Common use of Capitalization; Ownership Clause in Contracts

Capitalization; Ownership. (a) The authorized capital ------------------------- stock of the Company consists of (x) 1,066,667 shares of Preferred Stock, of which 1,033,333 shares are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Company's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notes. (b) Except for the Company Options, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company is a party or obligating the Company to issue or sell any shares of capital stock of, or other equity interests in, the Company. Except for the Company Options, no other awards have been made pursuant to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares. (d) The stock register of the Company accurately records: (i) the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock of the Company consists of (xi) 1,066,667 37,000,000 shares of Preferred Stock, Company Common Stock of which 1,033,333 shares 25,000,000 are issued class C-l Common Stock and outstanding and each share of which is convertible into one share of 12,000,000 are Class C-2 Common Stock and (yii) 2,162,667 7,000,000 shares of Common preferred stock, par value $0.0001 per share of the Company the “Company Preferred Stock”. As of the date of this Agreement, of which (i) 400,033 8,937,235 shares are of Class C-l Common Stock and 956,077 shares of Class C-2 Common Stock were issued and outstanding, all of which were validly issued and are fully paid, nonassessable and not subject to, or issued in violation of, any preemptive rights and (ii) 672,572 no shares are reserved for issuance pursuant to of Company Preferred Stock were issued or outstanding Company Options issued pursuant to the Company's 1995 Stock Plan (the "Company Stock Plan"), and (iii) ------------------ 44,228 822,500 shares of Common Stock are reserved for issuance upon held in treasury by the granting Company. A true, complete and accurate list of additional options pursuant to the holders of the capital stock of the Company Stock Plan and the number and classes of shares so held is set forth in Section 3.3(a) of the Company Disclosure Letter and except as listed in Section 3.3(a) of the Company Disclosure Letter, the Company has no other authorized, issued or outstanding shares of capital stock. Except as listed in Section 3.3(a) and (ivd) no shares are reserved for issuance pursuant to the Convertible Notes. (b) Except for of the Company OptionsDisclosure Letter, there are no existing options, warrants or other rights, agreementssubscriptions, arrangements warrants, unsatisfied preemptive rights, calls or commitments of any character relating to (c) the authorized and unissued capital stock or treasury stock of the Company or (d) any securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire from the Company any shares of capital stock of the Company. Except as set forth in Section 3.3(a) of the Company Disclosure Letter, there are no outstanding agreements to which the Company is a party respecting the voting, transferring or obligating holding of shares of the Company’s capital stock. (b) None of the Company or its Subsidiaries owns any equity interest in any Person except that the Persons listed in Section 3.4(b) of the Company Disclosure Letter are the wholly-owned, direct or indirect Subsidiaries of the Company. The authorized and issued shares of capital stock, or other comparable ownership interests, of each of the Subsidiaries is set forth in Section 3.3(b) of the Company Disclosure Letter. Except as listed in Section 3.3(b) of the Company Disclosure Letter, all issued and outstanding capital stock, or other comparable ownership interests, of each of the Company’s Subsidiaries is owned by the Company, free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, preemptive rights, limitations on voting rights, charges and other encumbrances of any nature whatsoever (collectively, “Liens”). Except as listed in Section 3.3(b) of the Company Disclosure Letter, there are no existing options, rights, subscriptions, warrants, unsatisfied preemptive rights, calls or commitments of any character relating to issue (i) the authorized and unissued capital stock or sell treasury stock (or other comparable ownership interests) of the Subsidiaries of the Company or (ii) any securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire from the Subsidiaries of the Company any shares of capital stock of, (or other equity interests in, the Companycomparable ownership interests) of such Subsidiary. Except for as set forth in Section 3.3(b) of the Company OptionsDisclosure Letter, no other awards have been made pursuant to the Company Stock Plan. There there are no outstanding contractual obligations of the Company agreements to repurchase, redeem or otherwise acquire any of the capital stock of which the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company its Subsidiaries is not a party to any agreement granting registration rights to any person with respect to any securities respecting the voting, transferring or holding of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as shares of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company WarrantsSubsidiary’s capital stock or other comparable ownership interests. (c) The Shares constitute all All of the issued outstanding shares of Company Common Stock are owned beneficially and outstanding capital stock of record by the Company Holders, and in the respective amounts, as set forth in Section 3.3(a) of the Company and Disclosure Letter, and, except as set forth in Section 3.3(c) of the Company Disclosure Letter are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the SharesLiens. (d) The stock register Section 3.3(d) of the Company accurately records: Disclosure Letter sets forth, as of the date of this Agreement, (iw) the name and address of each person owning Shares and persons to whom Company Stock Options have been granted, (iix) the certificate number date of each certificate evidencing Shares issued by grant for the Company, the number of shares evidenced company Stock Options held by each such certificateperson, (y) the exercise price for the Company Stock Options held by each such person and (z) whether such Company Stock Options (or Company Common Stock issued upon exercise of any Company Stock Options) are subject to vesting and, if subject to vesting, the date dates on which each of issuance thereof andthose Company Stock Options (or Company Common Stock issued upon exercise of any Company Stock Options) vest. Except as set forth in Section 2.2(a), in none of the case Company Stock Options (or Company Common Stock issued upon exercise of cancellation, any Common Stock Options) that are subject to vesting will vest as a result of the date consummation of cancellationthe Merger and the transactions contemplated by this Agreement.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock As of the Company consists of (x) 1,066,667 shares of Preferred Stock, of which 1,033,333 shares are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which Closing: (i) 400,033 788,457,390 ordinary shares in Ibis China Investment have been issued, all of which are validly issued and outstanding, fully paid and were not issued in violation of any preemptive rights; and (ii) 672,572 440,917,685 ordinary shares in TAHM have been issued, all of which are reserved for issuance pursuant to outstanding Company Options validly issued pursuant to the Company's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting and fully paid and were not issued in violation of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notesany preemptive rights. (b) Except as provided for in the Company OptionsTransaction Documents, there are no options, warrants warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to which any shares or securities of, or any other interest in, any of the Company is a party Companies or obligating either the Seller or the relevant Company to issue or sell any shares of capital stock or securities of, or any other equity interests interest in, the any Company. Except as provided for in the Company OptionsTransaction Documents (including, no other awards have been made without limitation pursuant to the Company Stock Plan. There Pre-Closing Restructuring), there are no outstanding contractual obligations of the any Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company ordinary shares or to provide funds to to, or make any material investment (in the form of a loan, capital contribution or otherwise) in in, any other entityPerson. The Company is not a party to any agreement granting registration rights to any person with respect to any securities Upon consummation of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10Pre-Closing Restructuring, 1996 among certain all of the Stockholders shares in the issued share capital of each Company shall be owned of record and beneficially by the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof Seller free and 20,833 Common Shares have been issued in satisfaction and cancellation clear of all such Company WarrantsEncumbrances. (c) The Shares constitute all All the issued and outstanding capital stock shares of or equity interest in each Transferred Subsidiary are validly issued, fully paid, non-assessable and, free of preemptive rights and as of the Company date of amendment and restatement of this Agreement, are owned of record and beneficially solely by the Stockholders Companies, as applicable, whether directly or indirectly, free and clear of all encumbrancesEncumbrances. All The registered capital of each Transferred Subsidiary that is incorporated in the Shares are PRC has been fully paid and nonassessablehas not been withdrawn at any time, in whole or in part. There are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the shares or securities of, or other interest in, any Transferred Subsidiary or obligating the Seller, any Company or any Transferred Subsidiary to issue or sell any shares or securities of, or any other interest in, any Transferred Subsidiary. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any shares of or equity interest in any Transferred Subsidiary. Each Transferred Subsidiary that is incorporated in the SharesPRC has made sufficient annual allocation to its statutory reserve fund in accordance with applicable Laws and has adopted proper accounting treatment with respect to such statutory reserve fund. (d) The stock share or member register (or other similar governmental registration document) of the Company each of Ibis China Investment, TAHM and each Transferred Subsidiary accurately records: (i) the name and address of each person Person owning Shares shares of or equity in such company, and (ii) the certificate number of each certificate evidencing Shares shares or equity interest issued by the Companysuch company, the number of shares or the amount of equity interest evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation. Each of Ibis China Investment, TAHM and the Transferred Subsidiaries are directly or indirectly wholly owned by the Seller. The Seller has provided Purchaser Parent with a copy of the issued incorporation certificates issued by the PRC Ministry of Commerce in respect of each Transferred Subsidiary. (e) Immediately prior to the Closing, (i) the Seller shall own ordinary shares in the capital of each Company, representing 100% of the issued outstanding share capital of each Company; and (ii) (A) Ibis China Investment shall, directly or indirectly, own 100% of the issued outstanding share capital of each ICI Transferred Subsidiary; (B) TAHM shall directly own 100% of the issued outstanding share capital of TAHM PRC; (C) NewCo1 shall, directly or indirectly, own 100% of the issued outstanding share capital of each NewCo1 Transferred Subsidiary; and (D) NewCo2 shall own 100% of the registered capital of AAPC Shanghai; all of which shares and equity interests referred to in the foregoing (i) and (ii) shall be (x) validly issued and fully paid and not have been issued or transferred in violation of any preemptive rights, and (y) owner of record and beneficially by the Seller and its Subsidiaries, whether directly or indirectly, free and clear of all Encumbrances. (f) Upon the consummation of the transactions contemplated by this Agreement and the NewCo2 Subscription Agreement, immediately following the Closing, (i) the Purchaser will: (x) legally and beneficially own the Ibis China Investment Shares and the NewCo1 Shares representing 100% of the issued and outstanding share capital of Ibis China Investment and 100% of the issued outstanding share capital of NewCo1, and (y) legally and beneficially own 29.2853% of all issued and outstanding ordinary shares of NewCo2, in each case, on an as-converted and fully diluted basis, and free and clear of all Encumbrances; and (ii) the Target Shares will be fully paid and there will be no unpaid capital contributions outstanding with respect to any Company. 34 (g) As of the Closing Date, other than the Transaction Documents, there are no voting trusts, shareholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the shares in the issued share capital of the Companies.

Capitalization; Ownership. (a) 3.4.1 The authorized capital ------------------------- stock authorized, issued and outstanding Shares and other equity securities of the Company consists and TopCo, as well as the beneficial owners thereof, are fully and accurately set forth on Section 3.4.1(a) of (x) 1,066,667 shares of Preferred Stockthe Disclosure Schedule, of which 1,033,333 shares are the Transferred Interests. The authorized, issued and outstanding capital stock and other equity securities of each share Acquired Company (other than the Company and TopCo), as well as the legal and beneficial owner(s) thereof, are fully and accurately set forth in Section 3.4.1(b) of which is convertible into one share the Disclosure Schedule. All of Common Stock and (y) 2,162,667 the outstanding Shares, Company Interests, other shares of Common Stockcapital stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Company's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notes. (b) Except for the Company Options, there are no options, warrants or other equity interests of the Acquired Companies have been duly authorized and are validly issued and outstanding and fully paid, and none were offered or issued in violation of any applicable Law. The Transferred Interests, represent 100% of the issued and outstanding equity of the Company and TopCo. Each Acquired Company, directly or indirectly, is the legal and beneficial owner of all of the outstanding equity securities of its Subsidiaries. Sellers that are residents or citizens of the United States own less than 5% of the outstanding equity securities of the Company and TopCo (including the Shares, the Company Interests and any virtual shares or options). 3.4.2 The Sellers are the legal and beneficial owner of all of the Transferred Interests, in each case, free and clear of all Liens, and, immediately after the Closing, Buyer will own the Transferred Interests free and clear of all Liens (other than Liens imposed on the Transferred Interests by Buyer or under applicable securities Laws). Seller 2, Seller 3, Seller 4 and the Company have the sole right to vote or direct the voting of all of the Shares at each of their respective discretions, on any matter submitted to a vote of the equity holders of TopCo having the right to vote thereon. Seller 1 has the sole right to vote or direct the voting of the Company Interests at its discretion, on any matter submitted to a vote of the equity holders of the Company having the right to vote thereon. Other than as pursuant to the organizational documents of the Company provided to Buyer, there are no voting trusts, voting agreements, proxies, shareholder agreements or other arrangements relating to the Transferred Interests. 3.4.3 No Acquired Company has granted any preemptive rights, agreementsrights of first refusal or other similar rights with respect to any of such capital stock or other equity securities of any Acquired Company and there are no offers, arrangements options, warrants, rights, agreements or commitments of any character kind granted or outstanding by any Acquired Company relating to which the issuance, conversion, registration, voting, sale or transfer of capital stock or any other equity securities of any Acquired Company or obligating any Acquired Company to purchase or redeem any of such capital stock or other equity securities. Other than to its shareholders, neither the Company is a party or obligating the Company to issue or sell nor TopCo has ever declared any unpaid dividends, and there are no accrued but unpaid dividends, on any shares of capital stock of, or other equity interests in, the Company. Except for the Company Options, no other awards have been made pursuant to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company or TopCo. 3.4.4 There are no obligations, contingent or otherwise, of any Acquired Company to provide funds to to, or make any material investment in (whether in the form of a loan, capital contribution or otherwise) in ), or provide any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect guarantee with respect to the voting obligations of, any third party. No Acquired Company is a party to, or transfer a participant in, any partnership, joint venture, or similar arrangement. Section 3.1 of the Disclosure Schedule contains a true and complete list of the articles of association, by-laws or other constitutional documents (as in effect on the Signing Date) of the Acquired Companies. True and complete copies of such documents have been disclosed to Buyer prior to the Signing Date. 3.4.5 Except as set forth on Section 3.4.5 of the Disclosure Schedules, there is no outstanding Indebtedness of any of the SharesAcquired Company. (d) The stock register of the Company accurately records: (i) the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock Sellers own (beneficially and of record) and have the sole unrestricted right, subject to the terms of the Operating Agreement, to sell the Subject Membership Interests, free and clear of all Liens. Upon transfer to Buyer by the Sellers of the Subject Membership Interests, Buyer will have good and marketable title to the Subject Membership Interests, free and clear of all Liens. Except as provided in the Operating Agreement, no Seller is a party to any, and, to the Sellers' Knowledge, there are no, agreements, written or oral, relating to the acquisition, disposition or voting of the securities of the Company. Effective as of the Closing Date, by virtue of the transfer of the Subject Membership Interests to Buyer, without taking into consideration the transactions contemplated by the Other Member's Purchase Agreement, Buyer shall become a Member of the Company consists with 76.5 Points and a Sharing Ratio of (x) 1,066,667 shares 76.5% and Buyer shall have all of Preferred Stockthe preferences and rights of a Member set forth in the Operating Agreement, of which 1,033,333 shares are issued including without limitation, Economic Rights and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to Voting Rights commensurate with a 76.5% ownership interest in the Company's 1995 Stock Plan (, the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant right to receive information about the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to any other rights of a Member under the Convertible NotesAct. (b) Except for As of the date hereof, the authorized and outstanding Membership Interests of the Company Optionsare held beneficially and of record by the Persons set forth on SCHEDULE 2.3A hereof, and the Points of each Member are as set forth on SCHEDULE 2.3B hereof. Except as contemplated under this Agreement, there are no outstanding securities of the Company or any subscriptions, options, warrants or other rightswarrants, agreements, arrangements or commitments of any character kind for or relating to which the Company is a party issuance or obligating the Company to issue or sell any shares of capital stock sale of, or other equity interests inoutstanding securities convertible into or exchangeable for, the Company. Except for the Company Options, no other awards have been made pursuant to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities of the Company. All warrants issued pursuant The Company has no obligation to purchase, redeem, or otherwise acquire any of its equity interests or any interests therein, except as provided in the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company WarrantsGoverning Documents. (c) All Membership Interests have been offered, issued, sold and delivered in material compliance with all applicable federal and state securities laws and not in violation of any preemptive rights. The Shares constitute all the issued relative rights, preferences, provisions, qualifications, limitations and outstanding capital stock restrictions in respect of the Company Membership Interests are as set forth in the Governing Documents and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the SharesAct. (d) The stock register Except as set forth in the Operating Agreement, there are no (a) preemptive rights, rights of first refusal, put or call rights or obligations or anti-dilution rights with respect to the issuance, sale or redemption of the Company accurately records: (i) the name and address of each person owning Shares Company's securities, including Membership Interests, and (iib) no documents, instruments or agreements, written or oral, relating to the certificate number acquisition, disposition or voting of each certificate evidencing Shares issued by the Company's securities, including Membership Interests, or restrictions on the number transfer of shares evidenced by each such certificatethe Company's securities, the date of issuance thereof and, in the case of cancellation, the date of cancellationincluding Membership Interests.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock All of the Company consists Company’s authorized and outstanding equity interests are owned by Seller, and the Interests constitute all of (x) 1,066,667 shares of Preferred Stock, of which 1,033,333 shares are the issued and outstanding and each share membership interests in the Company. All of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are the Company’s issued and outstandingoutstanding membership interests were duly authorized and validly issued, and are fully paid and non-assessable (ii) 672,572 shares are reserved for issuance pursuant to outstanding except as such non-assessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Options issued pursuant to Act). None of the Company's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting ’s issued and outstanding membership interests were issued in violation of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notes. (b) any contractual preemptive rights. Except for the Company Optionsrights created pursuant to this Agreement, there are no outstanding (A) options, warrants warrants, convertible securities or other rights, agreements, arrangements or commitments of any character kind relating to which the right to subscribe for or purchase membership interests in the Company is a party or obligating the Company to issue or sell any shares of capital membership interests or other interests in the Company or (B) stock ofappreciation, phantom stock, or other equity interests in, profit participation rights with respect to the Company. Except for the Company Options, no other awards have been made pursuant to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of membership interests in the Company or to provide funds to to, or make any material investment in, any other Person. (b) Except for its ownership of equity interests in its Subsidiaries and the form of a loanCoal Subsidiaries, capital contribution neither the Company nor any Subsidiary owns any equity interests or otherwise) other securities in any other entityPerson. The A true and complete list, as of the date hereof, of each Subsidiary, its jurisdiction of formation, its authorized, issued and outstanding equity interests, and the equityholders thereof is set forth in Section 4.04(b) of the Disclosure Schedules. Except as set forth in Section 4.04(b) of the Disclosure Schedules, all of the issued and outstanding equity interests in each Subsidiary are owned, beneficially and of record, directly by the Company is not a party or another Subsidiary wholly owned by the Company, free and clear of any and all (i) Liens (other than Liens to be discharged at Closing and transfer restrictions under Applicable Law), (ii) transfer restrictions (other than any agreement granting registration such transfer restrictions under Applicable Law or its Organizational Documents) and (iii) voting agreements, voting restrictions and other agreements or arrangements with respect to the ownership, voting, control or transfer of such equity interests. All such issued and outstanding equity interests were duly authorized and validly issued and are fully paid and non-assessable (except as such non-assessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act or Sections 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act). None of such issued and outstanding equity interests were issued in violation of any contractual preemptive rights. There are no outstanding (A) options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any kind relating to the right to subscribe for or purchase any equity interests in any Subsidiary or obligating any Subsidiary to issue or sell any equity interests in such Subsidiary or (B) stock appreciation, phantom stock, or profit participation rights to any person with respect to any securities of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessableSubsidiary. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer outstanding contractual obligations of any of the SharesSubsidiary to repurchase, redeem or otherwise acquire any equity interests in such Subsidiary or to provide funds to, or make any investment in, any other Person. (d) The stock register of the Company accurately records: (i) the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock Xxxxxx Gas Company Interests, the Xxxxxx Investment Company Interests and the ASC Interests constitute all of the Company consists outstanding equity interests of (x) 1,066,667 shares of Preferred Stock, of which 1,033,333 shares are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Company's 1995 Stock Plan . No equity interest of any Project Company was issued in violation of any Charter Document of such Project Company, any applicable Law or any pre‑emptive right (the "Company Stock Plan"), (iiior other similar right) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notesany Person. (b) Except for None of the Company Options, there are no options, warrants Project Companies has subsidiaries or other rights, agreements, arrangements or commitments of owns equity interests in any character to which the Person except as disclosed on Schedule 5.3. No Project Company is a party to (i) any Contract for the purchase, subscription, allotment or obligating the Company to issue or sell of any shares of capital stock ofunissued interests, units or other securities (including convertible securities, warrants or convertible obligations of any nature) of any Project Company, (ii) equity appreciation, phantom stock, profit participation or similar right with respect to any Project Company or (iii) voting trust, proxy or other Contract with respect to any equity interest of any Project Company, other than, in each case, those listed on Schedule 5.3 and contained in the Charter Documents of the Project Companies. The equity interests in, held by the Company, directly or indirectly, of each Subsidiary constitute all of the outstanding equity interests of each Subsidiary. Except for the Company OptionsThe Company, no other awards have been made pursuant directly or indirectly, has good and valid title to the Company Stock Plan. There all equity interests of each Subsidiary, free and clear of any Lien and there are no outstanding contractual obligations of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any of the capital stock equity securities of the Company or any Subsidiary, in each case, other than any Lien or obligation, (a) arising pursuant to provide funds to or make any material investment (in 1) this Agreement, (2) the form of a loan, capital contribution or otherwise) in any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities Charter Documents of the Company. All warrants issued pursuant to the Convertible Demand Note Acquired Companies, (3) applicable securities Laws, or (4) as set forth on Schedule 3.4, or (b) for Taxes not yet due and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued payable or being contested in satisfaction and cancellation of all such Company Warrantsgood faith. (c) The Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares. (d) The stock register of the Company accurately records: (i) the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock of the Company consists of (x) 1,066,667 shares of Preferred Stock, of which 1,033,333 shares are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Company's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notes. (b) Except for the Company Options, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company is a party or obligating the Company to issue or sell any shares of capital stock of, or other equity interests in, the Company. Except for the Company Options, no other awards have been made pursuant to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares. (d) The stock register of the Company accurately records: (i) the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization; Ownership. (a) The As of the date hereof, the authorized capital ------------------------- stock of the Company consists of of: (xi) 1,066,667 170,000,000 shares of Preferred voting common stock, par value $0.01 per share (the “Voting Common Stock”), of which 1,033,333 29,522,915.63685380 shares are issued and outstanding and each share as of which is convertible into one share of Common Stock and the date hereof, (yii) 2,162,667 10,000,000 shares of non-voting common stock, par value $0.01 per share (the “Non-Voting Common Stock” and, together with the Voting Common Stock, the “Common Stock”), of which (i) 400,033 307,151.39254217 shares are issued and outstandingoutstanding as of the date hereof, and (iii) 20,000,000 shares of preferred stock, par value $0.01 per share, of which no shares are issued and outstanding as of the date hereof. Section 3.3(a) of the Company Disclosure Schedule sets forth the number of shares of Common Stock reserved for issuance under the Company Stock Incentive Plan and the number of Company Options outstanding as of the date hereof. Section 3.3(a) of the Company Disclosure Schedule separately sets forth, for each Company Option outstanding as of the date hereof, (i) the holder’s name, (ii) 672,572 the number of shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Company's 1995 of Common Stock Plan (the "Company Stock Plan")covered, and (iii) ------------------ 44,228 shares are reserved for issuance upon the granting exercise price per share of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible NotesCommon Stock. (b) All of the issued and outstanding shares of Common Stock have been, and all shares of Common Stock subject to issuance under the Company Stock Incentive Plan upon issuance on the terms and conditions specified therein will be, duly authorized and validly issued and are fully paid and nonassessable. Except for the Stockholders’ Agreements, the Company Options, as set forth in Section 3.3(b) of the Company Disclosure Schedule or as otherwise provided for in this Agreement, as of the date of this Agreement there are no optionsnot, warrants or other rightsand as of the Closing Date, agreementsthere will not be, arrangements or commitments of any character to which the Company is a party or obligating the Company to issue or sell any shares of capital stock ofissued and outstanding or securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company or any subscriptions, options, warrants, calls, rights, commitments or other equity interests in, agreements of any character calling for the purchase or issuance of any securities of the Company or requiring payments based on or related to the value of any securities of the Company. Except for , including any securities representing the right to purchase or otherwise receive any other securities of the Company. (c) Other than as set forth in Section 3.3(c) of the Company OptionsDisclosure Schedule, no other awards have been made pursuant to the Company Stock Plan. There there are no outstanding contractual obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares. (d) The stock register Each of the holders of the Common Stock listed in Section 3.3(d) of the Company accurately records: Disclosure Schedule (ias such schedule may be updated from time to time prior to the Closing) is the record and beneficial owner of the shares of the Common Stock listed opposite such holder’s name on such schedule, free and address clear of each person owning Shares any Lien and any other limitation or restriction (ii) including any restriction on the certificate number right to vote, sell or otherwise dispose of each certificate evidencing Shares issued by such shares), and will transfer and deliver to Parent at the CompanyClosing via the Merger in accordance with this Agreement valid title to those shares, the number free and clear of shares evidenced by each any Lien and any such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellationlimitation or restriction.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock of the Company consists of (x) 1,066,667 500,000 shares of Preferred Company Common Stock, of which 1,033,333 62,500 shares are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Company's 1995 Stock Plan (the "Company Stock PlanShares"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notes. (b) Except for the Company Options, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company is a party or obligating the Company to issue or sell any shares of capital stock of, or other equity interests in, the Company. Except for the Company Options, no other awards have been made pursuant to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities Shares are all of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding shares of capital stock of the Company and have been duly authorized and validly issued and are owned fully paid and nonassessable and free of record and beneficially solely by preemptive rights. There are not, as of the date hereof, any outstanding or authorized subscriptions, options, warrants, calls, rights, commitments, or any other agreements of any character (any of the foregoing, a "Commitment") obligating the Company to issue any additional shares of capital stock of the Company, or any other securities convertible into or evidencing the right to subscribe for any shares of capital stock of the Company. The Company Stockholders own the respective number of shares of Company Common Stock set forth on Schedule 3.2(a) attached hereto, free and clear of all encumbrancesLiens other than restrictions imposed by applicable securities laws. All Each of the Company Stockholders has full legal right, power and authority to exchange, assign and transfer or cause to be exchanged, assigned or transferred their respective shares of Company Common Stock. The delivery to IES of the Company Shares pursuant to the terms of this Agreement will transfer valid title thereto, free and clear of all Liens other than restrictions imposed by applicable securities laws. No Company Stockholder has or will have appraisal or similar rights as a result of the consummation of the transactions contemplated by this Agreement. (b) The authorized capital stock of each of the Subsidiaries consists of the number and type of shares of capital stock set forth on Schedule 3.2(b) (collectively, "Subsidiary Stock"). Schedule 3.2(b) also sets forth the number and type of shares of Subsidiary Stock which are issued and outstanding (collectively, "Subsidiary Shares"), the securities of any other corporation owned by the Company or any of the Subsidiaries, as well as the names of any joint venture, partnership or other noncorporate entity in which the Company or any of the Subsidiaries is a participant. The Subsidiary Shares are all of the issued and outstanding shares of capital stock of the Subsidiaries and are directly or ultimately owned by the Company, free and clear of any Liens other than restrictions imposed by applicable securities laws, and have been duly authorized and validly issued and are fully paid and nonassessablenonassessable and free of preemptive rights. Also set forth on Schedule 3.2(b) is a listing of all names under which the Company and the Subsidiaries have done business within the five (5) year period ending on the date of this Agreement, as well as the names of all predecessors of the Company and the Subsidiaries, including the names of any entities from whom the Company or the Subsidiaries previously acquired significant assets within the five (5) year period ending on the date of this Agreement. There are are, as of the date hereof, no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of Commitments obligating any of the SharesSubsidiaries to issue any additional shares of capital stock of any such Subsidiaries, or any other securities convertible into or evidencing the right to subscribe for any shares of capital stock of any such Subsidiary. (d) The stock register of the Company accurately records: (i) the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock As of the Company consists of (x) 1,066,667 shares of Preferred Stock, of which 1,033,333 shares are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which Closing: (i) 400,033 788,457,390 ordinary shares in Ibis China Investment have been issued, all of which are validly issued and outstanding, fully paid and were not issued in violation of any preemptive rights; and (ii) 672,572 440,917,685 ordinary shares in TAHM have been issued, all of which are reserved for issuance pursuant to outstanding Company Options validly issued pursuant to the Company's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting and fully paid and were not issued in violation of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notesany preemptive rights. (b) Except as provided for in the Company OptionsTransaction Documents, there are no options, warrants warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to which any shares or securities of, or any other interest in, any of the Company is a party Companies or obligating either the Seller or the relevant Company to issue or sell any shares of capital stock or securities of, or any other equity interests interest in, the any Company. Except as provided for in the Company OptionsTransaction Documents (including, no other awards have been made without limitation pursuant to the Company Stock Plan. There Pre-Closing Restructuring), there are no outstanding contractual obligations of the any Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company ordinary shares or to provide funds to to, or make any material investment (in the form of a loan, capital contribution or otherwise) in in, any other entityPerson. The Company is not a party to any agreement granting registration rights to any person with respect to any securities Upon consummation of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10Pre-Closing Restructuring, 1996 among certain all of the Stockholders shares in the issued share capital of each Company shall be owned of record and beneficially by the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof Seller free and 20,833 Common Shares have been issued in satisfaction and cancellation clear of all such Company WarrantsEncumbrances. (c) The Shares constitute all All the issued and outstanding capital stock shares of or equity interest in each Transferred Subsidiary are validly issued, fully paid, non-assessable and, free of preemptive rights and as of the Company date of amendment and restatement of this Agreement, are owned of record and beneficially solely by the Stockholders Companies, as applicable, whether directly or indirectly, free and clear of all encumbrancesEncumbrances. All The registered capital of each Transferred Subsidiary that is incorporated in the Shares are PRC has been fully paid and nonassessablehas not been withdrawn at any time, in whole or in part. There are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the shares or securities of, or other interest in, any Transferred Subsidiary or obligating the Seller, any Company or any Transferred Subsidiary to issue or sell any shares or securities of, or any other interest in, any Transferred Subsidiary. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any shares of or equity interest in any Transferred Subsidiary. Each Transferred Subsidiary that is incorporated in the SharesPRC has made sufficient annual allocation to its statutory reserve fund in accordance with applicable Laws and has adopted proper accounting treatment with respect to such statutory reserve fund. (d) The stock share or member register (or other similar governmental registration document) of the Company each of Ibis China Investment, TAHM and each Transferred Subsidiary accurately records: (i) the name and address of each person Person owning Shares shares of or equity in such company, and (ii) the certificate number of each certificate evidencing Shares shares or equity interest issued by the Companysuch company, the number of shares or the amount of equity interest evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation. Each of Ibis China Investment, TAHM and the Transferred Subsidiaries are directly or indirectly wholly owned by the Seller. The Seller has provided Purchaser Parent with a copy of the issued incorporation certificates issued by the PRC Ministry of Commerce in respect of each Transferred Subsidiary. (e) Immediately prior to the Closing, (i) the Seller shall own ordinary shares in the capital of each Company, representing 100% of the issued outstanding share capital of each Company; and (ii) (A) Ibis China Investment shall, directly or indirectly, own 100% of the issued outstanding share capital of each ICI Transferred Subsidiary; (B) TAHM shall directly own 100% of the issued outstanding share capital of TAHM PRC; (C) NewCo1 shall, directly or indirectly, own 100% of the issued outstanding share capital of each NewCo1 Transferred Subsidiary; and (D) NewCo2 shall own 100% of the registered capital of AAPC Shanghai; all of which shares and equity interests referred to in the foregoing (i) and (ii) shall be (x) validly issued and fully paid and not have been issued or transferred in violation of any preemptive rights, and (y) owner of record and beneficially by the Seller and its Subsidiaries, whether directly or indirectly, free and clear of all Encumbrances. (f) Upon the consummation of the transactions contemplated by this Agreement and the NewCo2 Subscription Agreement, immediately following the Closing, (i) the Purchaser will: (x) legally and beneficially own the Ibis China Investment Shares and the NewCo1 Shares representing 100% of the issued and outstanding share capital of Ibis China Investment and 100% of the issued outstanding share capital of NewCo1, and (y) legally and beneficially own 29.2853% of all issued and outstanding ordinary shares of NewCo2, in each case, on an as-converted and fully diluted basis, and free and clear of all Encumbrances; and (ii) the Target Shares will be fully paid and there will be no unpaid capital contributions outstanding with respect to any Company. (g) As of the Closing Date, other than the Transaction Documents, there are no voting trusts, shareholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the shares in the issued share capital of the Companies.

Capitalization; Ownership. (a) The entire authorized capital ------------------------- stock of the Acquired Company consists of (x) 1,066,667 shares of Preferred Stock, of which 1,033,333 shares are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 1,000,000 shares of Common Stock, $0.10 par value. Exhibit ------- 3.3 contains a true, accurate and complete listing of which (i) 400,033 the total number --- of shares are issued of Common Stock of the Acquired Company outstanding. Exhibit ------- 3.3 also contains a true, accurate and outstandingcomplete listing of all the --- shareholders of the Acquired Company, (ii) 672,572 along with the number of shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Companyowned by each shareholder and such shareholder's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan full name and (iv) no shares are reserved for issuance pursuant to the Convertible Notesmailing address. (b) Except for All of the Company Options, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company is a party or obligating the Company to issue or sell any currently outstanding shares of capital stock of, or other equity interests in, the Company. Except for the Company Options, no other awards have been made pursuant to the Company Common Stock Plan. There are no outstanding contractual obligations of the Acquired Company to repurchaseare duly authorized, redeem or otherwise acquire any validly issued, fully paid and nonassessable. The Common Stock of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Acquired Company is not a party to any agreement granting registration rights to any person with respect to any securities subject to, and no shares of Common Stock of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Acquired Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation violation of, any preemptive rights or any right of all such Company Warrantsfirst refusal or other similar right in favor of any Person. (c) The Shares constitute all the issued Shareholders have good and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders marketable title to their shares, free and clear of all liens, encumbrances, claims and other charges of every kind. All The Shareholders have the full right to transfer their shares to Purchaser free and clear of all liens, encumbrances, claims and other charges of every kind and without violating any agreement or understanding to which the Acquired Company or the Shareholders or any of them are a party or by which they or any of them are bound. (d) Except as set forth on Exhibit 3.3, there are no outstanding ----------- options, warrants, calls, commitments or plans by the Acquired Company to issue any additional shares of its Common Stock, to pay any dividends on such shares or to purchase, redeem, or retire any outstanding shares of its Common Stock, nor are there outstanding any securities or obligations which are or may become convertible into or exchangeable for any shares of Common Stock of the Shares are fully paid and nonassessableAcquired Company. There are no voting trusts, stockholder agreements, proxies trusts or other agreements Contracts to which the Acquired Company or understandings in effect any of the Shareholders is a party or is bound with respect to the voting or transfer of any of the Shares. (d) The stock register Common Stock of the Company accurately records: (i) the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Acquired Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock Sale Shares represent, as of the time immediately prior to the Closing, eighty percent (80%) of all of the Capital Stock of the Company consists and, represent eighty percent (80%) of the legal and beneficial ownership interests in the Company or actual or contingent rights to acquire an interest in the Company. The Sellers are all the shareholders of the Company, and the Company owns one hundred per cent (x100%) 1,066,667 of the Capital Stock of the Target. Schedule 3.5(a) correctly and accurately reflects the total number of shares of Preferred Stock, the Capital Stock of which 1,033,333 the Company and the number of such shares are issued and outstanding and owned by each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant Seller immediately prior to the Company's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible NotesClosing. (b) Except for The Sale Shares have been duly authorized and validly issued and were not issued in violation of any preemptive rights. (c) The Company has no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other Contracts or commitments that would require the Company Optionsto issue, there sell, or otherwise cause to become outstanding any ownership interests in, or any securities convertible into or exchangeable or exercisable for any ownership interests in, the Company, other than pursuant to this Agreement and the Organizational Documents. (d) The Sale Shares are not subject to any voting trust, shareholder agreement or other similar Contract, including any Contract restricting or otherwise relating to voting, dividend rights, or disposition of the Sale Shares, other than pursuant to this Agreement and the Organizational Documents. (e) The Sellers have valid, legal title of and owns the Sale Shares of the Company free and clear of all Liens imposed by or of any third party as of the Closing Date. When the Sale Shares are transferred to the Buyer, the transfer of the Sale Shares will be in compliance with all applicable Laws, with all legal and beneficial title to the Sale Shares vesting completely in the Buyer. (f) The Company has valid, legal title of and owns the Target’s equity, free and clear of all Liens imposed by or on behalf of any third party. The respective equity interests of the Target are validly issued, fully paid, and non-assessable, and all such equity interests are owned directly and entirely by the Company. There are no existing options, warrants or other warrants, calls, rights, agreements, or Contracts or arrangements or commitments of any character to which the Company or the Target is a party requiring, and there are no securities of the Target outstanding that upon conversion or obligating exchange would require, the Company to issue issuance of any equity interests in the Target or sell any shares of capital stock ofother securities convertible into, exchangeable for, or other evidencing the right to subscribe for or purchase any equity interests inin the Target. Neither the Company, the Company. Except for the Company OptionsTarget, no other awards have been made pursuant or, to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchaseSellers’ Knowledge, redeem or otherwise acquire any of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company person is not a party to any agreement granting registration rights to any person with respect to any securities of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies trust or other agreements Contract or understandings in effect arrangement with respect to the voting voting, redemption, sale, transfer, or transfer of any other disposition of the Shares. (d) The stock register ownership interests in the Target. For purposes of the Company accurately records: this Agreement, “Knowledge” means (i) the name and address actual knowledge of each a natural person owning Shares or a director or any executive officer of an entity or any of their Affiliates, as such knowledge has been obtained in the normal conduct of the business and (ii) such knowledge as a reasonably prudent Person in such position should have obtained upon the certificate number exercise of each certificate evidencing Shares issued by reasonable diligence. Knowledge of the Sellers, the Company, or the number Target, when referred to in this Agreement, means the Knowledge of shares evidenced by each such certificatethe individuals listed and/or referred to in Schedule 3.5(f) (i.e., specified officers and managers of the Sellers, the date of issuance thereof and, Company and the Target and their immediate subordinates in the case of cancellationSellers, the date of cancellationCompany or the Target, and certain other key employee as the case may be).