SHARES OF PREFERRED STOCK WERE
ISSUED AND OUTSTANDING, NO SHARES OF COMMON STOCK OR PREFERRED STOCK WERE HELD
IN THE TREASURY OF THE COMPANY AND 1,000,000 SHARES OF COMMON STOCK WERE
RESERVED FOR ISSUANCE UPON THE EXERCISE OF OPTIONS ISSUED PURSUANT TO THE MDI
OPTION PLANS.
THE COMPANY HAS NOT ISSUED ANY CAPITAL STOCK SINCE SUCH DATE
OTHER THAN PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS AND/OR RESTRICTED
SHARES UNDER THE COMPANY'S STOCK OPTION PLANS. ALL ISSUED AND OUTSTANDING SHARES
OF THE COMPANY ARE VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE AND HAVE NOT
BEEN ISSUED IN VIOLATION OF THE PREEMPTIVE RIGHTS OF ANY STOCKHOLDER OF THE
COMPANY. ALL PRIOR SALES BY THE COMPANY OF SECURITIES OF THE COMPANY WERE EITHER
REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR EXEMPT FROM
SUCH REGISTRATION, AND NO SECURITY HOLDER HAS ANY RESCISSION RIGHTS WITH RESPECT
THERETO.
4.3
VALID ISSUANCE OF SHARES, ETC. THE
REPURCHASE SHARES AND ESCROW SHARES HAVE BEEN DULY AUTHORIZED, AND UPON ISSUANCE
PURSUANT TO THE TERMS HEREOF, WILL BE VALIDLY ISSUED, FULLY PAID AND
NONASSESSABLE AND NOT SUBJECT TO ANY ENCUMBRANCES, PREEMPTIVE RIGHTS OR
ANY OTHER SIMILAR CONTRACTUAL RIGHTS OF THE STOCKHOLDERS OF THE COMPANY OR ANY
OTHER PERSON, OTHER THAN THE CALL AGREEMENT.
4.4
SUBSIDIARIES AND INVESTMENTS. EXCEPT FOR THE
SUBSIDIARIES SET FORTH ON SCHEDULE 4.4 OF THE DISCLOSURE SCHEDULE (THE
"SUBSIDIARIES"), THE COMPANY HAS NO SUBSIDIARIES. THE COMPANY DOES NOT OWN,
DIRECTLY OR INDIRECTLY, ANY CAPITAL STOCK OR OTHER EQUITY OWNERSHIP OR
PROPRIETARY INTERESTS IN ANY OTHER CORPORATION, ASSOCIATION, TRUST, PARTNERSHIP,
JOINT VENTURE OR OTHER ENTITY. THE COMPANY OWNS ALL OF THE CAPITAL STOCK OF THE
SUBSIDIARIES, AND THERE ARE NO WARRANTIES, OPTIONS, AGREEMENTS, CONVERTIBLE
SECURITIES, PREEMPTIVE RIGHTS TO SUBSCRIBE FOR OR OTHER COMMITMENTS PURSUANT TO
WHICH ANY OF THE SUBSIDIARIES MAY BECOME OBLIGATED TO ISSUE ANY SHARES OF ITS
CAPITAL STOCK OR ANY OTHER SECURITIES TO ANY PERSON OTHER THAN THE COMPANY. NO
ACTIONS HAVE BEEN TAKEN BY THE COMPANY OR THE COMPANY'S BOARD OF DIRECTORS WITH
RESPECT TO THE SALE OR DISPOSITION OF THE STOCK, OWNERSHIP INTERESTS OR ASSETS
OF THE SUBSIDIARIES.
4.5
TITLE.
EXCEPT AS SET FORTH ON THE
DISCLOSURE SCHEDULE, EACH OF THE COMPANY AND THE SUBSIDIARIES HAS GOOD AND VALID
TITLE TO ALL PROPERTIES AND ASSETS, OWNED BY IT, FREE AND CLEAR OF ALL LIENS,
CHARGES, ENCUMBRANCES OR RESTRICTIONS, EXCEPT SUCH AS ARE NOT MATERIALLY
SIGNIFICANT OR IMPORTANT IN RELATION TO THE COMPANY'S AND THE SUBSIDIARIES'
BUSINESS, TAKEN AS A WHOLE; EXCEPT AS SET FORTH ON THE DISCLOSURE SCHEDULE, ALL
OF THE MATERIAL LEASES AND SUBLEASES UNDER WHICH EACH OF THE COMPANY AND THE
SUBSIDIARIES IS THE LESSOR OR SUBLESSOR OF PROPERTIES OR ASSETS OR UNDER WHICH
EACH OF THE COMPANY AND THE SUBSIDIARIES HOLDS PROPERTIES OR ASSETS AS LESSEE OR
SUBLESSEE ARE IN FULL FORCE AND EFFECT, AND NEITHER THE COMPANY NOR ANY
SUBSIDIARY IS IN DEFAULT IN ANY MATERIAL RESPECT WITH RESPECT TO ANY OF THE
TERMS OR PROVISIONS OF ANY OF SUCH LEASES OR SUBLEASES, AND