Common use of REPRESENTATIONS AND WARRANTIES OF COMPANY Clause in Contracts

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents that: (a) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents that: (a) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31March 29, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 210,000 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents thatto the Purchaser as of the Effective Date, and agrees that the Purchaser is entitled to rely on such representations, as follows: (ai) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property or results of operations of the Company. (ii) Exhibit A hereto sets forth the true and complete fully diluted capitalization of the Company immediately following issuance of the Shares to Purchaser, including, without limitation, issued and outstanding Common Stock, granted stock options, shares of Common Stock reserved for future award grants under the Company’s stock option plan, each series of Preferred Stock, and convertible securities, warrants and any other stock purchase rights. All outstanding shares of the Company’s Common Stock and all shares of the Company’s Common Stock underlying outstanding options are subject to (i) a right of first refusal in favor of the Company upon any proposed transfer (other than transfers for estate planning purposes); and (ii) a lock-up or market standoff agreement of not less than one hundred eighty (180) days following the Company’s initial public offering pursuant to a registration statement filed with the Securities and Exchange Commission under the Act. (iii) All corporate action required to be taken by the Company’s Board of Directors and stockholders in order to authorize the Company to enter into the License Agreement or this Agreement, and to issue the Shares to the Purchaser, has been taken. All action on the part of the officers of the Company necessary for the execution and delivery of the License Agreement and this Warrant Agreement and the issuance and delivery of the Shares has been duly authorized taken. The License Agreement and this Agreement, when executed and delivered by the Company's Board of Directors and constitutes the legal, shall constitute valid and legally binding obligation obligations of the Company Company, enforceable against the Company in accordance with its terms, their respective terms except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors' ’ rights generally. (iv) The Shares, when issued, sold and delivered in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance accordance with the terms and provisions of for the consideration set forth in this Warrant, nor Agreement and the issuance of Shares upon exercise of the WarrantLicense Agreement, will violate the terms be validly issued, fully paid and nonassessable and free of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except restrictions on transfer other than as set forth in subparagraph (bSection 4 hereof, applicable state and federal securities laws and liens or encumbrances created by or imposed by Purchaser. Assuming the accuracy of the representations of the CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH “[***]”. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. Purchasers in Section 3(a) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amendedthis Agreement, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, Shares will be duly authorized, fully paid issued in compliance with all applicable federal and non-assessablestate securities laws.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents and warrants to Dealer on the date hereof that: : (a) The execution it has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and to perform its obligations under this Agreement and has taken all necessary action to authorize such execution, delivery and performance; (b) such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any material contractual restriction binding on or affecting it or any of its assets; (c) all governmental and other consents that are required to have been obtained by it with respect to this Warrant has Agreement have been duly authorized by the Company's Board obtained and are in full force and effect and all conditions of Directors and constitutes the any such consents have been complied with; (d) its obligations under this Agreement constitute its legal, valid and binding obligation of the Company obligations, enforceable against the Company in accordance with its termstheir respective terms (subject to applicable bankruptcy, except as enforcement thereof may be limited by bankruptcyreorganization, insolvency, moratorium or other similar laws affecting the enforcement creditors’ rights generally and subject, as to enforceability, to equitable principles of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity application (regardless of whether such enforceability enforcement is considered sought in a proceeding at in equity or at law). Neither ); (e) each of it and its affiliates is not in possession of any material nonpublic information regarding Company or the execution nor Shares (other than regarding the delivery repurchase of this Warrant, nor fulfillment certain Convertible Notes and the unwind of nor compliance with related call option and warrant transactions to be announced prior to the terms and provisions of this Warrant, nor the issuance of Shares upon exercise opening of the WarrantExchange on June 2, will violate 2023); (f) it is not entering into this Agreement to create actual or apparent trading activity in the terms Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the certificate Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amendedamended (the “Exchange Act”); (g) it (i) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (ii) will exercise independent judgment in evaluating the Company recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (iii) has total assets of at least USD 50 million; and (h) it is not authorized any rights “insolvent” (either preemptive or otheras such term is defined under Section 101(32) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise Bankruptcy Code (Title 11 of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableUnited States Code)).

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents and warrants to Dealer (and agrees with Dealer in the case of Section 6(g)(ii)) on the date hereof that: (a) The execution it has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and to perform its obligations under this Agreement and has taken all necessary action to authorize such execution, delivery and performance; (b) such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any material contractual restriction binding on or affecting it or any of its assets; (c) all governmental and other consents that are required to have been obtained by it with respect to this Warrant has Agreement have been duly authorized by the Company's Board obtained and are in full force and effect and all conditions of Directors and constitutes the any such consents have been complied with; (d) its obligations under this Agreement constitute its legal, valid and binding obligation of the Company obligations, enforceable against the Company in accordance with its termstheir respective terms (subject to applicable bankruptcy, except as enforcement thereof may be limited by bankruptcyreorganization, insolvency, moratorium or other similar laws affecting the enforcement creditors’ rights generally and subject, as to enforceability, to equitable principles of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity application (regardless of whether such enforceability enforcement is considered sought in a proceeding at in equity or at law). Neither ); (e) each of it and its affiliates is not in possession of any material nonpublic information regarding Company or the execution nor Shares; (f) it is not entering into this Agreement to create actual or apparent trading activity in the delivery of this WarrantShares (or any security convertible into or exchangeable for the Shares), nor fulfillment of nor compliance with to raise or depress or otherwise manipulate the terms and provisions of this Warrant, nor the issuance of Shares upon exercise price of the WarrantShares (or any security convertible into or exchangeable for the Shares), will violate for the terms purpose of inducing the sale of the certificate Shares (or any security convertible into or exchangeable for the Shares) by others or otherwise in violation of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amendedamended (the “Exchange Act”), the provided that Company has not authorized any rights makes no representation or warranty with respect to Dealer’s Hedge Position (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring dealer’s hedge position in respect of derivatives relating to the issuance by Convertible Notes); and (g) (i) it is not on the Company ofdate hereof, any capital stock engaged in a distribution, as such term is used in Regulation M under the Exchange Act (“Regulation M”), of the Shares or any securities convertible into or exchangeable for its capital stock. deemed “reference securities” (das defined in Regulation M) Sufficient shares of authorized but unissued shares of Common Stock with respect to the Shares and (ii) it shall not engage in any such distribution during the period commencing on the date hereof and ending on the second Exchange Business Day immediately following the last day of the Company have been reserved by appropriate corporate action Hedge Unwind Period with respect to the Shares or such reference securities, unless it notifies Dealer, on the day immediately preceding the first day of the “restricted period” (as defined in Regulation M) of any such distribution, and of completion of such restricted period on the date such distribution is concluded; provided that, in connection with the prospective exercise notification with respect to the completion of the Warrantrestricted period, and, it shall be deemed to repeat the issuance representations contained in paragraphs (e) and (f) of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessablethis Section 6.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents and warrants to Dealer (and agrees with Dealer in the case of Section 6(g)(ii)) on the date hereof that: (a) The execution it has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and to perform its obligations under this Agreement and has taken all necessary action to authorize such execution, delivery and performance; (b) such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any material contractual restriction binding on or affecting it or any of its assets; (c) all governmental and other consents that are required to have been obtained by it with respect to this Warrant has Agreement have been duly authorized by the Company's Board obtained and are in full force and effect and all conditions of Directors and constitutes the any such consents have been complied with; (d) its obligations under this Agreement constitute its legal, valid and binding obligation of the Company obligations, enforceable against the Company in accordance with its termstheir respective terms (subject to applicable bankruptcy, except as enforcement thereof may be limited by bankruptcyreorganization, insolvency, moratorium or other similar laws affecting the enforcement creditors’ rights generally and subject, as to enforceability, to equitable principles of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity application (regardless of whether such enforceability enforcement is considered sought in a proceeding at in equity or at law). Neither ); (e) each of it and its affiliates is not in possession of any material nonpublic information regarding Company or the execution nor Shares; (f) it is not entering into this Agreement to create actual or apparent trading activity in the delivery of this WarrantShares (or any security convertible into or exchangeable for the Shares), nor fulfillment of nor compliance with to raise or depress or otherwise manipulate the terms and provisions of this Warrant, nor the issuance of Shares upon exercise price of the WarrantShares (or any security convertible into or exchangeable for the Shares), will violate for the terms purpose of inducing the sale of the certificate Shares (or any security convertible into or exchangeable for the Shares) by others or otherwise in violation of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amendedamended (the “Exchange Act”), the provided that Company has not authorized any rights makes no representation or warranty with respect to Dealer’s Hedge Position (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring dealer’s hedge position); and (g) (i) it is not on the issuance by date hereof, engaged in a distribution, as such term is used in Regulation M under the Company ofExchange Act (“Regulation M”), any capital stock of the Shares or any securities convertible into or exchangeable for its capital stock. deemed “reference securities” (das defined in Regulation M) Sufficient shares of authorized but unissued shares of Common Stock with respect to the Shares and (ii) it shall not engage in any such distribution during the period commencing on the date hereof and ending on the second Exchange Business Day immediately following the last day of the Company have been reserved by appropriate corporate action Hedge Unwind Period with respect to the Shares or such reference securities, unless it notifies Dealer, on the day immediately preceding the first day of the “restricted period” (as defined in Regulation M) of any such distribution, and of completion of such restricted period on the date such distribution is concluded; provided that, in connection with the prospective exercise notification with respect to the completion of the Warrantrestricted period, and, it shall be deemed to repeat the issuance representations contained in paragraphs (e) and (f) of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessablethis Section 6.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents and warrants to Dealer on the date hereof that: (a) The execution Company is not, and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation after consummation of the transactions contemplated hereby will not be, required to register as an “investment company” as such term is defined in the Investment Company enforceable against the Company in accordance with its termsAct of 1940, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject.amended; (b) As of December 31, 2002, the authorized capital stock Company is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Company consisted Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(18)(C) of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding.the Commodity Exchange Act); (c) Except None of Company and its officers and directors is, on the date hereof, aware of any material non-public information with respect to Issuer or the Shares; (d) to Company’s knowledge, no U.S. state or local law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as set forth a result of Dealer or its affiliates owning or holding (however defined) Shares; provided that no such representation shall be made by Company with respect to any rules and regulations applicable to Dealer (including Financial Industry Regulatory Authority rules) arising from Dealer’s status as a regulated entity under applicable law; (e) Company (A) is capable of evaluating investment risks independently, both in subparagraph general and with regard to all transactions and investment strategies involving a security or securities; (bB) abovewill exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million; and (f) Company is not entering into this Agreement to create actual or apparent trading activity in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights Shares (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities security convertible into or exchangeable for its capital stockthe Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. (dg) Sufficient shares of authorized but unissued shares of Common Stock of On the date hereof and the Notes Settlement Date, Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will is not require any further corporate action by the stockholders or directors of the Company, and will not be subject to preemptive rights “insolvent” (unless the exercise as such term is defined under Section 101(32) of the same has been irrevocably waived) in any present stockholders U.S. Bankruptcy Code (Title 11 of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableUnited States Code).

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company hereby represents thatand warrants to the Holder as follows: (a) As of the date hereof, the Company has 700,000,000 shares of Common Stock authorized, of which 3,536,865 shares of Common Stock are issued and outstanding, and 500,000 shares of preferred stock authorized, of which no shares are issued and outstanding. As of the date hereof, the Company has reserved for issuance 849,371 shares of Common Stock upon exercise of all outstanding options and warrants. All of the issued and outstanding shares of the Company's Common Stock are, and all shares reserved for issuance will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. The execution Conversion Shares to be issued and delivery delivered to the Holder upon conversion of this Warrant has the Note have been duly authorized and when issued upon such Debt Conversion and in accordance with this Agreement, will be validly issued, fully-paid and non-assessable. The Conversion Shares will be "restricted securities" as defined under Rule 144 promulgated under the Securities Act. (b) The Company has full legal power to execute and deliver this Agreement and to perform its obligations hereunder. All acts required to be taken by the Company's Board of Directors Company to enter into this Agreement and to carry out the transactions contemplated hereby have been properly taken, and this Agreement constitutes the a legal, valid and binding obligation of the Company Company, enforceable against the Company in accordance with its termsterms and does not conflict with, except as enforcement thereof may be limited by bankruptcyresult in a breach or violation of or constitute (or with notice of lapse of time or both constitute) a default under any instrument, insolvency, contract or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company or its subsidiaries is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstandinga party. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by None of the Company under the Act or in any report filed by the Company under the Securities Exchange Act Company's Certificate of 1934Incorporation, as amended, or Bylaws, or the Company has not authorized laws of Delaware, or New York, contains any rights (either preemptive applicable anti-takeover provision or other) or options to subscribe for or purchase from statute which would restrict the Company, 's ability to enter into this Agreement or consummate the transactions contemplated by this Agreement or which would limit any warrants or other agreements providing for or requiring of the issuance Holder's rights following consummation of the transactions contemplated by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stockthis Agreement. (d) Sufficient shares The Company has delivered or made available through EXXXX and SEDAR to the Holder prior to the execution of authorized but unissued shares this Agreement true and complete copies of Common Stock all periodic reports, registration statements and proxy statements filed by it with the U.S Securities and Exchange Commission (“Commission” or “SEC”) since December 10, 2009. Each of such filings with the Commission (collectively, the "SEC Filings"), as of its filing date, complied in all material respects with the requirements of the Company have been reserved rules and regulations promulgated by appropriate corporate action the Commission with respect thereto and did not contain any untrue statement of a material fact or omit a material fact necessary in order to make the prospective exercise statements contained therein not misleading in light of the Warrantcircumstances in which such statements were made. (e) Since January 1, and2012 and except as disclosed in the SEC Filings, the issuance Company has conducted its business in compliance in all material respects with all applicable laws, rules, regulations, court or administrative orders and processes and rules, directives and orders of either regulatory and self-regulatory agencies and bodies, except as would not reasonably be expected, singly or in the Warrant aggregate, to be materially adverse to the business, assets or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors financial condition of the Company, will . (f) No representation or warranty by the Company contained in this Agreement contains any untrue statement of a material fact or omits a material fact necessary in order to make the statements contained herein or therein not be subject to preemptive rights (unless the exercise misleading in light of the same has been irrevocably waived) circumstances in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessablestatements were made.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents that: ----------------------------------------- and warrants to Parent that (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to enter into this Agreement and to carry out its obligations hereunder, (b) the execution and delivery of this Warrant has Agreement by Company and the consummation by Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the Company's Board part of Directors Company and no other corporate proceedings on the part of Company are necessary to authorize this Agreement or any of the transactions contemplated hereby, (c) this Agreement has been duly executed and delivered by Company and constitutes the legal, a valid and binding obligation of the Company Company, enforceable against the Company in accordance with its terms, except as enforcement thereof such enforceability may be limited by bankruptcy, insolvency, or bankruptcy and other laws affecting the enforcement rights and remedies of creditors' rights in creditors generally and general principles of equity, (d) Company has taken all action necessary to authorize and except that the enforceability of the obligations hereunder is subject reserve for issuance and to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrantpermit it to issue, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the WarrantCompany Option, and at all times from the date hereof through the expiration of the Company Option will violate have reserved, that number of unissued Company Shares that are subject to the Company Option, all of which, upon their issuance and delivery in accordance with the terms of the certificate of incorporation or by-laws this Agreement, will be validly issued, fully paid and nonassessable, (e) upon delivery of the Company or, Shares to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock Parent upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waivedCompany Option, Parent will acquire the Company Shares free and clear of all liens, claims, charges, encumbrances and security interests of any nature whatsoever except those imposed by Parent, (f) assuming that the consents approvals, authorizations, permits, filings and notifications referred to in subsection (g) are obtained or made, as applicable, the execution and delivery of this Agreement by Company does not, and the performance of this Agreement by Company will not, conflict with, or result in any present stockholders violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or the Company and will not conflict with loss of a benefit under, or the creation of a lien, pledge, security interest or other encumbrance on assets pursuant to (any such conflict, violation, default, right of termination, cancellation or acceleration, loss or creation, a "Violation"), (A) any provision of the Amended and Restated Certificate of Incorporation or By-laws, each as amended, of Company or (B) any agreement provisions of any material mortgage, indenture, lease, contract or other agreement, instrument, permit, concession, franchise, or license or (C) any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Company or its properties or assets, except in the case of clauses (B) and (C) immediately above, for violations which would not, individually or in the aggregate, have a Material Adverse Effect on Company is a party or and (g) except as described in Section 2.3 of the Reorganization Agreement, the execution and delivery of this Agreement by which it is boundCompany does not, and such Common Stockthe performance of this Agreement by Company will not, when issued upon exercise of the Warrant in accordance require any consent, approval, authorization or permit of, or filing with its termsor notification to, will be duly authorized, fully paid and non-assessableany Governmental Entity or Regulatory Entity.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The In order to induce the ----------------------------------------- Purchaser to purchase the Shares, the Company represents thatand warrants to the Purchaser as follows: (a) The execution Company's authorized capital consists of (i) 10,000,000 shares of preferred stock, no shares of which are issued and outstanding, (ii) 75,000,000 shares of Class A common stock, of which 2,000,000 shares are issued and outstanding or are committed to be issued, (iii) and 25,000,000 shares of Class B common stock, of which 2,500,000 shares are issued and outstanding or are committed to be issued. A list of the current stockholders with the number of class of shares owned by each is attached as Schedule 1. The Company intends to issue 1,200,000 shares of Class A common stock and 2,600,000 shares of Class B common stock concurrently with the sale of the Shares to Purchaser. In addition, the Company has reserved an additional 500,000 shares of Class A common stock for issuance to key executive employees of the Company and intends to reserve an additional 4,300,000 shares of Class A common stock for issuance under the Company's 1998 Incentive Compensation Plan. Except as described in this Section Schedule 1, as of the date of the Agreement, there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments obligating the Company to issue, sell, deliver or transfer (including any right of conversion or exchange under any outstanding security or other instrument) any shares of the Company stock or any other securities. All outstanding shares of Class A common stock and Class B common stock have been duly and validly authorized and issued, are fully paid and non-assessable, and have been issued free of any lien, security interest, pledge, charge or encumbrance of any kind (collectively, "Encumbrances"). (b) The Company was incorporated on May 19, 1998 and has not yet commenced business operations. (c) The Company is a corporation duly organized and existing under the laws of the State of Delaware and is in good standing under such laws. The Company is duly qualified and licensed in each jurisdiction where the nature of the business conducted by it requires such qualification, except where the failure to qualify would not have a material adverse effect upon the Company's financial condition or results of operations. The Company has the requisite corporate power and authority to own or lease and operate its properties and assets, and to carry on its business as proposed to be conducted. The Company has delivered to the Purchaser true and complete copies of its Certificate of Incorporation and Bylaws, as in effect as of the date hereof. (d) The Company has all requisite corporate power to execute and deliver this Agreement and to sell and issue the Shares hereunder, and to carry out and perform its obligations under the terms of this Agreement. (e) Neither the Company nor any subsidiary thereof owns, directly or indirectly, of record or beneficially any capital stock or equity interest or investment in any corporation, association or business entity, except with respect to PaeTec Communications, Inc. and PaeTec International, Inc., each of which is a wholly owned subsidiary of the Company (the"Subsidiaries"). Each of the Subsidiaries is a corporation duly organized and existing under the laws of the State of Delaware and is in good standing under such laws. Each Subsidiary has the requisite corporate power and authority to own or lease and operate its properties and assets, and to carry on its business as proposed to be conducted. Neither the Company nor any Subsidiary is a partner or participant in any partnership or joint venture. (f) All corporate action on the part of the Company, its directors and stockholders necessary for the authorization, execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated herein and for the authorization, issuance and delivery of this Warrant the Shares has been duly authorized by the Company's Board of Directors and taken. This Agreement constitutes the legal, a valid and binding obligation of the Company Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by subject to laws of general application relating to bankruptcy, insolvency, or and the relief of debtors and other laws of general application affecting the enforcement of creditors' rights generally, including rules of law governing specific performance, injunctive relief or other equitable remedies. The Shares, when issued in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the WarrantAgreement, will violate the terms be validly issued, fully paid and nonassessable and will be free of the certificate any Encumbrances, and will be free of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subjectrestrictions on transfer other than under state and/or federal Securities laws. (bg) As No consent, approval, qualification, order or authorization of, or filing with, any governmental authority or any third party is required in connection with Company's valid execution, delivery or performance of December 31this Agreement, 2002or the offer, the authorized capital stock sale or issuance of the Shares by the Company, except filings required pursuant to applicable federal and state securities laws and blue sky laws, which filings the Company consisted shall complete within the lesser of fifteen (15) days of the date hereof or the required statutory period. (h) The Company has good and marketable title to its properties and assets and, with respect to the property and assets leased by the Company, holds valid leasehold interests therein, in each case subject to no mortgage, pledge, lien, security interest, conditional sale agreement, encumbrance or charge, except (i) 99,300,000 shares of Common Stocktax, $0.001 par value per sharematerialmen's or like liens for obligations not yet due or payable or being contested in good faith by appropriate proceedings, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and or (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of possible minor liens or encumbrances which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has do not authorized any rights (either preemptive or other) or options to subscribe for or purchase materially detract from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock value of the Company have been reserved by appropriate corporate action with property subject thereto or materially impair the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders operations of the Company and will which have arisen in the ordinary course of business. (i) Subject to the truth and accuracy of the Purchaser's representations set forth in this Agreement, the offer, sale and issuance of the Shares as contemplated by this Agreement are exempt from the registration requirements of the Securities Act, and from the qualification requirements of the California and New York blue sky laws. (j) The Company is not conflict with in violation of any provision term of its Certificate of Incorporation or its Bylaws, any term of any agreement to which the Company is a party party, or any judgment, decree, order, statute, rule or regulation to which the Company is subject, that would have a material adverse effect on the condition, financial or otherwise, prospects or operations of the Company. (k) The execution, delivery and performance by the Company of this Agreement, and the issuance, sale and delivery of the Shares will not violate any provision of law, the Certificate of Incorporation or Bylaws of the Company or any order, judgment or decree of any court or any governmental agency, or conflict with, result in a breach of, or constitute a default under, any indenture, agreement or other instrument by which it the Company, or any of its respective assets, is bound, and such Common Stock, when issued upon exercise or result in the creation or imposition of any Encumbrance on any of the Warrant assets of the Company. (l) There are no actions, suits, proceedings or investigations pending or threatened against the Company, and the Company is not aware of any basis for the foregoing except for an action pending in accordance Supreme Court, Monroe County, New York titled ACC Corp., et al v. Xxxxxx X. Xxxxxxxx, Xxxxxxx ----------------------------------------------- Ottalagana, Xxxx Xxxxx, PaeTec Corporation, and PaeTec Communications, Inc. --------------------------------------------------------------------------- (Index No. 7466-98). A copy of the complaint in this action has been furnished to Purchaser. The Company is not a party to or subject to the provisions of any order, writ, injunction, judgment or decree of any court or governmental agency. (m) The Company is insured with reputable insurers against all risks normally insured against by companies in similar lines of business, and all of the insurance policies maintained by the Company are in full force and effect. A schedule listing all insurance policies that are material to the Business has been furnished to Purchaser. The Company is not in default under any such policy. All insurance policies maintained by the Company will remain in full force and effect and may reasonably be expected to be renewed on comparable terms following consummation of the transactions contemplated by this Agreement (subject to continuing compliance with the applicable terms thereof and any right of insurers to terminate without cause), and the Company has received no notice or other indication from any insurer or agent of any intent to cancel or not so renew any of such insurance policies. (n) The Company does not have employment agreements with any of its employees. Since its inception, the Company has not experienced any labor disputes, union organization attempts or any work stoppage due to labor disagreements in connection with its termsbusiness. There is no labor strike, dispute, request for representation, slowdown or stoppage actually pending or threatened against or affecting the Company or any of the Subsidiaries. All workers' compensation and unemployment compensation insurance premiums due have been fully paid or accrued in the Company's financial statements. (o) All employee benefit plans within the meaning of Section 3(3) of the Employment Retirement Income Security Act of 197s4, as amended, and the related regulations and published interpretations ("ERISA"), are in full compliance with the applicable provisions of ERISA (as amended through the date of this Agreement), the regulations and published authorities thereunder, and all other laws applicable with respect to all such employee benefit plans, agreements and arrangements. The Company has performed all of its obligations under all such plans, agreements and arrangements. To the best knowledge of the Company, there are no actions (other than routine claims for benefits) pending or threatened against such plans or their assets, or arising out of such plans, agreements or arrangements, and, to the best knowledge of the Company, no facts exist which could give rise to any such Actions. (p) All group health plans of the Company and any Subsidiary have been operated in compliance with the group health plan continuation coverage requirements of Section 162(k) of the Internal Revenue Code to the extent such requirements are applicable. (q) There has been no act or omission by the Company or any Subsidiary that has given rise to or may give rise to fines, penalties, taxes, or related charges under Section 502(c) or (k) or Section 4071 of ERISA or Chapter 43 of the Internal Revenue Code. (r) Schedule 2 sets forth a complete list of all governmental licenses, permits and authorizations necessary for the Company and the Subsidiaries to operate their businesses as presently conducted and proposed to be conducted, including without limitation, those required by the U.S. Federal Communications Commission and by all relevant state public utilities commissions. Such licenses, permits and authorizations are in full force and effect and the Company knows of no threatened suspension, cancellation or invalidation thereof. (s) The Company has not issued to any other holder of the securities of the Company registration rights that are superior to the rights set forth in Section 4 of this Agreement. (t) The proceeds from the sale of the Shares will be duly authorizedused by the Company to fund expansion of the Company's switched-based telecommunications business including the purchase of equipment, fully paid the opening of new sales offices, for additional working capital, and non-assessablefor general corporate purposes. (u) The financial statements of the Company for the two month period ended June 30, 1998, compiled by Xxxx X. XxXxxxx, CPA, a copy of which is attached as Exhibit A, was prepared from the books and records of the Company and fairly sets forth the financial position of the Company, subject to the qualifications contained therein. (v) The foregoing representations and warranties of the Company are true and correct as of the date of this Agreement, shall be true and correct as of the closing of the sale of the Shares, and shall survive the closing. No representation of warranty of the Company in this Agreement contains, or on the closing date will contain, any untrue statement of material fact or omits, or on the closing date will omit, any material fact necessary in order to make the statements contained therein not misleading.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company hereby represents thatand warrants to the Holders as follows: (a) As of the date hereof, the Company has 400,000,000 shares of Common Stock authorized, of which 156,893,312 shares of Common Stock are issued and outstanding, and 2,000,000 shares of preferred stock authorized, of which no shares are issued and outstanding. As of the date hereof, the Company has reserved for issuance 24,266,707 shares of Common Stock upon exercise of all outstanding options and warrants. All of the issued and outstanding shares of the Company’s Common Stock are, and all shares reserved for issuance will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. The execution Exchange Shares to be issued and delivery delivered to the Holder upon exchange of this Warrant has the Notes have been duly authorized and when issued upon exchange of the Notes, will be validly issued, fully-paid and non-assessable. The issuance of the Exchange Shares will be exempt from registration pursuant to Section 3(a)(9) promulgated under the Securities Act of 1933, as amended (“Securities Act”), and such Exchange Shares will not be “restricted securities” as defined under Rule 144 promulgated under the Securities Act. (b) The Company has full legal power to execute and deliver this Agreement and, subject to receipt of Shareholder Approval, to perform its obligations hereunder. All acts required to be taken by the Company's Board Company to enter into this Agreement and, subject to receipt of Directors Shareholder Approval, to carry out the transactions contemplated hereby have been properly taken, and this Agreement constitutes the a legal, valid and binding obligation of the Company Company, enforceable against the Company in accordance with its termsterms and does not conflict with, except as enforcement thereof may be limited by bankruptcyresult in a breach or violation of or constitute (or with notice of lapse of time or both constitute) a default under any instrument, insolvency, contract or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company or its subsidiaries is subjecta party. (bc) As The affirmative vote of December 31, 2002, the authorized holders of record of at least a majority of the shares of the Company’s Common Stock cast at the Shareholder Meeting with respect to the matters referred to in Section 1 hereof is the only vote of the holders of any class or series of the capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by required to approve the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stocktransactions contemplated hereby. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors None of the Company’s Articles of Incorporation, will not be subject as amended, or Bylaws, or the laws of Florida, California or New York, contains any applicable anti-takeover provision or statute which would restrict the Company’s ability to preemptive rights (unless enter into this Agreement or consummate the exercise transactions contemplated by this Agreement or which would limit any of the same Holder’s rights following consummation of the transactions contemplated by this Agreement. (e) No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. (f) The Company has been irrevocably waiveddelivered or made available to the Holder prior to the execution of this Agreement true and complete copies of all periodic reports, registration statements and proxy statements filed by it with the Commission since January 1, 2006. Each of such filings with the Commission (collectively, the “SEC Filings”), as of its filing date, complied in all material respects with the requirements of the rules and regulations promulgated by the Commission with respect thereto and did not contain any untrue statement of a material fact or omit a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances in which such statements were made. (g) Since September 30, 2006, except as disclosed in any present stockholders the SEC Filings filed by the Company with the Commission before the date of this Agreement, the Company and will its subsidiaries, taken as a whole, has not conflict with suffered any provision material adverse change in its assets, liabilities, financial condition, results of any agreement to operations or business, except for those occurring as a result of general economic or financial conditions affecting the United States as a whole or the region in which the Company is conducts its business or developments that are not unique to the Company but also affect other entities engaged or participating in the brokerage industry generally in a party manner not materially less severely. For purposes of this section, revenues and operating results materially consistent with the Company’s revenues and operating results for the quarter ended September 30, 2006, as reflected in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, shall not be deemed a material adverse change. (h) No information to be contained in the Proxy Statement to be prepared pursuant to this Agreement and no representation or warranty by which it is bound, and such Common Stock, when issued upon exercise the Company contained in this Agreement contains any untrue statement of a material fact or omits a material fact necessary in order to make the statements contained herein or therein not misleading in light of the Warrant circumstances in accordance which such statements were made. (i) Since September 30, 2006 and except as disclosed in the SEC Filings filed by the Company with the Commission before the date of this Agreement, the Company has conducted its termsbusiness in compliance in all material respects with all applicable laws, will rules, regulations, court or administrative orders and processes and rules, directives and orders of regulatory and self-regulatory agencies and bodies, except as would not reasonably be duly authorizedexpected, fully paid and non-assessablesingly or in the aggregate, to be materially adverse to the business, assets or financial condition of the Company.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The To induce the Subscriber to enter into the Agreement, the Company represents thatand its principal shareholders do hereby represent and warrant as follows: (aA) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes Shares to be delivered to the legalSubscriber will constitute, under Delaware corporate law, valid and binding obligation legally issued Shares of the Company, fully paid, and nonassessable. (B) The officers of the Company enforceable against the are duly authorized to execute this Agreement and have taken all actions required by law and agreement, its charter and bylaws, to properly and legally execute this Agreement. (C) The Company is not involved in accordance with its termsany pending litigation, except as enforcement thereof may be limited by bankruptcy, insolvencyclaims, or other laws affecting governmental investigation or proceeding not reflected in its financial statements or otherwise disclosed in writing to the enforcement of creditors' rights in general Subscriber and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity there are no lawsuits, claims, assessments, investigations, or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company orsimilar matters, to the best knowledge of the management, threatened or contemplated against the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree its management or statute to which the Company is subjectproperties. (bD) As of December 31The Company is duly organized, 2002, validly existing and in good standing under the authorized capital stock laws of the Company consisted State of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated Delaware; it has the corporate power to own its property and to carry on its business as Class A Common Stock, of which 31,885,896 shares are issued now being conducted and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstandingis duly qualified to conduct such business in any jurisdiction so required. (cE) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act Pursuant to its Certificate of 1934Incorporation, as amended, the Company is authorized to issue 50,000,000 shares of Common Stock, par value $0.001 per share, 37,637,054 shares of which are issued and outstanding, fully paid and nonassessable. The company is authorized to issue 4,300 shares of Series A preferred stock, 4,300 shares of which are issued and outstanding. The Company has not authorized 100,000 shares of preferred stock, none of which is issued or outstanding prior to the closing hereof. The Company has no treasury stock. There are no other authorized or outstanding subscriptions, options, warrants, or other agreements or commitments obligating the Company to issue any rights (either preemptive or other) or options to subscribe for or purchase from the Companyadditional shares of its capital stock of any class, or any warrants options or other agreements providing for or requiring the issuance by the Company ofrights with respect thereto, any capital stock or any securities convertible into any shares of stock of any class. No shareholder of the Company has any right of first refusal or exchangeable for its any preemptive rights with respect to the issuance of the Company's capital stock. (dF) Sufficient shares of authorized but unissued shares of Common Stock Attached hereto and marked as Exhibit A, and hereby made a part hereof, are the Financial Statements of the Company have been reserved by appropriate corporate action with as of December 31, 1996, hereinafter referred to as the prospective exercise of "Financial Statements". Except as explained in the Warrant, andnotes thereto, the issuance of either Financial Statements present fairly the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders financial condition of the Company as of the dates thereof and will not conflict the results of operations for periods covered thereby and, except as aforesaid, the Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (G) The Company has in all material aspects performed all obligations required to be performed by it in the past and no claim exists for default in any provision of material respect under any agreement agreements, leases, or other documents to which the Company is a party party. (H) The Company has complied in all material aspects with all applicable statutes and regulations of any governmental authority having jurisdiction over it or by which it that have been applicable to its business. The Company is boundcurrent in its SEC filings and has filed all reports required to be filed with the SEC during the past twelve (12) months. (I) The Company has filed in correct form all income tax returns due with respect to all prior years, and all franchise, real and personal property tax returns that are required to be filed, and has paid all taxes as shown on the said returns and all assessments received by it to the extent that such Common Stocktaxes and assessments have become due. (J) No loans or other obligations are payable to officers, when issued upon exercise directors, employees, or stockholders of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableCompany.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents that: (a) The execution execution, delivery and delivery performance of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will (i) violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, or (ii) violate any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject, except for such violations that may have a de minimis effect on the Company, would not affect the Company's ability to execute and deliver this Warrant and would not affect the Holder's ability to exercise all or any portion of this Warrant. (b) As of December 31, 2002, the The authorized capital stock of the Company consisted consists of (i) 99,300,000 35,000,000 shares of Common Stock, $0.001 par value per shareof which, 95,000,000 shares of which are designated as Class A Common Stockbased upon information currently available, of which 31,885,896 10,248,191 shares are issued and outstanding, outstanding and 4,300,000 500,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 no shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amendedExhibit B attached hereto, the Company has does not authorized have outstanding any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents thatto the Purchaser as of the Effective Date, and agrees that the Purchaser is entitled to rely on such representations, as follows: (ai) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property or results of operations of the Company. (ii) Exhibit A hereto sets forth the true and complete fully diluted capitalization of the Company immediately following issuance of the Shares to Purchaser, including, without limitation, issued and outstanding Common Stock, granted stock options, shares of Common Stock reserved for future award grants under the Company’s stock option plan, each series of Preferred Stock, and convertible securities, warrants and any other stock purchase rights. All outstanding shares of the Company’s Common Stock and all shares of the Company’s Common Stock underlying outstanding options are subject to (i) a right of first refusal in favor of the Company upon any proposed transfer (other than transfers for estate planning purposes); and (ii) a lock-up or market standoff agreement of not less than one hundred eighty (180) days following the Company’s initial public offering pursuant to a registration statement filed with the Securities and Exchange Commission under the Act. (iii) All corporate action required to be taken by the Company’s Board of Directors and stockholders in order to authorize the Company to enter into the License Agreement or this Agreement, and to issue the Shares to the Purchaser, has been taken. All action on the part of the officers of the Company necessary for the execution and delivery of the License Agreement and this Warrant Agreement and the issuance and delivery of the Shares has been duly authorized taken. The License Agreement and this Agreement, when executed and delivered by the Company's Board of Directors and constitutes the legal, shall constitute valid and legally binding obligation obligations of the Company Company, enforceable against the Company in accordance with its terms, their respective terms except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors' ’ rights generally. (iv) The Shares, when issued, sold and delivered in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance accordance with the terms and provisions of for the consideration set forth in this Warrant, nor Agreement and the issuance of Shares upon exercise of the WarrantLicense Agreement, will violate the terms be validly issued, fully paid and nonassessable and free of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except restrictions on transfer other than as set forth in subparagraph (bSection 4 hereof, applicable state and federal securities laws and liens or encumbrances created by or imposed by Purchaser. Assuming the accuracy of the representations of the Purchasers in Section 3(a) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amendedthis Agreement, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, Shares will be duly authorizedissued in compliance with all applicable federal and state securities laws. CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH “[***]”. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 406 UNDER THE SECURITIES ACT OF 1933, fully paid and non-assessableAS AMENDED.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company hereby represents thatand warrants to the Holders as follows: (a) As of the date hereof, the Company has 200,000,000 shares of Common Stock authorized, of which 26,418,185 shares of Common Stock are issued and outstanding, and 10,000,000 shares of preferred stock authorized, of which 3,629,325 shares of Series A Preferred Stock are issued and outstanding and are convertible into 1,512,219 shares of Common Stock, and 544,399 shares of Series A Preferred Stock representing accrued dividends are convertible into 226,833 shares of Common Stock. As of the date hereof, the Company has reserved for issuance 2,914,315 shares of Common Stock upon exercise of all outstanding options and warrants. All of the issued and outstanding shares of Common Stock are, and all shares reserved for issuance will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. The execution Exchange Shares to be issued and delivery delivered to the Holders upon exchange of this Warrant has the Tranche C Debt and conversion of the Series A Preferred Stock have been duly authorized and when issued upon exchange of the Tranche C Debt and conversion of the Series A Preferred Stock, will be validly issued, fully-paid and non-assessable. The Warrants to be issued and delivered to the Holders upon the Closing have been duly authorized and the Warrant Shares, when issued upon exercise of the Warrants against payment therefore, will be validly issued, fully-paid and non-assessable. (b) The Company has full legal power to execute and deliver this Agreement and, subject to receipt of Shareholder Approval, to perform its obligations hereunder. All acts required to be taken by the Company's Board Company to enter into this Agreement and, subject to receipt of Directors Shareholder Approval, to carry out the transactions contemplated hereby have been properly taken, and this Agreement constitutes the a legal, valid and binding obligation of the Company Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other laws similar legal requirements affecting the enforcement of creditors' ’ rights in generally and by general principles of equity, and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered does not conflict with, result in a proceeding at equity breach or at law). Neither the execution nor the delivery violation of this Warrant, nor fulfillment or constitute (or with notice of nor compliance with the terms and provisions lapse of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation time or by-laws of the Company or, to the best of the Company's knowledge, both constitute) a default under any agreement (including any agreement with stockholders), instrument, judgment, decree contract or statute other agreement to which the Company or its subsidiaries is subjecta party. (bc) As The affirmative vote of December 31, 2002, the authorized holders of record of at least a majority of the shares of Common Stock (together with the Series A Preferred Stock voting on an as converted basis with the Common Stock) cast at the Shareholder Meeting with respect to the matters referred to in Section 1 hereof is the only vote of the holders of any class or series of the capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by required to approve the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stocktransactions contemplated hereby. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the prospective exercise of the Warrant, and, the issuance of either the Warrant transactions contemplated by this Agreement based upon arrangements made by or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors on behalf of the Company. (e) The Company has delivered or made available to the Holders prior to the execution of this Agreement, will not be subject to preemptive rights true and complete copies of all periodic reports, registration statements and proxy statements filed by it with the Commission since July 27, 2008. Each of such filings with the Commission (unless collectively, the exercise “SEC Filings”), as of its filing date, complied in all material respects with the requirements of the same has been irrevocably waivedrules and regulations promulgated by the Commission with respect thereto and did not contain any untrue statement of a material fact or omit a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances in which such statements were made. (f) Since October 24, 2009, except as disclosed in any present stockholders the SEC Filings filed by the Company with the Commission before the date of this Agreement, the Company and will its subsidiaries, taken as a whole, has not conflict with suffered any provision material adverse change in its assets, liabilities, financial condition, results of any agreement to operations or business, except for those occurring as a result of general economic or financial conditions affecting the United States as a whole or the region in which the Company is conducts its business or developments that are not unique to the Company but also affect other entities engaged or participating in the women’s intimate apparel industry generally in a party manner not materially less severely. For purposes of this section, revenues and operating results materially consistent with the Company’s revenues and operating results for the quarter ended October 24, 2009, as reflected in the Company’s Quarterly Report on Form 10-Q for the quarter ended October 24, 2009, shall not be deemed a material adverse change. (g) No information to be contained in the Proxy Statement to be prepared pursuant to this Agreement and no representation or warranty by which it is bound, and such Common Stock, when issued upon exercise the Company contained in this Agreement contains any untrue statement of a material fact or omits a material fact necessary in order to make the statements contained herein or therein not misleading in light of the Warrant circumstances in accordance which such statements were made. (h) Since October 24, 2009 and except as disclosed in the SEC Filings filed by the Company with the Commission before the date of this Agreement, the Company has conducted its termsbusiness in compliance in all material respects with all applicable laws, will rules, regulations, court or administrative orders and processes and rules, directives and orders of regulatory and self-regulatory agencies and bodies, except as would not reasonably be duly authorizedexpected, fully paid and non-assessablesingly or in the aggregate, to be materially adverse to the business, assets or financial condition of the Company.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The To induce the Subscriber to enter into the Agreement, the Company represents thatand its principal shareholders do hereby represent and warrant as follows: (aA) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes Shares to be delivered to the legalSubscriber will constitute, under Delaware corporate law, valid and binding obligation legally issued Shares of the Company, fully paid, and nonassessable. (B) The officers of the Company enforceable against the are duly authorized to execute this Agreement and have taken all actions required by law and agreement, its charter and bylaws, to properly and legally execute this Agreement. (C) The Company is not involved in accordance with its termsany pending litigation, except as enforcement thereof may be limited by bankruptcy, insolvencyclaims, or other laws affecting governmental investigation or proceeding not reflected in its financial statements or otherwise disclosed in writing to the enforcement of creditors' rights in general Subscriber and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity there are no lawsuits, claims, assessments, investigations, or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company orsimilar matters, to the best knowledge of the management, threatened or contemplated against the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree its management or statute to which the Company is subjectproperties. (bD) As of December 31The Company is duly organized, 2002, validly existing and in good standing under the authorized capital stock laws of the Company consisted State of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated Delaware; it has the corporate power to own its property and to carry on its business as Class A Common Stock, of which 31,885,896 shares are issued now being conducted and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstandingis duly qualified to conduct such business in any jurisdiction so required. (cE) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act Pursuant to its Certificate of 1934Incorporation, as amended, the Company is authorized to issue 50,000,000 shares of Common Stock, par value $0.001 per share, 46,809,054 shares of which are issued and outstanding, fully paid and nonassessable. The company is authorized to issue 4,300 shares of Series A preferred stock, 4,300 shares of which are issued and outstanding. The Company is authorized to issue 100,000 shares of preferred stock, none of which is issued or outstanding prior to the closing hereof. The Company has not authorized 8,000,000 shares of redeemable common stock warrant and 1,090,000 shares of stock option outstanding. The warrants and the options will be exercisable for a period of five years. No shareholder of the Company has any right of first refusal or any preemptive rights (either preemptive or other) or options with respect to subscribe for or purchase from the issuance of the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its 's capital stock. (dF) Sufficient shares of authorized but unissued shares of Common Stock Attached hereto and marked as Exhibit A, and hereby made a part hereof, are the Financial Statements of the Company have been reserved by appropriate corporate action with as of September 30, 1997, hereinafter referred to as the prospective exercise of "Financial Statements". Except as explained in the Warrant, andnotes thereto, the issuance of either Financial Statements present fairly the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders financial condition of the Company as of the dates thereof and will not conflict the results of operations for periods covered thereby and, except as aforesaid, the Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (G) The Company has in all material aspects performed all obligations required to be performed by it in the past and no claim exists for default in any provision of material respect under any agreement agreements, leases, or other documents to which the Company is a party party. (H) The Company has complied in all material aspects with all applicable statutes and regulations of any governmental authority having jurisdiction over it or by which it that have been applicable to its business. The Company is boundcurrent in its SEC filings and has filed all reports required to be filed with the SEC during the past twelve (12) months. (I) The Company has filed in correct form all income tax returns due with respect to all prior years, and all franchise, real and personal property tax returns that are required to be filed, and has paid all taxes as shown on the said returns and all assessments received by it to the extent that such Common Stocktaxes and assessments have become due. (J) No loans or other obligations are payable to officers, when issued upon exercise directors, employees, or stockholders of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableCompany.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The To induce the Subscriber to enter into the Agreement, the Company represents thatand its principal shareholders do hereby represent and warrant as follows: (aA) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes Shares to be delivered to the legalSubscriber will constitute, under Delaware corporate law, valid and binding obligation legally issued Shares of the Company, fully paid, and nonassessable. (B) The officers of the Company enforceable against the are duly authorized to execute this Agreement and have taken all actions required by law and agreement, its charter and bylaws, to properly and legally execute this Agreement. (C) The Company is not involved in accordance with its termsany pending litigation, except as enforcement thereof may be limited by bankruptcy, insolvencyclaims, or other laws affecting governmental investigation or proceeding not reflected in its financial statements or otherwise disclosed in writing to the enforcement of creditors' rights in general Subscriber and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity there are no lawsuits, claims, assessments, investigations, or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company orsimilar matters, to the best knowledge of the management, threatened or contemplated against the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree its management or statute to which the Company is subjectproperties. (bD) As of December 31The Company is duly organized, 2002, validly existing and in good standing under the authorized capital stock laws of the Company consisted State of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated Delaware; it has the corporate power to own its property and to carry on its business as Class A Common Stock, of which 31,885,896 shares are issued now being conducted and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstandingis duly qualified to conduct such business in any jurisdiction so required. (cE) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act Pursuant to its Certificate of 1934Incorporation, as amended, the Company is authorized to issue 50,000,000 shares of Common Stock, par value $0.001 per share, 26,937,054 shares of which are issued and outstanding, fully paid and nonassessable. The company is authorized to issue 4,300 shares of Series A preferred stock, 4,300 shares of which are issued and outstanding. The Company has not authorized 100,000 shares of preferred stock, none of which is issued or outstanding prior to the closing hereof. The Company has no treasury stock. There are no other authorized or outstanding subscriptions, options, warrants, or other agreements or commitments obligating the Company to issue any rights (either preemptive or other) or options to subscribe for or purchase from the Companyadditional shares of its capital stock of any class, or any warrants options or other agreements providing for or requiring the issuance by the Company ofrights with respect thereto, any capital stock or any securities convertible into any shares of stock of any class. No shareholder of the Company has any right of first refusal or exchangeable for its any preemptive rights with respect to the issuance of the Company's capital stock. (dF) Sufficient shares of authorized but unissued shares of Common Stock Attached hereto and marked as Exhibit A, and hereby made a part hereof, are the Financial Statements of the Company have been reserved by appropriate corporate action with as of December 31, 1996, hereinafter referred to as the prospective exercise of "Financial Statements". Except as explained in the Warrant, andnotes thereto, the issuance of either Financial Statements present fairly the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders financial condition of the Company as of the dates thereof and will not conflict the results of operations for periods covered thereby and, except as aforesaid, the Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (G) The Company has in all material aspects performed all obligations required to be performed by it in the past and no claim exists for default in any provision of material respect under any agreement agreements, leases, or other documents to which hich the Company is a party party. (H) The Company has complied in all material aspects with all applicable statutes and regulations of any governmental authority having jurisdiction over it or by which it that have been applicable to its business. The Company is boundcurrent in its SEC filings and has filed all reports required to be filed with the SEC during the past twelve (12) months. (I) The Company has filed in correct form all income tax returns due with respect to all prior years, and all franchise, real and personal property tax returns that are required to be filed, and has paid all taxes as shown on the said returns and all assessments received by it to the extent that such Common Stocktaxes and assessments have become due. (J) No loans or other obligations are payable to officers, when issued upon exercise directors, employees, or stockholders of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableCompany.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents that: (a) The execution execution, delivery and delivery performance of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will (i) violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, or (ii) violate any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject, except for such violations that may have a de minimis effect on the Company, would not affect the Company's ability to execute and deliver this Warrant and would not affect the Holder's ability to exercise all or any portion of this Warrant. (b) As of December 31, 2002, the The authorized capital stock of the Company consisted consists of (i) 99,300,000 35,000,000 shares of Common Stock, $0.001 par value per shareof which, 95,000,000 shares of which are designated as Class A Common Stockbased upon information currently available, of which 31,885,896 2,942,340 shares are issued and outstanding, outstanding and 4,300,000 500,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 no shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amendedExhibit B attached hereto, the Company has does not authorized have outstanding any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents and warrants that: (a) The execution execution, delivery and delivery performance of this Warrant has been duly authorized by the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will (i) violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, or (ii) violate any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject, except for such violations that may have a de minimis effect on the Company, would not affect the Company's ability to execute and deliver this Warrant and would not affect the Holder's ability to exercise all or any portion of this Warrant. (b) As of December 31, 2002, the The authorized capital stock of the Company consisted consists of (i) 99,300,000 35,000,000 shares of Common Stock, $0.001 par value per shareof which, 95,000,000 shares of which are designated as Class A Common Stockbased upon information currently available, of which 31,885,896 2,943,769 shares are issued and outstanding, and 4,300,000 500,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 no shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amendedExhibit B attached hereto, the Company has does not authorized have outstanding any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with respect to the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The As material inducement to Buyer to enter into this Agreement and to close hereunder, Company represents thathereby makes the following representations and warranties to Buyer: (a) The execution 2.1 Due Organization; Capitalization and delivery of this Warrant has been Articles, Bylaws and Records. Company are corporations duly authorized by organized, validly existing and in good standing under the Company's Board of Directors and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company orState of Delaware and has the full corporate power and authority to own its properties, carry on its business as it is now being conducted and perform its obligations under all Contracts, and is duly qualified to do business as a foreign corporation in the best jurisdictions specified in Schedule 2.1, which constitutes all the jurisdictions in which such qualification is required, except where such failure to qualify would not have a material adverse effect on the conduct of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree business or statute to which the Company is subject. (b) As of December 31, 2002, the financial condition. The authorized capital stock of the Company consisted consists of One Hundred Thousand (i100,000) 99,300,000 shares of Common Stockcommon stock, $0.001 .01 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 Nine Hundred Seventy (970) shares are issued and outstandingoutstanding and, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except except as set forth in subparagraph (b) aboveon Schedule 2.1, and in registration statements filed owned by the Company under the Act or in any report filed by the Company under the Securities Exchange Act Shareholders, free and clear of 1934all liens, as amendedencumbrances, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Companysecurity agreements, or any warrants or other agreements providing for or requiring the issuance by the Company ofoptions, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient claims, charges and restrictions, all of which outstanding shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorizedare validly issued, fully paid and non-assessable. Except as set forth in Schedule 2.1there are no shares of Company's capital stock held in its treasury. Except as set forth in Schedule 2.1, there are no options, warrants, rights, shareholder agreements or other instruments or agreements outstanding giving any person the right to acquire any shares of capital stock of Company [or any subsidiary of Company], nor are there any commitments to issue or execute any such options, warrants, rights, shareholder agreements or other instruments or agreements. Except as set forth in Schedule 2.1, there are no outstanding stock appreciation rights or similar rights measured with respect to any of Company's [or any Company subsidiary's] capital stock, nor are there any instruments, or agreements giving anyone the right to acquire any such rights. The minute books and stock records of Company and its subsidiaries are complete and accurate and all signatures included therein are the genuine signatures of the persons indicated as signing. True, correct and complete copies of Company's [and each subsidiary's] minute books and stock records, including Company's and each subsidiary's articles of incorporation and bylaws and all amendments to both, have been delivered to or made available for inspection by the Buyer. Company is not in material default under or in material violation of any provision of its articles of incorporation or its bylaws. The books of account, stock records, minute books and other records of the Company are, in all material respects, accurate, up-to-date and complete, and have been, maintained in accordance with sound and prudent business practices.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company hereby represents thatand warrants to the Holders as follows: (a) As of the date hereof, the Company has 200,000,000 shares of Common Stock authorized, of which 43,627,130 shares of Common Stock are issued and outstanding, and 2,000,000 shares of preferred stock authorized, of which no shares are issued and outstanding. As of the date hereof, the Company has reserved for issuance 8,153,030 shares of Common Stock upon exercise of all outstanding options and warrants. All of the issued and outstanding shares of the Company's Common Stock are, and all shares reserved for issuance will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. The execution Conversion Shares to be issued and delivery delivered to the Holders upon conversion of this Warrant has the Notes have been duly authorized and when issued upon such conversion, will be validly issued, fully-paid and non-assessable. The issuance of the Conversion Shares will be exempt from registration pursuant to Section 3(a)(9) promulgated under the Securities Act of 1933, as amended ("Securities Act") and such Conversion Shares will not be "restricted securities" as defined under Rule 144 promulgated under the Securities Act. (b) The Company has full legal power to execute and deliver this Agreement and to perform its obligations hereunder. All acts required to be taken by the Company's Board of Directors Company to enter into this Agreement and to carry out the transactions contemplated hereby have been properly taken, and this Agreement constitutes the a legal, valid and binding obligation of the Company Company, enforceable against the Company in accordance with its termsterms and does not conflict with, except as enforcement thereof may be limited by bankruptcyresult in a breach or violation of or constitute (or with notice of lapse of time or both constitute) a default under any instrument, insolvency, contract or other laws affecting agreement to which the enforcement of creditors' rights in general and except that the enforceability Company or its subsidiaries is a party. (c) The affirmative vote of the obligations hereunder is subject to general principals holders of equity (regardless record of whether such enforceability is considered in at least a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise majority of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best shares of the Company's knowledge, Common Stock present at the Shareholder Meeting with respect to the matters referred to in Section 1 hereof is the only vote of the holders of any agreement (including any agreement with stockholders), instrument, judgment, decree class or statute to which series of the Company is subject. (b) As of December 31, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by required to approve the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stocktransactions contemplated hereby. (d) Sufficient shares None of authorized but unissued shares the Company's Articles of Common Stock Incorporation, as amended, or Bylaws, or the laws of Florida, California or New York, contains any applicable anti-takeover provision or statute which would restrict the Company's ability to enter into this Agreement or consummate the transactions contemplated by this Agreement or which would limit any of the Holders' rights following consummation of the transactions contemplated by this Agreement. (e) No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company have other than the fees of any investment banking firm that has been reserved engaged by appropriate corporate action the Company to render the Fairness Opinion (defined below), the fees of which will be paid by the Company. (f) The Company has delivered or made available to the Holders prior to the execution of this Agreement true and complete copies of all periodic reports, registration statements and proxy statements filed by it with the prospective exercise Commission since January 1, 2002. Each of such filings with the Commission (collectively, the "SEC Filings"), as of its filing date, complied in all material respects with the requirements of the Warrantrules and regulations promulgated by the Commission with respect thereto and did not contain any untrue statement of a material fact or omit a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances in which such statements were made. (g) Since the date of the draft financials of the Company for the year ended December 31, and2003 to be filed with the Commission in the Company's Annual Report on Form 10-K for the year ended December 31, 2003 (a copy of which has been made available to the Holders), the issuance Company and its subsidiaries, taken as a whole, has not suffered any material adverse change in its assets, liabilities, financial condition, results of either operations or business, except for those occurring as a result of general economic or financial conditions affecting the Warrant United States as a whole or the shares region in which the Company conducts its business or developments that are not unique to the Company but also affect other entities engaged or participating in the brokerage industry generally in a manner not materially less severely. (h) The Company has received the opinion of Common Stock upon exercise Capitalink, L.C. (a copy of which will be furnished to each Holder) to the Warrant effect that the average price at which the Notes will not require any further corporate action by be converted is fair from a financial point of view to the stockholders or directors unaffiliated shareholders of the Company, will . (i) No information to be contained in the Proxy Statement to be prepared pursuant to this Agreement and no representation or warranty by the Company contained in this Agreement contains any untrue statement of a material fact or omits a material fact necessary in order to make the statements contained herein or therein not be subject to preemptive rights (unless the exercise misleading in light of the same circumstances in which such statements were made. (j) Since January 1, 2002 and except as disclosed in the SEC Filings, the Company has been irrevocably waived) conducted its business in any present stockholders compliance in all material respects with all applicable laws, rules, regulations, court or administrative orders and processes and rules, directives and orders of regulatory and self-regulatory agencies and bodies, except as would not reasonably be expected, singly or in the aggregate, to be materially adverse to the business, assets or financial condition of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableCompany.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The To induce the Subscriber to enter into the Agreement, the Company represents thatand its principal shareholders do hereby represent and warrant as follows: (aA) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors and constitutes Warrants to be delivered to the legalSubscriber will constitute, under Delaware corporate law, valid and binding obligation legally issued Warrants of the Company, fully paid, and nonassessable. (B) The officers of the Company enforceable against the are duly authorized to execute this Agreement and have taken all actions required by law and agreement, its charter and bylaws, to properly and legally execute this Agreement. (C) The Company is not involved in accordance with its termsany pending litigation, except as enforcement thereof may be limited by bankruptcy, insolvencyclaims, or other laws affecting governmental investigation or proceeding not reflected in its financial statements or otherwise disclosed in writing to the enforcement of creditors' rights in general Subscriber and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity there are no lawsuits, claims, assessments, investigations, or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company orsimilar matters, to the best knowledge of the management, threatened or contemplated against the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree its management or statute to which the Company is subjectproperties. (bD) As of December 31The Company is duly organized, 2002, validly existing and in good standing under the authorized capital stock laws of the Company consisted State of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated Delaware; it has the corporate power to own its property and to carry on its business as Class A Common Stock, of which 31,885,896 shares are issued now being conducted and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstandingis duly qualified to conduct such business in any jurisdiction so required. (cE) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act Pursuant to its Certificate of 1934Incorporation, as amended, the Company is authorized to issue 50,000,000 shares of Common Stock, par value $0.001 per share, 37,637,054 shares of which are issued and outstanding, fully paid and nonassessable. The company is authorized to issue 4,300 shares of Series A preferred stock, 4,300 shares of which are issued and outstanding. The Company has not authorized 100,000 shares of preferred stock, none of which is issued or outstanding prior to the closing hereof. The Company has no common stock warrant outstanding prior to the closing hereof. The Company has no treasury stock. There are no other authorized or outstanding subscriptions, options, or other agreements or commitments obligating the Company to issue any rights (either preemptive or other) or options to subscribe for or purchase from the Companyadditional shares of its capital stock of any class, or any warrants options or other agreements providing for or requiring the issuance by the Company ofrights with respect thereto, any capital stock or any securities convertible into any shares of stock of any class. No shareholder of the Company has any right of first refusal or exchangeable for its any preemptive rights with respect to the issuance of the Company's capital stock. (dF) Sufficient shares of authorized but unissued shares of Common Stock Attached hereto and marked as Exhibit A, and hereby made a part hereof, are the Financial Statements of the Company have been reserved by appropriate corporate action with as of December 31, 1996, hereinafter referred to as the prospective exercise of "Financial Statements". Except as explained in the Warrant, andnotes thereto, the issuance of either Financial Statements present fairly the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders financial condition of the Company as of the dates thereof and will not conflict the results of operations for periods covered thereby and, except as aforesaid, the Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (G) The Company has in all material aspects performed all obligations required to be performed by it in the past and no claim exists for default in any provision of material respect under any agreement agreements, leases, or other documents to which the Company is a party party. (H) The Company has complied in all material aspects with all applicable statutes and regulations of any governmental authority having jurisdiction over it or by which it that have been applicable to its business. The Company is boundcurrent in its SEC filings and has filed all reports required to be filed with the SEC during the past twelve (12) months. (I) The Company has filed in correct form all income tax returns due with respect to all prior years, and all franchise, real and personal property tax returns that are required to be filed, and has paid all taxes as shown on the said returns and all assessments received by it to the extent that such Common Stocktaxes and assessments have become due. (J) No loans or other obligations are payable to officers, when issued upon exercise directors, employees, or stockholders of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableCompany.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company hereby represents that: (a) The execution and delivery of this Warrant has been duly authorized by the warrants to Employee, that Company's Board authorized capital stock currently consists of Directors 200,000,000 shares of Common Stock and constitutes the legal, valid and binding obligation 3,000,000 shares of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law)preferred stock. Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 3115, 20022008, the authorized capital there were approximately 133,695,637 shares of Common Stock issued and outstanding, and no shares of preferred stock issued and outstanding. As of the Company consisted of (i) 99,300,000 December 15, 2008, there were warrants outstanding to purchase approximately 24,890,697 shares of Common Stock, 20,000,000 of which have an exercise price of $0.001 par value 2.00 per share, 95,000,000 shares and 4,890,697 of which are designated as Class A exercisable for $1.00 per share. As of December 15, 2008, there were options outstanding to purchase 6,250,000 shares of Common Stock, all of which 31,885,896 shares are issued have an exercise price of $1.00 per share. The Company further represents and outstandingwarrants to Employee that within five (5) days after the date of this Agreement, this Agreement, including, without limitation, the grant and 4,300,000 shares issuance of which are designated as Class B Common Stock, all of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as the equity incentive compensation set forth in subparagraph (b) above, shall have been authorized and approved in registration statements filed by accordance with all requisite corporate action, including the Company under requisite approval from a majority of the Act or in any report filed by the Company under the Securities Exchange Act stockholders of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or all in accordance with applicable law and the articles of incorporation, bylaws and all other documents governing the Company and its right and authority to undertake any warrants actions; except for the formal establishment of the Plans and required filings with the SEC of Information Statements, Proxy Statements or other agreements providing for such filings required in connection with the Plans or requiring the issuance by the equity grants. The Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued represents and warrants to Employee that when shares of Common Stock of are issued to Employee pursuant to the Company have been reserved by appropriate corporate action with the prospective Stock Grants Grant or exercise of the WarrantOption Shares, andsuch shares shall be validly issued, fully paid (subject to payment for the Options Shares) and non-assessable shares of Company Common Stock, and Employee will have good and valid title to such Company Common Stock, free of all liens and encumbrances. Company covenants and agrees with Employee that it shall at all times during the Term, reserve for issuance of either the Warrant or the shares of Common Stock upon exercise issuable as part of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless Stock Grant and the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableOption Shares.

REPRESENTATIONS AND WARRANTIES OF COMPANY. Company represents and warrants to the Buyer that the statements contained in this Paragraph 4.(b) are correct and complete as of the date of the Effective Date. (1) The Company represents that:is a corporation duly organized, existing and in good standing under the laws of the State of Florida and has the corporate power to conduct the business then being conducted by it. (a2) The execution, delivery and performance of this Agreement by the Company has been duly approved by the board of directors (the “Board”) of the Company and all other actions required to authorize and effect the offer and sale of the Acquired Units to Buyer will have been duly taken and approved. (3) The Acquired Units are duly authorized. The Acquired Units, when issued and paid for in accordance with the terms hereof, will be fully paid and non-assessable with no personal liability attaching thereto. (4) The authorized capital stock of the Company consists of 50,000,000 shares, of which (i) 37,500,000 shares are Common Stock; and (ii) 12,500,000 shares are designated as preferred stock, par value of $.0001 (the “Preferred Stock”). As of the Effective Date (as hereinafter defined), but without giving effect to the issuance of the Acquired Units, 18,000,000 shares of Common Stock are issued and outstanding and no shares of Preferred Stock are issued and outstanding. As of the Effective Date, no other Common Stock or Preferred Stock is issued and outstanding and there are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require the Company to issue, sell, or otherwise cause to become outstanding any of the Common Stock or Preferred Stock. Notwithstanding the foregoing, the Company reserves the right to issue Common Stock, Preferred Stock, or options, warrants and other contractual rights to purchase Common Stock or Preferred Stock (collectively, the “Subsequent Issuances”) to third parties who are not related or part of the this current offering and the Company has no obligation to inform or disclose to the Purchaser the occurrence of such Subsequent Issuances. The holders of outstanding shares of the Common Stock are entitled to receive dividends out of assets legally available therefor at such times and in such amounts, if any, as the Board may from time to time determine. Holders of the Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. Holders of the Common Stock are not entitled to preemptive rights, and the Common Stock is not subject to any right of conversion or redemption. (5) The execution and delivery of this Warrant has been duly authorized by the Company's Board of Directors Agreement and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise the Acquired Units will not result in a violation of or constitute a default: (A) under the Warrant, will violate the terms of the certificate articles of incorporation or by-laws of the Company or, to the best bylaws of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject.; (bB) As in the performance or observance of December 31any material obligation, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act agreement or condition contained in any report filed by the Company under the Securities Exchange Act of 1934bond, as amendeddebenture, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants note or other agreements providing for or requiring the issuance by the Company ofevidence of indebtedness, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any material agreement or instrument to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise Company or any of the Warrant in accordance with its termsproperty of the Company may be bound; or (C) of any material order, will be duly authorizedrule, fully paid and non-assessableregulation, writ, injunction or decree of any government, governmental instrumentality or court, domestic or foreign.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The In order to induce the ----------------------------------------- Purchaser to purchase the Shares, the Company represents thatand warrants to the Purchaser as follows: (a) The execution Company's authorized capital consists of (i) 10,000,000 shares of preferred stock, no shares of which are issued and outstanding, (ii) 75,000,000 shares of Class A common stock, of which 2,000,000 shares are issued and outstanding or are committed to be issued, (iii) and 25,000,000 shares of Class B common stock, of which 2,500,000 shares are issued and outstanding or are committed to be issued. A list of the current stockholders with the number and class of shares owned by each is attached as Schedule 1. The Company intends to issue 1,200,000 shares of Class A common stock and 2,600,000 shares of Class B common stock concurrently with the sale of the Shares to Purchaser. In addition, the Company has reserved an additional 500,000 shares of Class A common stock for issuance to key executive employees of the Company and intends to reserve an additional 4,300,000 shares of Class A common stock for issuance under the Company's 1998 Incentive Compensation Plan. Except as described in this Section and Schedule 1, as of the date of the Agreement, there are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments obligating the Company to issue, sell, deliver or transfer (including any right of conversion or exchange under any outstanding security or other instrument) any shares of the Company stock or any other securities. All outstanding shares of Class A common stock and Class B common stock have been duly and validly authorized and issued, are fully paid and non-assessable, and have been issued free of any lien, security interest, pledge, charge or encumbrance of any kind (collectively, "Encumbrances"). (b) The Company was incorporated on May 19, 1998 and has not yet commenced business operations. (c) The Company is a corporation duly organized and existing under the laws of the State of Delaware and is in good standing under such laws. The Company is duly qualified and licensed in each jurisdiction where the nature of the business conducted by it requires such qualification, except where the failure to qualify would not have a material adverse effect upon the Company's financial condition or results of operations. The Company has the requisite corporate power and authority to own or lease and operate its properties and assets, and to carry on its business as proposed to be conducted. The Company has delivered to the Purchaser true and complete copies of its Certificate of Incorporation and Bylaws, as in effect as of the date hereof. (d) The Company has all requisite corporate power to execute and deliver this Agreement and to sell and issue the Shares hereunder, and to carry out and perform its obligations under the terms of this Agreement. (e) Neither the Company nor any subsidiary thereof owns, directly or indirectly, of record or beneficially any capital stock or equity interest or investment in any corporation, association or business entity, except with respect to PaeTec Communications, Inc. and PaeTec International, Inc., each of which is a wholly owned subsidiary of the Company (the "Subsidiaries"). Each of the Subsidiaries is a corporation duly organized and existing under the laws of the State of Delaware and is in good standing under such laws. Each Subsidiary has the requisite corporate power and authority to own or lease and operate its properties and assets, and to carry on its business as proposed to be conducted. Neither the Company nor any Subsidiary is a partner or participant in any partnership or joint venture. The shares of capital stock of each Subsidiary held by the Company are free of any Encumbrances. (f) All corporate action on the part of the Company, its directors and stockholders necessary for the authorization, execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated herein and for the authorization, issuance and delivery of this Warrant the Shares has been duly authorized by the Company's Board of Directors and taken. This Agreement constitutes the legal, a valid and binding obligation of the Company Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by subject to laws of general application relating to bankruptcy, insolvency, or and the relief of debtors and other laws of general application affecting the enforcement of creditors' rights generally, including rules of law governing specific performance, injunctive relief or other equitable remedies. The Shares, when issued in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the WarrantAgreement, will violate the terms be validly issued, fully paid and nonassessable and will be free of the certificate any Encumbrances, and will be free of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subjectrestrictions on transfer other than under state and/or federal Securities laws. (bg) As No consent, approval, qualification, order or authorization of, or filing with, any governmental authority or any third party is required in connection with Company's valid execution, delivery or performance of December 31this Agreement, 2002or the offer, the authorized capital stock sale or issuance of the Shares by the Company, except filings required pursuant to applicable federal and state securities laws and blue sky laws, which filings the Company consisted shall complete within the lesser of fifteen (15) days of the date hereof or the required statutory period. (h) The Company has good and marketable title to its properties and assets and, with respect to the property and assets leased by the Company, holds valid leasehold interests therein, in each case subject to no mortgage, pledge, lien, security interest, conditional sale agreement, encumbrance or charge, except (i) 99,300,000 shares of Common Stocktax, $0.001 par value per sharematerialmen's or like liens for obligations not yet due or payable or being contested in good faith by appropriate proceedings, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and or (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of possible minor liens or encumbrances which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as set forth in subparagraph (b) above, and in registration statements filed by the Company under the Act or in any report filed by the Company under the Securities Exchange Act of 1934, as amended, the Company has do not authorized any rights (either preemptive or other) or options to subscribe for or purchase materially detract from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued shares of Common Stock value of the Company have been reserved by appropriate corporate action with property subject thereto or materially impair the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders operations of the Company and will which have arisen in the ordinary course of business. (i) Subject to the truth and accuracy of the Purchaser's representations set forth in this Agreement, the offer, sale and issuance of the Shares as contemplated by this Agreement are exempt from the registration requirements of the Securities Act, and from the qualification requirements of the California and New York blue sky laws. (j) The Company is not conflict with in violation of any provision term of its Certificate of Incorporation or its Bylaws, any term of any agreement to which the Company is a party party, or any judgment, decree, order, statute, rule or regulation to which the Company is subject, that would have a material adverse effect on the condition, financial or otherwise, prospects or operations of the Company. (k) The execution, delivery and performance by the Company of this Agreement, and the issuance, sale and delivery of the Shares will not violate any provision of law, the Certificate of Incorporation or Bylaws of the Company or any order, judgment or decree of any court or any governmental agency, or conflict with, result in a breach of, or constitute a default under, any indenture, agreement or other instrument by which it the Company, or any of its respective assets, is bound, and such Common Stock, when issued upon exercise or result in the creation or imposition of any Encumbrance on any of the Warrant assets of the Company. (l) There are no actions, suits, proceedings or investigations pending or threatened against the Company or its Subsidiaries, and the Company is not aware of any basis for the foregoing except for an action pending in accordance Supreme Court, Monroe County, New York titled ACC Corp., et al v. Xxxxxx X. Xxxxxxxx, --------------------------------------- Xxxxxxx Xxxxxxxxxx, Xxxx Xxxxx, PaeTec Corporation, and PaeTec Communications, ------------------------------------------------------------------------------ Inc. (Index No. 7466-98). A copy of the complaint in this action has been --- furnished to Purchaser. The Company is not a party to or subject to the provisions of any order, writ, injunction, judgment or decree of any court or governmental agency. (m) The Company is insured with reputable insurers against all risks normally insured against by companies in similar lines of business, and all of the insurance policies maintained by the Company are in full force and effect. A schedule listing all insurance policies that are material to the Business has been furnished to Purchaser. The Company is not in default under any such policy. All insurance policies maintained by the Company will remain in full force and effect and may reasonably be expected to be renewed on comparable terms following consummation of the transactions contemplated by this Agreement (subject to continuing compliance with the applicable terms thereof and any right of insurers to terminate without cause), and the Company has received no notice or other indication from any insurer or agent of any intent to cancel or not so renew any of such insurance policies. (n) The Company does not have employment agreements with any of its employees. Since its inception, the Company has not experienced any labor disputes, union organization attempts or any work stoppage due to labor disagreements in connection with its termsbusiness. There is no labor strike, dispute, request for representation, slowdown or stoppage actually pending or threatened against or affecting the Company or any of the Subsidiaries. All workers' compensation and unemployment compensation insurance premiums due have been fully paid or accrued in the Company's financial statements. (o) All employee benefit plans within the meaning of Section 3(3) of the Employment Retirement Income Security Act of 197s4, as amended, and the related regulations and published interpretations ("ERISA"), are in full compliance with the applicable provisions of ERISA (as amended through the date of this Agreement), the regulations and published authorities thereunder, and all other laws applicable with respect to all such employee benefit plans, agreements and arrangements. The Company has performed all of its obligations under all such plans, agreements and arrangements. To the best knowledge of the Company, there are no actions (other than routine claims for benefits) pending or threatened against such plans or their assets, or arising out of such plans, agreements or arrangements, and, to the best knowledge of the Company, no facts exist which could give rise to any such Actions. (p) All group health plans of the Company and any Subsidiary have been operated in compliance with the group health plan continuation coverage requirements of Section 162(k) of the Internal Revenue Code to the extent such requirements are applicable. (q) There has been no act or omission by the Company or any Subsidiary that has given rise to or may give rise to fines, penalties, taxes, or related charges under Section 502(c) or (k) or Section 4071 of ERISA or Chapter 43 of the Internal Revenue Code. (r) Schedule 2 sets forth a complete list of all governmental licenses, permits and authorizations necessary for the Company and the Subsidiaries to operate their businesses as presently conducted and proposed to be conducted, including without limitation, those required by the U.S. Federal Communications Commission and by all relevant state public utilities commissions. Such licenses, permits and authorizations are in full force and effect and the Company knows of no threatened suspension, cancellation or invalidation thereof. (s) The Company has not issued to any other holder of the securities of the Company registration rights that are superior to the rights set forth in Section 4 of this Agreement. (t) The proceeds from the sale of the Shares will be duly authorizedused by the Company to fund expansion of the Company's switched-based telecommunications business including the purchase of equipment, fully paid the opening of new sales offices, for additional working capital, and non-assessablefor general corporate purposes. (u) The financial statements of the Company for the two month period ended June 30, 1998, compiled by Xxxx X. XxXxxxx, CPA, a copy of which is attached as Exhibit A, was prepared from the books and records of the Company and fairly sets forth the financial position of the Company, subject to the qualifications contained therein. (v) The foregoing representations and warranties of the Company are true and correct as of the date of this Agreement, shall be true and correct as of the closing of the sale of the Shares, and shall survive the closing. No representation of warranty of the Company in this Agreement contains, or on the closing date will contain, any untrue statement of material fact or omits, or on the closing date will omit, any material fact necessary in order to make the statements contained therein not misleading.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The In addition to the representations contained in the Agreement, the representations and warranties of Company set forth in Section 3 of the Underwriting Agreement (the “Underwriting Agreement”) dated as of November 29, 2007 among Company and X.X. Xxxxxx Securities Inc., Xxxxxx Brothers Inc. and Wachovia Capital Markets LLC as representatives of the underwriters party thereto, are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein. Company hereby further represents and warrants to Dealer that: (a) The execution and delivery Shares of this Company initially issuable upon exercise of the Warrant has by the net share settlement method (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the Company's Board of Directors and constitutes the legal, valid and binding obligation terms of the Company enforceable against Warrant following the Company exercise of the Warrant in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law). Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise conditions of the Warrant, will violate be validly issued, fully-paid and non-assessable, and the terms issuance of the certificate of incorporation Warrant Shares will not be subject to any preemptive or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subjectsimilar rights. (b) As Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of December 311940, 2002, the authorized capital stock of the Company consisted of (i) 99,300,000 shares of Common Stock, $0.001 par value per share, 95,000,000 shares of which are designated as Class A Common Stock, of which 31,885,896 shares are issued and outstanding, and 4,300,000 shares of which are designated as Class B Common Stock, of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstandingamended. (c) Except Company is an “eligible contract participant” (as set forth such term is defined in subparagraph Section 1a(12) of the Commodity Exchange Act, as amended (bthe “CEA”)) abovebecause one or more of the following is true: Company is a corporation, partnership, proprietorship, organization, trust or other entity and: (A) Company has total assets in excess of USD 10,000,000; (B) the obligations of Company hereunder are guaranteed, or otherwise supported by a letter of credit or keepwell, support or other agreement, by an entity of the type described in Section 1a(12)(A)(i) through (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of the CEA; or (C) Company has a net worth in excess of USD 1,000,000 and has entered into this Agreement in registration statements filed connection with the conduct of Company’s business or to manage the risk associated with an asset or liability owned or incurred or reasonably likely to be owned or incurred by Company in the conduct of Company’s business. (d) Company is not entering into this Transaction ‘on the basis of’ material nonpublic information about the Company under within the Act or in any report filed by the Company meaning of Rule 10b5-1(b) under the Securities Exchange Act of 1934, as amended, amended (the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or any warrants or other agreements providing for or requiring the issuance by the Company of, any capital stock or any securities convertible into or exchangeable for its capital stock“Exchange Act”). (d) Sufficient shares of authorized but unissued shares of Common Stock of the Company have been reserved by appropriate corporate action with the prospective exercise of the Warrant, and, the issuance of either the Warrant or the shares of Common Stock upon exercise of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessable.

REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company hereby represents that: (a) The execution and delivery warrants to Employee, that Company’s authorized capital stock currently consists of this Warrant has been duly authorized by the Company's Board 200,000,000 shares of Directors Common Stock and constitutes the legal, valid and binding obligation 3,000,000 shares of the Company enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights in general and except that the enforceability of the obligations hereunder is subject to general principals of equity (regardless of whether such enforceability is considered in a proceeding at equity or at law)preferred stock. Neither the execution nor the delivery of this Warrant, nor fulfillment of nor compliance with the terms and provisions of this Warrant, nor the issuance of Shares upon exercise of the Warrant, will violate the terms of the certificate of incorporation or by-laws of the Company or, to the best of the Company's knowledge, any agreement (including any agreement with stockholders), instrument, judgment, decree or statute to which the Company is subject. (b) As of December 3115, 20022008, the authorized capital there were approximately 133,695,637 shares of Common Stock issued and outstanding, and no shares of preferred stock issued and outstanding. As of the Company consisted of (i) 99,300,000 December 15, 2008, there were warrants outstanding to purchase approximately 24,890,697 shares of Common Stock, 20,000,000 of which have an exercise price of $0.001 par value 2.00 per share, 95,000,000 shares and 4,890,697 of which are designated as Class A exercisable for $1.00 per share. As of December 15, 2008, there were options outstanding to purchase 6,250,000 shares of Common Stock, all of which 31,885,896 shares are issued have an exercise price of $1.00 per share. The Company further represents and outstandingwarrants to Employee that within five (5) days after the date of this Agreement, this Agreement, including, without limitation, the grant and 4,300,000 shares issuance of which are designated as Class B Common Stock, all of which 3,869,570 shares are issued and outstanding, and (ii) 10,000,000 shares of Preferred Stock, $0.001 par value per share 600,000 shares of which are designated as Series A Cumulative Convertible Preferred Stock, of which 39,544 shares are issued and outstanding. (c) Except as the equity incentive compensation set forth in subparagraph (b) above, shall have been authorized and approved in registration statements filed by accordance with all requisite corporate action, including the Company under requisite approval from a majority of the Act or in any report filed by the Company under the Securities Exchange Act stockholders of 1934, as amended, the Company has not authorized any rights (either preemptive or other) or options to subscribe for or purchase from the Company, or all in accordance with applicable law and the articles of incorporation, bylaws and all other documents governing the Company and its right and authority to undertake any warrants actions; except for the formal establishment of the Plans and required filings with the SEC of Information Statements, Proxy Statements or other agreements providing for such filings required in connection with the Plans or requiring the issuance by the equity grants. The Company of, any capital stock or any securities convertible into or exchangeable for its capital stock. (d) Sufficient shares of authorized but unissued represents and warrants to Employee that when shares of Common Stock of are issued to Employee pursuant to the Company have been reserved by appropriate corporate action with the prospective Stock Grants Grant or exercise of the WarrantOption Shares, andsuch shares shall be validly issued, fully paid (subject to payment for the Options Shares) and non-assessable shares of Company Common Stock, and Employee will have good and valid title to such Company Common Stock, free of all liens and encumbrances. Company covenants and agrees with Employee that it shall at all times during the Term, reserve for issuance of either the Warrant or the shares of Common Stock upon exercise issuable as part of the Warrant will not require any further corporate action by the stockholders or directors of the Company, will not be subject to preemptive rights (unless Stock Grant and the exercise of the same has been irrevocably waived) in any present stockholders of the Company and will not conflict with any provision of any agreement to which the Company is a party or by which it is bound, and such Common Stock, when issued upon exercise of the Warrant in accordance with its terms, will be duly authorized, fully paid and non-assessableOption Shares.