Common use of Capitalization of the Company and its Subsidiaries Clause in Contracts

Capitalization of the Company and its Subsidiaries. (a) The authorized capital stock of the Company consists of: (i) 278,000,000 shares of Company Common Stock, (A) 211,000,000 shares of which are designated as shares of Company Class A Common Stock and (B) 67,000,000 shares of which are designated as shares of Company Class B Common Stock and (ii) 10,000,000 shares of Company Preferred Stock, (A) 25,000 shares of which are designated as shares of Company Class A Preferred Stock, (B) 25,000 shares of which are designated as shares of Company Class B Preferred Stock and (C) 16,688 shares of which are designated as shares of Company Class C Preferred Stock. As of April 29, 2003, (i) 18,978,291 shares of Company Class A Common Stock were issued and outstanding, (ii) 45,142,508 shares of Company Class B Common Stock were issued and outstanding, (iii) no shares of Company Class A Preferred Stock were issued and outstanding, (iv) 25,000 shares of Company Class B Preferred Stock were issued and outstanding and (v) 16,688 shares of Company Class C Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been validly issued, and are fully paid, nonassessable and free of preemptive rights. As of April 29, 2003, a total of 4,170,854 shares of Company Class A Common Stock were reserved for issuance pursuant to outstanding Stock Options, and no other shares of Company Class A Common Stock are subject to issuance pursuant to Stock Options or awards of Restricted Shares. Immediately prior to the Effective Time, no shares of Company Class A Preferred Stock or Company Class C Preferred Stock will be outstanding and 25,000 shares of Company Class B Preferred Stock will be outstanding. Set forth in Section 4.2(a) of the Company Disclosure Schedule is a complete and accurate list of the Company Stock Plans and the number of shares of Company Common Stock reserved for issuance pursuant to Stock Options outstanding as of April 29, 2003 under each such Company Stock Plan, and no other shares of Company Common Stock are subject to issuance pursuant to such Company Stock Plans. Since April 29, 2003, no shares of capital stock of the Company have been issued other than pursuant to Stock Options set forth on the Award List, and since April 29, 2003, no Stock Options or Restricted Shares have been granted. Except as set forth above, and as contemplated by Section 2.1, there are no outstanding (i) shares of capital stock (including Restricted Shares) or other voting securities of the Company, (ii) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of the Company, (iii) options or other rights to acquire from the Company or any of its Subsidiaries, or obligations of the Company or any of its Subsidiaries to issue or sell, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company, or (iv) equity equivalents, interests in the ownership or earnings of the Company or other similar rights (collectively, "Company Securities"). Other than as contemplated by this Agreement, there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities. (b) All of the outstanding capital stock of, or other ownership interests in, each Subsidiary of the Company, is owned by the Company, directly or indirectly, free and clear of any Lien or any other limitation or restriction (including any restriction on the right to vote or sell the same, except as may be provided as a matter of law). All such shares have been validly issued, fully paid and nonassessable, and have been issued free of preemptive rights. There are no outstanding securities of the Company or any of its Subsidiaries convertible into or exchangeable for, no options or other rights to acquire from the Company or any of its Subsidiaries, and no other contract, understanding, arrangement or obligation (whether or not contingent) providing for the issuance or sale, directly or indirectly, of, any capital stock or other ownership interests in, or any other securities of, any Subsidiary of the Company. There are no outstanding equity equivalents, interests in the ownership or earnings or similar rights of any Subsidiary of the Company. There are no contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding shares of capital stock or other ownership interests in any Subsidiary of the Company. (c) The shares of Company Class A Common Stock constitute the only class of equity securities of the Company or any of its Subsidiaries registered or required to be registered under the Exchange Act. No Subsidiary of the Company owns any capital stock in the Company. (d) Other than the Voting Agreement, there are no voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries, or to the Company's Knowledge, any of the Company's stockholders, is a party with respect to the voting of the capital stock of the Company or any of its Subsidiaries. (e) To the Company's Knowledge, other than with respect to the Indebtedness set forth in Section 4.2(e) of the Company Disclosure Schedule, there is no Indebtedness of the Company or any of its Subsidiaries existing that contains any material restriction upon, or imposes any material penalty with respect to (i) the prepayment of such Indebtedness, (ii) the incurrence of Indebtedness by the Company or its Subsidiaries, respectively, or (iii) the ability of the Company or its Subsidiaries to grant any of the Liens on its properties or assets contemplated by the Financing Commitment Letters.

Capitalization of the Company and its Subsidiaries. (a) The authorized capital stock of the Company consists of: (i) 278,000,000 of 1,500,000,000 shares of Company Common Stock, (A) 211,000,000 shares of which are designated as shares of Company Class A Common Stock and (B) 67,000,000 50,000,000 shares of which are designated as shares preferred stock, par value $0.001, of the Company Class B Common Stock and (ii) 10,000,000 shares of Company the “Preferred Stock, (A) 25,000 shares of which are designated as shares of Company Class A Preferred Stock, (B) 25,000 shares of which are designated as shares of Company Class B Preferred Stock and (C) 16,688 shares of which are designated as shares of Company Class C Preferred Stock”). As of April 29, 2003the date hereof, (ia) 18,978,291 7,000,000 shares of Company Class Series A Preferred Stock are issued and outstanding, 7,254,997 shares of Series E Preferred Stock are issued and outstanding and have no voting rights, (b) 24,027,924 shares of Common Stock were are issued and outstanding, (iic) 45,142,508 12,468,025 shares of Company Class B Common Stock were issued and outstanding, (iii) no shares of Company Class A Preferred Stock were issued and outstanding, (iv) 25,000 shares of Company Class B Preferred Stock were issued and outstanding and (v) 16,688 shares of Company Class C Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been validly issued, and are fully paid, nonassessable and free of preemptive rights. As of April 29, 2003, a total of 4,170,854 shares of Company Class A Common Stock were reserved for issuance pursuant to outstanding Stock Options, and no other shares of Company Class A Common Stock are reserved for or subject to issuance pursuant issuance. Schedule 3.6 sets forth a true and correct list of all outstanding rights, options or warrants to Stock Options or awards of Restricted Shares. Immediately prior to the Effective Time, no purchase shares of Company Class A Preferred Stock any class or Company Class C Preferred Stock will be outstanding and 25,000 shares series of Company Class B Preferred Stock will be outstanding. Set forth in Section 4.2(a) of the Company Disclosure Schedule is a complete and accurate list of the Company Stock Plans and the number of shares of Company Common Stock reserved for issuance pursuant to Stock Options outstanding as of April 29, 2003 under each such Company Stock Plan, and no other shares of Company Common Stock are subject to issuance pursuant to such Company Stock Plans. Since April 29, 2003, no shares of capital stock of the Company have been issued (collectively, the “Company Options”) and a true and correct list of each of the Company’s stock option, incentive, purchase or other than plans pursuant to Stock Options set forth on which options or warrants to purchase stock of the Award ListCompany may be issued (collectively, and since April 29, 2003, no Stock Options or Restricted Shares have been grantedthe “Existing Plans”). Except as set forth above, out on Schedule 3.6 and as contemplated by Section 2.1, there are no outstanding for (i) shares of capital stock (including Restricted Shares) or other voting securities Common Stock issuable pursuant to the exercise of the Companyoutstanding Company Options, (ii) shares of Common Stock issuable upon conversion of the Series A Preferred Stock, or the Series E Preferred Stock, (iii) securities issuable upon conversion of the Convertible Promissory Note, dated May 10, 2012, (the “MxXxxxx Note”), there are no shares of Common Stock or any other equity security of the Company issuable upon conversion or exchange of any security of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of the Companynor any rights, (iii) options or other rights to acquire from the Company or any of its Subsidiaries, or obligations of the Company or any of its Subsidiaries to issue or sell, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company, or (iv) equity equivalents, interests in the ownership or earnings of the Company or other similar rights (collectively, "Company Securities"). Other than as contemplated by this Agreement, there are no warrants outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities. (b) All of the outstanding capital stock of, or other ownership interests in, each Subsidiary of the Company, is owned by the Company, directly or indirectly, free and clear of any Lien or any other limitation or restriction (including any restriction on the right to vote or sell the same, except as may be provided as a matter of law). All such shares have been validly issued, fully paid and nonassessable, and have been issued free of preemptive rights. There are no outstanding securities of the Company or any of its Subsidiaries convertible into or exchangeable for, no options or other rights to acquire from the Company or any of its Subsidiaries, and no other contract, understanding, arrangement or obligation (whether or not contingent) providing for the issuance or sale, directly or indirectly, of, any capital stock or other ownership interests in, or any other securities of, any Subsidiary of the Company. There are no outstanding equity equivalents, interests in the ownership or earnings or similar rights of any Subsidiary of the Company. There are no contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding shares of capital stock or other ownership interests in any Subsidiary of the Company. (c) The shares of Company Class A Common Stock constitute the only class of equity securities of the Company or any of its Subsidiaries registered or required to be registered under the Exchange Act. No Subsidiary of the Company owns any capital stock in the Company. (d) Other than the Voting Agreement, there are no voting trusts or other agreements or understandings to which the Company or any acquire shares of its Subsidiaries, or to the Company's Knowledge, any of the Company's stockholders, is a party with respect to the voting of the capital stock of the Company or any of its Subsidiaries. (e) To . Neither the Company's KnowledgeCompany nor any of its Subsidiaries is contractually obligated to issue any shares of stock or to purchase, redeem or otherwise acquire any of its outstanding shares of stock. Neither the Company nor any of its Subsidiaries has created any “phantom stock,” stock appreciation rights or other than similar rights the value of which is related to or based upon the price or value of the Common Stock. Neither the Company nor any of its Subsidiaries has outstanding debt or debt instruments providing for voting rights with respect to the Indebtedness set forth in Section 4.2(e) of Company or such Subsidiary to the Company Disclosure Scheduleholders thereof. Other than pursuant to the Investor Rights Agreement, there is no Indebtedness stockholder of the Company or any of its Subsidiaries existing or other Person is entitled to any preemptive or similar rights to subscribe for shares of stock of the Company or any of its Subsidiaries. All of the issued and outstanding shares of Common Stock and Preferred Stock are duly authorized, validly issued, fully paid, and nonassessable. Other than pursuant to the Employment Agreements between the Company and MxXxxxx and Song, respectively, neither the Company nor any of its Subsidiaries has granted to any Person the right to demand or request that contains the Company or such Subsidiary effect a registration under the Securities Act of any material restriction upon, securities held by such Person or imposes to include any material penalty with respect to (i) the prepayment securities of such Indebtedness, (ii) the incurrence of Indebtedness Person in any such registration by the Company or its Subsidiaries, respectively, or (iii) the ability of the Company or its Subsidiaries to grant any of the Liens on its properties or assets contemplated by the Financing Commitment Letterssuch Subsidiary.

Capitalization of the Company and its Subsidiaries. (a) The authorized capital stock of the Company consists of: (i) 278,000,000 of 125,000,000 shares of Company capital stock, including 120,000,000 shares of Common Stock, (A) 211,000,000 of which 72,960,367 shares of which are designated as shares of Company Class A Common Stock and (B) 67,000,000 shares of which are designated as shares of Company Class B Common Stock and (ii) 10,000,000 shares of Company Preferred Stock, (A) 25,000 shares of which are designated as shares of Company Class A Preferred Stock, (B) 25,000 shares of which are designated as shares of Company Class B Preferred Stock and (C) 16,688 shares of which are designated as shares of Company Class C Preferred Stock. As of April 29, 2003, (i) 18,978,291 shares of Company Class A Common Stock were issued and outstandingoutstanding as of the close of business on October 27, (ii) 45,142,508 2006, 5,000,000 shares of Company Class B Common Preferred Stock, par value $0.01 per share (“Preferred Stock”), none of which Preferred Stock were issued and outstanding, is outstanding (iii) no including 200,000 shares of Series AA Junior Preferred Stock, par value $0.01 per share, reserved for issuance in connection with the exercise of preferred stock purchase rights (the “Company Class A Preferred Rights”) issued pursuant to that certain Rights Agreement, dated as of November 22, 2000, between the Company and American Stock were issued and outstandingTransfer & Trust Company, as Rights Agent, as amended by Amendment No. 1 thereto, dated February 11, 2003 (iv) 25,000 shares of Company Class B Preferred Stock were issued and outstanding and (v) 16,688 shares of Company Class C Preferred Stock were issued and outstandingthe “Rights Agreement”)). All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued and are fully paid and nonassessable. The Company has no shares of Common Stock or Preferred Stock reserved for or otherwise subject to issuance, except that as of the close of business on October 27, 2006, there were 6,656,963 shares of the Common Stock subject to issuance pursuant to options outstanding under the plans of the Company identified in Section 5.2 of the Company Disclosure Schedule or the Company Stock Plans and 10,382,372 shares of the Common Stock subject to issuance pursuant to the Warrants. The name of the holder of each Company Stock Option, the exercise price of such Company Stock Option and the aggregate number of shares of Common Stock subject to such Company Stock Option are set forth on Section 5.2(a) of the Company Disclosure Schedule. 449,344 shares of the Common Stock are reserved for issuance pursuant to the ESPP, of which 25,000 Shares will be issued at the conclusion of the Offering Period ending October 31, 2006. Each of the outstanding shares of capital stock or other ownership interests of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by the Company or a direct or indirect wholly owned Subsidiary of the Company, in each case free and clear of any Lien. There are no registration rights or preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind which obligate the Company or any of its Subsidiaries to register, 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 from the Company or any of its Subsidiaries, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are issued or outstanding. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter. (b) As of the date of this Agreement, there are outstanding and unexercised Warrants to purchase 10,382,372 shares of Common Stock. Section 5.2(b) of the Company Disclosure Schedule identifies for each Warrant, (i) the name of the holder of the Warrant as of the date of this Agreement; (ii) the date on which such Warrant was granted; (iii) the exercise price per share of the Warrant; (iv) the number of shares covered by the Warrant; (v) the number of shares of Common Stock as to which such Warrant had vested at such date; (vi) the applicable vesting schedule for such Warrant and whether the exercisability or vesting of the Warrant will be accelerated in any way by the Merger or the transactions contemplated hereby; (vii) whether such Warrant was issued in connection with the performance of services and (viii) the date on which the Warrant expires. All of the shares of Common Stock subject to the issuance pursuant to the Warrants, upon issuance prior to or at the Effective Time on terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. As of April 29, 2003, a total of 4,170,854 shares of The Company Class A Common Stock were reserved for issuance pursuant has made available to outstanding Stock Options, and no other shares of Company Class A Common Stock are subject to issuance pursuant to Stock Options or awards of Restricted Shares. Immediately prior to the Effective Time, no shares of Company Class A Preferred Stock or Company Class C Preferred Stock will be outstanding and 25,000 shares of Company Class B Preferred Stock will be outstanding. Set forth in Section 4.2(a) of the Company Disclosure Schedule is a Parent complete and accurate list correct copies of the Company Stock Plans and the number of shares of Company Common Stock reserved for issuance pursuant to Stock Options outstanding as of April 29, 2003 under each such Company Stock Plan, and no other shares of Company Common Stock are subject to issuance pursuant to such Company Stock Plans. Since April 29, 2003, no shares of capital stock of the Company have been issued other than pursuant to Stock Options set forth on the Award List, and since April 29, 2003, no Stock Options or Restricted Shares have been granted. Except as set forth above, and as contemplated by Section 2.1, there are no outstanding (i) shares of capital stock (including Restricted Shares) or other voting securities of the Company, (ii) securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of the Company, (iii) options or other rights to acquire from the Company or any of its Subsidiaries, or obligations of the Company or any of its Subsidiaries to issue or sell, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company, or (iv) equity equivalents, interests in the ownership or earnings of the Company or other similar rights (collectively, "Company Securities"). Other than as contemplated by this Agreement, there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities. (b) All of the outstanding capital stock of, or other ownership interests in, each Subsidiary of the Company, is owned by the Company, directly or indirectly, free and clear of any Lien or any other limitation or restriction (including any restriction on the right to vote or sell the same, except as may be provided as a matter of law). All such shares have been validly issued, fully paid and nonassessable, and have been issued free of preemptive rights. There are no outstanding securities of the Company or any of its Subsidiaries convertible into or exchangeable for, no options or other rights to acquire from the Company or any of its Subsidiaries, and no other contract, understanding, arrangement or obligation (whether or not contingent) providing for the issuance or sale, directly or indirectly, of, any capital stock or other ownership interests in, or any other securities of, any Subsidiary of the Company. There are no outstanding equity equivalents, interests in the ownership or earnings or similar rights of any Subsidiary of the Company. There are no contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding shares of capital stock or other ownership interests in any Subsidiary of the Companyall Warrants. (c) The shares of Company Class A Common Stock constitute the only class of equity securities of the Company or any of its Subsidiaries registered or required to be registered under the Exchange Act. No Subsidiary of the Company owns any capital stock in the Company. (d) Other than the Voting Agreement, there There are no voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries, or to the Company's Knowledge, any of the Company's stockholders, Subsidiaries is a party with respect to the voting of any of the capital stock of the Company or any of its the Subsidiaries. (e) To the Company's Knowledge, other . Other than with respect to the Indebtedness as set forth in on Section 4.2(e) 5.2 of the Company Disclosure Schedule, there is no Indebtedness none of the Company or any of its Subsidiaries existing that contains is obligated under any material restriction upon, registration rights or imposes similar agreements to register any material penalty with respect to (i) the prepayment shares of such Indebtedness, (ii) the incurrence of Indebtedness by the Company or its Subsidiaries, respectively, or (iii) the ability capital stock of the Company or any of its Subsidiaries on behalf of any Person. (d) Since October 12, 2004, no milestone event as described in the Sale Agreement among the Company, Skinetics Biosciences, Inc. and the sellers described therein has occurred and no fact, event or circumstance has occurred that would reasonably be expected to grant cause such a milestone event to occur. (e) Prior to the date hereof, the Company has taken all actions with respect to the ESPP as are necessary to provide that the ESPP shall terminate prior to the Effective Time, that no Person will have any right to purchase Common Stock under the ESPP after the Effective Time and that no more than 20,000 shares of Common Stock may be issued in the aggregate with respect to any Offering Period (as defined in the ESPP) that begins after the date hereof (but prior to the Effective Time). The Company has provided to Parent written evidence of each of the Liens on its properties or assets contemplated by foregoing. Any Offering Period (as defined in the Financing Commitment LettersESPP) in effect immediately prior to the Effective Time will terminate at the Effective Time.