Common use of Capitalization; Indebtedness Clause in Contracts

Capitalization; Indebtedness. (a) The authorized capital stock of the Company consists of fifty million (50,000,000) shares of Common Stock and two million (2,000,000) shares of preferred stock, $.01 par value per share (the “Preferred Stock”). As of June 24, 2002: (i) twenty-four million six hundred sixty thousand nine hundred fifty-seven (24,660,957) shares of Common Stock were issued and outstanding; (ii) four million three hundred twenty-one thousand nine hundred sixteen (4,321,916) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive the Common Stock granted under the Company’s 1995 Stock Option Plan, as amended (the “1995 Plan”); (iii) two hundred sixty thousand (260,000) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to receive the Common Stock granted under the Company’s Director Stock Option Plan (the “Director Plan” and together with the 1995 Plan, the “Company Stock Option Plans”); (iv) two million (2,000,000) shares of Common Stock were reserved for issuance upon the conversion of the First December 2000 Note; (v) five hundred thousand (500,000) shares of Common Stock were reserved for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the Convertible Note; (viii) five hundred fifty-nine thousand five hundred thirty-two (559,532) shares of Common Stock were held by the Company in the Company’s treasury; (ix) no shares of Preferred Stock were issued or outstanding; and (x) warrants to purchase two hundred seventy thousand five hundred sixty-two (270,562) shares of Common Stock were issued and outstanding (the “Existing Warrants”). (b) All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive or similar rights. Except as set forth in this Section 2.4 and except for changes resulting from the issuance of shares of Common Stock pursuant to the Company Stock Option Plans and the Existing Warrants, or as expressly permitted by this Agreement or the Related Agreements, (i) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock or other voting securities of the Company, (B) any securities of the Company or any Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of or ownership interests in the Company or any Company subsidiary, or (C) any warrants, calls, options or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Company subsidiary to issue, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or voting securities of or other ownership interests in, the Company or any Company subsidiary, (ii) there are no outstanding obligations of the Company or any Company subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, and (iii) except as contemplated in this Agreement or the Related Agreements or as set forth on Schedule 2.4(b), the Company is not presently under any obligation, has not agreed or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise file any registration statement under the Securities Act or the Exchange Act covering, any of its currently outstanding capital stock or other securities or any of its capital stock or other securities that may be subsequently issued. (c) Except as provided for in this Agreement or the Related Agreements and except as set forth on Schedule 2.4(c), neither the Company nor any Company subsidiary is a party to any agreement granting any preemptive or antidilutive rights with respect to any securities of the Company or any Company subsidiary that are outstanding as of the date hereof, or with respect to any securities of the Company or any Company subsidiary that may be subsequently issued upon the conversion or exercise of any instrument outstanding as of the date hereof. Except as set forth on Schedule 2.4(c) hereto, the execution, delivery and performance of this Agreement and the Related Agreements and the issuance of the Convertible Note and the Note Shares will not trigger any of the preemptive or antidilutive rights under any of the agreements set forth on such Schedule 2.4(c). Other than the Fielding Pharmaceutical Company, the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other person. (d) Except for the Convertible Note to be issued hereunder, the First December 2000 Note, the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) hereto, the Company has no Indebtedness (as defined in the Amended and Restated Investor Rights Agreement).

Capitalization; Indebtedness. (ai) The entire authorized capital stock of the Company consists of fifty million (50,000,000A) 80,000,000 shares of Company Common Stock and two million (2,000,000) Stock, of which 9,350,840 shares of preferred stock, $.01 par value per share (the “Preferred Stock”). As of June 24, 2002: (i) twenty-four million six hundred sixty thousand nine hundred fifty-seven (24,660,957) shares of Common Stock were are issued and outstanding; , (B) 51,445,186 shares of Preferred Stock, which are divided into (1) 7,189,801 shares of Series A Preferred Stock, of which 7,120,250 shares are issued and outstanding, (2) 9,688,195 shares of Series A-1 Preferred Stock, of which 9,688,195 shares are issued and outstanding, (3) 11,234,358 shares of Series B Preferred Stock, of which 10,843,325 shares are issued and outstanding, (4) 9,597,101 shares of Series C Preferred Stock, of which 9,597,101 shares are issued and outstanding, (5) 10,000,000 shares of Series D Preferred Stock, of which 5,988,024 shares are issued and outstanding, (6) 2,157,997 shares of Series E-1 Preferred Stock, of which 1,937,628 shares are issued and outstanding, (7) 758,924 shares of Series E-2 Preferred Stock, of which 487,330 shares are issued and outstanding, and (8) 818,810 shares of Series E-3 Preferred Stock, of which 545,724 shares are issued and outstanding. Schedule 4(e)(i) of the Disclosure Schedule sets forth the name of each holder of record of the Company Capital Stock and the number and type of shares owned by such holder. All of the outstanding shares of Company Capital Stock are validly issued, fully paid and non-assessable. (ii) four million three hundred twenty-one thousand nine hundred sixteen (4,321,916) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive the Common Stock granted under the The Company’s 1995 's 2007 Stock Option Plan, as amended (the “1995 Plan”); (iii) two hundred sixty thousand (260,000) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to receive the Common Stock granted under the Company’s Director Stock Option and Grant Plan (the “Director "Plan” and together with ") authorizes the 1995 issuance of up to 7,206,767 shares of Company Common Stock pursuant to awards granted under such Plan, the “Company Stock Option Plans”); (iv) two million (2,000,000) of which options to purchase 3,749,542 shares of Company Common Stock were reserved for issuance upon the conversion have been granted under such Plan and are outstanding as of the First December 2000 Note; date hereof (v) five hundred thousand (500,000) shares of Common Stock were reserved the "Company Options"). Except for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the Convertible Note; (viii) five hundred fifty-nine thousand five hundred thirty-two (559,532) shares of Common Stock were held by the Company in Options and the Company’s treasury; (ix) Outstanding Warrants, there are no shares outstanding options, warrants, purchase rights, subscription rights, conversion rights, exchange rights or other contracts or commitments that would require the Company to issue, sell or otherwise cause to become outstanding any of Preferred Stock were issued its equity securities. There are no outstanding or outstanding; and (x) warrants authorized stock appreciation, phantom stock or similar rights with respect to purchase two hundred seventy thousand five hundred sixty-two (270,562) shares of Common Stock were issued and outstanding (the “Existing Warrants”). (b) All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive or similar rights. Except as set forth in this Section 2.4 and except for changes resulting from the issuance of shares of Common Stock pursuant to the Company Stock Option Plans and the Existing Warrants, or as expressly permitted by this Agreement or the Related Agreements, (i) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock or other voting equity securities of the Company. (iii) The Company has delivered to Purchaser complete and correct copies of any unexpired (A) shareholder agreements, (B) any voting agreements, voting trusts, proxies and other contracts or agreements relating to the voting of the equity securities of the Company or any Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of or ownership interests in that the Company or any Company subsidiary, or (C) any warrants, calls, options or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Company subsidiary to issue, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or voting securities of or other ownership interests in, the Company or any Company subsidiary, (ii) there are no outstanding obligations of the Company or any Company subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, and (iii) except as contemplated in this Agreement or the Related Agreements or as set forth on Schedule 2.4(b), the Company is not presently under any obligation, has not agreed or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise file any registration statement under the Securities Act or the Exchange Act covering, any of its currently outstanding capital stock or other securities or any of its capital stock or other securities that may be subsequently issued. (c) Except as provided for in this Agreement or the Related Agreements and except as set forth on Schedule 2.4(c), neither the Company nor any Company subsidiary is a party to any agreement granting any preemptive or antidilutive rights with respect to any securities and (B) forms of option agreements and equity plans, all of which documents are listed on Schedule 4(e)(iii) of the Company or any Company subsidiary that are outstanding as of the date hereof, or with respect to any securities of the Company or any Company subsidiary that may be subsequently issued upon the conversion or exercise of any instrument outstanding as of the date hereof. Except as set forth on Schedule 2.4(c) hereto, the execution, delivery and performance of this Agreement and the Related Agreements and the issuance of the Convertible Note and the Note Shares will not trigger any of the preemptive or antidilutive rights under any of the agreements set forth on such Schedule 2.4(c). Other than the Fielding Pharmaceutical Company, the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other personDisclosure Schedule. (div) Except for Schedule 4(e)(iv) of the Convertible Note Disclosure Schedule sets forth the outstanding Company Indebtedness, if any, as of immediately prior to the Closing. All of such Company Indebtedness, if any, will be issued hereunder, discharged at the First December 2000 Note, the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) hereto, the Company has no Indebtedness (as defined in the Amended and Restated Investor Rights Agreement)Effective Time.

Capitalization; Indebtedness. (a) The authorized capital stock of the Company consists of fifty one hundred million (50,000,000100,000,000) shares of common stock, $0.01 par value per share (the “Common Stock Stock”) and two million (2,000,000) shares of preferred stock, $.01 par value per share (the “Preferred Stock”). As of June 2430, 20022004: (i) twentythirty-four million six eight hundred sixty twenty-five thousand nine eight hundred fiftyeighty-seven five (24,660,95734,825,885) shares of Common Stock were issued and outstanding; (ii) four million three hundred twenty-one thousand nine hundred sixteen nine thousand six hundred eighteen (4,321,9164,909,618) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive the Common Stock granted under the Company’s 1995 Stock Option Plan, as amended (the “1995 Plan”); (iii) two hundred sixty seventy thousand (260,000270,000) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to receive the Common Stock granted under the Company’s Director Stock Option Plan (the “Director Plan” and together with the 1995 Plan, the “Company Stock Option Plans”); (iv) two five million one hundred eighty-eight thousand one hundred forty-seven (2,000,0005,188,147) shares of Common Stock were reserved for issuance upon the conversion of the First December 2000 NoteNotes; (v) five hundred thousand (500,000) shares of Common Stock were reserved for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the Convertible Note; (viii) five two hundred fifty-nine three thousand five eight hundred thirtyforty-two eight (559,532253,848) shares of Common Stock were held by the Company in the Company’s treasury; (ixvi) no shares of Preferred Stock were issued or outstanding; and (xvii) warrants to purchase two hundred seventy thousand five hundred sixty-two (270,56270,000) shares of Common Stock were issued and outstanding (the “Existing Warrants”)outstanding. (b) All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive or similar rights. Except as set forth in this Section 2.4 2.5, except as provided in the Collaboration Agreements (including the Notes) and except for changes resulting from the issuance of shares of Common Stock pursuant to the Company Stock Option Plans stock option plans and the Existing Warrantswarrants, or as expressly permitted by this Agreement or the Related AgreementsAgreement, (i) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock or other voting securities of the Company, (B) any securities of the Company or any Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of or ownership interests in the Company or any Company subsidiary, or (C) any warrants, calls, options or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Company subsidiary to issue, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or voting securities of or other ownership interests in, the Company or any Company subsidiary, ; (ii) there are no outstanding obligations of the Company or any Company subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, ; and (iii) except as contemplated described in this Agreement or the Related Agreements or as set forth on Schedule 2.4(b)Agreements, the Company is not presently under any obligation, has not agreed or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise file any registration statement under the Securities Act or the Exchange Act covering, any of its currently outstanding capital stock or other securities or any of its capital stock or other securities that may be subsequently issued. (c) Except as provided for in this Agreement or the Related Collaboration Agreements and except as set forth on Schedule 2.4(c(including the Notes), neither the Company nor any Company subsidiary is a party to any agreement granting any preemptive or antidilutive rights with respect to any securities of the Company or any Company subsidiary that are outstanding as of the date hereof, or with respect to any securities of the Company or any Company subsidiary that may be subsequently issued upon the conversion or exercise of any instrument outstanding as of the date hereof. Except as set forth on Schedule 2.4(c) hereto, the The execution, delivery and performance of this Agreement and the Related Agreements and the issuance of the Convertible Note Exchange Shares and the Note Sales Force Shares will not trigger any of the preemptive preemptive, antidilutive or antidilutive similar rights under any of agreement to which the agreements set forth on such Schedule 2.4(cCompany or any Company subsidiary is a party, except as provided in the Collaboration Agreements (including the Notes). Other than the Fielding Pharmaceutical Company, a Delaware corporation (“Fielding”), the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other person. (d) Except for the Convertible Note to be issued hereunder, the First December 2000 Note, the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) hereto, the Company has no Indebtedness (as defined in the Amended and Restated Investor Rights Agreement).

Capitalization; Indebtedness. (a) The authorized capital stock of the Company consists of fifty million (50,000,000) shares of Common Stock and two million (2,000,000) shares of preferred stock, $.01 par value per share (the “Preferred Stock”). As of June August 24, 20022001: (i) twenty-four million six hundred sixty thousand nine hundred fifty-seven Twenty Three Million Forty Nine Thousand Three Hundred Forty (24,660,95723,049,340) shares of Common Stock were issued and outstanding; (ii) four million three hundred twentyFour Million Three Hundred Seventy-one thousand nine hundred sixteen Six Thousand Nine Hundred Twenty-Six (4,321,9164,376,926) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive the Common Stock granted under the Company’s 1995 Stock Option Plan, as amended Plan (the “1995 Plan”); (iii) two hundred sixty thousand Four Hundred Twenty Thousand (260,000420,000) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to receive the Common Stock granted under the Company’s Director Stock Option Plan (the “Director Plan” and together with the 1995 Plan, the “Company Stock Option Plans”); (iv) two million Two Million Five Hundred Thousand (2,000,0002,500,000) shares of Common Stock were reserved for issuance upon the conversion of the First December 2000 NoteNote and the Second December 2000 Note and any other notes issued in connection with the December 2000 Note Purchase Agreement; (v) five hundred thousand Five Hundred Seventy-Seven Thousand One Hundred Sixty-One (500,000) shares of Common Stock were reserved for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the Convertible Note; (viii) five hundred fifty-nine thousand five hundred thirty-two (559,532577,161) shares of Common Stock were held by the Company in the Company’s treasury; (ixvi) no shares of Preferred Stock were issued or outstanding; and (xvii) warrants to purchase two hundred seventy thousand five hundred sixtyOne Million Seventy-two Two Thousand Fifty-Three (270,5621,072,053) shares of Common Stock were issued and outstanding (the “Existing Warrants”). (b) All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive or similar rights. Except as set forth in this Section 2.4 and except for changes resulting from the issuance of shares of Common Stock pursuant to the Company Stock Option Plans and the Existing Warrants, or as expressly permitted by this Agreement or the Related Agreements, (i) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock or other voting securities of the Company, (B) any securities of the Company or any Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of or ownership interests in the Company or any Company subsidiary, or (C) any warrants, calls, options or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Company subsidiary to issue, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or voting securities of or other ownership interests in, the Company or any Company subsidiary, (ii) there are no outstanding obligations of the Company or any Company subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, and (iii) except as contemplated in this Agreement or the Related Agreements or as set forth on Schedule 2.4(b), the Company is not presently under any obligation, has not agreed or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise file any registration statement under the Securities Act or the Exchange Act covering, any of its currently outstanding capital stock or other securities or any of its capital stock or other securities that may be subsequently issued. (c) Except as provided for in this Agreement or the Related Agreements and except as set forth on Schedule 2.4(c), neither the Company nor any Company subsidiary is a party to any agreement granting any preemptive or antidilutive rights with respect to any securities of the Company or any Company subsidiary that are outstanding as of the date hereof, or with respect to any securities of the Company or any Company subsidiary that may be subsequently issued upon the conversion or exercise of any instrument outstanding as of the date hereof. Except as set forth on Schedule 2.4(c) hereto, the The execution, delivery and performance of this Agreement and the Related Agreements and the issuance of the Convertible Note and the Note Shares will not trigger any of the preemptive or antidilutive rights under any of the agreements set forth on such Schedule 2.4(c)) hereto. Other than the Fielding Pharmaceutical CompanyCompany subsidiaries, the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other person.. A list of all of the Company subsidiaries is set forth in an exhibit to the 2000 10-K. (d) Except for the Convertible Note to be issued hereunder, the First December 2000 Note, Note and the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) heretoNote, the Company has no Indebtedness (as defined in the Amended and Restated Investor Rights Agreement, as amended).

Capitalization; Indebtedness. (a) The authorized capital stock of the Company consists of fifty million (50,000,000) shares of Common Stock and two million (2,000,000) shares of preferred stock, $.01 par value per share (the “"Preferred Stock”"). As of June August 24, 20022001: (i) twenty-four million six hundred sixty thousand nine hundred fifty-seven Twenty Three Million Forty Nine Thousand Three Hundred Forty (24,660,95723,049,340) shares of Common Stock were issued and outstanding; (ii) four million three hundred twentyFour Million Three Hundred Seventy-one thousand nine hundred sixteen Six Thousand Nine Hundred Twenty-Six (4,321,9164,376,926) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive the Common Stock granted under the Company’s 's 1995 Stock Option Plan, as amended Plan (the “"1995 Plan”"); (iii) two hundred sixty thousand Four Hundred Twenty Thousand (260,000420,000) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to receive the Common Stock granted under the Company’s 's Director Stock Option Plan (the “"Director Plan” " and together with the 1995 Plan, the “"Company Stock Option Plans”"); (iv) two million Two Million Five Hundred Thousand (2,000,0002,500,000) shares of Common Stock were reserved for issuance upon the conversion of the First December 2000 NoteNote and the Second December 2000 Note and any other notes issued in connection with the December 2000 Note Purchase Agreement; (v) five hundred thousand Five Hundred Seventy-Seven Thousand One Hundred Sixty-One (500,000) shares of Common Stock were reserved for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the Convertible Note; (viii) five hundred fifty-nine thousand five hundred thirty-two (559,532577,161) shares of Common Stock were held by the Company in the Company’s 's treasury; (ixvi) no shares of Preferred Stock were issued or outstanding; and (xvii) warrants to purchase two hundred seventy thousand five hundred sixtyOne Million Seventy-two Two Thousand Fifty-Three (270,5621,072,053) shares of Common Stock were issued and outstanding (the “"Existing Warrants”"). (b) All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive or similar rights. Except as set forth in this Section 2.4 and except for changes resulting from the issuance of shares of Common Stock pursuant to the Company Stock Option Plans and the Existing Warrants, or as expressly permitted by this Agreement or the Related Agreements, (i) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock or other voting securities of the Company, (B) any securities of the Company or any Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of or ownership interests in the Company or any Company subsidiary, or (C) any warrants, calls, options or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Company subsidiary to issue, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or voting securities of or other ownership interests in, the Company or any Company subsidiary, (ii) there are no outstanding obligations of the Company or any Company subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, and (iii) except as contemplated in this Agreement or the Related Agreements or as set forth on Schedule 2.4(b), the Company is not presently under any obligation, has not agreed or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise file any registration statement under the Securities Act or the Exchange Act covering, any of its currently outstanding capital stock or other securities or any of its capital stock or other securities that may be subsequently issued. (c) Except as provided for in this Agreement or the Related Agreements and except as set forth on Schedule 2.4(c), neither the Company nor any Company subsidiary is a party to any agreement granting any preemptive or antidilutive rights with respect to any securities of the Company or any Company subsidiary that are outstanding as of the date hereof, or with respect to any securities of the Company or any Company subsidiary that may be subsequently issued upon the conversion or exercise of any instrument outstanding as of the date hereof. Except as set forth on Schedule 2.4(c) hereto, the execution, delivery and performance of this Agreement and the Related Agreements and the issuance of the Convertible Note and the Note Shares will not trigger any of the preemptive or antidilutive rights under any of the agreements set forth on such Schedule 2.4(c). Other than the Fielding Pharmaceutical Company, the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other person. (d) Except for the Convertible Note to be issued hereunder, the First December 2000 Note, the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) hereto, the Company has no Indebtedness (as defined in the Amended and Restated Investor Rights Agreement).or

Capitalization; Indebtedness. (a) The authorized capital stock of the Company consists of fifty million (50,000,000i) 200,000,000 shares of Company Common Stock and two million (2,000,000ii) 1,859,814 shares of preferred stock, $.01 par value $0.001 per share (the “Company Preferred Stock”). As , of June 24, 2002: (i) twenty-four million six hundred sixty thousand nine hundred fifty-seven (24,660,957) shares of Common which 200,000 have been designated as the Company’s Series H Preferred Stock were issued and outstanding; (ii) four million three hundred twenty-one thousand nine hundred sixteen (4,321,916) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive Rights. As of the close of business on April 1, 2011: (A) 83,292,192 shares of Company Common Stock granted under were issued and outstanding (including the Company’s 1995 Stock Option Planassociated Rights issued pursuant to the Rights Agreement dated as of October 21, 2002 (as amended amended) (the “1995 PlanRights Agreement”) between the Company and Computer Share Trust Company, N.A., as rights agent (the “Rights Agent”); (iiiB) two hundred sixty thousand (260,000) no shares of Common Company Preferred Stock were reserved for issuance upon the exercise of outstanding stock options issued or other rights to receive the Common Stock granted under the Company’s Director Stock Option Plan (the “Director Plan” and together with the 1995 Plan, the “Company Stock Option Plans”)outstanding; (ivC) two million (2,000,000) no shares of Common Stock were reserved for issuance upon the conversion of the First December 2000 Note; (v) five hundred thousand (500,000) shares of Common Stock were reserved for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the Convertible Note; (viii) five hundred fifty-nine thousand five hundred thirty-two (559,532) shares of Company Common Stock were held by the Company in the Company’s treasuryas treasury shares; (ixD) no there were outstanding Options to purchase 11,320,746 shares of Preferred Company Common Stock and 23,428,571 shares of Company Common Stock were reserved for issuance under the Stock Plan (including upon exercise of the Options issued or outstandingunder the Stock Plan); and (xE) warrants to purchase two hundred seventy thousand five hundred sixty-two (270,562) there were 1,665,719 shares of Company Common Stock were subject to outstanding Restricted Stock Units. Except as set forth in this Section 3.2, such issued and outstanding (the “Existing Warrants”). (b) All outstanding shares of capital stock Company Common Stock have been duly authorized and validly issued, are fully paid and nonassessable, and are free of preemptive or similar rights under any provision of the DGCL and the Company are Charter Documents or any agreement to which the Company is a party or by which the Company is otherwise bound. In connection with any exercise of the Top-Up Option, upon delivery to Merger Sub of the Top-Up Option Shares against payment therefore in accordance with Section 1.4, such Top-Up Option Shares shall be duly authorized, validly issued, fully paid and nonassessable non-assessable shares of Company Common Stock. (b) Section 3.2(b) of the Company Disclosure Letter sets forth a complete and not accurate list, as of the close of business on April 1, 2011, of (i) the name of each holder of each Option or Restricted Stock Unit (each, a “Company Equity Award”) that is outstanding under the Stock Plan as of such date, (ii) the number of Shares subject to preemptive each such outstanding Company Equity Award, (iii) in the case of Options, the exercise price of such Option, and (vi) the extent to which each such Company Equity Award is vested and exercisable as of such date. The Company has made available to Parent or similar rights. its designee complete and accurate copies of (x) the Stock Plan, (y) all forms of agreements evidencing Options and (z) all forms of agreements evidencing Restricted Stock Units. (c) There are no outstanding bonds, debentures, notes or other Indebtedness of the Company having the right to vote (or convertible into or exchangeable for securities having the right to vote) on any matters on which stockholders of the Company may vote. (d) Except as set forth in this Section 2.4 and except for changes resulting from the issuance 3.2, as of shares of Common Stock pursuant to the Company Stock Option Plans and the Existing WarrantsApril 1, or as expressly permitted by this Agreement or the Related Agreements2011, (i) there are not no issued, reserved for issuance or outstanding (Ai) any shares of capital stock of or other voting securities of or ownership interests in the Company, (Bii) any securities of the Company or any Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock or other voting securities of or ownership interests in the Company or any Company subsidiaryCompany, or (Ciii) any warrants, calls, options or other rights rights, in each case, to acquire from the Company or any Company subsidiaryCompany, or any other obligation of the Company or any Company subsidiary to issue, any capital stock, stock or other voting securities or other ownership interests in, in or any securities convertible into or exchangeable or exercisable for capital stock or other voting securities or ownership interests in the Company or (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or voting securities of or other ownership interests in, the Company or any (the items in clauses (i) through (iv) being referred to collectively as the “Company subsidiary, (ii) there Securities”). There are no outstanding obligations of the Company or any Company subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, and (iii) except as contemplated in this Agreement or of the Related Agreements or as set forth on Schedule 2.4(b), the Company Securities. The Company is not presently under a party to any obligationvoting agreement with respect to the voting of any Company Securities. The Company has not, during the period from April 1, 2011 to the date of this Agreement, issued any Company Securities, other than upon the exercise of Options and the vesting of Restricted Stock Units outstanding as of April 1, 2011. (e) The Company has not agreed not, between January 1, 2009 and the date of this Agreement, declared or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “Securities Act”)paid any dividend, or the Securities Exchange Act of 1934declared or made any distribution on, as amended (the “Exchange Act”), authorized or otherwise file effected any registration statement under the Securities Act split-up or the Exchange Act coveringany other recapitalization of, any of its currently outstanding capital stock stock, or other securities directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding capital stock, other than as a result of any cashless exercise of any Option or the net issuance of capital stock or other securities that may be subsequently issuedupon the vesting of Restricted Stock Units. (cf) Except as provided for in this Agreement or the Related Agreements and except as set forth on Schedule 2.4(c), neither the Company nor any Company subsidiary is a party to any agreement granting any preemptive or antidilutive rights with respect to any securities The compensation committee of the Company or any Company subsidiary that are outstanding as Board (the “Compensation Committee”) consists solely of the date hereof, or with respect to any securities of the Company or any Company subsidiary that may be subsequently issued upon the conversion or exercise of any instrument outstanding as of the date hereof. Except as set forth on Schedule 2.4(c) hereto, the execution, delivery and performance of this Agreement and the Related Agreements and the issuance of the Convertible Note and the Note Shares will not trigger any of the preemptive or antidilutive rights under any of the agreements set forth on such Schedule 2.4(c). Other than the Fielding Pharmaceutical Company, the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other person. (d) Except for the Convertible Note to be issued hereunder, the First December 2000 Note, the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) hereto, the Company has no Indebtedness independent directors (as defined in the Amended Nasdaq Marketplace Rules) and Restated Investor Rights has taken, at a duly convened meeting thereof, all such actions as may be required to cause to be exempted under Rule 14d–10(d)(2) under the Exchange Act, any and all employment compensation, severance and employee benefit agreements and arrangements that have been entered into or granted by the Company with or to current directors, officers, or employees of the Company to ensure that all such agreements and arrangements satisfy the non-exclusive safe harbor provisions of Rule 14d–10(d)(2) of the Exchange Act. Since January 1, 2009, all Options were granted at an exercise price of at least equal to the fair market value (within the meaning of Section 409(A) of the Code) of a share of Company Common Stock on the date of grant and since such date no Option has been repriced, extended or amended since the date of its grant. (g) As of the date of this Agreement), the only principal amount of outstanding Indebtedness for borrowed money of the Company is set forth in Section 3.2(g) of the Company Disclosure Letter. As April, 1, 2011, the Company had approximately $75,000,000.00 in cash and investments.

Capitalization; Indebtedness. (a) The authorized capital stock of the Company consists of fifty one hundred million (50,000,000100,000,000) shares of common stock, $0.01 par value per share (the "Common Stock Stock") and two million (2,000,000) shares of preferred stock, $.01 par value per share (the “"Preferred Stock”"). As of June 2430, 20022004: (i) twentythirty-four million six eight hundred sixty twenty-five thousand nine eight hundred fiftyeighty-seven five (24,660,95734,825,885) shares of Common Stock were issued and outstanding; (ii) four million three hundred twenty-one thousand nine hundred sixteen nine thousand six hundred eighteen (4,321,9164,909,618) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive the Common Stock granted under the Company’s 's 1995 Stock Option Plan, as amended (the “1995 Plan”); (iii) two hundred sixty seventy thousand (260,000270,000) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to receive the Common Stock granted under the Company’s 's Director Stock Option Plan (the “Director Plan” and together with the 1995 Plan, the “Company Stock Option Plans”); (iv) two five million one hundred eighty-eight thousand one hundred forty-seven (2,000,0005,188,147) shares of Common Stock were reserved for issuance upon the conversion of the First December 2000 NoteNotes; (v) five hundred thousand (500,000) shares of Common Stock were reserved for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the Convertible Note; (viii) five two hundred fifty-nine three thousand five eight hundred thirtyforty-two eight (559,532253,848) shares of Common Stock were held by the Company in the Company’s 's treasury; (ixvi) no shares of Preferred Stock were issued or outstanding; and (xvii) warrants to purchase two hundred seventy thousand five hundred sixty-two (270,56270,000) shares of Common Stock were issued and outstanding (the “Existing Warrants”)outstanding. (b) All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive or similar rights. Except as set forth in this Section 2.4 2.5, except as provided in the Collaboration Agreements (including the Notes) and except for changes resulting from the issuance of shares of Common Stock pursuant to the Company Stock Option Plans stock option plans and the Existing Warrantswarrants, or as expressly permitted by this Agreement or the Related AgreementsAgreement, (i) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock or other voting securities of the Company, (B) any securities of the Company or any Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of or ownership interests in the Company or any Company subsidiary, or (C) any warrants, calls, options or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Company subsidiary to issue, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or voting securities of or other ownership interests in, the Company or any Company subsidiary, ; (ii) there are no outstanding obligations of the Company or any Company subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, ; and (iii) except as contemplated described in this Agreement or the Related Agreements or as set forth on Schedule 2.4(b)Agreements, the Company is not presently under any obligation, has not agreed or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “"Securities Act”"), or the Securities Exchange Act of 1934, as amended (the “"Exchange Act”"), or otherwise file any registration statement under the Securities Act or the Exchange Act covering, any of its currently outstanding capital stock or other securities or any of its capital stock or other securities that may be subsequently issued. (c) Except as provided for in this Agreement or the Related Collaboration Agreements and except as set forth on Schedule 2.4(c(including the Notes), neither the Company nor any Company subsidiary is a party to any agreement granting any preemptive or antidilutive rights with respect to any securities of the Company or any Company subsidiary that are outstanding as of the date hereof, or with respect to any securities of the Company or any Company subsidiary that may be subsequently issued upon the conversion or exercise of any instrument outstanding as of the date hereof. Except as set forth on Schedule 2.4(c) hereto, the The execution, delivery and performance of this Agreement and the Related Agreements and the issuance of the Convertible Note Exchange Shares and the Note Sales Force Shares will not trigger any of the preemptive preemptive, antidilutive or antidilutive similar rights under any of agreement to which the agreements set forth on such Schedule 2.4(cCompany or any Company subsidiary is a party, except as provided in the Collaboration Agreements (including the Notes). Other than the Fielding Pharmaceutical Company, a Delaware corporation ("Fielding"), the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other person. (d) Except for the Convertible Note to be issued hereunder, the First December 2000 Note, the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) hereto, the Company has no Indebtedness (as defined in the Amended and Restated Investor Rights Agreement).

Capitalization; Indebtedness. (a) The authorized capital stock of the Company consists of fifty million (50,000,000i) 240,000,000 shares of Company Common Stock and two million (2,000,000ii) 1,000,000 shares of preferred stock, $.01 par value $1.00 per share (the “"Company Preferred Stock”"). As , of June 24, 2002: (i) twenty-four million six hundred sixty thousand nine hundred fifty-seven (24,660,957) which 240,000 shares of Common have been designated as the Company's Series A Junior Participating Preferred Stock were issued and outstanding; (ii) four million three hundred twenty-one thousand nine hundred sixteen (4,321,916) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive Rights. As of the close of business on August 31, 2009: (A) 110,992,118 shares of Company Common Stock granted under were issued and outstanding (including 2,178,059 shares of Restricted Stock and including in each case the associated Rights issued pursuant to the Rights Agreement dated as of June 3, 2002 (the "Rights Agreement") between the Company and EquiServe Trust Company’s 1995 Stock Option Plan, as amended rights agent (the “1995 Plan”"Rights Agent")); (iiiB) two hundred sixty thousand (260,000) no shares of Company Preferred Stock were issued or outstanding; (C) 4,260,822 shares of Company Common Stock were held by the Company as treasury shares; (D) there were outstanding Options to purchase 9,644,018 shares of Company Common Stock and 14,578,152 shares of Company Common Stock were reserved for issuance under the Stock Plans (including upon the exercise of outstanding stock options or other rights to receive the Common Stock granted under the Company’s Director Stock Option Plan (the “Director Plan” and together with the 1995 Plan, the “Company Stock Option Plans”Options); (ivE) two million there were 58,711 shares of Company Common Stock subject to outstanding Restricted Stock Units; (2,000,000F) there were 1,134,661 shares of Company Common Stock available for issuance under the ESPP; and (G) there was outstanding (x) $99,844,000 in aggregate principal amount of the Convertible Notes due 2010 convertible as of such date into 3,346,517 shares of Company Common Stock, and (y) $188,255,000 in aggregate principal amount of Convertible Notes due 2024 convertible as of such date into zero (0) shares of Company Common Stock, and not less than the aggregate number of shares of Company Common Stock were reserved for issuance upon specified in the conversion of the First December 2000 Note; preceding clause (vx) five hundred thousand (500,000) shares of Common Stock were reserved for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the such Convertible Note; (viii) five hundred fifty-nine thousand five hundred thirty-two (559,532) shares of Common Stock were held by the Company in the Company’s treasury; (ix) no shares of Preferred Stock were issued or outstanding; and (x) warrants to purchase two hundred seventy thousand five hundred sixty-two (270,562) shares of Common Stock were Notes. Such issued and outstanding (shares of Company Common Stock have been duly authorized and validly issued, are fully paid and nonassessable, and are free of preemptive or similar rights under any provision of the “Existing Warrants”)DGCL and the Company Charter Documents or any agreement to which the Company is a party or by which the Company is otherwise bound. (b) All outstanding shares of capital stock Section 3.2(b) of the Company are duly authorizedDisclosure Letter sets forth a complete and accurate list, validly issuedas of the close of business on August 31, fully paid and nonassessable and not 2009, of (i) the name of each holder of each Option, share of Restricted Stock or Restricted Stock Unit (each, a "Company Equity Award") that is outstanding under the Stock Plans as of such date, (ii) the number of Shares subject to preemptive each such outstanding Company Equity Award, (iii) in the case of Options, the exercise price of such Option, and (vi) the extent to which each such Company Equity Award is vested and exercisable as of such date. The Company has made available to Parent or similar rights. its designee complete and accurate copies of all (w) Stock Plans and the ESPP, (x) forms of agreements evidencing Options, (y) forms of agreements evidencing Shares of Restricted Stock, and (z) the forms of agreements evidencing Restricted Stock Units. (c) There are no outstanding bonds, debentures, notes or other Indebtedness of the Company having the right to vote (or, except for the Convertible Notes, convertible into or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote. (d) Except as set forth in this Section 2.4 and except for changes resulting from the issuance 3.2 or set forth in Section 3.2 of shares of Common Stock pursuant to the Company Stock Option Plans and the Existing WarrantsDisclosure Letter, or as expressly permitted by this Agreement or the Related Agreementsof August 31, (i) 2009, there are not no issued, reserved for issuance or outstanding (Ai) any shares of capital stock of or other voting securities of or ownership interests in the Company that were issued by the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or other voting securities of or ownership interests in the Company, (Biii) any securities warrants, calls, options or other rights, in each case, to acquire from the Company, or other obligation of the Company to issue, any capital stock or other voting securities or ownership interests in or any Company subsidiary securities convertible into or exchangeable or exercisable for shares of capital stock or other voting securities of or ownership interests in the Company or any (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, "phantom" stock or similar securities or rights, in each case, that were issued by the Company subsidiaryand that are derivative of, or (C) any warrantsprovide economic benefits based, callsdirectly or indirectly, options on the value or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Company subsidiary to issueprice of, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or voting securities of or other ownership interests in, the Company or any (the items in clauses (i) through (iv) being referred to collectively as the "Company subsidiary, (ii) there Securities"). There are no outstanding obligations of the Company or any Company subsidiary Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, and (iii) except as contemplated in this Agreement or the Related Agreements or as set forth on Schedule 2.4(b), of the Company is not presently under any obligation, has not agreed or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise file any registration statement under the Securities Act or the Exchange Act covering, any of its currently outstanding capital stock or other securities or any of its capital stock or other securities that may be subsequently issued. (c) Except as provided for in this Agreement or the Related Agreements and except as set forth on Schedule 2.4(c), neither Securities. Neither the Company nor any Company subsidiary Subsidiaries is a party to any voting agreement granting any preemptive or antidilutive rights with respect to the voting of any securities Company Securities. None of the Shares or Company Securities are owned by any Company Subsidiary. The Company has not, during the period from August 31, 2009 to the date of this Agreement, issued any Company Securities. (e) The Company has not, since December 31, 2008 and to the date of this Agreement, declared or paid any dividend, or declared or made any distribution on, or authorized or effected any split-up or any other recapitalization of, any of its capital stock, or directly or indirectly redeemed, purchased or otherwise acquired any of its outstanding capital stock, other than as a result of any cashless exercise of any Option or the acquisition of any Shares of Restricted Stock from employees of the Company or any Company subsidiary that are outstanding as Subsidiary whose employment has terminated with the Company or such Company Subsidiary. (f) The Compensation Committee of the date hereofCompany Board consists solely of independent directors (as defined in the Nasdaq Marketplace Rules) and has taken, at a duly convened meeting thereof, all such actions as may be required to cause to be exempted under Rule 14d-10(d)(2) under the Exchange Act, any and all employment compensation, severance and employee benefit agreements and arrangements that have been entered into or with respect to any securities of granted by the Company or any Company subsidiary Subsidiary with or to current or future directors, officers, or employees of the Company and the Company Subsidiaries, to ensure that may be subsequently issued upon all such agreements and arrangements satisfy the conversion non-exclusive safe harbor provisions of Rule 14d-10(d)(2) of the Exchange Act. All Options were granted at an exercise price at least equal to the fair market value (within the meaning of Section 409A of the Code) of a Share on the date of grant and no Option has been repriced, extended or exercise amended since the date of any instrument outstanding as its grant. (g) As of the date hereof. Except as of this Agreement, the only principal amount of outstanding Indebtedness for borrowed money of the Company and the Company Subsidiaries is set forth on Schedule 2.4(c) hereto, the execution, delivery and performance of this Agreement and the Related Agreements and the issuance in Section 3.2 of the Convertible Note and the Note Shares will not trigger any Company Disclosure Letter. Section 3.2 of the preemptive or antidilutive rights under any Company Disclosure Letter sets forth a true, correct and complete list of all material obligations of the agreements set forth Company or of its Subsidiaries in respect of interest rate, commodity (whether exchange traded or over-the-counter) or currency obligation swaps, options, xxxxxx (including cash-flow xxxxxx), or similar arrangements, in each case as in effect on such Schedule 2.4(c). Other than the Fielding Pharmaceutical Company, the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other persondate hereof. (d) Except for the Convertible Note to be issued hereunder, the First December 2000 Note, the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) hereto, the Company has no Indebtedness (as defined in the Amended and Restated Investor Rights Agreement).

Capitalization; Indebtedness. (a) The authorized capital stock of the Company consists of fifty million (50,000,000) shares of Common Stock and two million (2,000,000) shares of preferred stock, $.01 par value per share (the “"Preferred Stock”"). As of June 24, 2002: (i) twenty-four million six hundred sixty thousand nine hundred fifty-seven (24,660,957) shares of Common Stock were issued and outstanding; (ii) four million three hundred twenty-one thousand nine hundred sixteen (4,321,916) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to purchase or receive the Common Stock granted under the Company’s 's 1995 Stock Option Plan, as amended (the “"1995 Plan”"); (iii) two hundred sixty thousand (260,000) shares of Common Stock were reserved for issuance upon the exercise of outstanding stock options or other rights to receive the Common Stock granted under the Company’s 's Director Stock Option Plan (the “"Director Plan” " and together with the 1995 Plan, the “"Company Stock Option Plans”"); (iv) two million (2,000,000) shares of Common Stock were reserved for issuance upon the conversion of the First December 2000 Note; (v) five hundred thousand (500,000) shares of Common Stock were reserved for issuance upon the conversion of the Second December 2000 Note; (vi) three hundred sixty thousand four hundred ninety (360,490) shares of Common Stock were reserved for issuance upon the conversion of the September 2001 Note; (vii) one million seven hundred ninety-eight thousand five hundred sixty-one (1,798,561) shares of Common Stock were reserved for issuance upon conversion of the Convertible Note; (viii) five hundred fifty-nine thousand five hundred thirty-two (559,532) shares of Common Stock were held by the Company in the Company’s 's treasury; (ix) no shares of Preferred Stock were issued or outstanding; and (x) warrants to purchase two hundred seventy thousand five hundred sixty-two (270,562) shares of Common Stock were issued and outstanding (the “"Existing Warrants”"). (b) All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive or similar rights. Except as set forth in this Section 2.4 and except for changes resulting from the issuance of shares of Common Stock pursuant to the Company Stock Option Plans and the Existing Warrants, or as expressly permitted by this Agreement or the Related Agreements, (i) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock or other voting securities of the Company, (B) any securities of the Company or any Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of or ownership interests in the Company or any Company subsidiary, or (C) any warrants, calls, options or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Company subsidiary to issue, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or voting securities of or other ownership interests in, the Company or any Company subsidiary, (ii) there are no outstanding obligations of the Company or any Company subsidiary to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities, and (iii) except as contemplated in this Agreement or the Related Agreements or as set forth on Schedule 2.4(b), the Company is not presently under any obligation, has not agreed or committed, and has not granted rights, to register under the Securities Act of 1933, as amended (the “"Securities Act”"), or the Securities Exchange Act of 1934, as amended (the “"Exchange Act”"), or otherwise file any registration statement under the Securities Act or the Exchange Act covering, any of its currently outstanding capital stock or other securities or any of its capital stock or other securities that may be subsequently issued. (c) Except as provided for in this Agreement or the Related Agreements and except as set forth on Schedule 2.4(c), neither the Company nor any Company subsidiary is a party to any agreement granting any preemptive or antidilutive rights with respect to any securities of the Company or any Company subsidiary that are outstanding as of the date hereof, or with respect to any securities of the Company or any Company subsidiary that may be subsequently issued upon the conversion or exercise of any instrument outstanding as of the date hereof. Except as set forth on Schedule 2.4(c) hereto, the execution, delivery and performance of this Agreement and the Related Agreements and the issuance of the Convertible Note and the Note Shares will not trigger any of the preemptive or antidilutive rights under any of the agreements set forth on such Schedule 2.4(c). Other than the Fielding Pharmaceutical Company, the Company does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other person. (d) Except for the Convertible Note to be issued hereunder, the First December 2000 Note, the Second December 2000 Note and the September 2001 Note and except as set forth on Schedule 2.4(d) hereto, the Company has no Indebtedness (as defined in the Amended and Restated Investor Rights Agreement).