AND THE OTHER
TRANSACTION DOCUMENTS OR THE CONSUMMATION OR PERFORMANCE OF ANY OF THE
CONTEMPLATED TRANSACTIONS.
3.3
CAPITALIZATION; NO SUBSIDIARIES; STOCKHOLDER
CLAIMS AGAINST XCEL JAPAN.
(A)
SELLER IS THE SOLE LEGAL, BENEFICIAL,
EQUITABLE AND RECORD OWNER OF ALL OF THE AUTHORIZED AND ISSUED OUTSTANDING
CAPITAL EQUITY OF XCEL JAPAN.
XCEL JAPAN DOES NOT HAVE OUTSTANDING ANY SHARES
OF CAPITAL EQUITY CONTAINING ANY PROFIT PARTICIPATION FEATURES, ANY STOCK
APPRECIATION RIGHTS OR PHANTOM STOCK PLAN.
XCEL JAPAN IS NOT SUBJECT TO ANY
OBLIGATION (CONTINGENT OR OTHERWISE) TO REPURCHASE OR OTHERWISE ACQUIRE OR
RETIRE ANY OF ITS CAPITAL EQUITY.
ALL OF THE XCEL JAPAN SHARES HAVE BEEN DULY
AUTHORIZED AND ARE VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE.
THERE ARE NO
OUTSTANDING OPTIONS, WARRANTS, CALLS, AGREEMENTS, SUBSCRIPTIONS, UNDERSTANDINGS,
CONVERSION OR OTHER RIGHTS (INCLUDING PREEMPTIVE RIGHTS, RIGHTS OF FIRST REFUSAL
AND PHANTOM STOCK RIGHTS), PROXY, VOTING, TRANSFER RESTRICTION OR STOCKHOLDER
AGREEMENTS OR AGREEMENTS OF ANY KIND FOR THE PURCHASE OR
27
ACQUISITION FROM XCEL JAPAN FOR CAPITAL EQUITY OF XCEL JAPAN OR OBLIGATING XCEL
JAPAN TO ISSUE ANY ADDITIONAL CAPITAL EQUITY OR ANY OTHER SECURITIES CONVERTIBLE
INTO, EXCHANGEABLE FOR OR EVIDENCING THE RIGHT TO SUBSCRIBE FOR ANY CAPITAL
EQUITY OF XCEL JAPAN.
XCEL JAPAN DOES NOT OWN, OR HAVE ANY CONTRACT TO ACQUIRE,
ANY CAPITAL EQUITY OF ANY OTHER PERSON OR ANY DIRECT OR INDIRECT EQUITY OR
OWNERSHIP INTEREST IN ANY OTHER BUSINESS. THE XCEL JAPAN SHARES ARE NOT SUBJECT
TO ANY TRANSFER RESTRICTIONS OTHER THAN RESTRICTIONS ON TRANSFERABILITY
GENERALLY IMPOSED ON SECURITIES UNDER THE SECURITIES LAWS OF THE UNITED STATES
AND JAPAN. NO THIRD PARTY HAS ANY CLAIM OR RIGHT TO ANY OWNERSHIP INTEREST IN
XCEL JAPAN.
(B)
XCEL JAPAN DOES NOT DIRECTLY OR INDIRECTLY
OWN ANY CAPITAL EQUITY OF ANY OTHER CORPORATION OR HAVE ANY DIRECT OR INDIRECT
EQUITY OR OWNERSHIP IN ANY BUSINESS. XCEL JAPAN IS NOT SUBJECT TO ANY OBLIGATION
OR REQUIREMENT TO PROVIDE FUNDS OR TO MAKE ANY INVESTMENT IN THE FORM OF A LOAN,
CAPITAL CONTRIBUTION OR OTHERWISE IN ANY ENTITY.
EXCEPT FOR XCEL JAPAN, SELLER
DOES NOT OWN OR HAVE ANY DIRECT OR INDIRECT INTEREST OR CONTROL OVER ANY
CORPORATION, PARTNERSHIP, JOINT VENTURE OR ENTITY OF ANY KIND THAT OPERATES A
BUSINESS SIMILAR TO THE DIGITRAN BUSINESS OR WHICH PROVIDES ANY SUPPLIES OR
MANUFACTURES ANY PRODUCT OR PART THEREOF FOR THE DIGITRAN BUSINESS.
(C)
NO STOCKHOLDER OF XCEL JAPAN HAS ANY DIRECT
OR INDIRECT CLAIM AGAINST XCEL JAPAN AND XCEL JAPAN IS NOT DIRECTLY OR
INDIRECTLY OBLIGATED OR LIABLE TO ANY STOCKHOLDER.
(D)
DIGITRAN, LTD. CURRENTLY CONDUCTS NO
BUSINESS OPERATIONS.
3.4
FINANCIAL STATEMENTS.
(A)
SELLER HAS DELIVERED TO BUYERS: (I) THE
UNAUDITED BALANCE SHEETS OF THE DIGITRAN BUSINESS FOR THE FISCAL QUARTERS ENDED
MARCH 31, 2005 THROUGH SEPTEMBER 30, 2008, AND THE RELATED UNAUDITED STATEMENTS
OF INCOME FOR THE FISCAL QUARTERS THEN ENDED (COLLECTIVELY, THE "DIGITRAN
FINANCIAL STATEMENTS"), AND (II) AN UNAUDITED BALANCE SHEET OF THE DIGITRAN
BUSINESS AS OF DECEMBER 31, 2008 (THE "INTERIM DIGITRAN BALANCE SHEET") AND THE
RELATED UNAUDITED STATEMENTS OF INCOME FOR THE