Common use of Parent and Merger Sub Capitalization Clause in Contracts

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 shares of Parent Common Stock, of which there were 114,820,683 shares issued and outstanding as of the close of business on March 3, 2000, and 5,000,000 shares of Preferred Stock, par value $0.001 per share, of which no shares are issued or outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. As of the close of business on March 3, 2000, (i) 17,137,292 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee Stock Purchase Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of which, as of the date hereof, are issued and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (d) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 shares of Parent Common Stock, of which there were 114,820,683 64,773,413 shares issued and outstanding as of the close of business on March 328, 2000, and 5,000,000 shares of Preferred Stock, par value $0.001 per share, of which no shares are issued or outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to any right of rescission or preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent Charter Documents or any agreement or document to which Parent is a party or by which it is bound. As of the date of this Agreement, there are no shares of Parent Common Stock held in treasury by Parent. (b) As of the close of business on March 328, 2000, (i) 17,137,292 7,242,904 shares of Parent Common Stock are subject to issuance pursuant to outstanding options ("PARENT OPTIONS") to purchase Parent Common StockStock under Parent's 1997 Stock Plan and 1999 Equity Incentive Plan ("PARENT STOCK OPTION PLANS") for an aggregate exercise price of $45,865,480, (ii) 142,551 shares of Parent Common Stock are subject to issuance pursuant to Parent Options other than pursuant to the Parent Stock Option Plans for an aggregate exercise price of $512,704, and (iiiii) 1,748,494 750,000 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee Stock Purchase PlanPlan ("PARENT ESPP"). Parent has made available to Company an accurate and complete copy of each of the Parent Stock Option Plans and the form of all stock option agreements evidencing Parent Options. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would will be duly authorized, validly issued, fully paid and nonassessable. Other than as set forth on Part 3.2(b) of the Parent Disclosure Letter, there are no commitments or agreements of any character to which the Parent is bound obligating Parent to accelerate the vesting of any Parent Option as a result of the Merger. (bc) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all 100 of which, as of the date hereof, are issued and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (d) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 500,000,000 shares of Parent Common Stock, of which there were 114,820,683 105,937,482 shares issued and outstanding as of the close of business on March 3August 5, 20002003, and 5,000,000 shares of Preferred Stock, par value $0.001 per share, none of which no shares are issued or outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document Contract to which Parent is a party or by which it is bound. . (b) As of the close of business on March 3August 5, 20002003, (i) 17,137,292 27,198,713 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 746,730 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity ’s 1999 Employee Stock Purchase Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. (bc) The authorized capital stock of Merger Sub consists of 1,000 100 shares of common stock, $0.01 0.001 par value, all of which, as of the date hereof, are issued and outstanding and are held directly by Parent. All of the outstanding shares of Merger Sub's ’s common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub has no subsidiaries. (d) Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (de) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 shares of Parent Common Stock, of which there were 114,820,683 81,089,265 shares issued and outstanding as of the close of business on March 3November 30, 20002003, and 5,000,000 15,000,000 shares of Preferred Stockpreferred stock, par value $0.001 per share, none of which no shares are issued or outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document Contract to which Parent is a party or by which it is bound. . (b) As of the close of business on March 3November 30, 20002003, (i) 17,137,292 11,818,963 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common StockStock under Parent’s 1999 Stock Plan, 2000 Stock Plan and Amended and Restated 2000 Incentive Stock Plan, (ii) 1,748,494 no more than 2,880,265 shares of Parent Common Stock are subject to issuance to participants in Parent’s Employee Stock Purchase Plan (together with the plans described in clause (i), the “Parent Option Plans”) and (iii) 16,291,792 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee Stock Purchase Planpursuant to the Parent Option Plans. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. (bc) The authorized capital stock of Merger Sub consists of 1,000 100 shares of common stock, $0.01 0.001 par value, all of which, as of the date hereof, are issued and outstanding and are held directly by Parent. All of the outstanding shares of Merger Sub's ’s common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub has no subsidiaries. (d) Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (de) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable, will be registered under the Securities Act, and will be approved for listing on the NASDAQ National Market.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 shares of Parent Common Stock, of which there were 114,820,683 53,325,075 shares issued and outstanding as of the close of business on March 3January 11, 2000, and 5,000,000 shares of Preferred Stock, par value $0.001 per share, of which no shares are issued or outstanding2001. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. As of the close of business on March 3January 11, 20002001, (i) 17,137,292 13,101,530 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 400,923 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity 1993 Employee Stock Purchase Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would will be duly authorized, validly issued, fully paid and nonassessable. (b) Except as set forth in Section 3.2(a) of this Agreement or Part 3.2 of the Parent Disclosure Letter, there are no equity securities, partnership interests or similar ownership interests of any class of Parent equity security, or any securities exchangeable or convertible into or exercisable for such equity securities, partnership interests or similar ownership interests, issued, reserved for issuance or outstanding. (c) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 0.001 par value, all of which, as of the date hereof, are issued and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (d) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized ------------------------------------ capital stock of Parent consists solely of 200,000,000 500,000,000 shares of Parent Common StockStock par value $.01 per share, of which there were 114,820,683 192,686,181 shares issued and outstanding as of the close of business on March 3April 30, 2000, and 5,000,000 10,000,000 shares of Preferred Stock, par value $0.001 0.01 per share, of which no shares are issued or outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. As of the close of business on March 3May 19, 2000, (i) 17,137,292 there were 16,151,407 shares of Parent Common Stock are authorized under the 1999 Equity Incentive Plan, of which 7,836,696 were subject to issuance outstanding options, 7,123,759 were issued pursuant to outstanding options to purchase Parent Common Stockand 1,190,952 were available for future grants. As of May 19, and (ii) 1,748,494 2000, there were 8,072,856 shares of Parent Common Stock are reserved for future issuance authorized under Parent's 1998 Equity the 1999 Employee Stock Purchase Plan, of which 1,848,216 were issued pursuant to outstanding options. As of May 19, 2000, there were 1,500,000 shares of Parent Common Stock authorized under the 1999 Non-Employee Director Option Plan, of which 20,000 were subject to outstanding options and 1,480,000 were available for future grants. As of May 19, 2000, there were no shares of Parent Common Stock authorized for future grant under the 1995 Stock Option/ Stock Issuance Plan, and there were 23,811,501 shares subject to outstanding options. As of May 19, 2000, there were 24,000,000 shares of Parent Common Stock authorized under the 1999 Supplemental Stock Option Plan, of which 23,887,500 were subject to outstanding options. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of which, as of the date hereof, are issued and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (d) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 500,000,000 shares of Parent Common StockStock par value $.01 per share, of which there were 114,820,683 192,686,181 shares issued and outstanding as of the close of business on March 3April 30, 2000, and 5,000,000 10,000,000 shares of Preferred Stock, par value $0.001 0.01 per share, of which no shares are issued or outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. As of the close of business on March 3May 19, 2000, (i) 17,137,292 there were 16,151,407 shares of Parent Common Stock are authorized under the 1999 Equity Incentive Plan, of which 7,836,696 were subject to issuance outstanding options, 7,123,759 were issued pursuant to outstanding options to purchase Parent Common Stockand 1,190,952 were available for future grants. As of May 19, and (ii) 1,748,494 2000, there were 8,072,856 shares of Parent Common Stock are reserved for future issuance authorized under Parent's 1998 Equity the 1999 Employee Stock Purchase Plan, of which 1,848,216 were issued pursuant to outstanding options. As of May 19, 2000, there were 1,500,000 shares of Parent Common Stock authorized under the 1999 Non-Employee Director Option Plan, of which 20,000 were subject to outstanding options and 1,480,000 were available for future grants. As of May 19, 2000, there were no shares of Parent Common Stock authorized for future grant under the 1995 Stock Option/ Stock Issuance Plan, and there were 23,811,501 shares subject to outstanding options. As of May 19, 2000, there were 24,000,000 shares of Parent Common Stock authorized under the 1999 Supplemental Stock Option Plan, of which 23,887,500 were subject to outstanding options. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of which, as of the date hereof, are issued and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Parent Common Stock, all outstanding Company OptionsParent options, and all outstanding shares of capital stock of each subsidiary of Company Parent have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (d) The Parent Common Stock to be issued in the Offer and the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized As of the Effective Date, the authorized, issued and outstanding share capital stock of Parent consists solely of 200,000,000 shares of Parent Common Stock, of which there were 114,820,683 shares issued and outstanding as of the close of business on March 3, 2000, and 5,000,000 shares of Preferred Stockcommon stock, par value $0.001 per shareshare (the “Parent Common Stock”), of which no 73,327,492 shares are issued or and outstanding. All outstanding ; and 20,000,000 shares of preferred stock, par value $0.001 per share (the “Parent Common Preferred Stock”), of which 1,000,000 shares have been designated as the Class A Convertible Preferred Stock and of which 1,000,000 shares are duly authorized, validly issued, fully paid issued and nonassessable outstanding and 17,000,000 shares have been designated as the Series B Preferred Stock and of which 13,784,201 shares are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. issued and outstanding. (b) As of the close of business on March 3, 2000, (i) 17,137,292 shares of Closing the Parent Common Stock are subject Shares to issuance pursuant be issued to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee Stock Purchase Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would Company Shareholders will be duly authorized, validly issued, fully paid and nonassessable. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of which, as of the date hereof, are issued non-assessable and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's common stock will have been duly authorized and validly issuedissued in accordance with all applicable laws, and are fully paid and nonassessable. Merger Sub was formed for including, but not limited to, the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purposeSecurities Act. (c) All outstanding shares Upon consummation of Company Common Stockthe Contemplated Transactions, the Shareholders shall own all outstanding Company Optionsof the Parent Shares issued to them hereunder, free and clear of all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instrumentsLiens. (d) The Parent Common Stock Shares are Depository Trust Company (“DTC”) eligible and listed in transferable status and shall not be subject to any DTC “chills” or “locks” and are quoted on the OTC Markets (or another over-the-counter market to be agreed on) and not subject to any notice of suspension or delisting. (e) All issued in and outstanding shares of capital stock of Parent, immediately prior to the MergerClosing Date, when issued in accordance with the provisions of this Agreementhave been duly authorized, will be are validly issued, fully paid and nonassessablenon-assessable, and have been issued in accordance with all applicable laws, including, but not limited to, the Securities Act. (f) The authorized, issued and outstanding share capital of Merger Sub consists of 1,000,000 shares of common stock, par value of $.0001 per share, of which at least one (1) share is issued and outstanding and is owned by Parent.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 (i) 5,000,000 shares of preferred stock of Parent, $.001 par value per share, of which 2,666,667 shares have been designated Series A Convertible Preferred Stock, $0.001 par value per share ("Series A Preferred Stock") and (ii) 50,000,000 shares of Parent Common Stock, of which there were 114,820,683 7,778,876 shares issued and outstanding as of the close of business on March 3December 10, 2000, and 5,000,000 2001. There are 1,995,000 shares of Series A Preferred Stock, par value $0.001 per share, Stock issued and outstanding as of which no shares are issued or outstandingthe date hereof. All outstanding shares of Preferred Stock and Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. As of the close of business on March 3December 10, 20002001, (i) 17,137,292 2,190,111 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 2,655,890 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee 2001 Stock Purchase Option and Incentive Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would will be duly authorized, validly issued, fully paid and nonassessable. (b) Except as set forth in Section 3.2(a) of this Agreement or Part 3.2 of the Parent Disclosure Letter, there are no equity securities, partnership interests or similar ownership interests of any class of Parent equity security, or any securities exchangeable or convertible into or exercisable for such equity securities, partnership interests or similar ownership interests, issued, reserved for issuance or outstanding. (c) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of which, as Merger Sub Common Stock. As of the date hereof, 100 shares of Merger Sub Common Stock are issued and outstanding and outstanding, all of which are held by Parent. All of the outstanding shares of Merger Sub's common stock Sub Common Stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (d) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 600,000,000 shares of Parent Common Stock, par value $.01 per share, of which there were 114,820,683 319,365,275 shares issued and outstanding as of the close of business on March 3May 17, 20002001, and 5,000,000 1,000,000 shares of Preferred Stock, par value $0.001 .01 per share, of which no one share is issued and outstanding as of the close of business on May 17, 2001 (for the purpose of effecting voting rights for the exchangeable shares are of EGI Canada Corporation identified immediately hereafter), and 10,644,223 shares of EGI Canada Corporation, exchangeable on a one-for-one basis into shares of Parent Common Stock at any time, of which there were 2,757,463 shares issued or outstandingand outstanding as of the close of business on May 17, 2001. As of May 17, 2001, there were outstanding employee stock options to purchase an aggregate of 43,304,770 shares of Parent Common Stock (of which options to purchase an aggregate of 21,016,931 shares of Parent Common Stock were exercisable). All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. As of the close of business on March 3, 2000, (i) 17,137,292 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee Stock Purchase Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of which, as of the date hereof, are issued and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Parent Common Stock, all outstanding Company OptionsParent options, and all outstanding shares of capital stock of each subsidiary of Company Parent have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (d) The Parent Common Stock to be issued in the Merger, Offer and the Merger when issued in accordance with the provisions of this Agreement and, assuming that Company warrants to be assumed by Parent in the Merger are legally valid, binding and enforceable at the date of this Agreement, the Parent Common Stock to be issued upon the exercise of such warrants in accordance with the terms thereof, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized As of the Effective Date, the authorized, issued and outstanding share capital stock of Parent consists solely of 200,000,000 shares of Parent Common Stock, of which there were 114,820,683 shares issued and outstanding as of the close of business on March 3, 2000, and 5,000,000 shares of Preferred Stockcommon stock, par value $0.001 per shareshare (the “Parent Common Stock”), of which no 73,327,492 shares are issued or and outstanding. All outstanding ; and 20,000,000 shares of preferred stock, par value $0.001 per share (the “Parent Common Preferred Stock”), of which 1,000,000 shares have been designated as the Class A Convertible Preferred Stock and of which 1,000,000 shares are duly authorized, validly issued, fully paid issued and nonassessable outstanding and 13,000,000 shares have been designated as the Series B Preferred Stock and of which 12,306,599 shares are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. issued and outstanding. (b) As of the close of business on March 3, 2000, (i) 17,137,292 shares of Closing the Parent Common Stock are subject Shares to issuance pursuant be issued to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee Stock Purchase Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would Company Shareholders will be duly authorized, validly issued, fully paid and nonassessable. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of which, as of the date hereof, are issued non-assessable and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's common stock will have been duly authorized and validly issuedissued in accordance with all applicable laws, and are fully paid and nonassessable. Merger Sub was formed for including, but not limited to, the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purposeSecurities Act. (c) All outstanding shares Upon consummation of Company Common Stockthe Contemplated Transactions, the Shareholders shall own all outstanding Company Optionsof the Parent Shares issued to them hereunder, free and clear of all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instrumentsLiens. (d) The Parent Common Stock Shares are Depository Trust Company (“DTC”) eligible and listed in transferable status and shall not be subject to any DTC “chills” or “locks” and are quoted on the OTC Markets (or another over-the-counter market to be agreed on) and not subject to any notice of suspension or delisting. (e) All issued in and outstanding shares of capital stock of Parent, immediately prior to the MergerClosing Date, when issued in accordance with the provisions of this Agreementhave been duly authorized, will be are validly issued, fully paid and nonassessablenon-assessable, and have been issued in accordance with all applicable laws, including, but not limited to, the Securities Act. (f) The authorized, issued and outstanding share capital of Merger Sub consists of 1,000,000 shares of common stock, par value of $.0001 per share, of which at least one (1) share is issued and outstanding and is owned by Parent.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 1,000,000,000 shares of Parent Common Stock, of which there were 114,820,683 204,114,323 shares issued and outstanding as of the close of business on March 3September 20, 20002001, and 5,000,000 shares of Preferred Stock, par value $0.001 per share, none of which no shares are issued or outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document Contract to which Parent is a party or by which it is bound. . (b) As of the close of business on March 3September 20, 20002001, (i) 17,137,292 21,308,338 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 1,471,370 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee Stock Purchase Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. (bc) The authorized capital stock of Merger Sub consists of 1,000 100 shares of common stock, $0.01 0.00001 par value, all of which, as of the date hereof, are issued and outstanding and are held directly by Parent. All of the outstanding shares of Merger Sub's common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub has no subsidiaries. (d) Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (de) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized capital stock of Parent consists solely of 200,000,000 shares of Parent Common Stock, of which there were 114,820,683 73,889,870 shares issued and outstanding as of the close of business on March 3August 9, 2000, 2004 and 5,000,000 10,000,000 shares of Preferred Stockpreferred stock, par value $0.001 0.01 per share, of which no shares are issued or outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. As of the close of business on March 3August 9, 20002004, (i) 17,137,292 10,819,378 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common Stock, and (ii) 1,748,494 1,412,061 shares of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity ’s 1999 Employee Stock Purchase Plan. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would will be duly authorized, validly issued, fully paid and nonassessable. (b) The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $0.01 par value, all of which, as of the date hereof, are issued and outstanding and are held by Parent. All of the outstanding shares of Merger Sub's ’s common stock have been duly authorized and validly issued, and are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws and other applicable material Legal Requirements and (ii) all material requirements set forth in applicable agreements or instruments. (d) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.

Parent and Merger Sub Capitalization. (a) The authorized As of the Effective Date, the authorized, issued and outstanding share capital stock of Parent consists solely of 200,000,000 100,000,000 shares of common stock, par value $0.0001 per share (the “Parent Common Stock”), of which there were 114,820,683 10,000,000 shares are issued and outstanding as of the close of business on March 3, 2000, outstanding; and 5,000,000 shares of Preferred Stockpreferred stock, par value $0.001 0.0001 per shareshare (the “Parent Preferred Stock”), of which no shares are issued or and outstanding. All outstanding shares of Parent Common Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement or document to which Parent is a party or by which it is bound. As of the close Effective Date, the Parent Preferred Stock consists of business on March 3, 2000, (i) 17,137,292 10,000 shares of Parent Common Stock are subject to issuance pursuant to outstanding options to purchase Parent Common Series A Preferred Stock, of which no shares are issued and (ii) 1,748,494 shares outstanding. The capitalization of Parent Common Stock are reserved for future issuance under Parent's 1998 Equity Employee Stock Purchase Plan. All shares as of the Effective Date is as set forth on the capitalization table of Parent Common Stock subject dated the date hereof and delivered by Parent to issuance as aforesaid, upon issuance the Company on the terms date hereof (the “Parent Capitalization Table”). (b) Immediately after the Closing the Merger Consideration and conditions specified in the instruments pursuant to which they are issuable, would all other issued and outstanding share capital of Parent will be duly authorized, validly issued, fully paid and nonassessablenon-assessable and will have been issued in accordance with all applicable laws, including, but not limited to, the Securities Act. (bc) Upon consummation of the Contemplated Transactions, the Company Shareholder shall own all of the Merger Consideration, free and clear of all Encumbrances. (d) The authorized Parent Common Stock is Depository Trust Company (“DTC”) eligible and listed in transferable status and shall not be subject to any DTC “chills” or “locks.” (e) All issued and outstanding shares of capital stock of Parent, immediately prior to the Closing Date, have been duly authorized, are validly issued, fully paid and non-assessable, and have been issued in accordance with all applicable laws, including, but not limited to, the Securities Act. (f) As of the Closing Date, except for Parent Series A Preferred Stock as contemplated by Section 5.01(a) and any warrants or other securities that may be issued to the placement agent in connection with the Preferred Offering, Parent shall not have any outstanding options, warrants or other securities convertible into Parent Common Stock. (g) Assuming that the Company Capitalization Table is true, correct and complete in all respects, the capitalization of the Parent as of immediately after the Closing will be as stated on the Closing Capitalization Table, provided that the Parties acknowledge and agree that the shareholders of Parent immediately prior to the Closing may transfer certain portions of their shares of Parent Common Stock to other parties prior to the Closing. (h) The authorized, issued and outstanding share capital of Merger Sub consists of 1,000 shares of common stock, par value of $0.01 par valueper share, all of which, as of the date hereof, are which one share is issued and outstanding and are held is owned by Parent. All of the outstanding , and 100 shares of Merger Sub's common stock have been duly authorized and validly issuedpreferred stock, and par value of $0.01 per share, of which no shares are fully paid and nonassessable. Merger Sub was formed for the purpose of consummating the Merger and has no material assets or liabilities except as necessary for such purpose. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and all outstanding shares of capital stock of each subsidiary of Company have been issued and granted in compliance with (i) all applicable securities laws outstanding. The Parties acknowledge and other applicable material Legal Requirements agree that the representations and (ii) all material requirements warranties set forth in applicable agreements or instrumentsthis Section 4.03 shall be deemed automatically updated, if necessary, to reflect the completion of the matters contemplated in Section 5.01. (d) The Parent Common Stock to be issued in the Merger, when issued in accordance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable.