly authorized, have been duly authorized validly issued and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear have not been issued in violation of any lien, pledge, security interest, claim preemptive or other encumbrancesimilar rights and were issued in compliance with applicable securities Laws or exemptions therefrom. Except as set forth above on Section 5.02(a) of the Disclosure Schedules, there is no Voting Debt or other equity or voting interests in the Company Disclosure LetterCompany, there are no preemptive or any outstanding options, warrants or other rights of any kind to acquire any Units, Voting Debt, or other Equity Interests or voting interest of the Company, nor any outstanding rightssecurities convertible into or exchangeable for, optionsor which otherwise confer on the holder thereof any right to acquire, warrantsany Units, conversion rightsVoting Debt, stock appreciation rightsor other Equity Interests or voting interests of the Company, redemption rightsor any rights to subscribe for or to purchase, repurchase rightsor any agreements providing for the issuance (contingent or otherwise) of, agreementsany Units, arrangements Voting Debt, or commitments other Equity Interests or voting interests in the Company. The Company has not committed to issue any such option, warrant, right or sell security. Except as set forth on Section 5.02(a) of the Disclosure Schedules, the Company is not a party to any shares right of capital stock first refusal, right of first offer, proxy, voting agreement, voting trust, registration rights agreement or equity holders’ agreement with respect to the sale or voting of any Units, Voting Debt or other securities of Equity Interests or voting interests in the Company or any of its Subsidiaries or any securities or obligations convertible into or exchangeable into or exercisable forfor any Units, Voting Debt or giving any Person a right to subscribe for other Equity Interests or acquire, any securities of voting interests in the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights Company. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes notes, debt securities or other obligations the holders Debt of which have any Group Company having the right to vote (or convertible into or exercisable for into, exchangeable for, securities having the right to vote) with the stockholders on any matters on which any holder of any Equity Interest of the Company on or any matter member of the Company Group may vote ("“Voting Debt"”). Other than Nantong and Armor Plastics, the Company has no subsidiaries nor owns any shares of capital stock, other ownership interest or other securities of any other Person. Each Person who has received Units that constitute “profits interests” in the Company has filed a timely Code Section 83(b) election with respect to such Units. All Units that constitute “profits interests” in the Company have been granted with a threshold equity value equal to at least the fair market value of such Unit on the applicable date of grant and the threshold equity value of each such Unit is equal to an amount that is consistent with the treatment of such Unit as a “profits interest” under Revenue Procedures 93-27 and 2001-43.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has 1 membership unit issued and outstanding. Except as set forth above, no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. Except as specified in the Company Disclosure Letter, the Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of Florida, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in this Section 3.03 and in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Shares or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary.

Capital Structure. The authorized capital stock of the Company United Digital consists of 500,000,000 Shares10,000 ordinary shares, all of which 69,773,183 Shares were outstanding are issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of United Digital are issued, reserved for issuance or outstanding. United Digital is the sole record and beneficial owner of all of the issued and outstanding capital stock of each of its subsidiaries. All outstanding shares of the Company's Subsidiaries is capital stock of United Digital and each of its subsidiaries are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of Hong Kong, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company United Digital Constituent Instruments or any of its Subsidiaries Contract to which United Digital is a party or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have United Digital or any of its subsidiaries having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of United Digital Stock or the stockholders capital stock of any of its subsidiaries may vote (“Voting United Digital Debt”). As of the Company on date of this Agreement, there are not any matter options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which United Digital or any of its subsidiaries is a party or by which any of them is bound ("a) obligating United Digital or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, United Digital or any of its subsidiaries or any Voting United Digital Debt"), (b) obligating United Digital or any of its subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of United Digital or of any of its subsidiaries. As of the date of this Agreement, there are not any outstanding contractual obligations of United Digital to repurchase, redeem or otherwise acquire any shares of capital stock of United Digital.

Capital Structure. The Buyer has an authorized capital stock capitalization ----------------- consisting of the Company consists 100,000,000 shares of 500,000,000 SharesCommon Stock, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997par value $.0001 per share, and 50,000,000 20,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) .0001 per share (the "Preferred Shares"), of which no shares were outstanding as shares. As of the close date hereof, Buyer has issued and outstanding 51,833,184 shares of business on September 11, 1997Common Stock. 10,995,000 shares of Common Stock are subject to issuance upon the conversion or exercise of presently issued and outstanding warrants and options of Buyer. 166,667 shares of Common Stock are subject to issuance upon the conversion of preferred stock. 12,511,000 shares of Common Stock are reserved for issuance under Buyer's existing stock option plans. 166,667 shares of Series A Preferred Stock have been issued and 166,667 shares are outstanding. All of the outstanding Shares have shares of Common Stock and Preferred Stock issued to date has been duly and validly authorized and issued and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect whollynon-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbranceassessable. Except as set forth above or as disclosed in Section 4.2 of the Company Buyer Disclosure Letter----------------------------------- Schedule, as of the date of this Agreement, (i) there are no preemptive or other outstanding rights, -------- options, warrants, conversion rightsscript, stock appreciation rightsrights to subscribe to, redemption rights, repurchase rights, agreements, arrangements calls or commitments to issue of any character whatsoever relating to, or sell securities or rights convertible into, any shares of capital stock or other securities of the Company Buyer or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable forsubsidiaries, or giving any Person a right to subscribe for contracts, commitments, understandings or acquire, any securities of the Company arrangements by which Buyer or any of its Subsidiariessubsidiaries is or may become bound to redeem or issue additional shares of capital stock of Buyer or any of its subsidiaries or options, warrants, scrip, rights to subscribe to calls or commitments of any character whatsoever relating, or securities or rights convertible into, any shares of capital stock of Buyer or any of its subsidiaries, (ii) there are no outstanding debt securities and (iii) there are no agreements or arrangements under which Buyer or any of its subsidiaries is obligated to register the sale of any of their securities under the Securities Act. Except as disclosed in Section 4.2 of the ------------------ Buyer Disclosure Schedule, there are no securities or obligations evidencing such instruments containing any ------------------------- anti-dilution, right of first refusal, preemptive rights are authorized, issued or outstanding. Neither similar provisions that will be triggered by the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders issuance of the Company on any matter ("Voting Debt")Shares as described in this Agreement. Upon issuance of the Merger Shares, such securities will be duly and validly issued, fully paid and non-assessable.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 40,000,000 shares of Preferred Stockcommon stock, $.01 par value one-thousandth of one dollar ($.001) per share (the "Preferred SharesCompany Common Stock"), and 2,000,000 shares of which preferred stock, $.01 par value ("Company Preferred Stock"). At the date hereof, 10,252,844 Company Shares were issued and outstanding and no shares of Company Preferred Stock were outstanding as issued and outstanding. In addition, at the date hereof, an aggregate of the close 1,114,930 shares of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there Common Stock were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock under various employee and Incentive Plan (the "Stock Plan") director plans and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each agreements of the outstanding Company all as accurately described in all material respects in Section 3.1(c) of the Company Disclosure Letter. Except as set forth above, no shares of capital stock or other equity or voting securities of each the Company are reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is duly authorizedCompany are, and all such shares issuable upon the exercise of stock options will be, validly issued, fully paid and nonassessable and owned not subject to preemptive rights. No capital stock has been issued by a direct the Company since July 14, 1998, to the date hereof, other than shares of Company Common Stock issued pursuant to options outstanding on or indirect wholly-owned subsidiary prior to such date in accordance with their terms at such date. Except pursuant to stock option plans of the Company, free and clear Company described in Section 3.1(l) of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure LetterLetter (collectively, the "Company Stock Plans"), there are no preemptive outstanding or other outstanding rightsauthorized securities, options, warrants, conversion calls, rights, stock appreciation rightscommitments, redemption rights, repurchase preemptive rights, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its subsidiaries is a party, or by which any of them is bound, obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other equity or voting securities of of, or other ownership interests in, the Company or any of its Subsidiaries subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of obligating the Company or any of its Subsidiariessubsidiaries to issue, and no securities grant, extend or obligations evidencing enter into any such rights are authorizedsecurity, issued option, warrant, call, right, commitment, agreement, arrangement or outstandingundertaking. Neither Except as set forth in Section 3.1(c) of the Company nor Disclosure Letter, all of which shall be terminated without cost to the Company by the Effective Time of the Merger, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company. There are no restrictions on the Company with respect to voting the stock of any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")subsidiaries.

Capital Structure. The authorized and outstanding capital ----------------- stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997date hereof is, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11Closing Date will be, 1997. as set forth in the Private Placement Memorandum under the caption "Capitalization." All of the outstanding Shares shares of the Company's capital stock have been duly authorized and are validly issued, are fully paid and nonassessable, were issued in compliance with all applicable federal and state securities laws and all applicable gaming laws and are not subject to, and were not issued in violation of, any preemptive or similar rights. The Company has no Shares or Preferred Shares reserved for issuance, except that, Except as of September 11, 1997set forth in the Private Placement Memorandum, there were 4,827,730 Shares reserved for issuance pursuant are no outstanding securities, options, warrants, calls, rights, contracts, commitments, agreements, arrangements, understandings or undertakings of any kind to which the Company's 1993 Stock and Incentive Plan (Company or any of its subsidiaries is a party, or by which any of them is bound, obligating the "Stock Plan") and 500,000 Shares reserved for issuance pursuant Company or any of its subsidiaries to the Western Save Plan. Each of the outstanding issue, deliver or sell, or cause to be issued, delivered or sold, shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letteror any of its subsidiaries, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements any securities convertible into or commitments to issue exercisable or sell exchangeable for any shares of capital stock or other securities of the Company or any of its Subsidiaries subsidiaries, or obligating the Company or any securities of its subsidiaries to issue, grant, extend or obligations convertible enter into any such security, option, warrant, call, right, contract, commitment, agreement, arrangement, understanding or exchangeable into undertaking. Except as set forth on Schedule 2.3 of the Schedule of Exceptions attached as Schedule A hereto (the "Schedule of Exceptions"), there are no contracts, commitments, agreements, arrangements, understandings or exercisable forundertakings of any kind to which the Company or any of its subsidiaries is a party, or giving by which any Person a of them is bound, granting to any person the right to subscribe for or acquire, require the Company to file a registration statement under the Securities Act with respect to any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither requiring the Company nor to include such securities with Common Shares registered pursuant to any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")registration statement.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, 50,000 ordinary shares of which 69,773,183 Shares were outstanding 100 ordinary shares are issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. Except as specified in the Company Disclosure Letter, the Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the British Virgin Islands, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in this section 3.03 and in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Shares or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. Except as set forth in the Company Disclosure Letter, as of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of Parent.

Capital Structure. The authorized capital stock (a) Section 5.03(a)(i) of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as Disclosure Schedule sets forth (i) all of the close authorized shares or other equity interests of business on September 11, 1997, the Company and 50,000,000 (ii) the number of shares of Preferred Stockeach class or other equity interests in the Company that are issued and outstanding, par value one-thousandth of one dollar ($.001) per share (together with the "Preferred Shares"), of which no record or beneficial owners thereof and whether such shares were outstanding as or other equity interests are subject to vesting or forfeiture. The shares or other equity interests of the close of business on September 11, 1997. All of the outstanding Shares Company have been duly authorized authorized, are validly issued and are validly issued, fully paid and nonassessablenon-assessable. The Company has no Ordinary Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan"reflected on Section 5.03(a)(i) and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the Company Disclosure Schedule are the only outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear all of any lien, pledge, security interest, claim or other encumbrancewhich are uncertificated. Except as set forth above or in the Company Disclosure Letterfor this Agreement, there are no preemptive or other outstanding rights, options, warrants, subscriptions, puts, calls, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements rights or agreements or commitments of any character (including any Shareholder rights plan or similar plan commonly referred to issue as a “poison pill”) relating to the authorized and issued, unissued or sell any treasury shares of capital stock stock, or other securities equity or voting interests, of the Company, and the Company is not committed to issue any of the foregoing. The shares or other equity interests of the Company have not been issued in violation of any applicable Laws or the organizational documents of the Company. The Company does not have any of its Subsidiaries debt securities outstanding that have voting rights or any securities are exercisable or obligations convertible into, or exchangeable into or exercisable redeemable for, or giving that give any Person a right to subscribe for or acquire, shares or other equity interests of the Company. There are no obligations, contingent or otherwise, to repurchase, redeem (or establish a sinking fund with respect to redemption) or otherwise acquire any securities shares or other equity interests of the Company. There are no shares or other equity or voting interests of the Company reserved for issuance. The Company has not issued any shares of capital stock or any of its Subsidiaries, and no securities other equity or obligations evidencing such rights are authorized, issued or outstanding. Neither voting interests under the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to voteIncentive Plan. Except as set forth on Section 5.03(a)(ii) with the stockholders of the Company on Disclosure Schedule, there are no voting trusts, shareholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any matter ("Voting Debt").of the equity interests of the Company. There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to the shares of, or other equity or voting interests in, the Company. 28

Capital Structure. The As of the date hereof, the authorized capital stock of the Company SSI consists of 500,000,000 Shares, 25,000,000 shares of which 69,773,183 Shares were outstanding as SSI Common Stock and 1,200,000 shares of SSI Preferred Stock. At the close of business on September 11April 30, 1997, and 50,000,000 1998: (i) 9,046,804 shares of SSI Common Stock and 800,000 shares of SSI Preferred StockStock were issued and outstanding, par value one-thousandth 1,552,124 shares of one dollar SSI Common Stock were reserved for issuance pursuant to outstanding options ("SSI Stock Options") under SSI's Stock Option Plan (the "SSI Stock Plan") and 1,950,000 shares of SSI Common Stock were reserved for issuance pursuant to outstanding warrants to purchase SSI Common Stock at an exercise price of $.001) 3.00 per share (the "Preferred SharesSSI Warrants"), of which (ii) no shares of SSI Common Stock were outstanding as of held by SSI in its treasury; and (iii) no bonds, debentures, notes or other indebtedness having the close of business right to vote (or convertible into securities having the right to vote) on September 11, 1997any matters on which SSI stockholders may vote ("Voting Debt") were issued or outstanding. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, SSI Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b), all outstanding shares of capital stock of the Subsidiaries of SSI are owned by SSI, or a direct or indirect wholly-wholly owned subsidiary Subsidiary of the CompanySSI, free and clear of all liens, charges, encumbrances, claims and options of any lien, pledge, security interest, claim or other encumbrancenature. Except as set forth above in this Section 3.1(b) or in on Schedule 3.1(b) and except for changes since April 30, 1998 resulting from the Company Disclosure Letterexercise of employee stock options granted pursuant to, or from issuances or purchases under, the SSI Stock Plan or as contemplated by this Agreement, there are outstanding: (i) no preemptive shares of capital stock, Voting Debt or other outstanding rightsvoting securities of SSI; (ii) no securities of SSI or any Subsidiary of SSI convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of SSI or any Subsidiary of SSI; and (iii) no options, warrants, conversion calls, rights (including preemptive rights), stock appreciation rightscommitments or agreements to which SSI or any Subsidiary of SSI is a party or by which it is bound in any case obligating SSI or any Subsidiary of SSI to issue, redemption rightsdeliver, repurchase rightssell, agreementspurchase, arrangements redeem or commitments acquire, or cause to issue be issued, delivered, sold, purchased, redeemed or sell any acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company SSI or of any Subsidiary of SSI, or obligating SSI or any Subsidiary of its Subsidiaries SSI to grant, extend or enter into any securities such option, warrant, call, right, commitment or obligations convertible agreement. Except as set forth on Schedule 3.1(b), there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or exchangeable into other agreements or exercisable forunderstandings to which SSI is a party or by which it is bound relating to the voting of any shares of the capital stock of SSI that will limit in any way the solicitation of proxies by or on behalf of SSI from, or giving any Person a right the casting of votes by, the stockholders of SSI with respect to subscribe for or acquirethe Merger. Except as set forth on Schedule 3.1(b), any securities there are no restrictions on SSI to vote the stock of the Company or any of its Subsidiaries. Except as set forth on Schedule 3.1(b), and there are no securities persons known to beneficially or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders record own over one percent of the Company on any matter ("Voting Debt")outstanding shares of SSI Common Stock.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 200,000,000 Shares, of which 69,773,183 29,479,864 Shares were outstanding as of the close of business on September 11March 1, 19972007, and 50,000,000 15,000,000 shares of Preferred Stockpreferred stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), none of which no shares were outstanding as of the close date hereof. Except as set forth in Schedule 5.1(b) of business on September 11the Company Disclosure Letter, 1997no Shares are held in the treasury of the Company or by any of its Subsidiaries. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Except as set forth in Schedule 5.1(b) of the Company Disclosure Letter and other than the Shares reserved for issuance as of March 1, 2007, under the 1998 Stock Option Plan for Management and Key Employees and the 2004 Stock Incentive Plan and the outstanding non-employee options and warrants (collectively, the “Stock Plans”), the Company has no Shares or Preferred Shares reserved for issuance. Schedule 5.1(b) of the Company Disclosure Letter contains a correct and complete list of options, except thatrestricted stock, performance stock units and restricted stock units, if any, outstanding as of September 11the date hereof under the Stock Plans, 1997including the holder, there were 4,827,730 date of grant, term, number of Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorizedand, validly issuedwhere applicable, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbranceexercise price. Except as set forth above or in Schedule 5.1(b) of the Company Disclosure LetterLetter or as set forth above, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements arrangements, calls, commitments or commitments rights of any kind that obligate the Company or any of its Subsidiaries to issue or sell any shares of capital stock or other equity securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any equity securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither Upon any issuance of any Shares in accordance with the terms of the Stock Plans, such Shares will be duly authorized, validly issued, fully paid and nonassessable and free and clear of any Liens. The Company nor any of its Subsidiaries has does not have outstanding any bonds, debentures, notes or other obligations for borrowed money the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter matter. For purposes of this Agreement, a wholly owned Subsidiary of the Company shall include any Subsidiary of the Company of which all of the shares of capital stock of such Subsidiary other than director qualifying shares are owned by the Company ("Voting Debt"or a wholly owned Subsidiary of the Company). With respect to the Company Options, there has been no grant of any Company Option since the date of the Company’s initial public offering of its common stock, $0.01 par value (the “IPO”) other than 25,166 Company Options granted to employees at fair market value as of the applicable grant date.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 shares of Common Stock, par value $.001 per share (the "Company Shares"), of which 69,773,183 Shares 85,163,416 shares were issued and outstanding and no shares were held in treasury as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997Agreement Date. All of the outstanding Company Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Except as disclosed on Schedule 4.2, as of the Agreement Date, the Company has no Shares or Preferred Company Shares reserved for or subject to issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by Company or a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in as disclosed on Schedule 4.2, as of the Company Disclosure Letter, Agreement Date there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or to sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations obligation evidencing such rights are authorized, issued or outstanding. Neither Except as disclosed on Schedule 4.2, the Company nor any of its Subsidiaries has does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")matter. No Company Shares are held by a Subsidiary of the Company.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 200,000 shares of Preferred Class A Common Stock, 200,000 shares of Class B Common Stock and 100,000 shares of preferred stock, par value one-thousandth of one dollar ($.001) 1.00 per share (the "Preferred SharesStock"), of which 25,000 shares are designated as Series A Preferred Stock. As of the date of this Agreement, there are 76,625.74 shares of Class A Common Stock and no shares were of Class B Common Stock issued and outstanding as and no shares of Common Stock are held by the Company in its treasury. As of the close date of business on September 11this Agreement, 1997there are no shares of Series A Preferred Stock issued and outstanding. All No shares of capital stock of the outstanding Shares have been duly authorized and Company are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 for any other purpose other than shares of Class B Common Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to upon the Western Save Planconversion of such shares into Class A Common Stock. Each of All the issued and outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear have not been issued in violation of any lienpreemptive or similar rights. There are no bonds, pledgedebentures, security interest, claim notes or other encumbranceindebtedness issued or outstanding having the right to vote ("Voting Debt") on any matters on which holders of Common Stock may vote, except as permitted under the Certificate of Designations. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion calls, rights, stock appreciation rightscommitments, redemption rightsor agreements of any character to which the Company or any of its subsidiaries is a party or by which any of them is bound obligating the Company or any of its subsidiaries to issue, repurchase rightsdeliver, agreementsor sell, arrangements or commitments cause to issue be, issued, delivered or sell any sold, additional shares of capital stock or other securities any Voting Debt of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable forsubsidiaries, or giving any Person a right to subscribe for or acquire, any securities of obligating the Company or any of its Subsidiariessubsidiaries to grant, and extend, or enter into any such option, warrant, call, right, commitment, or agreement. There are no securities or outstanding contractual obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on to repurchase, redeem, or otherwise acquire any matter ("Voting Debt").shares of Common Stock or other capital stock of the Company. There are no outstanding contractual obligations of any of the Company's subsidiaries to purchase, redeem or otherwise acquire any shares of capital stock of such subsidiaries. All the issued and outstanding shares of capital stock of each subsidiary of the Company are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. Upon Buyer's acquisition of the Shares at the Closing pursuant to the terms and conditions of this Agreement, Buyer will own 100% of the issued and outstanding capital stock of the Company and all securities convertible into, exercisable for or exchangeable into capital stock of the Company,

Capital Structure. The authorized capital stock of the Company TEC consists of 500,000,000 Shares10,000 ordinary shares, all of which 69,773,183 Shares were outstanding are issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of TEC are issued, reserved for issuance or outstanding. TEC is the sole record and beneficial owner of all of the issued and outstanding capital stock of each of its subsidiaries. All outstanding shares of the Company's Subsidiaries is capital stock of TEC and each of its subsidiaries are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities applicable corporate laws of the Company Hong Kong Special Administrative Region of the People’s Republic of China, the TEC Constituent Instruments or any of its Subsidiaries Contract to which TEC is a party or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have TEC or any of its subsidiaries having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of TEC Stock or the stockholders capital stock of any of its subsidiaries may vote (“Voting TEC Debt”). As of the Company on date of this Agreement, there are not any matter options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which TEC or any of its subsidiaries is a party or by which any of them is bound ("a) obligating TEC or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, TEC or any of its subsidiaries or any Voting TEC Debt"), (b) obligating TEC or any of its subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of TEC or of any of its subsidiaries. As of the date of this Agreement, there are not any outstanding contractual obligations of TEC to repurchase, redeem or otherwise acquire any shares of capital stock of TEC.

Capital Structure. The authorized capital stock of the Company Buyer consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and (i) 50,000,000 shares of Preferred Stockcommon shares, par value one-thousandth of one dollar ($.001) 1.00 per share (the "Preferred SharesBuyer Common Stock"), of which no shares were outstanding as and (ii) 20,000,000 preference shares. As of the close date hereof, 5,880,115 shares of business on September 11Buyer Common Stock are issued and outstanding, 1997. All 81,000 shares of the outstanding Shares have been duly authorized Buyer Common Stock were subject to employee stock options and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as 462,400 shares of September 11, 1997, there Buyer Common Stock were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save PlanBuyer Employee Benefit Plans. Each Except as set forth above, as of the outstanding date hereof no shares of capital stock or other equity securities of each Buyer are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of Buyer are, and any shares of Buyer Common Stock issued upon settlement of the Company's Subsidiaries is Holdco Note will be at the time of issuance, duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenot subject to preemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Buyer having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which holders of the Company on any matter Buyer Common Stock may vote ("Voting Buyer Debt"). Except as set forth above or as disclosed in Section 3.2(c) of the Disclosure Schedule, as of the date hereof there are not any options, warrants, rights, convertible or exchangeable securities, commitments, contracts, arrangements or undertakings of any kind to which Buyer or any Subsidiary is a party or by which any of them is bound (i) obligating Buyer or any Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Buyer or of any Subsidiary or any Voting Buyer Debt or (ii) obligating Buyer or any Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, contract, arrangement or undertaking. Except as disclosed in Section 3.2(c) of the Disclosure Schedule, there are no restrictions upon the voting, dividend rights or transfer of any shares of Buyer Common Stock pursuant to Buyer's organizational documents or any agreement to which Buyer is a party. The Holdco Note has been duly authorized by Holdco and, when executed, issued and delivered to Sellers as contemplated by this Agreement, will constitute the valid and binding obligation of Holdco, enforceable against Holdco in accordance with its terms.

Capital Structure. The authorized capital stock of the Company consists ----------------- of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 100,000 shares of Preferred Stockcommon stock, $10.00 par value one-thousandth of one dollar ($.001) per share (the "Preferred SharesCompany Common Stock"), of -------------------- which no 61,663 shares were outstanding as of Company Common Stock are issued and outstanding, including the close of business on September 11, 1997Abandoned Shares. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding No other shares of capital stock or other equity or voting securities of each the Company are reserved for issuance or outstanding, except on September 14, 1981, the Company reserved for issuance in connection with the merger of its subsidiary into Roanoke & Botetourt Telephone Company 436 shares more than were required for the merger transaction. All outstanding shares of capital stock of the Company's Subsidiaries is duly authorized, Company are validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary not subject to preemptive rights. All of such issued and outstanding shares of capital stock of the CompanyCompany were offered and sold in compliance with all applicable state and Federal securities laws, free rules and clear of any lien, pledge, security interest, claim or other encumbranceregulations. Except as set forth above or in with respect to the Company Disclosure LetterAbandoned Shares, there are no preemptive outstanding or other outstanding rightsauthorized securities, options, warrants, conversion calls, rights, stock appreciation rightscommitments, redemption rights, repurchase preemptive rights, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its subsidiaries is a party, or by which any of them is bound, obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other equity or voting securities of of, or other ownership interests in, the Company or any of its Subsidiaries subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of obligating the Company or any of its Subsidiariessubsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Except for the Voting Agreements, there are not as of the date hereof and no securities there will not be at the Effective Time of the Merger any registration rights agreements, shareholder agreements, voting trusts or obligations evidencing such rights are authorized, issued other agreements or outstanding. Neither understandings to which the Company nor is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company. There are no restrictions on the Company with respect to voting the stock of any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")subsidiaries.

Capital Structure. The authorized capital stock of the Company UAS consists of 500,000,000 Shares110,000,000 shares divided into 100,000,000 shares of common stock, $0.0001 par value; and 10,000,000 shares of which 69,773,183 Shares were outstanding as preferred stock, $0.0001 par value. As of the close date of business on September 11this Agreement, 19971,172,544 shares of UAS’s common stock are issued and outstanding, and 50,000,000 no shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997preferred stock are issued or and outstanding. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of the capital stock of UAS are, and all such shares that may be issued prior to the date hereof or other securities of each of simultaneous with the Company's Subsidiaries is Closing as outlined in Annex A will be when issued and delivered, duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companycorporate law of Nevada, free and clear the UAS Charter, the UAS Bylaws or any Contract to which UAS is a party or otherwise bound. As of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letterdate of this Agreement, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders indebtedness of which have UAS outstanding having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which holders of UAS’s common stock may vote. As of the Company on date of this Agreement, and except as set forth in Schedule 4.3, there are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any matter kind to which UAS is a party or by which it is bound ("Voting Debt")a) obligating UAS to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, UAS, (b) obligating UAS to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of UAS. As of the date of this Agreement, and except as set forth in Schedule 4.3, there are no outstanding contractual obligations of UAS to repurchase, redeem or otherwise acquire any shares of capital stock of UAS. The stockholder list of UAS provided to Duke is a current stockholder list generated by its stock transfer agent, and such list accurately reflects all of the issued and outstanding shares of the UAS’s common stock.

Capital Structure. The As of the date of this Agreement and the First Tranche Closing, the authorized share capital of the Company consists and will consist of one million shares of common stock, $.01 par value per share, of which only the Company Shares are issued and outstanding. No preferred shares are authorized under the Company Charter Documents. There are no shares of common stock of the Company consists reserved for issuance upon exercise of 500,000,000 any warrants; or shares of common stock of the Company reserved for issuance upon conversion of outstanding convertible promissory notes, and other than the Company Shares, of which 69,773,183 Shares were outstanding as no shares or other voting securities of the close of business on September 11Company are issued, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997reserved for issuance or outstanding. All of the outstanding Company Shares have been duly authorized are and are validly issued, fully paid and nonassessable. The all of the Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant that will be issued to the Company's 1993 Stock and Incentive Plan (Parent at the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is First Tranche Closing will be when issued duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the State of Texas, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there Charter Documents or any Contract (as hereinafter defined) to which the Company is a party or otherwise bound. There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company having the right to vote (or that are convertible into into, or exercisable for exchangeable for, securities having the right to vote) with (“Voting Company Debt”). Except as set forth in the stockholders Company Disclosure Schedule, as of the date of this Agreement, there are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company on is a party or by which the Company is bound (i) obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares or other equity interests in, or any matter security convertible or exercisable for or exchangeable into any shares or capital stock or other equity interest in, the Company or any Voting Company Debt, ("Voting Debt")ii) obligating the Company to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, contract, arrangement or undertaking or (iii) that give any individual, entity, firm, organization, trust or Governmental Entity (collectively, “person”) the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the shares of capital stock of the Company.

Capital Structure. The authorized capital stock of the Company consists solely of 500,000,000 Shares, 20,000,000 shares of which 69,773,183 Shares were outstanding as of Common Stock. At the close of business on September 11two (2) business days preceding the date of this Agreement, 19978,762,602 shares of Common Stock were outstanding (exclusive of treasury shares), and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding no other shares of capital stock or any bonds, debentures, notes or other securities of each of indebtedness having the right to vote on any matters on which the Company's Subsidiaries is duly authorized, shareholders may vote ("VOTING DEBT") issued or outstanding. All outstanding shares of Common Stock are validly issued, fully paid and nonassessable and free of preemptive rights. Except for (i) employee stock options to purchase 436,136 shares of Common Stock, (ii) warrants to purchase 1,300,000 shares of Common Stock held by Humana Inc. and expiring ratably from December 17, 1995 through December 17, 1996, (iii) warrants to purchase 338,580 shares of Common Stock held by persons or entities other than Humana Inc., (iv) Humana Inc.'s right of first refusal to purchase 3,181,986 shares of Common Stock held by Richxxx X. Xxxxx (xxe "RIGHT OF FIRST REFUSAL") and (v) the outstanding rights to purchase Common Stock under the Company's Employee Stock Purchase Plan, there are no options, warrants, calls, rights, commitments of agreements of any character to which the Company or any Subsidiary is a party 11. or by which it is bound obligating the Company or any Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or any Voting Debt of the Company or of any Subsidiary obligating the Company or any Subsidiary to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Schedule 2.8 sets forth a true and complete list, as of the date immediately preceding the date of this Agreement, of the holders of outstanding options or warrants (exclusive of publicly traded options or warrants), together with the exercise prices and expiration dates thereof. The outstanding shares of capital stock of each Subsidiary are validly issued, fully paid, nonassessable and free of preemptive rights and are owned by a direct or indirect wholly-owned subsidiary of the Company, Company free and clear of any lienliens, pledgeclaims, encumbrances, security interestinterests, claim or other encumbranceequities, charges and options of any nature whatsoever. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any No shares of capital stock Common Stock or other securities warrants or options to purchase Common Stock are in escrow or held as security for any obligation of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable foror, or giving any Person a right to subscribe for or acquirethe Company's knowledge, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")beneficial owner thereof.

Capital Structure. (a) The authorized capital stock of the Company consists of 500,000,000 Shares100,000,000 shares of Company Common Stock and 2,000,000 shares of preferred stock, of which 69,773,183 Shares were outstanding as of par value $0.0001 per share (the “Company Preferred Stock”). At the close of business on September 11January 28, 19972014, (i) 55,712,233 shares of Company Common Stock and no shares of Company Preferred Stock were issued and outstanding, (ii) no shares of Company Common Stock were held by the Company in its treasury, and 50,000,000 (iii) 10,887,375 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (Company Common Stock were reserved and available for issuance pursuant to the "Preferred Shares")Company Stock Plans, of which no 1,216,181 shares of Company Common Stock were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (Company ESPP. Except as set forth above, at the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each close of the outstanding business on January 28, 2014, no shares of capital stock or other voting securities of each the Company were issued, reserved for issuance or outstanding. All outstanding shares of Company Common Stock are, and all such shares that may be issued prior to the Company's Subsidiaries is Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect whollyissued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company Charter, the Company By-owned subsidiary laws or any Contract to which the Company is, or, to the knowledge of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities a stockholder of the Company is, a party or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and otherwise bound. There are no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Common Stock may vote (“Voting Company Debt”). Except as set forth above, as of the stockholders date of this Agreement, there are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or of any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking, (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of capital stock of the Company on or (iv) subjecting any matter ("Voting Debt")of its securities to any Lien. As of the date of this Agreement, there are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 SharesTwenty Million (20,000,000) equity shares. There are sixteen million (16,000,000) equity shares outstanding. Except as set forth above, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other equity securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenot subject to preemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness or other securities of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which shareholders of the Company on may vote. The Company Disclosure Schedule sets forth the outstanding Capitalization of the Company. Except as set forth above, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any matter kind to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or obligating the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Other than the Company Stock Options and Company Warrants, there are no outstanding contractual obligations, commitments, understandings or arrangements of the Company to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of the Company. There are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities under the Securities Act of 1933, as amended (the "Voting DebtSecurities Act")) or other agreements or arrangements with or among any securityholders of the Company with respect to securities of the Company.

Capital Structure. The authorized capital stock of the Company Stratum consists of 500,000,000 Shares5,000,000 shares of common stock, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, $0.01 par value and 50,000,000 1,000,000 shares of Preferred Stock. As of the December 31, par value one-thousandth 2013, 2,655,738 shares of one dollar ($.001) per share (the "Preferred Shares"), of which Stratum’s common stock and no shares were outstanding as of the close of business on September 11, 1997preferred stock are issued and outstanding. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company Stratum has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares approximately 240,000 shares reserved for issuance pursuant to the Company's 1993 under its 2006 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Option Plan. Each of the All outstanding shares of the capital stock or other securities of each of Stratum are, and all such shares that may be issued prior to the Company's Subsidiaries is date hereof will be when issued, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary of the Company, free and clear issued in violation of any lienpurchase option, pledgecall option, security interestright of first refusal, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letterpreemptive right, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company subscription right or any similar right under any provision of its Subsidiaries Nevada law, the Stratum Articles of Incorporation, the Stratum Bylaws or any securities Contract to which Stratum is a party or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Stratum having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which holders of Stratum’s common stock may vote (“Voting Stratum Debt”). As of the Company on date of this Agreement, there are not any matter options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Stratum is a party or by which it is bound ("a) obligating Stratum to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Stratum or any Voting Stratum Debt"), (b) obligating Stratum to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of Stratum. As of the date of this Agreement, there are not any outstanding contractual obligations of Stratum to repurchase, redeem or otherwise acquire any shares of capital stock of Stratum. The stockholder list provided to Cinco is a current stockholder and such list accurately reflects all of the issued and outstanding shares of the Stratum’s common stock.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding the Units. Effective as of the close of business on September 11, 1997, execution and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares")Closing, of which the transactions referenced by this Agreement, except as set forth in the Company’s Constituent Instruments there are no shares were Units, or rights with respect thereto issued and outstanding as of the close of business on September 11or reserved for employees. The issued and outstanding, 1997. All of the outstanding Shares Units have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, are fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary were issued in compliance with all applicable state and federal laws concerning, the issuance of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancesecurities. Except as set forth above or in the Company Disclosure LetterConstituent Instruments, there are no preemptive or other outstanding outstanding, rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue agreements for the purchase or sell any shares of capital stock or other securities of acquisition from the Company or of any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of Units. Except as set forth in this section 3.03 and in the Company or any of its SubsidiariesDisclosure Letter, and no securities or obligations evidencing such rights there are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Units may vote (“Voting Company Debt”). Except as set forth above, as of the stockholders date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. Except as set forth in the Company Disclosure Letter, as of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of Parent.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares100,000 shares of common stock and 10,000 shares of preferred stock, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 only 10,000 shares of Preferred Stockcommon stock are issued and outstanding. Except as set forth above, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. The Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the State of Nevada, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive Constituent Instruments or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments any Contract (as defined in Section 3.05) to issue or sell any shares of capital stock or other securities of which the Company is a party or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company.

Capital Structure. (a) The authorized capital stock of the Company consists solely of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 800,000,000 shares of Preferred StockCommon Stock of which: (i) 552,135,062 shares of Common Stock are issued and outstanding, par value one-thousandth subject to the exercise of one dollar outstanding Options between the date hereof and the Closing Date, ($.001ii) per share (the "Preferred Shares"), of which no shares were outstanding as of Common Stock are issued and held by the close Company in treasury, (iii) 29,418,909 shares of business on September 11, 1997. All of the outstanding Shares have been duly authorized and Common Stock are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant upon exercise of outstanding Options, subject to the Company's 1993 exercise of outstanding Options between the date hereof and the Closing Date and (iv) 4,517,029 shares of Common Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares are reserved for issuance pursuant to under the Western Save PlanStock Purchase Plans. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any No bonds, debentures, notes or other obligations the holders instruments or evidence of which have indebtedness having the right to vote (or convertible into or exercisable for or exchangeable for, securities having the right to vote) with on any matters on which the stockholders holders of Common Stock may vote are issued or outstanding. All outstanding shares of Common Stock are duly authorized and validly issued, fully paid and nonassessable, and were not issued in violation of any preemptive or other similar rights. Except as set forth above, and as set forth on Company Disclosure Schedule 5.3(a), there (A) are no shares of capital stock or other equity interests of the Company on authorized, issued or outstanding, (B) are no securities of the Company or any matter Subsidiary of the Company convertible into, or exchangeable or exercisable for, shares of capital stock or other equity interests of the Company or any Subsidiary of the Company, ("Voting Debt")C) is no option, warrant, call, preemptive right, subscription or other right, agreement, arrangement, understanding or commitment of any character, relating to the issued or unissued capital stock or other equity interest of the Company or any Subsidiary of the Company, obligating the Company or any Subsidiary of the Company to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or other equity interest in, the Company or any Subsidiary of the Company or securities convertible into or exchangeable for such shares, or equity interests, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, subscription or other right, commitment, arrangement or agreement and (D) is no outstanding contractual obligation of the Company or any Subsidiary of the Company to repurchase, redeem or otherwise acquire any capital stock or other equity interest 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 Subsidiary of the Company or any other Person.

Capital Structure. The authorized capital stock of the Company consists solely of 500,000,000 Shares10,000,000 shares of Common Stock, of which 69,773,183 Shares 5,135,516 shares were issued and outstanding as of the close of business on September 11January 27, 19972006. Since such date, and 50,000,000 the Company has not issued any shares of Preferred Common Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares shares of Common Stock have been duly authorized and validly issued and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares shares of Common Stock reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 issuance other than 50,000 Shares reserved for issuance pursuant to the Company's 1993 ’s Amended and Restated 2001 Stock and Incentive Option Plan (the "“Stock Plan") ”). There are no options to purchase Common Stock or other awards granted under the Stock Plan or rights outstanding in respect of securities of the Company or any of its Subsidiaries under any other Company Benefit Plan (collectively, “Company Options and 500,000 Shares reserved for issuance pursuant to the Western Save PlanAwards”). Each of the outstanding shares of capital stock or other securities of each of the Company's ’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by the Company or by a direct or indirect wholly-wholly owned subsidiary Subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbranceencumbrance (collectively, “Liens”). Except as set forth above or in for the Company Disclosure LetterTop-Up Options, there are no preemptive or other outstanding rights, options, warrants, rights, conversion rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, redemption rights, repurchase rights, agreementscalls, stock-based performance units, commitments, Contracts, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its Subsidiaries is a party or by which any of them is bound (i) obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, shares of capital stock or other securities equity interests in, or any security convertible into, or exercisable or exchangeable for, any capital stock of or other equity interest in, the Company or any of its Subsidiaries or any securities Voting Debt, (ii) obligating the Company or obligations any of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of shares of capital stock of or other equity interests in, or any security convertible into, or exercisable or exchangeable into or exercisable for, any capital stock of or giving other equity interest in, the Company or any Person of its Subsidiaries or any Voting Debt, and no such obligations, instruments or securities are authorized, issued or outstanding. There are no voting trusts or other arrangements or understandings to which the Company or any of its Subsidiaries is a right party with respect to subscribe for the voting of any capital stock of or acquire, any securities of other equity interest in the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the The Company nor any of its Subsidiaries has does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("“Voting Debt"”). The Company does not own, directly or indirectly, any voting interest that may require a filing by Parent or any of its affiliates under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the “HSR Act”). Exhibit 21 to the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2005, includes all of the Subsidiaries of the Company that, as of the date of this Agreement are “Significant Subsidiaries” (as defined in Rule 1-02 of Regulation S-X of the SEC).

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 50,000 ordinary shares of Preferred Stockwhich, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares")50,000 ordinary shares are issued and outstanding. Except as set forth above, of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. Except as specified in the Company Disclosure Letter, the Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the British Virgin Islands, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in this section 3.03 and in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock or the stockholders common stock of any Company Subsidiary may vote ("Voting Company Debt"). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. Except as set forth in the Company Disclosure Letter, as of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of Parent.

Capital Structure. The authorized share capital stock of the Company consists of 500,000,000 SharesFive Hundred Fifty Million (550,000,000) shares of stock consisting of (i) Five Hundred Million (500,000,000) shares of common stock, par value $0.0001 per share, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, Nineteen Million Six Hundred Two Thousand (19,602,000) shares are issued and 50,000,000 outstanding; and (ii) Fifty Million (50,000,000) shares of Preferred Stockpreferred stock, par value one-thousandth of one dollar ($.001) 0.0001 per share (the "Preferred Shares")share, of which no shares were outstanding as are issued and outstanding. No shares or other voting securities of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and Company are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Planor outstanding. Each of the All outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of its state of incorporation, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there Charter Documents or any Contract (as defined in Section 3.04) to which the Company is a party or otherwise bound. There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which holders of Company Shares may vote (“Voting Company Debt”). Except as set forth herein, as of the date of this Agreement, there are no options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company on is a party or by which the Company is bound (i) obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares or other equity interests in, or any matter security convertible or exercisable for or exchangeable into any shares or capital stock or other equity interest in, the Company or any Voting Company Debt, ("Voting Debt")ii) obligating the Company to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the shares or capital stock of the Company.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 125,000,000 shares of Company Common Stock and 25,000,000 shares of Company Preferred Stock. 9,375,000 shares of Company Common Stock are issued and outstanding. No shares of Company Common Stock are subject to outstanding stock options and 1,000,000 shares of Company Preferred Stock are issued and outstanding. Except as set forth above, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of the Company's Subsidiaries is Company Capital Stock are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the CompanyFBCA, free the Company Charter, the Company By-laws or any Contract (as defined in Section 3.05) to which the Company is a party or otherwise bound. Except for the ownership interests set forth in Section 3.03 of the letter dated as of the date of this Agreement, from the Company to Parent and clear of Sub (the "Company Disclosure Letter"), there are not any lienbonds, pledgedebentures, security interest, claim notes or other encumbranceindebtedness 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 holders of Company Common Stock may vote ("Voting Company Debt"). Except as set forth above or in Section 3.03 of the Company Disclosure Letter, as of the date of this Agreement, there are no preemptive or other outstanding rights, not any options, warrants, conversion rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, redemption rightsstock-based performance units, repurchase rightscommitments, agreementsContracts, arrangements or commitments undertakings of any kind to issue which the Company is a party or sell any by which it is bound (i) obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other securities equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any of its Subsidiaries Voting Company Debt, (ii) obligating the Company to issue, grant, extend or enter into any securities such option, warrant, call, right, security, commitment, Contract, arrangement or obligations convertible undertaking or exchangeable into or exercisable for, or giving (iii) that give any Person a person the right to subscribe for receive any economic benefit or acquireright similar to or derived from the economic benefits and rights occurring to holders of Company Common Stock. As of the date of this Agreement, there are not any securities outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstandingcapital stock of the Company. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders Section 3.03 of the Company on any matter ("Voting Debt")Disclosure Letter sets forth the name of each registered holder of Company Capital Stock and the number of shares of Company Common Stock and/or Company Preferred Stock owned by such holder.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares100,000,000 shares of common stock and 10,000,000 shares of preferred stock, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 only 17,900,000 shares of Preferred Stockcommon stock and 5,000,000 shares of preferred stock are issued and outstanding. Except as set forth above, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. All outstanding shares of the Company's Subsidiaries is capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the State of Texas, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive Constituent Instruments or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments any Contract (as defined in Section 3.05) to issue or sell any shares of capital stock or other securities of which the Company is a party or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock (“Voting Company Debt”). Except as set forth above, as of the stockholders date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company is a party or by which any of them is bound (a) obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on =. As of the date of this Agreement, there are not any matter ("Voting Debt")outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company.

Capital Structure. The authorized capital stock of the Company Xiangrui consists of 500,000,000 Shares, 50,000 no par value shares of which 69,773,183 Shares were outstanding 1 share is issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of Xiangrui are issued, reserved for issuance or outstanding. Xiangrui is the sole record and beneficial owner of all of the issued and outstanding capital stock of each of its subsidiaries. All outstanding shares of the Company's Subsidiaries is capital stock of Xiangrui and each of its subsidiaries are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities applicable corporate laws of the Company British Virgin Islands, the Xiangrui Constituent Instruments or any of its Subsidiaries Contract to which Xiangrui is a party or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Xiangrui or any of its subsidiaries having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Xiangrui Stock or the stockholders capital stock of any of its subsidiaries may vote (“Voting Xiangrui Debt”). As of the Company on date of this Agreement, there are not any matter options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Xiangrui or any of its subsidiaries is a party or by which any of them is bound ("a) obligating Xiangrui or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Xiangrui or any of its subsidiaries or any Voting Xiangrui Debt"), (b) obligating Xiangrui or any of its subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of Xiangrui or of any of its subsidiaries. As of the date of this Agreement, there are not any outstanding contractual obligations of Xiangrui to repurchase, redeem or otherwise acquire any shares of capital stock of Xiangrui.

Capital Structure. (a) The authorized capital stock of equity interests in the Company consists consist of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 Five Million (5,000,000) shares of Common Stock, Nine Hundred Fifty Thousand (950,000) shares of Series A Preferred Stock, par value one-thousandth and Two Hundred (200) shares of one dollar Series B Preferred Stock. As of the date hereof, there are Four Million ($.0014,000,000) per share shares of Company Common Stock issued and outstanding, Nine Hundred Fifty Thousand (the "950,000) shares of Series A Preferred Shares")Stock issued and outstanding, and Two Hundred (200) shares of Series B Preferred Stock issued and outstanding, all of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary free of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancepreemptive rights. Except as set forth above or at Schedule 3.2, neither the ------------ Company nor any of its Subsidiaries has any benefit plans under which any equity interests in the Company Disclosure Letteror any of its Subsidiaries are issuable. The Company has not promised or agreed to issue equity interests under such benefit plans. Except as set forth above, there no Company Capital Stock or other voting securities of the Company are issued, reserved for issuance or outstanding and the Company Shareholders own all issued and outstanding shares of Company Capital Stock. There are no preemptive or other outstanding rights, options, warrants, conversion calls, rights, stock appreciation rightsputs or agreements to which the Company or any of its Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Subsidiaries to issue, redemption rightsdeliver, repurchase rightssell or redeem, agreementsor cause to be issued, arrangements delivered, sold or commitments to issue or sell redeemed, any additional shares of capital stock Company Capital Stock (or other voting securities or equity equivalents) of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of obligating the Company or any of its SubsidiariesSubsidiaries to grant, and no securities extend or obligations evidencing enter into any such rights are authorizedoption, issued warrant, call, right, put or outstandingagreement. Neither the Company nor any of its Subsidiaries has outstanding any bondsExcept as set forth in Schedule 3.2(a), debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders neither of the Company on --------------- Shareholders or the Company are a party to, and do not otherwise have any matter knowledge of the current existence of, any shareholder agreement, voting trust agreement or any other similar contract, agreement, arrangement, commitment, plan or understanding relating to the voting, dividend, ownership or transfer rights of any Company Capital Stock. True and complete copies of the Company's Articles of Incorporation (the "Voting DebtCompany Articles")., and Bylaws of the Company ---------------- (the "Company Bylaws") have been delivered to Parent. --------------

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares100 shares of common stock, par value $0.01 per share, of which 69,773,183 Shares were outstanding as of 10 shares, constituting the close of business on September 11Shares, 1997, are issued and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessableoutstanding. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is are duly authorized, validly issued, fully paid and paid, nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the CompanyGeneral Corporation Law of the State of Delaware, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure LetterCharter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company Bylaws or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right Contract to subscribe for or acquire, any securities of which the Company is a party or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) on any matters on which holders of the Shares may vote (“Voting Company Debt”). There are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or the Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or the Company Subsidiary to issue, deliver or sell, pledge, grant a security interest on or encumber, or cause to be issued, delivered or sold, pledged, a security interest granted on or encumbered, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or the Company Subsidiary or any Voting Company Debt or (ii) obligating the Company or the Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking. There are no other agreements to which the Company or the Company Subsidiary is a party, or among the holders of the Shares, with respect to the stockholders voting of the Shares. There are no outstanding contractual obligations of the Company on or the Company Subsidiary to repurchase, redeem or otherwise acquire any matter ("Voting Debt")shares of capital stock of the Company or the Company Subsidiary.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as 5,000,000 shares of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Company Common Stock, par value one-thousandth $.01 per share. There are, as of one dollar the execution date of this Agreement, issued and outstanding ($.001i) per share 3,210,712 shares of the Company Common Stock; (ii) convertible debentures as described in Schedule 3.6 of the Disclosure Schedule (the "Preferred SharesCompany Convertible Debentures") convertible into 40,096 shares of the Company Common Stock that would be converted into Merger Consideration pursuant to Section 2.4(b) hereof; and (iii) Company Stock Options relating to 710,048 shares of the Company Common Stock that would be converted into Merger Consideration pursuant to Section 2.4(b) hereof. No shares of the Company Common Stock are held by the Company as treasury stock. Except as set forth in or pursuant to Section 3.6(b), of which there are issued and outstanding (i) no shares were outstanding as of capital stock or other voting securities of the close Company, (ii) no securities of business on September 11the Company or any other Person convertible into or exchangeable or exercisable for shares of capital stock or other voting securities of the Company, 1997and (iii) no subscriptions, options, warrants, calls, rights (including preemptive rights), commitments, understandings or agreements to which the Company is a party or by which it is bound obligating the Company to issue, deliver, sell, purchase, redeem or acquire shares of capital stock or other voting securities of the Company (or securities convertible into or exchangeable or exercisable for shares of capital stock or other voting securities of the Company) or obligating the Company to grant, extend or enter into any such subscription, option, warrant, call, right, commitment, understanding or agreement. All outstanding shares of the outstanding Shares have been duly authorized and Company Common Stock are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant non-assessable and not subject to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancepreemptive right. Except as set forth above in Schedule 3.6 of the Disclosure Schedule, at the Closing there will be no shareholder agreement, voting trust or in other agreement or understanding to which the Company Disclosure Letter, there are no preemptive is a party or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments by which it is bound relating to issue or sell the voting of any shares of the capital stock of the Company. There are no outstanding stock appreciation, phantom stock, profit participation, or similar rights with respect to the Company. Material Agreements. Schedule 3.7 of the Disclosure Schedule contains a complete list of the Material Agreements to which the Company is a party (other securities of than this Agreement and related agreements) or by which the Company or the Assets are bound (including all amendments and modifications thereto). The Company has made available to Parent or provided Parent with a true and correct copy of all such Material Agreements, including all amendments and modifications thereof. No right or obligation of any party to any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiariessuch Material Agreements has been waived, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor party to any of such Material Agreements is in material default of its Subsidiaries obligations thereunder. No event has outstanding any bondsoccurred and no condition exists which, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders giving of notice or the lapse of time or both, would constitute any such material breach or material default. Each of such Material Agreements is a valid, binding and enforceable obligation of the Company on any matter ("Voting Debt")parties thereto in accordance with its terms and is in full force and effect.

Capital Structure. The authorized capital stock of the Company Xxxxx consists of 500,000,000 Shares, 100,000,000 shares of which 69,773,183 Shares were outstanding as Xxxxx Common Stock and 15,000,000 shares of the close preferred stock of business on September 11Xxxxx (“Xxxxx Preferred Stock”). As of the date hereof, 1997(i) 8,006,000 shares of Xxxxx Common Stock are issued and outstanding, (ii) no shares of Xxxxx Preferred Stock are issued and outstanding, and 50,000,000 (iii) no shares of Xxxxx Common Stock or Xxxxx Preferred StockStock are held by Xxxxx in its treasury. Except as set forth above, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each Xxxxx are issued, reserved for issuance or outstanding. Xxxxx is the sole record and beneficial owner of all of the Company's Subsidiaries is capital shares of Xxxxx Sauce Co., Inc. All outstanding capital shares of Xxxxx and the Xxxxx Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary of the Company, free and clear issued in violation of any lienpurchase option, pledgecall option, security interestright of first refusal, claim preemptive right, subscription right or other encumbranceany similar right or any Contract to which such company is a party or otherwise bound. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, not any options, warrants, conversion rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, redemption rightsstock-based performance units, repurchase rightscommitments, agreementsContracts, arrangements or commitments undertakings of any kind to issue which Xxxxx or sell any of the Xxxxx Subsidiary is a party or by which any of them is bound (i) obligating Xxxxx or the Xxxxx Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional capital shares, or any security convertible or exercisable for or exchangeable into the capital shares of Xxxxx or the Xxxxx Subsidiary, (ii) obligating Xxxxx or the Xxxxx Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital shares of Xxxxx or of the Xxxxx Subsidiary. As of the date of this Agreement, there are not any outstanding contractual obligations of Xxxxx to repurchase, redeem or otherwise acquire any shares of capital stock or other securities of Xxxxx. At the Closing, Xxxxx shall deliver to KCI a certified stockholder list generated by its stock transfer agent which shall accurately reflect all of the Company or any issued and outstanding shares of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")Xxxxx Common Stock however held.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares2,250,000 shares of common stock, par value $0.10 per share, of which 69,773,183 Shares were outstanding 2,000,000 shares are designated as Class A common stock and 250,000 shares are designated as Class B common stock; and 200,000 shares of preferred stock, par value $0.10 per share, of which 125,000 are designated as Series A preferred stock, 14,000 are designated as Series B Preferred Stock and the remainder are undesignated. At the close of business on September 11__,March 9, 19971999, (i) 706,950 shares of Company Class A Common Stock were issued and outstanding, (ii) 172,513 shares of Company Class B Common Stock were issued and outstanding or subject to options, (iii) 125,000 shares of Company Series A Preferred Stock were issued and outstanding, and 50,000,000 (iv) 14,000 shares of Company Series B Preferred StockStock were issued and outstanding. There are no bonds, par value one-thousandth debentures, notes or other indebtedness of one dollar the Company having the right to vote ($.001or convertible into securities having the right to vote) per share (on any matters on which stockholders of the "Preferred Shares"Company may vote. Except as set forth in Schedule 3.01(c), of which no shares were outstanding as of the close date of business on September 11this Agreement, 1997. All there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the outstanding Shares have been duly authorized and are validly Company or any of its subsidiaries is a party or by which any of them is bound obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, fully paid and nonassessable. The Company has no Shares delivered or Preferred Shares reserved for issuancesold, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding additional shares of capital stock or other voting securities of each the Company or of any of its subsidiaries or obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Except as described in Schedule 3.01(c), as of the Company's Subsidiaries is date of this Agreement, there are not any outstanding contractual obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries. All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no not subject to preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt").

Capital Structure. The authorized capital stock of the Company Love Group consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 1,000,000,000 shares of Preferred Stockcommon stock, par value one-thousandth of one dollar ($.001) 0.0001 per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessableshare. The Company has number of shares of Love Group’s common stock issued and outstanding is set forth in the Love Group Disclosure Letter. No shares of Love Group’s common stock are held by Love Group in its treasury. Except as set forth in the Love Group Disclosure Letter, no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each Love Group were issued, reserved for issuance or outstanding. All outstanding shares of the Company's Subsidiaries is capital stock of Love Group are, and all such shares that may be issued prior to the date hereof will be when issued, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the CompanyNevada Revised Statutes, free and clear of any lienthe Love Group Charter, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company Love Group Bylaws or any of its Subsidiaries Contract to which Love Group is a party or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Love Group having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Love Group’s common stock may vote (“Voting Love Group Debt”). Except as set forth in the stockholders Love Group Disclosure Letter, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Love Group is a party or by which it is bound (a) obligating Love Group to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Love Group or any Voting Love Group Debt, (b) obligating Love Group to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the Company on capital stock of Love Group. As of the date of this Agreement, there are not any matter ("Voting Debt")outstanding contractual obligations of Love Group to repurchase, redeem or otherwise acquire any shares of capital stock of Love Group. Except as set forth in the Love Group Disclosure Letter, Love Group is not a party to any agreement granting any securityholder of Love Group the right to cause Love Group to register shares of the capital stock or other securities of Love Group held by such securityholder under the Securities Act. The stockholder list provided to Lovego Holdings is a current stockholder list generated by its stock transfer agent, and such list accurately reflects all of the issued and outstanding shares of the Love Group’s common stock.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares50,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share, of which 69,773,183 Shares there were issued and outstanding as of the close of business on September 11March 3, 19972000, and 50,000,000 19,735,416 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which Common Stock and no shares were outstanding as of the close of business on September 11, 1997preferred stock. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is Common Stock have been duly authorized, validly issued, fully paid and are nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim liens or encumbrances other encumbrancethan any liens or encumbrances created by or imposed upon the holders thereof and have been issued in compliance with all federal and state securities laws. The Company has no subsidiaries. Except as set forth above or in Section 3.2 of the Company Disclosure LetterSchedule, there are no preemptive or other outstanding rights, (a) options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights or other similar rights, agreements, arrangements or commitments of any character obligating the Company to issue or sell any shares of its capital stock stock, (b) notes, bonds, debentures or other securities indebtedness of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which the stockholders shareholders of the Company may vote or (c) outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of Common Stock or any other capital stock of, or any equity interest in, the Company. The Shares, the Warrants and the Warrant Shares (collectively, the "SECURITIES") have been duly authorized for issuance and sale to the Purchasers pursuant to this Agreement and are validly issued. The Shares are, and, when issued pursuant to the terms and conditions set forth in the Warrant, the Warrant Shares will be, fully paid and non-assessable, and no holder of Securities is or will be subject to personal liability with respect to the obligations of the Company by reason of being such a holder. Other than as set forth in Section 3.2(d) of the Company Disclosure Schedule, the Shares and the Warrants are, and the Warrant Shares, when issued, shall be, free of preemptive rights or rights of first refusal created by statute, the Company's Certificate of Incorporation or Bylaws or any agreement to which the Company is a party or by which it is bound and, based on the representations of Purchasers contained in Sections 4.6, 4.7 and 4.8 of this Agreement, are and shall be issued in compliance with all federal and state securities laws. Except for Form D filings required to perfect exemptions under applicable federal and/or state securities laws and the filing of an application to list additional shares of Common Stock with the Nasdaq SmallCap Market, no filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any matter court or governmental authority or agency, domestic or foreign is necessary or required in connection with the due authorization, execution and delivery of the Operative Agreements ("Voting Debt")as hereinafter defined) or for the offering, issuance or sale of the Securities. The form of certificate that will be used to evidence the Shares will comply in all material respects with all applicable statutory requirements, with any applicable requirements of the Certificate of Incorporation and Bylaws of the Company and with the requirements of the Nasdaq SmallCap Market. On March 1, 2000, the Company declared a two-for-one stock split of its Common Stock payable on March 27, 2000 in the form of a dividend of one share of Common Stock to each holder of record at the close of business on March 17, 2000. Effective as of the payment with respect to such stock split, all outstanding share and per share amounts, and the number and Purchase Price per share of the Shares and Warrants, shall be deemed to give effect to such split.

Capital Structure. The authorized capital stock of the Company Strategic consists of 500,000,000 Shares, 25,000,000 shares of which 69,773,183 Shares were outstanding as of Strategic Common Stock. At the close of business on September 11October 13, 19971995, and 50,000,000 6,054,451 shares of Preferred StockStrategic Common Stock were issued and outstanding. Except as set forth above, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of at the close of business on September 11October 13, 1997. All of the outstanding Shares have been duly authorized and are validly issued1995, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each Strategic were issued, reserved for issuance or outstanding, except for 325,000 shares issuable pursuant to outstanding share purchase warrants exercisable at $2.25 (Cdn.) per Strategic share (the "Strategic Warrants"). All outstanding shares of the Company's Subsidiaries is capital stock of Strategic are, and all shares which may be issued pursuant to this Agreement, when issued, duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct or indirect whollynot subject to pre-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbranceemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders indebtedness of which have Strategic having the right to vote (or, except for the Strategic Warrants, convertible into, or convertible into or exercisable for exchangeable for, securities having the right to vote) with the on any matters on which stockholders of Strategic may vote. Except as set forth above, as of the Company on date hereof, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any matter ("Voting Debt")kind to which Strategic or any Material Subsidiary is a party or by which any of them is bound obligating Strategic or any Material Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of Strategic or any Material Subsidiary or obligating Strategic or Merger Sub to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the date of this Agreement, there are not any outstanding contractual obligations of Strategic or any Material Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of Strategic or any Material Subsidiary. There are not any outstanding contractual obligations of Strategic to vote or to dispose of any shares of the capital stock of any Material Subsidiary. As of the date of this Agreement, the authorized capital of Merger Sub consists of 1,000 shares of common stock, without par value, 100 of which have been validly issued for $0.025 each, are fully paid and non-assessable and are owned by Strategic free and clear of any lien.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares40,000,000 shares of Company Common Stock and 5,000,000 shares of preferred stock, of which 69,773,183 Shares were outstanding as of par value $.001 per share. At the close of business on September 11, 1997, and 50,000,000 (i) 11,968,588 shares of Preferred StockCompany Common Stock were issued and outstanding, par value one-thousandth of one dollar ($.001ii) per share (the "Preferred Shares"), of which no shares of Company Common Stock were held by the Company in its treasury and (iii) 1,967,824 shares of Company Common Stock were reserved for issuance pursuant to outstanding Company Stock Plans (as of defined in Section 5.06) (including 71,829 shares reserved pursuant to the ESPP (as defined in Section 3.01(l)). Except as set forth above, at the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights or rights (other than Stock Options (as defined in Section 5.06)) to receive shares of Company Common Stock on a deferred basis granted under the Company Stock Plans or otherwise. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all shares which may be issued pursuant to the Company Stock Plans will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to preemptive rights. There are no bonds, debentures, notes or indirect wholly-owned subsidiary other indebtedness of the CompanyCompany having the right to vote (or convertible into, free and clear or exchangeable for, securities having the right to vote) on any matters on which stockholders of any lien, pledge, security interest, claim or other encumbrancethe Company may vote. Except as set forth above or in the Company Disclosure Letterabove, and except for Stock Options that may be granted as permitted under clause (z) of Section 4.01(a)(ii), there are no preemptive or other outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rightscontracts, redemption rightscommitments, repurchase rightsagree ments, agreementsarrangements, arrangements obligations or commitments undertakings of any kind to issue which the Company or sell any of its subsidiaries is a party, or by which the Company or any of its subsidiaries is bound, obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or any of its Subsidiaries subsidiaries or obligating the Company or any securities of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, contract, commitment, agreement, arrangement, obligation or undertaking. There are not any outstanding contractual obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities (i) of the Company or any of its Subsidiariessubsidiaries to repurchase, and no securities redeem or obligations evidencing such rights are authorized, issued or outstanding. Neither otherwise acquire any shares of capital stock of the Company nor or (ii) of the Company to vote or to dispose of any shares of the capital stock of any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt")subsidiaries.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Sharesas of the date hereof, and will consist of which 69,773,183 Shares were outstanding as of the Effective Time, 75,000,000 shares of Company Common Stock and 25,000,000 shares of preferred stock, $.001 par value per share (the "Company Preferred Stock"). The rights, privileges and preferences of the Company Common Stock and Company Preferred Stock are as stated in the Company's Amended and Restated Articles of Incorporation. As of the close of business on September 11March 10, 19971999, (i) 22,789,908 shares of the Company Common Stock and no shares of the Company Preferred Stock were issued and outstanding, (ii) no shares of Company Common Stock were held by the Company in its treasury, and 50,000,000 (iii) 894,378 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares Company Common Stock were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each upon exercise of the Stock Options (as hereinafter defined). All issued and outstanding shares of capital stock or other securities Company Common Stock are, and all shares which may be issued upon the exercise of each of the Company's Subsidiaries is Stock Options will be, duly authorized, validly issued, fully paid and nonassessable nonassessable, and owned by a direct or indirect wholly-owned subsidiary are not subject to and were not issued in violation of any preemptive rights. To the Knowledge (as defined in Section 8.3) of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive voting trusts, voting agreements, irrevocable proxies or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments agreements with respect to issue or sell any voting shares of capital stock of the Company. There are no bonds, debentures, notes or other securities indebtedness of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have subsidiaries having the right to vote (or convertible into or exercisable exchangeable for other securities having the right to vote) with on any matters on which the stockholders of the Company may vote. Except as set forth above and except as set forth in Section 3.1(c) of the Company Disclosure Schedule, as of the date of this Agreement, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its subsidiaries is a party or by which any of them is bound obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or of any of its subsidiaries or obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock (or options to acquire any such shares) of the Company or any of its subsidiaries. There are no agreements, arrangements or commitments of any character (contingent or otherwise) pursuant to which any person is or may be entitled to receive any payment based on the revenues, earnings or financial performance of the Company or any matter of its subsidiaries or assets or calculated in accordance therewith (other than ordinary course payments or commissions to sales representatives of the Company based upon revenues generated by them without augmentation as a result of the transactions contemplated hereby) or to cause the Company or any of its subsidiaries to file a registration statement under the Securities Act of 1933, as amended (the "Voting DebtSecurities Act"), or which otherwise relate to the registration of any securities of the Company.

Capital Structure. The As of the date of this Agreement, the authorized capital stock of the Company consists of 500,000,000 Shares, 20,000,000 shares of which 69,773,183 Shares were outstanding as Common Stock. As of the close date of business on September 11this Agreement, 1997, and 50,000,000 (i) 10,000,000 shares of Preferred Stock, par value one-thousandth of one dollar Common Stock are issued and outstanding and ($.001ii) per share (the "Preferred Shares"), of which no shares were outstanding as of Common Stock are held by the close Company in treasury. No bonds, debentures, notes or other instruments or evidence of business indebtedness having the right to vote (or convertible into or exercisable or exchangeable for, securities having the right to vote) on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to any matters on which the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Planstockholders may vote are issued or outstanding. Each of the All outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, Common Stock are validly issued, fully paid and nonassessable and owned by a direct were not issued in violation of any preemptive or indirect wholly-owned subsidiary other similar rights. All issuances of Common Stock of the CompanyCompany and capital stock of each Subsidiary have been in material compliance with all applicable securities laws and regulations, free and clear of any lien, pledge, security interest, claim or other encumbranceall Taxes thereon have been paid (except for Taxes not yet due and payable and for Taxes being contested in good faith). Except as referenced in Section 2.10 and as set forth above or in the Company Disclosure LetterSchedule 3.1(b), there are outstanding (A) no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any voting securities of the Company or any of its Subsidiaries, and (B) no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on or any matter Subsidiary of the Company convertible into, or exchangeable or exercisable for, shares of capital stock or other voting securities of the Company or any Subsidiary of the Company and ("Voting Debt")C) no options, warrants, calls, rights, commitments or agreements to which the Company or any Subsidiary of the Company is a party or by which it is bound, in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, shares of capital stock or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement.

Capital Structure. The (a) As of the date hereof, the authorized capital stock of the Company Buyer consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stockcommon stock, .001 par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as value. As of the close Closing, 1,053,295 shares of business on September 11, 1997common stock were issued and outstanding. All Schedule 4.9 is the shareholder list of Buyer at the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessabletime of Closing. No shares of common stock were held by the Buyer in its treasury. The Company Buyer has no Shares outstanding stock options, stock appreciation rights, phantom units, profit participation or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant similar rights with respect to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save PlanBuyer. Each of the outstanding No shares of capital stock or other equity or voting securities of each the Buyer are reserved for issuance or are outstanding. All of the Company's Subsidiaries is issued and outstanding shares of capital stock of the Buyer are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear have not been issued in violation of any lienpreemptive rights or in violation of state or federal securities laws, pledge, security interest, claim or other encumbranceand there are no preemptive rights with respect thereto. No capital stock has been issued by the Buyer since the Buyer Balance Sheet Date. Except as set forth above or in above, as of the Company Disclosure Letter, date hereof there are no preemptive outstanding or other outstanding rightsauthorized securities, options, warrants, conversion calls, rights, stock appreciation rightscommitments, redemption rights, repurchase preemptive rights, agreements, arrangements arrangements, or commitments undertakings of any kind to issue which the Buyer is a party, or sell by which it is bound, obligating the Buyer to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other equity or voting securities of, or other ownership interests in, the Buyer or obligating the Buyer to issue, grant, extend, or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement, or undertaking. There are not as of the Company date of this Agreement and there will not be at the Closing Date any shareholder agreements, voting trusts or other agreements or understandings to which the Buyer is a party or by which it is bound relating to the voting of any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities shares of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders capital stock of the Company on any matter ("Voting Debt")Buyer.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as 10,000 ordinary shares. As of the close date of business on September 11this Agreement, 1997ten thousand (10,000) ordinary shares are issued and outstanding. Except as set forth above, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. The Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the Hong Kong, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in the Company Disclosure Letterthis section 3.03, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of Parent.

Capital Structure. The authorized share capital stock of the Company consists of 500,000,000 Shares50,000 ordinary shares, of which 69,773,183 Shares were outstanding 10,000 ordinary shares are issued and outstanding, all of which are held legally and beneficially by the Stockholder. Except as set forth above, no shares or other voting securities of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and Company are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to or outstanding. Except as specified in the Company's 1993 Stock Company Disclosure Letter, the Company is the sole legal and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each beneficial owner of all of the issued shares of each Company Subsidiary, either directly or indirectly. All outstanding shares of capital stock or other securities of the Company and each of the Company's Subsidiaries is Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the British Virgin Islands, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in this section 3.03 and in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the shares of the Company on or of any matter ("Voting Debt")Company Subsidiary. Except as set forth in the Company Disclosure Letter, as of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of Parent.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, 60,000,000 shares of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, Common Stock and 50,000,000 20,000,000 shares of Preferred Stock. As of January 20, par value one-thousandth 1998, (i) 14,361,925 shares of one dollar Common Stock and no shares of Preferred Stock were issued and outstanding, (ii) 489,117 shares of Common Stock were held by the Company in its treasury (and 150,000 outstanding shares of Common Stock held by a total of six persons who are listed on Scheduled 3(d)(ii) to the Company Disclosure Letter are to be purchased by the Company at a price of $.001) 21.00 per share (prior to Closing pursuant to written agreements which the "Preferred Shares"Company has previously delivered to the Purchaser), and (iii) 861,804 shares of which Common Stock were issuable under the Company's employee benefit or incentive plans pursuant to awards granted or that may be granted by the Company. (The written agreements referred in clauses (ii) hereof are sometimes also referred to herein as "Repurchase Agreements.") Except as set forth in this Section 3(d) or in Schedule 3(d) to the Company Disclosure Letter, no shares were outstanding as of Common Stock or other voting securities of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly Company were issued, fully paid and nonassessablereserved for issuance or outstanding. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant outstanding stock appreciation rights relating to the Company's 1993 Common Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the Company. All outstanding shares of capital stock or other securities of each Common Stock of the Company's Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to preemptive rights. There are no bonds, debentures, notes or indirect wholly-owned subsidiary other indebtedness of the CompanyCompany having the right to vote (or convertible into, free and clear or exchangeable for, securities having the right to vote) on any matters on which stockholders of any lien, pledge, security interest, claim or other encumbrancethe Company may vote. Except (A) as set forth above in this Section 3(d), or (B) as set forth in Schedule 3(d) to the Company Disclosure Letter, there are no preemptive or other outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any Company Subsidiary is a party or by which such entity is bound, obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock stock, voting securities or other securities ownership interests of the Company or any of its Subsidiaries Company Subsidiary or obligating the Company or any securities Company Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. Except as set forth on Schedule 3(d) to the Company Disclosure Letter, there are no outstanding contractual obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its SubsidiariesCompany Subsidiary to repurchase, and no redeem or otherwise acquire any capital stock, voting securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter ("Voting Debt").ownership interests in the

Capital Structure. The authorized capital stock of the Company Digital consists of 500,000,000 Shares50,000,000 shares of Digital Common Stock, of which 69,773,183 Shares were outstanding as of par value $.025 per share. At the close of business on September 11October 6, 19971995, and 50,000,000 (i) 11,589,267 shares of Preferred StockDigital Common Stock were issued and outstanding, par value one-thousandth (ii) 40,061 shares of one dollar Digital Common Stock were held by Digital in its treasury, ($.001iii) per share (the "Preferred Shares"), 1,818,980 shares of which no shares Digital Common Stock were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan Plans (the "Stock Plan"as defined in Section 5.6) and 500,000 Shares (iv) 2,705,000 shares of Digital Common Stock were reserved for issuance pursuant to upon exercise of Digital's outstanding share purchase warrants ("Digital Warrants"). Except as set forth above, at the Western Save Plan. Each close of the outstanding business on October 6, 1995, no shares of capital stock or other voting securities of each Digital were issued, reserved for issuance or outstanding. All outstanding shares of capital stock of Digital are, and all shares which may be issued pursuant to the Company's Subsidiaries is Stock Plans will be, when issued, duly authorized, validly issued, fully paid and nonassessable non- assessable and owned by a direct or indirect whollynot subject to pre-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbranceemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders indebtedness of which have Digital having the right to vote (or, except for the Digital Warrants, convertible into, or convertible into or exercisable for exchangeable for, securities having the right to vote) with the on any matters on which stockholders of Digital may vote. Except as set forth above, as of the Company on date hereof, there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any matter ("Voting Debt")kind to which Digital or any of its subsidiaries is a party or by which any of them is bound obligating Digital or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of Digital or of any of its subsidiaries or obligating Digital or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the date of this Agreement, there are not any outstanding contractual obligations of Digital or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Digital or any of its subsidiaries. There are not any outstanding contractual obligations of Digital to vote or to dispose of any shares of the capital stock of any of its subsidiaries.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 (i) 100,000 shares of Preferred Stock, par value one-thousandth Common Stock and (ii) 6,000 shares of one dollar ($.001) per share preferred stock. 16,021 shares of Common Stock (the "Preferred Shares")) are issued and outstanding. Except as set forth above, of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other equity securities of each of the Company's Subsidiaries is Company are issued, reserved for issuance or outstanding. The Shares are duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenot subject to preemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which holders of the Company on any matter Shares may vote ("Voting Company Debt"). Except as disclosed in Section 3.1(c) of the Disclosure Schedule, there are not any options, warrants, rights, convertible or exchangeable securities, phantom stock units, stock-based performance units, commitments, contracts, arrangements or undertakings of any kind to which the Company or any Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or of any Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Subsidiary to issue, grant, extend or enter into any such option, warrant, right, security, commitment, contract, arrangement or undertaking or (iii) which provides the economic equivalent of an equity ownership interest in the Company or the applicable Subsidiary of the Company. CGUIHL is the record and beneficial owner of the CGUIHL Shares, and CGULLC is the record and beneficial owner of the CGULLC Shares, in each case, free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind (collectively, "Liens"). There are no restrictions upon the voting, dividend rights or transfer of any shares of Common Stock pursuant to the Company's Certificate of Incorporation or By-laws or any agreement to which CGNU, either Seller or the Company is a party. Assuming Newco has the requisite power and authority to be the lawful owner of the Shares, upon delivery of and payment for the Shares at the Closing as herein provided, good and valid title to the Shares will pass to Newco, free and clear of all Liens, other than any Liens arising from acts of Newco. As of the date hereof, the sum of the outstanding aggregate principal amount of the Term Note and accrued and unpaid interest thereon is $1,134,756,945. Sellers have delivered to Buyer a true and complete copy of the Term Note.

Capital Structure. The authorized Company is the sole record and beneficial owner of all of the issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and each Company Subsidiary are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of Canada, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in the Company Disclosure Letterthis Section 3.03, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Shares or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares1,000 ordinary shares, of which 69,773,183 Shares were outstanding 1,000 shares are issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. The Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the British Virgin Islands, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive Constituent Instruments or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments any Contract (as defined in Section 3.05) to issue or sell any shares of capital stock or other securities of which the Company is a party or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company.

Capital Structure. The authorized shares of Risetime are 50,000 ordinary shares of a single class with a par value of US$1.00 each. As of the date of this Agreement, one ordinary share is issued and outstanding. Except as set forth above, no shares or other voting securities of Risetime are issued, reserved for issuance or outstanding. Except as specified in Risetime Disclosure Letter, Risetime is the sole record and beneficial owner of all of the issued and outstanding capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997each Risetime Subsidiary. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of the capital stock or other securities of Risetime and each of the Company's Subsidiaries is Risetime Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities applicable corporate laws of the Company British Virgin Islands, Risetime Constituent Instruments or any of its Subsidiaries Contract (as defined in Section 3.05) to which Risetime is a party or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Risetime or any Risetime Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Risetime Stock or the stockholders common stock of any Risetime Subsidiary may vote ("VOTING DEBT"). Except as set forth above, as of the Company on date of this Agreement, there are not any matter options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Risetime or any Risetime Subsidiary is a party or by which any of them is bound ("i) obligating Risetime or any Risetime Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Risetime or any Risetime Subsidiary or any Voting Debt"), (ii) obligating Risetime or any Risetime Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of Risetime or of any Risetime Subsidiary. Except as set forth in Risetime Disclosure Letter, as of the date of this Agreement, there are not any outstanding contractual obligations of Risetime to repurchase, redeem or otherwise acquire any shares of capital stock of Pubco.

Capital Structure. The authorized share capital of the Company U.S. $21,000 divided into 6,000,000 common shares of U.S. $0.001 par value each and 1,500,000 preferred shares of U.S. $0.01 par value each. As of the date of this Agreement, 5,099,503 ordinary shares are issued and outstanding and none of the preferred shares are issued and outstanding. Except as set forth above, no shares or other voting securities of the Company are issued, reserved for issuance or outstanding. Except as specified in the Company Disclosure Letter, the Company is the sole record and beneficial owner of all of the issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and each Company Subsidiary are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the Cayman Islands, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in this section 3.03 and in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. Except as set forth in the Company Disclosure Letter, as of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of Parent.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares60,000,000 shares of Company Common Stock, par value $1.00 per share. As of which 69,773,183 Shares were outstanding the close of business on July 31, 2001, there were: (i) 28,552,465 shares of Company Common Stock issued and outstanding; (ii) 1,883,569 shares of Company Common Stock held in the treasury of the Company; (iii) 1,226,350 shares of Company Common Stock Options available for grant pursuant to the Company Stock Plans and 1,226,350 shares of Company Common Stock reserved for issuance pursuant to the Company Stock Plans, and (iv) 3,048 shares of Company Common Stock reserved for issuance pursuant to the Company ESPP. Except as set forth above, as of the close of business on September 11July 31, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 19972001, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding no shares of capital stock or other equity securities of each the Company issued, reserved for issuance or outstanding. All outstanding shares of capital stock of the Company's Subsidiaries is Company are, and all shares which may be issued pursuant to the Company Stock Plans will be, when issued, duly authorized, validly issued, fully paid and nonassessable and owned not subject to preemptive rights. All securities issued by a direct the Company were issued in compliance in all material respects with all applicable federal and state securities laws and all applicable rules and regulations promulgated thereunder. There are no outstanding bonds, debentures, notes or indirect wholly-owned subsidiary other indebtedness or debt securities of the CompanyCompany that have the right to vote (or that are convertible into, free and clear or exchangeable for, securities having the right to vote) on any matters on which shareholders of any lienthe Company may vote (collectively, pledge, security interest, claim or other encumbrance"VOTING DEBT"). Except as set forth above or in the Company Disclosure Letterabove, there are no preemptive or other outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements or commitments undertakings of any kind to issue which the Company or sell any of its subsidiaries is a party or by which any of them is bound obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of the Company or of any of its subsidiaries or obligating the Company or any of its subsidiaries to issue, grant, extend, accelerate the vesting of or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of the Company or any of its Subsidiaries subsidiaries to repurchase, redeem or otherwise acquire or make any securities or obligations convertible or exchangeable into or exercisable for, or giving payment in respect of any Person a right to subscribe for or acquire, any securities shares of capital stock of the Company or any of its Subsidiariessubsidiaries. To the knowledge of the Company, and there are no irrevocable proxies with respect to shares of capital stock of the Company or any subsidiary of the Company. Except as set forth in Section 3.01(c) of the Company Disclosure Schedule, there are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other agreements or arrangements with or, to the knowledge of the Company, among any securityholders of the Company with respect to securities or obligations evidencing such rights are authorizedof the Company. Since December 31, 2000, the Company has not (A) issued or outstanding. Neither permitted to be issued any shares of capital stock, or securities exercisable for or convertible into shares of capital stock, of the Company nor or any of its Subsidiaries has outstanding subsidiaries, other than pursuant to any bondsemployee stock options issued prior to the date hereof under the Company Stock Plans; (B) repurchased, debenturesredeemed or otherwise acquired, notes directly or other obligations the holders indirectly through one or more subsidiaries, any shares of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders capital stock of the Company or any of its subsidiaries or (C) declared, set aside, made or paid to the shareholders of the Company dividends or other distributions on any matter ("Voting Debt")the outstanding shares of capital stock of the Company.

Capital Structure. The authorized capital stock of the Company LGYV consists of 500,000,000 Shares, 100,000,000 shares of which 69,773,183 Shares were outstanding as common stock and 10,000,000 shares of preferred stock. As of the close date hereof, 315,064 shares of business on September 11, 1997common stock are issued and outstanding, and 50,000,000 no shares of Preferred Stock, par value one-thousandth preferred stock are outstanding. No shares of one dollar ($.001) per share (the "Preferred Shares"), capital stock or other voting securities of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and LGYV are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuanceissuance or outstanding, except that, as of September 11, 1997, there were 4,827,730 Shares other than up to 5 million shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Planproposed stock incentive plan. Each of the outstanding shares of capital stock or other securities of each of the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have NEXALIN or any of its subsidiaries having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of LGYV’s capital stock or the stockholders capital stock of any of its subsidiaries may vote (“Voting LGYV Debt”). As of the Company on date of this Agreement, there are not any matter options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which LGYV or any of its subsidiaries is a party or by which any of them is bound ("a) obligating LGYV or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, LGYV or any of its subsidiaries or any Voting LGYV Debt"), (b) obligating LGYV or any of its subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of LGYV or of any of its subsidiaries, other than three outstanding convertible notes in the aggregate principal amount of $520,000, which are convertible, in the aggregate, into 25% of the outstanding shares of common stock of LGYV immediately following such conversion. As of the date of this Agreement, there are not any outstanding contractual obligations of LGYV to repurchase, redeem or otherwise acquire any shares of capital stock of LGYV.

Capital Structure. The authorized capital stock capitalization of the Company consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close date hereof, including the authorized capital stock, the number of business on September 11shares issued and outstanding, 1997, the number of shares issuable and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock stock option plans, the number of shares issuable and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each securities exercisable or exchangeable for, or convertible into, any shares of capital stock is set forth on SCHEDULE 2.4 of the Company Disclosure Schedule. All of such outstanding shares of capital stock have been, or other securities of each of the Company's Subsidiaries is duly authorizedupon issuance, will be, validly issued, fully paid and nonassessable and owned by a direct or indirect whollynon-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbranceassessable. Except as set forth above or in on SCHEDULE 2.4, no shares of capital stock of the Company Disclosure Letterare subject to preemptive rights or any other similar rights or any liens or encumbrances created by any agreement to which the Company is a party. Except as set forth on SCHEDULE 2.4, there are no preemptive or other outstanding rights, options, warrants, conversion rightsscrip, stock appreciation rightsrights to subscribe to, redemption rights, repurchase rights, agreements, arrangements calls or commitments to issue of any character whatsoever relating to, or sell securities or rights convertible into or exercisable or exchangeable for, any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither arrangements by which the Company nor 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, nor are any such issuances or arrangements contemplated. The Company has outstanding any bonds, debentures, notes furnished to the Purchaser or other obligations the holders its representatives true and correct copies of which have the right to vote (or all instruments and agreements governing securities convertible into or exercisable or exchangeable for securities having the right to vote) with the stockholders capital stock of the Company. EXHIBIT A sets forth a true, correct and complete list of all Persons that hold equity in the Company, or any instrument convertible into equity as of the Closing Date, and sets forth the state of residence for each such Person. Company on any matter ("Voting Debt")shall deliver an updated EXHIBIT A at or prior to the Closing Date.

Capital Structure. The Section 5.2 of the Seller Disclosure Letter sets forth the authorized capital stock or other equity interests of each of the Company consists Business Subsidiaries and the number of 500,000,000 Shares, shares or the ownership percentages of which 69,773,183 Shares were outstanding as each class of capital stock or other equity interests of the close Business Subsidiaries that are issued and outstanding and the owner of business on September 11such shares or other equity interests, 1997, and 50,000,000 shares in each case without giving effect to the plan of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding reorganization as of the close of business on September 11, 1997detailed in Schedule 7.6. All of the outstanding Shares shares or other equity interests of each of the Business Subsidiaries have been duly authorized and are validly issued, and, solely with respect to any Business Subsidiary that is a corporation, are fully paid and nonassessablenonassessable and were not issued in violation of any preemptive rights. The Company has There are (a) no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock of, or other securities of each of equity or voting interest in, any Business Subsidiary, other than the Company's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and Equity Interests or such shares or interests owned by a direct or indirect wholly-owned subsidiary of the CompanyBusiness Subsidiary, free and clear (b) no outstanding securities of any lienBusiness Subsidiary convertible into or exchangeable for shares of capital stock of, pledge, security interest, claim or other encumbrance. Except as set forth above equity or in the Company Disclosure Lettervoting interest in, there are any Business Subsidiary, (c) no preemptive options, warrants or rights of conversion or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue acquire from any Business Subsidiary or sell obligating any shares of capital stock or other securities of the Company Business Subsidiaries to issue, register or sell, or that restrict the transfer or voting of, any of its Subsidiaries shares, other equity interests or securities convertible into or exchangeable for its shares or other equity interests or any securities shares or other equity interests in any Business Subsidiary, (d) no obligations of any Business Subsidiary to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable into security or exercisable forother similar agreement or commitment relating to any capital stock of, or giving other equity or voting interest (including any Person a right to subscribe for or acquirevoting debt) in, any securities Business Subsidiary (the items in clauses (a), (b), (c) and (d), together with the capital stock of any Business Subsidiary, being referred to collectively as “Securities”) and (e) no other obligations by any Business Subsidiary to make any payments based on the Company price or value of any Securities or dividends paid thereon or revenues, earnings or financial performance or any other attribute of its Subsidiariesany Business Subsidiary. There are no outstanding agreements of any kind which obligate any Business Subsidiary to repurchase, redeem or otherwise acquire any Securities, or obligate any Business Subsidiary to grant, extend or enter into any such agreements, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has Business Subsidiary does not have any outstanding any bonds, debentures, notes or other obligations obligations, the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders holders of the Company capital stock or other equity interests in any Business Subsidiary on any matter ("Voting Debt")matter. No Business Subsidiary owns any Security of any Person other than another Business Subsidiary.

Capital Structure. The authorized capital stock Upon delivery, the capitalization of the Company consists of 500,000,000 Shareswill be set forth in the Company Disclosure Letter. Except as set forth therein, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of the Company are issued, reserved for issuance or outstanding. The Company is the sole record and beneficial owner of all of the issued and outstanding capital stock of each of Company Subsidiary. To the Company's Subsidiaries is knowledge, all outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of Israel, free and clear of the Company Constituent Instruments or any lien, pledge, security interest, claim Contract (as defined in Section 3.05) to which the Company is a party or other encumbranceotherwise bound. Except as set forth above or in the Company Disclosure LetterLetter or as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations Indebtedness (as defined in Section 3.19 below) of the holders of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Shares or the stockholders shares of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares, 50,000,000 shares of which 69,773,183 Shares were outstanding as of (the "COMPANY CAPITAL STOCK"). At the close of business on September 11June 10, 19972002, (i) 10,385,000 shares of Company Common Stock were issued and outstanding, (ii) no shares of Company Common Stock were held by the Company in its treasury, and 50,000,000 (iii) 1,672,157 shares of Preferred Stock, par value one-thousandth Company Common Stock were subject to outstanding Company Stock Options (as defined in Section 6.04) and 606,943 additional shares of one dollar ($.001) per share (the "Preferred Shares"), of which no shares Company Common Stock were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Company Stock and Incentive Plan Plans (as defined in Section 6.04). Except as set forth above, at the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each close of the outstanding business on June 10, 2002, no shares of capital stock or other voting securities of each the Company were issued, reserved for issuance or outstanding. All outstanding shares of Company Capital Stock are, and all such shares that may be issued prior to the Company's Subsidiaries is Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the CompanyBCA, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure LetterCharter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company By-laws or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right Contract (as defined in Section 3.05) to subscribe for or acquire, any securities of which the Company is a party or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders of which have Company having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Common Stock may vote ("VOTING COMPANY DEBT"). Except as set forth above, as of the stockholders date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (i) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or of any Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (iii) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of Company Capital Stock. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company on or any matter ("Voting Debt")Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares100 ordinary shares, of which 69,773,183 Shares were outstanding 100 shares are issued and outstanding. Except as of the close of business on September 11set forth above, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of each the Company are issued, reserved for issuance or outstanding. The Company is the sole record and beneficial owner of all of the Company's Subsidiaries is issued and outstanding capital stock of each Company Subsidiary. All outstanding shares of the capital stock of the Company and each Company Subsidiary are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of the British Virgin Islands, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive Constituent Instruments or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments any Contract (as defined in Section 3.05) to issue or sell any shares of capital stock or other securities of which the Company is a party or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations the holders indebtedness of which have Company or any Company Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which holders of Company Stock or the stockholders common stock of any Company Subsidiary may vote (“Voting Company Debt”). Except as set forth above, as of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound (a) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any Company Subsidiary or any Voting Company Debt, (b) obligating the Company or any Company Subsidiary to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company on or of any matter ("Voting Debt")Company Subsidiary. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company.

Capital Structure. The authorized capital stock of the Company consists of 500,000,000 Shares10,000 ordinary shares, all of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, are issued and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessableup (or credited as fully paid up). The Company has Except as set forth above, no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding shares of capital stock or other voting securities of the Company are issued, reserved for issuance or outstanding. The Company is the sole legal and beneficial owner of all of the issued and outstanding capital stock of each of its subsidiaries. All shares of the Company's Subsidiaries is capital stock of the Company and each of its subsidiaries are duly authorized, validly issued, fully paid and nonassessable and owned by a direct not subject to or indirect wholly-owned subsidiary issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Companyapplicable corporate laws of Hong Kong, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive Constituent Instruments or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments any Contract to issue or sell any shares of capital stock or other securities of which the Company is a party or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights otherwise bound. There are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding not any bonds, debentures, notes or other obligations indebtedness of the holders Company or any of which have its subsidiaries having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which holders of the Company on Stock or the capital stock of any matter of its subsidiaries may vote ("“ Voting the Company Debt ”). As of the date of this Agreement, there are not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any of its subsidiaries is a party or by which any of them is bound (a) obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, the Company or any of its subsidiaries or any Voting the Company Debt"), (b) obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Company or of any of its subsidiaries. As of the date of this Agreement, there are not any outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company.

Capital Structure. The authorized capital stock of the Company Capital consists of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as of the close of business on September 11, 1997, and 50,000,000 30,000,000 shares of Preferred StockCapital Common Stock and no shares of preferred stock, par value one-thousandth of one dollar ($.001) .01 per share (the "Preferred SharesStock"). On the date hereof, (a) 11,853,516 shares of which Capital Common Stock and no shares of Preferred Stock were outstanding as issued and outstanding, (b) no shares of the close of business on September 11, 1997. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Company has no Shares Capital Common Stock or Preferred Shares reserved for issuanceStock were held by Capital in its treasury and (c) 236,250 shares of Capital Common Stock were issuable upon exercise of outstanding Capital Options. On the date of this Agreement, except thatas set forth above in this Section 5.3, as of September 11, 1997, there were 4,827,730 Shares reserved for issuance pursuant to the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save Plan. Each of the outstanding no shares of capital stock or other voting securities of each Capital were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights relating to the capital stock of the Company's Subsidiaries is Capital. All outstanding shares of capital stock of Capital are duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of the Company, free and clear of any lien, pledge, security interest, claim or other encumbrancenot subject to preemptive rights. Except as set forth above or in the Company Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders indebtedness of which have Capital having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with on any matters on which shareholders of Capital may vote. Except (i) for the stockholders Capital Options or (ii) as set forth on Schedule 5.3, as of the Company date of this Agreement there are no outstanding securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which Capital or any Capital Subsidiary is a party or by which such entity is bound, obligating Capital or any Capital Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, voting securities or other ownership interests of Capital or any Capital Subsidiary or obligating Capital or any Capital Subsidiary to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking (other than to Capital or a Capital Subsidiary). Except as set forth on Schedule 5.3, there are no outstanding contractual obligations of Capital or any matter Capital Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of Capital or any capital stock, voting securities or other ownership interests in any Capital Subsidiary or make any material investment ("Voting Debt"in the form of a loan, capital contribution or otherwise) in any person (other than a Capital Subsidiary).

Capital Structure. The (a) As of the Closing Date, the authorized capital stock of the Company consists will be as set forth in the Amended and Restated Certificate of 500,000,000 Shares, of which 69,773,183 Shares were outstanding as Incorporation. As of the close of business on September 11Closing Date, 1997, and 50,000,000 shares of Preferred Stock, par value one-thousandth of one dollar ($.001) per share (the "Preferred Shares"), of which no shares were outstanding as New Common Stock equal to 10% of the close aggregate number of business shares of New Common Stock to be issued and outstanding on September 11the Effective Date, 1997. All immediately after the effectiveness of the outstanding Shares have been duly authorized and are validly issuedPlan, fully paid and nonassessable. The Company has no Shares or Preferred Shares reserved for issuance, except that, as of September 11, 1997, there were 4,827,730 Shares will be reserved for issuance pursuant to an equity incentive plan as described in the Company's 1993 Stock and Incentive Plan (the "Stock Plan") and 500,000 Shares reserved for issuance pursuant to the Western Save PlanDisclosure Statement. Each No shares of preferred stock of the Company will be issued and outstanding on the Closing Date. The shares of capital stock or other securities of each of New Common Stock issuable hereunder and under the Company's Subsidiaries is Plan will, when issued, (i) be duly authorized, validly issued, fully paid and nonassessable and owned by a direct nonassessable, (ii) not have been issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or indirect wholly-owned subsidiary any similar right under any provision of the CompanyDelaware General Corporation Law, free the Amended and clear Restated Certificate of Incorporation or the Amended and Restated By-Laws or any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Company Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments Contract to issue or sell any shares of capital stock or other securities of which the Company or any of its Subsidiaries subsidiaries is a party or by which any of its or their respective assets are bound, and (iii) be delivered by the Company free and clear of all Liens, except for Liens created by, or otherwise resulting from actions by, the recipient of such shares. As of the Closing Date, the Company will have no Voting Debt. As of the Closing Date there will be no (A) outstanding obligations, options, warrants, convertible securities, exchangeable securities, securities or rights that are linked to the value of the New Common Stock or other rights, agreements or commitments relating to the capital stock of the Company (but only to the Company’s Knowledge with respect to any such obligations, options, rights, agreements or commitments to which the Company is not a party) or obligating the Company to issue or sell or otherwise transfer shares of capital stock of the Company or any securities or obligations convertible into or exchangeable into for any shares of capital stock of the Company or exercisable forany Voting Debt, (B) outstanding obligations of the Company to repurchase, redeem or otherwise acquire shares of its capital stock, (C) voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of shares of capital stock of the Company (but only to the Company’s Knowledge with respect to any such agreements or understandings to which the Company is not a party), except for the Standstill Agreement, or giving (D) rights of first refusal, preemptive rights, subscription rights or any Person a right similar rights under any provision of the Delaware General Corporation Law, the Amended and Restated Certificate of Incorporation or the Amended and Restated By-Laws or any Contract to subscribe for or acquire, any securities of which the Company or any of its Subsidiaries, and no securities subsidiaries is a party or obligations evidencing such rights are authorized, issued or outstanding. Neither the Company nor by which any of its Subsidiaries has or their respective assets are bound, except for the preemptive rights provided for in the Amended and Restated Certificate of Incorporation, and except, in the case of the foregoing clauses (C) and (D), as would not reasonably be expected to materially and adversely affect the value of the New Common Stock to be acquired by the Standby Purchasers pursuant to this Agreement. As of the Closing Date, the Company will not have an outstanding “poison pill” or any bonds, debentures, notes or other obligations the holders of which have similar arrangement in effect giving any Person the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of purchase any equity interest in the Company on any matter ("Voting Debt")upon the occurrence of certain events, except for the Rights Agreement.