Common use of Parent Capital Structure Clause in Contracts

Parent Capital Structure. The authorized capital stock of Parent consists of 200,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Parent Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matter.

Parent Capital Structure. The As of the date hereof, the authorized capital stock of Parent consists of 200,000,000 50,000,000 shares of Parent Common Stock, of which 36,122,600 44,172,420 shares were outstanding as of the close of business on July 7December 31, 2000, and 1,000,000 -0- shares of Preferred Stock, par value $0.01 .001 per shareshare (the "PARENT PREFERRED SHARES"), of which 120 shares of Series B Convertible Stock none were outstanding as of the close of business on July 7December 31, 2000 (the "Parent Preferred Shares")2000. All of the outstanding shares of Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each or other securities of Parent's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-wholly owned subsidiary Subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbranceLiens. Except as set forth above or in above, as of the Parent Disclosure Letter, date hereof there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, arrangements or commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no securities or obligation obligations evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any mattermatter ("PARENT VOTING DEBT").

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 500,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, Stock and 1,000,000 10,000,000 shares of Preferred Stock, $.01 par value $0.01 per share(“Parent Preferred Stock”). As of December 13, of which 120 2007, (i) 356,863,804 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. Parent has , (ii) no Parent Common Stock or shares of Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there Stock were 4,375,000 issued and outstanding and (iii) no shares of Parent Common Stock reserved for issuance pursuant to and no shares of Parent Preferred Stock were held in the JFAX.Xxxtreasury of Parent or by Subsidiaries of Parent. As of December 13, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate 2007, a sufficient number of 3,431,666 shares of Parent Common Stock were reserved for future issuance upon pursuant to warrants, stock options and other stock awards, and restricted stock awards granted and outstanding as of December 13, 2007 under Parent’s Long-Term Incentive Plan and inactive stock option plans that were acquired in connection with acquisitions of Dreco Energy Services, Ltd, IRI International, Corporation and Varco International, Inc. (collectively, the conversion “Parent Stock Plans”). Except for (1) the issuance of shares of Parent Common Stock in connection with the Parent Preferred Shares or upon Stock Plans (including the exercise of warrants, stock options or other stock awards thereunder), or (2) as set forth in the Parent Disclosure Letter, no change in such capitalization has occurred between December 13, 2007 and the date of this Agreement. All shares of Parent Common Stock subject to issuance as specified above are duly authorized and, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Parent Common Stock or the capital stock of any Subsidiary or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of obligations of Subsidiaries entered into in the ordinary course of business. Parent has not repurchased any outstanding warrantsshares of Parent Common Stock since December 13, 2007. Each All of the outstanding shares of capital stock of each of Parent's ’s Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares (other than directors’ qualifying shares in the case of foreign Subsidiaries) are owned by a direct Parent or indirect wholly-owned subsidiary another Subsidiary of Parent, Parent free and clear of any lienall Liens, pledgeagreements or limitations on Parent’s voting rights. (b) As of the date hereof, security interest, claim or other encumbrance. Except except as set forth above in this Section 4.02 or in as reserved for future grants of securities under the Parent Disclosure LetterStock Plans, there are no preemptive equity securities of any class of Parent or other outstanding rightsany securities exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding. As of the date hereof, except as set forth in this Section 4.02, there are no options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangementsequity securities, calls, rights, commitments or rights agreements of any kind that obligate the character to which Parent or any of its Subsidiaries is a party or by which it is bound obligating Parent or any of its Subsidiaries to issue issue, deliver or sell, or cause to sell any be issued, delivered or sold, additional shares of capital stock or other equity securities of Parent or any class of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no or any securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible exchangeable into or exercisable for securities having such equity securities, or obligating Parent or any of its Subsidiaries to grant, extend, accelerate the right vesting of or enter into any such option, warrant, equity security, call, right, commitment or agreement. To the best knowledge of Parent, there are no voting trusts, proxies or other voting agreements or understandings with respect to vote) with the stockholders shares of Parent on any mattercapital stock of Parent.

Parent Capital Structure. The (a) As of the date of this Agreement, the authorized capital stock of Parent consists of 200,000,000 of: (i) 150,000,000 shares of Parent Common Stock, $0.0001 par value, of which 36,122,600 70,746,528 shares were have been issued and are outstanding as of the close of business on July 7April 16, 2000, 1999; and 1,000,000 (ii) 5,000,000 shares of Preferred Stock, $0.0001 par value $0.01 per share, none of which 120 shares of Series B Convertible Stock were have been issued or are outstanding as of the close date of business on July 7, 2000 (the "Parent Preferred Shares")this Agreement. All of the outstanding Parent shares of Parent's Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, and are fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as . (b) As of July 7, 2000, there were 4,375,000 the date of this Agreement: (i) 14,513,047 shares of Parent Common Stock reserved for are subject to issuance pursuant to the JFAX.Xxx, Xxc. 1997 outstanding options to purchase Common Stock Option under Parent's stock option plans; (ii) 1,333,853 shares of Common Stock are reserved for future issuance under Parent's 1996 Stock Plan (the "PARENT PURCHASE PLAN"); and (iii) 1,000,000 shares of Common Stock are reserved for issuance under Parent's 1998 Employee Stock Purchase Plan. (Stock options granted by Parent Stock Planpursuant to Parent's stock option plans are referred to in this Agreement as ") PARENT OPTIONS"). Parent has made available to the Company accurate and an aggregate complete copies of 3,431,666 all stock option plans pursuant to which Parent has granted stock options that are currently outstanding as of the date of this Agreement and the form of all stock option agreements evidencing such options. All shares of Parent Common Stock reserved for subject to issuance as aforesaid, upon issuance on the conversion of terms and conditions specified in the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable nonassessable. (c) As of the date of this Agreement, 2,577,240 shares of Parent Common Stock are subject to issuance pursuant to outstanding warrants to purchase Common Stock. (d) All outstanding shares of Parent Common Stock, all outstanding Parent Options, and owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Parent Disclosure Letter, there are no preemptive or other all outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of each subsidiary of Parent or any of its Subsidiaries or any have been issued and granted in compliance with (i) all applicable securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, laws and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote applicable Legal Requirements and (or convertible into or exercisable for securities having the right to voteii) with the stockholders of Parent on any matterall requirements set forth in applicable Contracts.

Parent Capital Structure. (a) The authorized capital stock of the Parent consists of 200,000,000 of: (i) 37,500,000 shares of Parent Common Stock, of which 36,122,600 37,312,500 shares were are issued and outstanding as on the date hereof. Each share of the close Company Preferred Stock is convertible into one share of business on July 7, 2000, and 1,000,000 shares of Preferred Company Common Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Capital Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned are not subject to preemptive rights created by a direct or indirect wholly-owned subsidiary statute, the Charter Documents of the Parent, free and clear of or any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in agreement to which the Parent Disclosure Letteris a party or by which it is bound, there and together with all Parent Options have been issued in compliance with all applicable Laws, including federal and state securities Laws. There are no preemptive declared or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries accrued but unpaid dividends with respect to issue or to sell any shares of Parent Capital Stock. The Parent has no capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of than the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are Capital Stock authorized, issued or outstanding. Parent does not have has no Parent Capital Stock that is unvested. (b) Parent has never adopted, sponsored or maintained, or reserved shares for issuance under, any stock option plan or any other plan or agreement (whether written or oral, formal or informal) providing for equity compensation to any Person. There are no options, warrants, calls, rights, convertible securities, commitments or agreements of any character, written or oral, to which the Parent is a party or by which the Parent is bound obligating the Parent to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the Parent Capital Stock or obligating the Parent to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. There are no outstanding any bondsor authorized stock appreciation, debenturesphantom stock, notes profit participation, or other obligations rights, rights of any type, the holders value of which have is determined by reference in whole or in part to the right to vote value of Parent Capital Stock or any other securities of the Parent (whether payable in cash, property or convertible into or exercisable for securities having the right to voteotherwise) with respect to the stockholders Parent. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting securities of the Parent. There are no agreements to which the Parent on is a party relating to the registration, sale or transfer (including agreements relating to rights of first refusal, co-sale rights or “drag-along” rights) of any matterParent Capital Stock.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 of: (i) 24,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 there were 11,259,727 shares issued and outstanding as of May 14, 2007, and (ii) 5,850,000 shares of undesignated blank check preferred stock, of which 5,000 shares have been designated as Series B Convertible Stock were Preferred Stock, all of which series have been issued and are outstanding as of the close May 14, 2007. The authorized capital stock of business on July 7DYHP Acquisition consists of 100 shares of Common Stock, 2000 par value $0.01 per share (the "Parent Preferred Shares"“DYHP Acquisition Common Stock”). All , all of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except thatwhich, as of July 7the date hereof, 2000, there were 4,375,000 are issued and outstanding and are held by Parent. All outstanding shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent DYHP Acquisition Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned are not subject to preemptive rights created by a direct statute, the Articles of Incorporation or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Parent Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities Bylaws of Parent or any of its Subsidiaries DYHP Acquisition, respectively, or any securities agreement or obligations convertible document to which Parent or exchangeable into DYHP Acquisition is a party or exercisable forby which it is bound. As of May 14, or giving any Person a right 2007, Parent had reserved an aggregate of 2,100,000 shares of Parent Common Stock, net of exercises, for issuance to subscribe employees, consultants and non-employee directors pursuant to Parent’s 1999 Stock Option Plan and 1999 Non-Employee Stock Option Plan (collectively, the “Parent Stock Option Plans”), under which options are outstanding for or acquire2,071,768 shares (“Parent Stock Options”), any securities and under which 28,232 shares remain available for grant as of May 14, 2007. As of May 14, 2007, Parent had reserved an aggregate of 962,500 shares of Parent Common Stock for issuance to holders of warrants to purchase shares of Parent Common Stock (“Parent Warrant”). 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. Schedule 3.2(a) lists each outstanding Parent Stock Option and each Parent Warrant at May 14, 2007, the name of the Parent or any of its Subsidiariesholder thereof, and no securities or the exercise price therefor. (b) Schedule 3.2(b) lists each outstanding promissory note, debenture, capital lease, letter of credit and other debt obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matterand DYHP Acquisition as of May 14, 2007, including the name of the payee, the principal amount, interest rate, outstanding balance, and maturity.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 500,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, Stock and 1,000,000 5,000,000 shares of Preferred Stock, $.01 par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 share (the "Parent Preferred SharesStock"). All As of the outstanding January 2, 1998: (i) 181,626,660 shares of Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. ; (ii) no shares of Parent has Preferred Stock are issued or outstanding; (iii) no shares of Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as Stock were held in the treasury of July 7, 2000, there were 4,375,000 Parent or by Subsidiaries of Parent; and (iv) 10,903,494 shares of Parent Common Stock were reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan stock options granted and outstanding under Parent's stock option plans (the "Parent Option Plans"). Between January 2, 1998 and the date hereof, (i) no additional shares of capital stock have been reserved for issuance by Parent and (ii) the only issuances of shares of capital stock of Parent Common Stock Plan") and an aggregate have been issuances of 3,431,666 Parent Common Stock upon the exercise of outstanding stock options. All shares of Parent Common Stock reserved for subject to issuance as specified above, upon issuance pursuant to the conversion of terms and conditions specified in the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is instruments pursuant to which they are issuable, shall be duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrancenonassessable. Except as set forth above or in the Parent Disclosure Letter, there There are no preemptive obligations, contingent or other outstanding rightsotherwise, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue repurchase, redeem or to sell otherwise acquire any shares of capital stock Parent Common Stock. (b) Except as set forth in this Section 4.2 or other as reserved for future grants of options under the Parent Option Plans, there are no equity securities of Parent any class of Parent, or any of its Subsidiaries or any securities or obligations convertible or security exchangeable into or exercisable forfor such equity securities, or giving any Person a right to subscribe issued, reserved for or acquire, any securities of the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are authorized, issued issuance or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matter.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 500,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000$.00025 par value, and 1,000,000 5,000,000 shares of Preferred Stock, $.001 par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred SharesStock"). All ---------------------- As of the outstanding March 3, 2000, (i) 156,835,002 shares of Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. Parent has , and (ii) no shares of Parent Common Stock were held in the treasury of Parent or by Subsidiaries of Parent. The Parent Preferred Shares reserved for issuance, except that, as Disclosure Schedule sets forth the number of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for future issuance pursuant to the JFAX.Xxxstock options granted and outstanding as of March 10, Xxc. 1997 Stock Option Plan 2000 under Parent stock option and stock purchase plans (collectively, the "Parent Stock PlanPlans") ). No ------------------ material change in such capitalization has occurred between December 31, 1999 and an aggregate the date of 3,431,666 this Agreement, except as a result of the exercise of stock options. As of the date of this Agreement, no Parent Preferred Stock is issued and outstanding. All shares of Parent Common Stock reserved for subject to issuance as specified above are duly authorized and, upon issuance on the conversion terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Parent to repurchase, redeem or otherwise acquire any shares of Parent Common Stock or the capital stock of any of its Subsidiaries or to loan funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than (i) guarantees of bank obligations of Subsidiaries entered into in the ordinary course of business, and (ii) repurchase rights of Parent under the Parent Preferred Shares Stock Plans, or upon the exercise of outstanding warrantsunder any stock option agreements pursuant to which options were granted under these plans. Each All of the outstanding shares of capital stock of each of Parent's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by a direct Parent or indirect wholly-owned subsidiary of Parent, another Subsidiary free and clear of any lienall security interests, pledgeliens, security interestclaims, claim pledges, agreements, limitations on Parent's voting rights, charges or other encumbrance. encumbrances of any nature other than security interests, liens, claims, pledges, agreements, limitations, charges or other encumbrances that (A) relate to any taxes or other governmental charges or levies that are not yet due and payable, (B) relate to, were created, arose or exist in connection with any legal proceeding that is being contested in good faith, or (C) individually or in the aggregate would not materially interfere with the ability of Parent and each of its Subsidiaries to conduct their business as currently conducted. (b) Except as set forth above in this Section 4.02 or in as reserved ------------ for future grants of options under the Parent Disclosure LetterStock Plans as of March 10, 2000, (i) there are were no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights equity securities of any kind that obligate the Parent or any class of its Subsidiaries to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no or any securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible exchangeable into or exercisable for securities having such equity securities, issued, reserved for issuance or outstanding, and (ii) there were no options, warrants, equity securities, calls, rights, commitments or agreements of any character to which Parent was a party or by which it was bound obligating Parent to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of Parent or obligating Parent to grant, extend, or enter into any such option, warrant, equity security, call, right, commitment or agreement. There are no voting trusts, proxies or other voting agreements or understandings with respect to the right shares of capital stock of Parent and to votewhich Parent is a party. (c) The shares of Parent Common Stock to be issued in connection with the stockholders Merger (including shares of Parent on any matterCommon Stock to be issued upon exercise of Company Stock Options assumed by Parent pursuant to this Agreement) have been authorized by all necessary corporate action and, when issued in accordance with this Agreement, will be validly issued, fully paid and nonassessable and not subject to preemptive rights.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 60,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000$.01 par value, and 1,000,000 5,000,000 shares of Preferred Stock, $.01 par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred SharesStock"). All As of the outstanding April 30, 1998, (i) 15,516,770 shares of Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. Parent has , (ii) no shares of Parent Common Stock were held in the treasury of Parent or by Subsidiaries of Parent. Section 3.2 of the Parent Preferred Shares reserved for issuance, except that, as Disclosure Schedule shows the number of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for future issuance pursuant to stock options granted and outstanding as of April 30, 1998 and the JFAX.Xxxplans under which such options were granted (together with the 1997 Employee Stock Purchase Plan, Xxc. 1997 Stock Option Plan (the "Parent Stock PlanPlans") ). No material change in such capitalization has occurred between April 30, 1998 and an aggregate the date of 3,431,666 this Agreement. As of the date of this Agreement, none of the shares of Parent Preferred Stock are issued and outstanding. All shares of Parent Common Stock, subject to issuance as specified above, are duly authorized and, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Parent Common Stock reserved for issuance upon or the conversion capital stock of any Subsidiary or to provide funds to or make any material investment (in the Parent Preferred Shares form of a loan, capital contribution or upon otherwise) in any such Subsidiary or any other entity other than guarantees of bank obligations of Subsidiaries entered into in the exercise ordinary course of outstanding warrantsbusiness. Each All of the outstanding shares of capital stock of each of Parent's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by a direct Parent or indirect wholly-owned subsidiary of Parent, another Subsidiary free and clear of any lienall security interests, pledgeliens, security interestclaims, claim pledges, agreements, limitations in Parent's voting rights, charges or other encumbranceencumbrances of any nature. (b) Except as set forth in this Section 3.2 or as reserved for future grants of options and issuances of shares of Common Stock under the Parent Stock Plans, there are no equity securities of any class of Parent or any of its Subsidiaries, or any security exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding. Except as set forth above or in the Parent SEC Reports filed prior to the date hereof or disclosed in Section 3.2 of the Parent Disclosure LetterSchedule, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangementsequity securities, calls, rights, commitments or rights agreements of any kind that obligate the character to which Parent or any of its Subsidiaries are a party or by which it is bound obligating Parent or any of its Subsidiaries to issue issue, deliver or sell, or cause to sell any be issued, delivered or sold, additional shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the obligating Parent or any of its SubsidiariesSubsidiaries to grant, and extend, accelerate the vesting of, change the price of, or otherwise amend or enter into any such option, warrant, equity security, call, right, commitment or agreement. To the knowledge of Parent, there are no securities or obligation evidencing such rights are authorizedvoting trusts, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes proxies or other obligations voting agreements or understandings with respect to the holders shares of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders capital stock of Parent on any matterParent.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 150,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, and 1,000,000 10,000,000 shares of Preferred Stock, $.01 par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred SharesStock")) and one share of Special Voting Stock. All As of the outstanding August 9, 2004, (i) 85,891,223 shares of Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. , (ii) no shares of Parent has Preferred Stock were issued and outstanding, (iii) no shares of Special Voting Stock were issued and outstanding and (iv) no shares of Parent Common Stock or and no shares of Parent Preferred Shares reserved for issuance, except that, as Stock were held in the treasury of July 7, 2000, there were 4,375,000 Parent or by Subsidiaries of Parent. The Parent Disclosure Letter shows the number of shares of Parent Common Stock reserved for future issuance pursuant to warrants, stock options and other stock awards, and restricted stock awards granted and outstanding as of August 9, 2004 under Parent's Stock Award and Long Term Incentive Plan, the JFAX.Xxx, Xxc. 1997 Dreco Stock Option Plan and the IRI Stock Option Plan (collectively, the "Parent Stock PlanPlans") and an aggregate ). Except for the issuance of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of in connection with the Parent Preferred Shares or upon Stock Plans (including the exercise of warrants, stock options or other stock awards thereunder), or except as set forth in the Parent Disclosure Letter, no change in such capitalization has occurred between August 9, 2004 and the date of this Agreement. All shares of Parent Common Stock subject to issuance as specified above are duly authorized and, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Parent Common Stock or the capital stock of any Subsidiary or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of obligations of Subsidiaries entered into in the ordinary course of business. Parent has not repurchased any outstanding warrantsshares of Parent Common Stock since July 3, 2004. Each All of the outstanding shares of capital stock of each of Parent's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by a direct Parent or indirect wholly-owned subsidiary another Subsidiary of Parent, Parent free and clear of any lienall Liens, pledgeagreements or limitations on Parent's voting rights. (b) As of the date hereof, security interest, claim or other encumbrance. Except except as set forth above in this Section 4.02 or in as reserved for future grants of securities under the Parent Disclosure LetterStock Plans, there are no preemptive equity securities of any class of Parent or other outstanding rightsany security exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding. As of the date hereof, except as set forth in this Section 4.02, there are no options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangementsequity securities, calls, rights, commitments or rights agreements of any kind that obligate the character to which Parent or any of its Subsidiaries is a party or by which it is bound obligating Parent or any of its Subsidiaries to issue issue, deliver or sell, or cause to sell any be issued, delivered or sold, additional shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the obligating Parent or any of its SubsidiariesSubsidiaries to grant, and extend, accelerate the vesting of or enter into any such option, warrant, equity security, call, right, commitment or agreement. To the best knowledge of Parent, there are no securities or obligation evidencing such rights are authorizedvoting trusts, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes proxies or other obligations voting agreements or understandings with respect to the holders shares of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders capital stock of Parent on any matterParent.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 shares of Parent Common Stockauthorized, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, issued and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each the Parent (the “Parent Capital Stock”) as of the date hereof are set forth on the Parent SEC Reports. Except as disclosed on the Parent SEC Reports, all issued and outstanding shares of capital stock of the Parent Common have been duly authorized and validly issued, are fully paid and nonassessable, have not been issued in violation of any preemptive rights, and are free from any restrictions on transfer (other than restrictions under the Securities Act or state securities laws) or any option, lien, pledge, security interest, encumbrance or charge of any kind. Other than as described on the Parent SEC Reports, Parent has no other equity securities or securities containing any equity features that are authorized, issued or outstanding. Except as set forth in the Parent SEC Reports hereto, there are no agreements or other rights or arrangements existing which provide for the sale or issuance of capital stock by the Parent and there are no rights, subscriptions, warrants, options, conversion rights or agreements of any kind outstanding to purchase or otherwise acquire from the Parent any shares of capital stock or other securities of the Parent of any kind. Except as set forth on the Parent SEC Reports, there are no agreements or other obligations (contingent or otherwise) which may require the Parent to repurchase or otherwise acquire any shares of its capital stock. Except as set forth on the Parent SEC Reports, to the Parent's Subsidiaries is ’s knowledge, there exist no voting trusts, proxies, or other contracts with respect to the voting of shares of capital stock of the Parent. (b) The authorized capital of the Merger Sub consists of 1,000 shares of common stock, par value $0.0001 per share, all of which are issued and outstanding and held of record by the Parent as of the date hereof. The issued and outstanding shares of capital stock of the Merger Sub are duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear have not been issued in violation of any lien, pledge, security interest, claim or other encumbrancepreemptive rights. Except as set forth above or in the Parent Disclosure Letter, there There are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase privileges or other rights, agreements, arrangementsarrangements or commitments obligating Merger Sub to issue, callssell, commitments purchase or rights redeem any shares of its capital stock or securities or obligations of any kind that obligate the Parent convertible into or any of its Subsidiaries to issue or to sell exchangeable for any shares of its capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matterstock.

Parent Capital Structure. The authorized capital stock of the Parent consists of 200,000,000 shares of Parent Common Stock, Stock of which 36,122,600 there were approximately twenty-two million, five hundred seventy-eight thousand, and eight hundred seventy-two (22,578,372) shares were issued and outstanding as of the close date of business on July 7, 2000, and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares")this Agreement. All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance are duly authorized and validly issued and are not subject to preemptive rights created by statute, the Article of Incorporation or Bylaws of the Parent or any agreement or document to which the Parent is a party or by which it is bound. The Parent Disclosure Letter sets forth the following information with respect to each Parent Stock Option outstanding as of the date of this Agreement: (i) the name of the optionee; (ii) the particular plan pursuant to the JFAX.Xxx, Xxc. 1997 which such Parent Stock Option Plan was granted; (iii) the "Parent Stock Plan") and an aggregate number of 3,431,666 shares of Parent Common Stock reserved for issuance upon subject to such Parent Stock Option; (iv) the conversion exercise price of such Parent Stock Option; (v) the date on which such Parent Stock Option was granted; and (vi) the date on which such Parent Stock Option expires. The Parent has made available to the Integrated accurate and complete copies of the Parent Preferred Shares or upon Stock Option Plans and the exercise forms of outstanding warrantsall agreements evidencing the Parent Stock Options. Each of the outstanding All shares of capital stock of each of Parent's Subsidiaries is 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 and owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrancenonassessable. Except as set forth above or in the Parent Disclosure LetterLetter of this Agreement, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights agreements of any kind that obligate character to which the Parent or is bound obligating the Parent to accelerate the vesting of any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person Stock Option as a right to subscribe for or acquire, any securities result of the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matterMerger.

Parent Capital Structure. The (a) As of the date of this Agreement, the authorized capital stock of Parent consists of 200,000,000 of: (i) 150,000,000 shares of Parent Common Stock, $0.0001 par value, of which 36,122,600 70,746,528 shares were have been issued and are outstanding as of the close of business on July 7April 16, 2000, 1999; and 1,000,000 (ii) 5,000,000 shares of Preferred Stock, $0.0001 par value $0.01 per share, none of which 120 shares of Series B Convertible Stock were have been issued or are outstanding as of the close date of business on July 7, 2000 (the "Parent Preferred Shares")this Agreement. All of the outstanding Parent shares of Parent's Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, and are fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as . (b) As of July 7, 2000, there were 4,375,000 the date of this Agreement: (i) 14,513,047 shares of Parent Common Stock reserved for are subject to issuance pursuant to the JFAX.Xxx, Xxc. 1997 outstanding options to purchase Common Stock Option under Parent's stock option plans; (ii) 1,333,853 shares of Common Stock are reserved for future issuance under Parent's 1996 Stock Plan (the "Parent Stock Purchase Plan"); and (iii) 1,000,000 shares of Common Stock are reserved for issuance under Parent's 1998 Employee Stock Purchase Plan. (Stock options granted by Parent pursuant to Parent's stock option plans are referred to in this Agreement as "Parent Options"). Parent has made available to the Company accurate and an aggregate complete copies of 3,431,666 all stock option plans pursuant to which Parent has granted stock options that are currently outstanding as of the date of this Agreement and the form of all stock option agreements evidencing such options. All shares of Parent Common Stock reserved for subject to issuance as aforesaid, upon issuance on the conversion of terms and conditions specified in the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable nonassessable. (c) As of the date of this Agreement, 2,577,240 shares of Parent Common Stock are subject to issuance pursuant to outstanding warrants to purchase Common Stock. (d) All outstanding shares of Parent Common Stock, all outstanding Parent Options, and owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Parent Disclosure Letter, there are no preemptive or other all outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of each subsidiary of Parent or any of its Subsidiaries or any have been issued and granted in compliance with (i) all applicable securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, laws and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote applicable Legal Requirements and (or convertible into or exercisable for securities having the right to voteii) with the stockholders of Parent on any matterall requirements set forth in applicable Contracts.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 500,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000$.00025 par value, and 1,000,000 5,000,000 shares of Preferred Stock, $.001 par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred SharesStock"). All As of the outstanding March 3, 2000, (i) 156,835,002 shares of Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. Parent has , and (ii) no shares of Parent Common Stock were held in the treasury of Parent or by Subsidiaries of Parent. The Parent Preferred Shares reserved for issuance, except that, as Disclosure Schedule sets forth the number of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for future issuance pursuant to the JFAX.Xxxstock options granted and outstanding as of March 10, Xxc. 1997 Stock Option Plan 2000 under Parent stock option and stock purchase plans (collectively, the "Parent Stock PlanPlans") ). No material change in such capitalization has occurred between December 31, 1999 and an aggregate the date of 3,431,666 this Agreement, except as a result of the exercise of stock options. As of the date of this Agreement, no Parent Preferred Stock is issued and outstanding. All shares of Parent Common Stock reserved for subject to issuance as specified above are duly authorized and, upon issuance on the conversion terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Parent to repurchase, redeem or otherwise acquire any shares of Parent Common Stock or the capital stock of any of its Subsidiaries or to loan funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than (i) guarantees of bank obligations of Subsidiaries entered into in the ordinary course of business, and (ii) repurchase rights of Parent under the Parent Preferred Shares Stock Plans, or upon the exercise of outstanding warrantsunder any stock option agreements pursuant to which options were granted under these plans. Each All of the outstanding shares of capital stock of each of Parent's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by a direct Parent or indirect wholly-owned subsidiary of Parent, another Subsidiary free and clear of any lienall security interests, pledgeliens, security interestclaims, claim pledges, agreements, limitations on Parent's voting rights, charges or other encumbrance. encumbrances of any nature other than security interests, liens, claims, pledges, agreements, limitations, charges or other encumbrances that (A) relate to any taxes or other governmental charges or levies that are not yet due and payable, (B) relate to, were created, arose or exist in connection with any legal proceeding that is being contested in good faith, or (C) individually or in the aggregate would not materially interfere with the ability of Parent and each of its Subsidiaries to conduct their business as currently conducted. (b) Except as set forth above in this Section 4.02 or in as reserved for future grants of options under the Parent Disclosure LetterStock Plans as of March 10, 2000, (i) there are were no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights equity securities of any kind that obligate the Parent or any class of its Subsidiaries to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no or any securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible exchangeable into or exercisable for securities having such equity securities, issued, reserved for issuance or outstanding, and (ii) there were no options, warrants, equity securities, calls, rights, commitments or agreements of any character to which Parent was a party or by which it was bound obligating Parent to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of Parent or obligating Parent to grant, extend, or enter into any such option, warrant, equity security, call, right, commitment or agreement. There are no voting trusts, proxies or other voting agreements or understandings with respect to the right shares of capital stock of Parent and to votewhich Parent is a party. (c) The shares of Parent Common Stock to be issued in connection with the stockholders Merger (including shares of Parent on any matterCommon Stock to be issued upon exercise of Company Stock Options assumed by Parent pursuant to this Agreement) have been authorized by all necessary corporate action and, when issued in accordance with this Agreement, will be validly issued, fully paid and nonassessable and not subject to preemptive rights.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 shares of Parent Common Stockauthorized, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, issued and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each Parent as of Parent's Subsidiaries is the date hereof are set forth on Schedule 3.2. All issued and outstanding shares of Parent Common Stock have been duly authorized, authorized and validly issued, are fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of Parentnonassessable, free and clear have not been issued in violation of any preemptive rights, and are free from any restrictions on transfer (other than restrictions under the Securities Act or state securities laws) or any option, lien, pledge, security interest, claim encumbrance or charge of any kind. Other than as described on Schedule 3.2, Parent has no other encumbranceequity securities or securities containing any equity features that are authorized, issued or outstanding. Except as set forth above or in the Parent Disclosure Letteron Schedule 3.2, there are no preemptive agreements or other outstanding rights or arrangements which provide for the sale or issuance of capital stock by the Parent and there are no rights, subscriptions, warrants, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments rights or rights agreements of any kind that obligate outstanding to purchase or otherwise acquire from the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of the Parent of any kind. Except as set forth on Schedule 3.2, there are no agreements or other obligations (contingent or otherwise) which may require the Parent to repurchase or otherwise acquire any shares of its Subsidiaries or Common Stock. (b) Parent does not own, and is not a party to any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right Contract to subscribe for or acquire, any equity securities or other securities of the Parent any entity or any direct or indirect equity or ownership interest in any other entity. There exist no voting trusts, proxies, or other contracts with respect to the voting of its Subsidiariesshares of Parent Common Stock. (c) Parent is the sole shareholder of Merger Sub. Merger Sub does not own, and no is not a party to any Contract to acquire, any equity securities or obligation evidencing such rights other securities of any entity or any direct or indirect equity or ownership interest in any other entity. There are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes no agreements or other obligations rights or arrangements which provide for the holders sale or issuance of which have the right capital stock by Merger Sub and there are no rights, subscriptions, warrants, options, conversion rights or agreements of any kind outstanding to vote (purchase or convertible into otherwise acquire from Merger Sub any shares of capital stock or exercisable for other securities having the right to vote) with the stockholders of Parent on Merger Sub of any matterkind.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 150,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, and 1,000,000 10,000,000 shares of Preferred Stock, $.01 par value $0.01 per share(“Parent Preferred Stock”) and one share of Special Voting Stock. As of August 9, of which 120 2004, (i) 85,891,223 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. , (ii) no shares of Parent has Preferred Stock were issued and outstanding, (iii) no shares of Special Voting Stock were issued and outstanding and (iv) no shares of Parent Common Stock or and no shares of Parent Preferred Shares reserved for issuance, except that, as Stock were held in the treasury of July 7, 2000, there were 4,375,000 Parent or by Subsidiaries of Parent. The Parent Disclosure Letter shows the number of shares of Parent Common Stock reserved for future issuance pursuant to warrants, stock options and other stock awards, and restricted stock awards granted and outstanding as of August 9, 2004 under Parent’s Stock Award and Long Term Incentive Plan, the JFAX.Xxx, Xxc. 1997 Dreco Stock Option Plan and the IRI Stock Option Plan (collectively, the "“Parent Stock Plan") and an aggregate Plans”). Except for the issuance of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of in connection with the Parent Preferred Shares or upon Stock Plans (including the exercise of warrants, stock options or other stock awards thereunder), or except as set forth in the Parent Disclosure Letter, no change in such capitalization has occurred between August 9, 2004 and the date of this Agreement. All shares of Parent Common Stock subject to issuance as specified above are duly authorized and, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Parent Common Stock or the capital stock of any Subsidiary or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of obligations of Subsidiaries entered into in the ordinary course of business. Parent has not repurchased any outstanding warrantsshares of Parent Common Stock since July 3, 2004. Each All of the outstanding shares of capital stock of each of Parent's ’s Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares (other than directors’ qualifying shares in the case of foreign Subsidiaries) are owned by a direct Parent or indirect wholly-owned subsidiary another Subsidiary of Parent, Parent free and clear of any lienall Liens, pledgeagreements or limitations on Parent’s voting rights. (b) As of the date hereof, security interest, claim or other encumbrance. Except except as set forth above in this Section 4.02 or in as reserved for future grants of securities under the Parent Disclosure LetterStock Plans, there are no preemptive equity securities of any class of Parent or other outstanding rightsany security exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding. As of the date hereof, except as set forth in this Section 4.02, there are no options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangementsequity securities, calls, rights, commitments or rights agreements of any kind that obligate the character to which Parent or any of its Subsidiaries is a party or by which it is bound obligating Parent or any of its Subsidiaries to issue issue, deliver or sell, or cause to sell any be issued, delivered or sold, additional shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the obligating Parent or any of its SubsidiariesSubsidiaries to grant, and extend, accelerate the vesting of or enter into any such option, warrant, equity security, call, right, commitment or agreement. To the best knowledge of Parent, there are no securities or obligation evidencing such rights are authorizedvoting trusts, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes proxies or other obligations voting agreements or understandings with respect to the holders shares of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders capital stock of Parent on any matterParent.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 50,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, $0.01 par value ("PARENT COMMON STOCK") and 1,000,000 6,405,884 shares of Preferred Stock, $0.01 par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred SharesPARENT PREFERRED STOCK"). All As of the outstanding November 30, 1999: (i) 18,980,324 shares of Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. Parent has ; (ii) no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock were held in the treasury of Parent; (iii) no shares of Parent Preferred Stock were outstanding; (vi) options to purchase 3,119,610 shares of Parent Common Stock were outstanding under the Parent's 1995 and 1997 Stock Option Plans and options to purchase 350,057 shares of Parent Common Stock were outstanding under the 1996 and 1998 Stock Option Plan of a subsidiary of Parent and 1,419,892 additional shares were available for grant under the Parent 1995 and 1997 Stock Option Plans; (v) 250,000 shares of Parent Common Stock were reserved for issuance under Parent's 1998 Employee Stock Purchase Plan, of which 215,809 shares remain available for grant thereunder; and (iv) 150,000 shares of Parent Common Stock were reserved for issuance pursuant to the JFAX.XxxParent's 401(k) plan, Xxcnone of which were outstanding. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 All shares of Parent Common Stock reserved for subject to issuance as specified above, upon issuance on the conversion of terms and conditions specified in the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights or rights of first refusal created by statute, the charter documents of Parent or MergerSub or any agreement to which Parent or MergerSub is a party or by which it is bound. All of the outstanding shares of capital stock of MergerSub are duly authorized, validly issued, fully paid and nonassessable, and all such shares are owned by a direct or indirect wholly-owned subsidiary of Parent, Parent free and clear of any lienall security interests, pledgeliens, security interestclaims, claim pledges, agreements, limitations on Parent's voting rights, charges or other encumbrance. encumbrances of any nature. (b) Except as set forth above in this Section 4.2 or as reserved for future grants of options under the Parent stock option plans (as more fully described in the Parent Disclosure LetterSEC Reports defined in Section 4.4), there are (i) no preemptive equity or other debt securities of any class of Parent, or any security exchangeable into or exercisable for such equity or debt securities, issued, reserved for issuance or outstanding rightsand (ii) no outstanding subscriptions, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangementsputs, calls, rights or other commitments or rights agreements of any kind that obligate the character to which Parent is a party or by which it is bound obligating Parent to issue, deliver, sell, repurchase or redeem or cause to be issued, delivered, sold, repurchased or redeemed any of its Subsidiaries to issue equity or to sell any shares of capital stock or other debt securities of Parent or obligating Parent to grant, extend, accelerate the vesting of, change the exercise price of or otherwise amend or enter into any of its Subsidiaries such option, warrant, call, right, commitment or any securities agreement. There are no contracts, commitments or obligations convertible agreements relating to voting, purchase or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities sale of the Parent's capital stock to which the Parent or any is a party. (c) The Merger Shares to be issued pursuant to the Merger, when issued in accordance with the terms of its Subsidiariesthis Agreement, will be duly authorized, validly issued, fully paid, and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matternonassessable.

Parent Capital Structure. The authorized capital stock of Parent consists of 200,000,000 5,000,000,000 shares of Parent Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share ("Parent Preferred Stock"), 2,000,000 of which shares have been designated Series A Junior Participating Preferred Stock, all of which 36,122,600 shares were outstanding will be reserved for issuance upon the exercise of preferred stock purchase rights (the "Parent Rights") issuable pursuant to the Rights Agreement between Parent and Equiserve Trust Company, N.A., dated as of March 15, 2001 (the "Parent Rights Agreement"). At the close of business on July 711, 20002003, and 1,000,000 (i) 608,331,741 shares of Preferred StockParent Common Stock were issued and outstanding, par value $0.01 per share, of which 120 (ii) 16,458,620 shares of Series B Convertible Parent Common Stock were outstanding as held by Parent in its treasury and (iii) no shares of Parent Preferred Stock were issued or outstanding. As of July 11, 2003, (i) Parent had reserved an aggregate of 326,885,729 shares of Parent Common Stock for issuance pursuant to its option plans (excluding Parent's employee stock purchase plans) and (ii) at the close of business on July 711, 2000 2003, there were (the "Parent Preferred Shares"). All x) outstanding options to purchase an aggregate of the outstanding 116,680,063 shares of Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no (excluding rights to purchase Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 under Parent's employee stock purchase plans) and (y) 7,600,000 shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxx, Xxcunder Parent's employee stock purchase plans. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 All outstanding shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding are, and all shares of capital stock of each of Parent's Subsidiaries is Parent Common Stock which may be issued pursuant to this Agreement will be, when issued in accordance with the terms hereof, duly authorized, validly issued, fully paid and nonassessable and owned 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 direct party or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim by which it or other encumbranceits assets is bound. Except as disclosed in Parent SEC Reports filed prior to the date hereof, there is no holder or group of holders that beneficially owns greater than 1% of the shares of Parent Common Stock outstanding (including for this purpose any shares convertible into Parent Common Stock on a fully diluted as converted basis, whether or not vested) who have registration rights with respect to any such securities. Except as otherwise set forth above or in the Parent Disclosure Letterthis Section 3.3, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights equity securities of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities class of Parent or any of its Subsidiaries equity security, or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for such equity securities having issued, reserved for issuance or outstanding other than such equity securities that do not, in the right to vote) with the stockholders aggregate, represent in excess of 2% of outstanding shares of Parent Common Stock, on any mattera fully diluted as converted basis.

Parent Capital Structure. The authorized capital stock of Parent consists of 200,000,000 (i) 100,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000par value $0.001 per share, and 1,000,000 (ii) 5,000,000 shares of Preferred Stock, par value $0.01 0.001 per share, of which 120 shares of Series B Convertible Stock were outstanding as . As of the close of business on July 7May 25, 2004, 53,428,439 shares of Parent Common Stock were issued and outstanding. As of May 25, 2004, 274 shares of Parent’s Series A Preferred Stock were issued or outstanding. As of May 25, 2004, (i) an aggregate of 6,200,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent’s 2000 Equity Incentive Plan (the "“Parent Stock Option Plan”), under which options to purchase 5,562,876 shares were outstanding and 66,401 shares remained available for future grants, (ii) 500,000 shares of Parent Common Stock were reserved and available for issuance pursuant to a stock option grant made to Parent’s Chief Executive Officer outside of the Parent Stock Option Plan, (iii) 208,380 shares of Parent Common Stock were reserved and available for issuance pursuant to Parent’s 2000 Employee Stock Purchase Plan (the “Parent Purchase Plan”), (iv) 4,546,721 shares of Parent Common Stock were reserved and available for issuance pursuant to the conversion of or payments of dividends pursuant to the outstanding shares Table of Contents of Parent’s Series A Preferred Shares")Stock in accordance with the terms and conditions of the Series A Preferred Stock, and (v) 12,505,747 shares of Parent Common Stock were reserved and available for issuance pursuant to outstanding warrants. Except as set forth in the immediately preceding sentence, no shares of capital stock or other equity securities of Parent are issued, reserved for issuance or outstanding. All of the outstanding Parent Common Stock and Parent Preferred Shares shares of Parent’s capital stock have been duly authorized and validly issued and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 All shares of Parent Common Stock reserved for subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to the JFAX.Xxxwhich they are issuable, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is shall be duly authorized, validly issued, fully paid and nonassessable and owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Parent Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matternonassessable.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 500,000,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000$.00025 par value, and 1,000,000 5,000,000 shares of Preferred Stock, $.001 par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred SharesStock"). All As of the outstanding March 3, 2000, (i) 156,835,002 shares of Parent Common Stock were issued and Parent Preferred Shares have been duly authorized and outstanding, all of which are validly issued, fully paid and nonassessable. Parent has , and (ii) no shares of Parent Common Stock were held in the treasury of Parent or by Subsidiaries of Parent. The Parent Preferred Shares reserved for issuance, except that, as Disclosure Schedule sets forth the number of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for future issuance pursuant to the JFAX.Xxxstock options granted and outstanding as of March 10, Xxc. 1997 Stock Option Plan 2000 under Parent stock option and stock purchase plans (collectively, the "Parent Stock PlanPlans") ). No material change in such capitalization has occurred between December 31, 1999 and an aggregate the date of 3,431,666 this Agreement, except as a result of the exercise of stock options. As of the date of this Agreement, no Parent Preferred Stock is issued and outstanding. All shares of Parent Common Stock reserved for subject to issuance as specified above are duly authorized and, upon issuance on the conversion terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Parent to repurchase, redeem or otherwise acquire any shares of Parent Common Stock or the capital stock of any of its Subsidiaries or to loan funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than (i) guarantees of bank obligations of Subsidiaries entered into in the ordinary course of business, and (ii) repurchase rights of Parent under the Parent Preferred Shares Stock Plans, or upon the exercise of outstanding warrantsunder any stock option agreements pursuant to which options were granted under these plans. Each All of the outstanding shares of capital stock of each of Parent's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Parent Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matter.or

Parent Capital Structure. The authorized capital stock of the Parent on the date hereof consists of 200,000,000 56,250,000 shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, Stock and 1,000,000 750,000 shares of Preferred Stockpreferred stock, par value $0.01 per shareshare (“Parent Preferred Stock”), of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 a) 5,607,315 shares of Parent Common Stock reserved for issuance pursuant are issued and outstanding (before giving effect to the JFAX.Xxxissuances to be made at Closing), Xxc. 1997 Stock Option Plan and (the "Parent Stock Plan"b) and an aggregate of 3,431,666 22,500 shares of Parent Common Preferred Stock reserved for issuance upon are issued and outstanding (before giving effect to the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrantsissuances to be made at Closing). Each of the outstanding No other shares of capital stock or other securities of each the Parent are issued, reserved for issuance or outstanding. All outstanding shares of Parent's Subsidiaries is the capital stock of the Parent are, and all such shares that may be issued prior to the Closing Date to the Company Shareholders hereunder will be when issued, duly authorized, validly issued, fully paid and nonassessable non-assessable and owned by a direct not subject to or indirect wholly-owned subsidiary of Parent, free and clear issued in violation of any lienpurchase option, pledgecall option, security interestright of first refusal, claim preemptive right, subscription right or any similar right under any provision of the DGCL, the Parent Constituent Instruments or any Contract to which the Parent is a party or otherwise bound. There are not any bonds, promissory notes or other encumbranceindebtedness of the Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of the Parent Stock may vote (“Voting Parent Debt”). Except as set forth above or in the Parent Disclosure Letter, as of the date of this Agreement, there are no preemptive or other outstanding rights, options, warrants, conversion rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights, redemption rightsstock-based performance units, repurchase rightscommitments, agreementsContracts, arrangements, calls, commitments arrangements or rights undertakings of any kind that obligate to which the Parent is a party or any of its Subsidiaries by which it is bound (a) obligating the Parent to issue issue, deliver or sell, or cause to sell any be issued, delivered or sold, additional shares of capital stock or other securities of Parent equity interests in, or any of its Subsidiaries security convertible or any securities or obligations convertible exercisable for or exchangeable into or exercisable for(A) any capital stock of, or giving other equity interest in, the Parent or (B) any Person a Voting Parent Debt, (b) obligating the Parent to issue, grant, extend or enter into any such option, warrant, call, right, security, commitment, Contract, arrangement or undertaking or (c) that give any person the right to subscribe for receive any economic benefit or acquireright similar to or derived from the economic benefits and rights occurring to holders of the capital stock of the Parent. As of the date of this Agreement, there are no outstanding contractual obligations of the Parent to repurchase, redeem or otherwise acquire any shares of capital stock of the Parent. Except as set forth in the Parent Disclosure letter, there are no agreements to which the Parent is a party or by which it is bound with respect to the voting (including without limitation voting trusts or proxies), registration under the Securities Act, or sale or transfer (including without limitation agreements relating to preemptive rights, rights of first refusal, co-sale rights or “drag along” rights) of any securities of the Parent. All of the issued and outstanding shares of Parent or any of its SubsidiariesCommon Stock were issued in compliance with applicable federal and state securities laws. The stockholder list provided to the Company is a current stockholder list generated by the Parent’s stock transfer agent, and no securities or obligation evidencing such rights are authorized, list accurately reflects all of the issued or outstanding. Parent does not have and outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders shares of Parent on any matterCommon Stock as at the date of this Agreement.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 50,000,000 shares of authorized Common Stock of which 18,404,632 shares were issued and outstanding at June 9, 2000. The Parent Capital Stock is held by the persons, with the domicile addresses and in the amounts set forth on Section 3.2(a) of the Parent Disclosure Schedule. All outstanding shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Capital Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable non-assessable and owned not subject to preemptive rights created by a direct statute, the certificate of incorporation or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Parent Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities bylaws of Parent or any agreement to which Parent is a party or by which it is bound. There are no declared or accrued but unpaid dividends with respect to any shares of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Parent or any of its Subsidiaries, and Capital Stock. Parent has no securities or obligation evidencing such rights are other capital stock authorized, issued or outstanding. (b) Parent has reserved 2,137,500 shares of Common Stock for issuance to employees and consultants pursuant to outstanding, unexercised options. Section 3.2(b) of the Parent does not Disclosure Schedule sets forth for each of the outstanding Parent Options (defined below) the name of the holder of such option and the number of shares of Common Stock subject to such option. SECTION 3.2(b) of the Parent Disclosure Schedule also sets forth the name of the holder of any Parent Capital Stock subject to a right or repurchase by Parent ("PARENT RESTRICTED STOCK"), the number of shares of Parent Restricted Stock and the vesting schedule for such Parent Restricted Stock. Except for the options, warrants and rights described in Section 3.2(b) of the Parent Disclosure Schedule (the "PARENT Options") and Parent Convertible Note (defined below), there are no options, warrants, calls, rights, commitments or agreements of any character, written or oral, to which Parent is a party or by which it is bound obligating the Parent to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Parent or obligating the Parent to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. The holders of Parent Options have been or will be given, or shall have properly waived, any required notice before the Merger and all such rights will be terminated at or before the Effective Time. Section 3.2(b) of the Parent Disclosure Schedule sets forth for each outstanding any bondsParent stock appreciation right (each a "PARENT SAR"), debenturesthe name of the holder of such Parent SAR, notes the number of shares of Common Stock associated with such Parent SAR. Except for the Parent SARs described in Section 3.2(b) of the Parent Disclosure Schedule, there are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other obligations similar rights with respect to the Parent. Except as contemplated hereby, there are no voting trusts, proxies, or other agreements or understandings with respect to the voting stock of the Parent. As a result of the Merger, Parent will be the record and sole beneficial owner of all outstanding capital stock of the Surviving Corporation and rights to acquire or receive the capital stock of the Surviving Corporation. ***REORGANIZATION AGREEMENT*** -34- (c) Parent has reserved One Million Four Hundred Thousand (1,400,000) shares of Parent Common Stock for issuance to Silvano DiGenova under xxxx xxxxxxx Xxxvertible Promissory Note dated March 31, 1999 in the principal amount of One Million Four Hundred Thousand Dollars ($1,400,000) (the "PARENT CONVERTIBLE NOTE"), which Parent issued to Silvano DiGenova. (x) The authorized capital stock of Merger Sub consists of 1,000 shares of Common Stock, 1,000 shares of which, as of the date hereof, are issued and outstanding and are held by Parent. All such shares have been duly authorized, and all such issued and outstanding shares have been validly issued, are fully paid and nonassessable and are free of any liens or encumbrances other than any liens or encumbrances created by or imposed upon the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matterthereof.

Parent Capital Structure. (a) The authorized stock of Parent consists of 50,000,000 shares of Common Stock, of which 23,927,806 shares were issued and outstanding as of July 31, 2002, and 5,000,000 shares of Preferred Stock, of which 5,830 shares are issued and outstanding and designated as Series A Preferred Stock as of the date hereof, which are convertible into 5,830,000 shares of Common Stock, 12,890 shares are issued and outstanding and designated as Series B Preferred Stock as of the date hereof, which are convertible into 2,010,920 shares of Common Stock, and 2,000 shares are issued and outstanding and designated as Series C Preferred Stock as of the date hereof. Parent has reserved 1,000,000 shares of Common Stock for issuance under its Employee Stock Purchase Plan. The authorized capital stock of Parent Merger Sub consists of 200,000,000 100 shares of Common Stock, 100 shares of which, as of the date hereof, are issued and outstanding and are held by Parent. All such shares have been duly authorized, and all such issued and outstanding shares have been validly issued, are fully paid and nonassessable and are free of any liens or encumbrances other than any liens or encumbrances created by or imposed upon the holders thereof. All outstanding shares of Parent Common Stockcapital stock were not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of Parent or any agreement to which 36,122,600 shares the Parent is a party or by which it is bound at the time of issuances, except those preemptive rights that were outstanding as waived. All offers for sale, sales and issuances of the close capital stock of business on July 7, 2000, and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized in compliance with all applicable agreements and are validly issuedall applicable laws, fully paid including applicable federal and nonassessablestate securities laws. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 The shares of Parent Common Stock reserved for issuance to be issued pursuant to the JFAX.XxxMerger, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is when issued, will be duly authorized, validly issued, fully paid paid, non-assessable and nonassessable issued in compliance with applicable federal and owned applicable state securities laws. (b) As of the date hereof, Parent has reserved 6,695,514 shares of Common Stock for issuance to officers, employees, non-employee directors, consultants and certain advisors pursuant to the 1995 Stock Plan, the 1995 Director Option Plan and the 1999 Stock Plan, of which 4,720,201 shares are subject to outstanding, unexercised options and 1,975,313 shares remain available for future grant. Parent has reserved 2,672,435 shares of Common Stock for issuance upon exercise of warrants. Schedule 3.2(b) sets forth for each outstanding option or warrant the name of the holder of such option or warrant, the number of shares of Common Stock subject to such option or warrant, the exercise price of such option or warrant and the vesting schedule for such option or warrant, including the extent vested to date and whether the exercisability of such option or warrant will be accelerated and become exercisable by a direct or indirect wholly-owned subsidiary reason of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrancethe transactions contemplated by this Agreement. Except as set forth above or for the options and warrants described in the Parent Disclosure LetterSchedule 3.2(b), there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangementssubscriptions, calls, preemptive rights, rights, commitments or rights agreements of any kind that obligate the character, written or oral, to which Parent is a party or any of its Subsidiaries by which it is bound obligating Parent to issue issue, deliver, sell, repurchase or redeem, or cause to sell be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock or other securities of Parent or obligating the Parent to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. The holders of its Subsidiaries options and warrants have been or any securities or obligations convertible or exchangeable into or exercisable forwill be given, or giving any Person a right to subscribe for or acquireshall have properly waived, any securities of required notice prior to the Parent or any of its SubsidiariesMerger, and no securities or obligation evidencing all such rights are authorized, issued will be terminated at or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations prior to the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matterEffective Time.

Parent Capital Structure. The authorized capital stock of the Parent consists of 200,000,000 shares of Parent Common Stock, Stock of which 36,122,600 there were approximately twenty-two million, five hundred seventy-eight thousand, and eight hundred seventy-two (22,578,372) shares were issued and outstanding as of the close date of business on July 7, 2000, and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares")this Agreement. All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance are duly authorized and validly issued and are not subject to preemptive rights created by statute, the Article of Incorporation or Bylaws of the Parent or any agreement or document to which the Parent is a party or by which it is bound. The Parent Disclosure Letter sets forth the following information with respect to each Parent Stock Option outstanding as of the date of this Agreement: (i) the name of the optionee; (ii) the particular plan pursuant to the JFAX.Xxx, Xxc. 1997 which such Parent Stock Option Plan was granted; (iii) the "Parent Stock Plan") and an aggregate number of 3,431,666 shares of Parent Common Stock reserved for issuance upon subject to such Parent Stock Option; (iv) the conversion exercise price of such Parent Stock Option; (v) the date on which such Parent Stock Option was granted; and (vi) the date on which such Parent Stock Option expires. The Parent has made available to Integrated accurate and complete copies of the Parent Preferred Shares or upon Stock Option Plans and the exercise forms of outstanding warrantsall agreements evidencing the Parent Stock Options. Each of the outstanding All shares of capital stock of each of Parent's Subsidiaries is 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 and owned by a direct or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrancenonassessable. Except as set forth above or in the Parent Disclosure LetterLetter of this Agreement, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights agreements of any kind that obligate character to which the Parent or is bound obligating the Parent to accelerate the vesting of any of its Subsidiaries to issue or to sell any shares of capital stock or other securities of Parent or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person Stock Option as a right to subscribe for or acquire, any securities result of the Parent or any of its Subsidiaries, and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matterMerger.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of: (i) Any unlimited number of 200,000,000 Common Shares with no par value of which 38,129,928 shares are issued and outstanding at September 30, 2006; (ii) 50,000,000 Preferred Shares with no par value, of which 10,000,000 preferred shares have been designated the Series A Convertible Preferred Shares and 6,000 preferred shares have been designated the Series B Convertible Preferred Shares. Of the 10,000,000 designated Series A Convertible Preferred Shares, 5,375,000 were issued and converted into common shares in 2004, leaving 4,625,000 available to be issued. Of the 6,000 Series B Convertible Preferred Shares, all 6,000 have been issued and converted into common shares as at September 30, 2006. All outstanding shares of Parent Common Stock, of which 36,122,600 shares were outstanding as of the close of business on July 7, 2000, and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Capital Stock were outstanding as of the close of business on July 7, 2000 (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable non-assessable and owned not subject to preemptive rights created by statute, the Articles of Continuance or Bylaws of the Company or any agreement to which Parent is a direct party or indirect wholly-owned subsidiary by which it is bound. There are no declared or accrued but unpaid dividends with respect to any shares of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Parent Capital Stock. (b) Except as set forth above or in the Parent Disclosure LetterSecurity Filings or granted in the ordinary course since the date of the most recent balance sheet included therein, there are no preemptive or other outstanding rights, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights agreements of any kind that obligate the character, written or oral, to which Parent is a party or any of its Subsidiaries by which it is bound obligating Parent to issue issue, deliver, sell, repurchase or redeem, or cause to sell be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock or other securities of Parent or obligating Parent to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any of its Subsidiaries such option, warrant, call, right, commitment or any securities agreement. There are no outstanding or obligations convertible or exchangeable into or exercisable forauthorized stock appreciation, phantom stock, profit participation, or giving any Person other similar rights with respect to Parent. No option, warrant or other security of Parent that is subject to a right vesting schedule or exercisability schedule will be accelerated by the transactions contemplated by this Agreement. (c) To Parent’s Knowledge there are no voting trusts, proxies, or other agreements or understandings with respect to subscribe for or acquirethe voting stock of Parent. (d) The rights, any securities preferences, privileges and restrictions of the shares of Parent or any Common Stock issuable as consideration (“Parent Shares”) are as stated in Parent’s Articles of its SubsidiariesContinuance as in effect on the date hereof. The Parent Preferred Stock is convertible into Parent Common Stock as provided in the Articles. When issued in compliance with the provisions of this Agreement and Parent’s Articles of Continuance, the Parent Shares will be validly issued, fully paid and nonassessable, and no will be free of any liens or encumbrances; provided, however, that the Parent Shares may be subject to restrictions on transfer under state, federal or Canadian securities laws as set forth herein or obligation evidencing as otherwise required by such rights are authorized, issued or outstanding. Parent does not have outstanding any bonds, debentures, notes or other obligations laws at the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any mattertime a transfer is proposed.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 shares of Parent Common Stock, Stock of which 36,122,600 29,659,376 shares were issued and outstanding as of the close of business on July 7May 8, 20002001, and 1,000,000 5,000,000 shares of Preferred Stock, $.01 par value, all of which are undesignated and none of which is issued or outstanding. The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, $.01 par value $0.01 per share("Merger Sub Common Stock"), of which 120 100 shares of Series B Convertible Stock were outstanding which, as of the close of business on July 7date hereof, 2000 (the "Parent Preferred Shares")are issued and outstanding and are held by Parent. All of the issued and outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock reserved for issuance pursuant and Merger Sub Common Stock have been duly authorized, and all such issued and outstanding shares have been validly issued, are fully paid and nonassessable, are not subject to the JFAX.Xxx, Xxc. 1997 Stock Option Plan any preemptive rights (the "Parent Stock Plan"and were not issued in violation of any preemptive rights) and an aggregate are free of 3,431,666 shares of Parent Common Stock reserved for issuance any liens or encumbrances other than any liens or encumbrances created by or imposed upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrantsholders thereof. Each of the outstanding shares of Parent Common Stock and outstanding shares of capital stock of each or other equity interests of Parent's Subsidiaries is subsidiaries was issued in compliance with all applicable federal and state laws concerning the issuance of securities. No bonds, debentures, notes or other indebtedness of the Parent having the right to vote on any matters on which stockholders of the Parent may vote are issued or outstanding. As of May 8, 2001, Parent had reserved (i) 4,582,000 shares of Common Stock for issuance to executives, key employees and consultants of Parent or its subsidiaries pursuant to its 1989 Incentive and Nonqualified Stock Option Plan, as amended, under which options were outstanding for 345,736 shares and no shares remained available for future option grants, (ii) 4,000,000 shares of Common Stock for issuance to executives, key employees and consultants of the Company or its subsidiaries pursuant to its 1995 Nonqualified Stock Option Plan, as amended, under which options were outstanding for 66,169 shares and no shares remained available for future option grants, (iii) 4,700,000 shares of Common Stock for issuance to employees, directors and consultants and other individuals providing services to Parent or its subsidiaries pursuant to its 1996 Incentive and Nonqualified Stock Option Plan, as amended, under which options were outstanding for 3,786,602 shares and 412,248 shares remained available for future option grants, (iv) 7,500,000 shares of Common Stock for issuance to employees pursuant to its 1997 Nonqualified Stock Option Plan, as amended, under which options were outstanding for 6,534,379 shares and 530,342 shares remained available for future option grants and (v) 700,000 shares of Common Stock for issuance under its 1996 Employee Stock Purchase Plan, as amended (the "Parent ESPP"). 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, shall be duly authorized, validly issued, fully paid and nonassessable nonassessable. The Parent Schedules include a list of all issuances of capital stock by Parent since January 1, 1998 (other than issuances pursuant to the option plans and owned options described in clauses (i) and (ii) above (the "Parent Stock Option Plans") and the Parent ESPP) and also list for each outstanding option at May 8, 2001, the name of the holder of such option, the number of shares subject to such option, the exercise price of such option, the number of shares as to which such option will have been vested at May 8, 2001 and, if the exercisability of such option will be accelerated in any way by the transactions contemplated by this Agreement or for any other reason, an indication of the extent of such acceleration. Such list also describes any repricing of options which has taken place since January 1, 1998. The Parent Schedules also include a direct or indirect wholly-owned subsidiary list of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or all the participants in the Parent Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights ESPP and the number of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities Parent Common Stock which will be issuable to the participants therein for the offering period ending October 31, 2001 if all current participants continue to contribute at current levels (assuming the purchase price of Parent or any such shares to be 85% of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities the fair market value of the Parent Common Stock on the first day of the current offering period). Since May 8, 2001, there have been no changes in the capital structure of Parent other than issuances of Parent Common Stock (i) upon the exercise of options granted under the Parent Stock Option Plans and (ii) pursuant to the Parent ESPP. (b) The shares of Parent Common Stock to be issued pursuant to the Merger, upon exercise of Company Stock Options to be assumed by Parent by reason of the Merger or any of its Subsidiariesunder the Company ESPP following the Merger will, and no securities or obligation evidencing such rights are upon issuance, be duly authorized, issued or outstanding. Parent does validly issued, fully paid and non-assessable and will not have outstanding been issued in violation of any bonds, debentures, notes subscriptive or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matterpreemptive rights.

Parent Capital Structure. The authorized capital stock of Parent ------------------------ consists of 200,000,000 900,000,000 shares of Parent Common Stock, par value $0.0001 per share, of which 36,122,600 there were 230,115,,485 shares were issued and outstanding as of the close of business on July 7June 30, 2000, 2000 and 1,000,000 15,000,000 shares of Preferred Stock, par value $0.01 0.0001 per share, of which 120 one share was issued and outstanding. The authorized capital stock of Merger Sub consists of 100 shares of Series B Convertible Stock were outstanding Common Stock, par value $0.0001 per share (the "Merger Sub Common Stock"), all of which, as of the close of business on July 7date hereof, 2000 (the "Parent Preferred Shares")are issued and outstanding and are held by Parent. All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 shares of Parent Common Stock, Parent Preferred Stock reserved for issuance pursuant to the JFAX.Xxx, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 shares of Parent Merger Sub Common Stock reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrants. Each of the outstanding shares of capital stock of each of Parent's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable non-assessable and owned are not subject to preemptive rights created by a direct statute, the Certificate of Incorporation or indirect wholly-owned subsidiary of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth above or in the Parent Disclosure Letter, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Parent or any of its Subsidiaries to issue or to sell any shares of capital stock or other securities Bylaws of Parent or any of its Subsidiaries Merger Sub, respectively, or any securities agreement or obligations convertible document to which Parent or exchangeable into Merger Sub is a party or exercisable forby which it is bound. As of June 30, or giving any Person a right 2000, Parent had reserved an aggregate of 45,967,866 shares of Parent Common Stock, net of exercises, for issuance to subscribe employees, consultants and non-employee directors pursuant to Parent's 1996 Flexible Stock Incentive Plan (the "Parent Stock Option Plan"), under which options are outstanding for or acquire25,489,533 shares and under which 11,356,009 shares are available for grant as of June 30, any securities 2000. As of June 30, 2000, 7,904,794 shares were reserved for issuance pursuant to options granted outside the Parent or any Stock Option Plan. As of its SubsidiariesJune 30, 2000, there were 18,965,024 warrants outstanding to purchase shares of Parent Common Stock. All shares of Parent Common Stock subject to issuance as aforesaid, upon issuance on the terms and no securities or obligation evidencing such rights conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, issued or outstanding. Parent does not have outstanding any bondsvalidly issued, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matterfully paid and nonassessable.

Parent Capital Structure. (a) The authorized capital stock of Parent consists of 200,000,000 of: (A) 560,000,000 shares of Parent Common Stock, par value $0.001 per share and (B) 40,000,000 shares of preferred stock, par value $0.001 per share, of which 36,122,600 (x) 100,000 shares were outstanding have been designated as of Series A Preferred Stock (the "PARENT SERIES A PREFERRED STOCK") and (y) 15,000,000 shares have been designated as Series B Preferred Stock (the "PARENT SERIES B PREFERRED STOCK"). At the close of business on July 7April 30, 2000, and 1,000,000 shares of Preferred Stock, par value $0.01 per share, of which 120 shares of Series B Convertible Stock were outstanding as of the close of business on July 7, 2000 2007: (the "Parent Preferred Shares"). All of the outstanding Parent Common Stock and Parent Preferred Shares have been duly authorized and are validly issued, fully paid and nonassessable. Parent has no Parent Common Stock or Parent Preferred Shares reserved for issuance, except that, as of July 7, 2000, there were 4,375,000 i) 176,390,889 shares of Parent Common Stock reserved for issuance pursuant to the JFAX.Xxxwere issued and outstanding, Xxc. 1997 Stock Option Plan (the "Parent Stock Plan") and an aggregate of 3,431,666 excluding shares of Parent Common Stock held by Parent in its treasury, (ii) 3,132,119 shares of Parent Common Stock were issued and held by Parent in its treasury, (iii) no shares of Parent Series A Preferred Stock were issued and outstanding, (iv) 3,562,238 shares of Parent Series B Preferred Stock were issued and outstanding and (v) not more than 18,470,116 shares of Parent Common Stock were reserved for issuance upon the conversion of the Parent Preferred Shares or upon the exercise of outstanding warrantsemployee and director stock options to purchase shares of Parent Common Stock. Each No shares of Parent Common Stock are owned or held by any subsidiary of Parent. All of the outstanding shares of capital stock of each Parent are, and all shares of Parent's Subsidiaries is capital stock of Parent which may be issued as contemplated or permitted by this Agreement will be, when issued, duly authorized, authorized and validly issued, fully paid and nonassessable and owned by a direct not subject to any preemptive rights. There are no declared or indirect wholly-owned subsidiary accrued but unpaid dividends with respect to any shares of capital stock of Parent, free and clear of any lien, pledge, security interest, claim or other encumbrance. . (b) Except as set forth above or and as set forth in Section 3.3(b) of the Parent Disclosure LetterSchedule, as of the close of business on April 30, 2007, there are no preemptive or other outstanding rightssecurities, options, warrants, conversion calls, rights, stock appreciation rights, redemption rights, repurchase rightscommitments, agreements, arrangements, calls, commitments arrangements or rights undertakings of any kind that obligate the to which Parent or any of its Subsidiaries subsidiaries is a party or by which any of them is bound obligating Parent or any of its subsidiaries to issue issue, deliver or sell, or cause to sell any be issued, delivered or sold, additional shares of capital stock or other voting securities of Parent or any of its Subsidiaries subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the obligating Parent or any of its Subsidiariessubsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the close of business on April 30, 2007, there are not any outstanding contractual obligations of Parent or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Parent or any of its subsidiaries. (c) The authorized capital stock of Sub consists of 1,000 shares of common stock, par value $0.001 per share, of which 1,000 shares are issued and no securities or obligation evidencing such rights are authorized, issued or outstanding. Parent is the sole stockholder of Sub and is the legal and beneficial owner of all 1,000 issued and outstanding shares. Sub was formed by counsel to Parent at the direction of Parent, solely for purposes of effecting the Merger and the other transactions contemplated hereby. Except as contemplated by this Agreement, Sub does not have outstanding hold, nor has it held, any bonds, debentures, notes material assets or incurred any material liabilities nor has Sub carried on any business activities other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) than in connection with the stockholders of Parent on any matterMerger and the transactions contemplated by this Agreement.