DOCUMENTS THAT THE COMPANY WAS REQUIRED TO FILE UNDER THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), SINCE JANUARY 1, 2003 (THE "SEC
DOCUMENTS").
THE SEC DOCUMENTS COMPLIED AS TO FORM IN ALL MATERIAL RESPECTS
WITH THE SECURITIES AND EXCHANGE COMMISSION'S (THE "SEC") REQUIREMENTS AS OF
THEIR RESPECTIVE FILING DATES, AND THE INFORMATION CONTAINED THEREIN AS OF THE
DATE THEREOF DID NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO
STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE
STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE,
NOT MISLEADING, EXCEPT TO THE EXTENT THAT INFORMATION CONTAINED IN ANY SUCH
DOCUMENT HAS BEEN REVISED OR SUPERSEDED BY A LATER FILED SEC DOCUMENT.
4
2.6.
CAPITALIZATION. IMMEDIATELY PRIOR TO THE CLOSING, THE AUTHORIZED
CAPITAL STOCK OF THE COMPANY CONSISTS OF:
i.
50,000,000 shares of Common Stock,
$0.001 par value per share of which 27,652,889 shares are issued and outstanding
at the close of business on January 31, 2006; and
ii.
5,000,000 shares of Preferred Stock,
$0.001 par value per share.
Each series of Preferred Stock designated by the
Board of Directors is listed on Schedule 2.6 hereto.
ALL SUBSCRIPTIONS, WARRANTS, OPTIONS, CONVERTIBLE SECURITIES, AND OTHER RIGHTS
(CONTINGENT OR OTHER) TO PURCHASE OR OTHERWISE ACQUIRE EQUITY SECURITIES OF THE
COMPANY ISSUED AND OUTSTANDING AS OF JANUARY 31, 2006, OR CONTRACTS,
COMMITMENTS, UNDERSTANDINGS, OR ARRANGEMENTS BY WHICH THE COMPANY OR ANY OF ITS
SUBSIDIARIES IS OR MAY BE OBLIGATED TO ISSUE SHARES OF COMMON STOCK, OR
SECURITIES OR RIGHTS CONVERTIBLE OR EXCHANGEABLE FOR SHARES OF COMMON STOCK, ARE
AS SET FORTH ON SCHEDULE 2.6 HERETO.
EXCEPT AS SET FORTH ON SCHEDULE 2.6, OR AS
A RESULT OF EXERCISES OF STOCK OPTIONS PURSUANT TO THE COMPANY'S STOCK OPTION
AND INCENTIVE PLAN, NO COMMON STOCK NOR ANY SUBSCRIPTION, WARRANT, OPTION,
CONVERTIBLE SECURITY, OR OTHER RIGHT (CONTINGENT OR OTHER) TO PURCHASE OR
OTHERWISE ACQUIRE EQUITY SECURITIES OF THE COMPANY IS OUTSTANDING ON THE CLOSING
DATE.
THE ISSUED AND OUTSTANDING SHARES OF THE COMPANY'S CAPITAL STOCK HAVE
BEEN DULY AUTHORIZED AND VALIDLY ISSUED, ARE FULLY PAID AND NONASSESSABLE, HAVE
BEEN ISSUED IN COMPLIANCE WITH ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS,
AND WERE NOT ISSUED IN VIOLATION OF OR SUBJECT TO ANY PREEMPTIVE RIGHTS OR OTHER
RIGHTS TO SUBSCRIBE FOR OR PURCHASE SECURITIES.
NO HOLDER OF COMMON STOCK IS
ENTITLED TO PREEMPTIVE OR SIMILAR RIGHTS.
2.7.
LEGAL PROCEEDINGS.
EXCEPT AS DISCLOSED IN THE SEC DOCUMENTS,
THERE IS NO ACTION, SUIT OR PROCEEDING BEFORE ANY COURT, GOVERNMENTAL AGENCY OR
BODY, DOMESTIC OR FOREIGN, NOW PENDING OR, TO THE ACTUAL KNOWLEDGE OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES, THREATENED AGAINST THE COMPANY OR ITS
SUBSIDIARIES WHEREIN AN UNFAVORABLE DECISION, RULING OR FINDING WOULD REASONABLY
BE EXPECTED TO MATERIALLY ADVERSELY AFFECT THE VALIDITY OR ENFORCEABILITY OF, OR
THE AUTHORITY OR ABILITY OF THE COMPANY TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT.
2.8.
NO VIOLATIONS.
NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS
IN