HAVE RESERVED FROM ITS DULY AUTHORIZED CAPITAL STOCK EQUAL TO THE SUM OF
(A) THE COMMON SHARES (B) THE NUMBER OF COMMON SHARES ISSUABLE UPON CONVERSION
OF THE CONVERTIBLE NOTES (WITHOUT TAKING INTO ACCOUNT ANY LIMITATIONS ON THE
CONVERSION, OR REDEMPTION OF THE CONVERTIBLE NOTES SET FORTH IN THE CONVERTIBLE
NOTES) AT THE CLOSING (Y) THE NUMBER OF COMMON SHARES ISSUABLE UPON EXERCISE OF
THE WARRANTS (WITHOUT TAKING INTO ACCOUNT ANY LIMITATIONS ON THE EXERCISE OF THE
WARRANTS SET FORTH IN THE WARRANTS).
(F)
CAPITALIZATION. THE AGGREGATE NUMBER OF SHARES AND TYPE OF ALL
AUTHORIZED, ISSUED AND OUTSTANDING CLASSES OF CAPITAL STOCK, OPTIONS AND OTHER
SECURITIES OF THE COMPANY (WHETHER OR NOT PRESENTLY CONVERTIBLE INTO OR
EXERCISABLE OR EXCHANGEABLE FOR SHARES OF CAPITAL STOCK OF THE COMPANY) IS SET
FORTH IN SCHEDULE 3.1(F) HERETO. ALL OUTSTANDING SHARES OF CAPITAL STOCK ARE
DULY AUTHORIZED, VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE AND HAVE BEEN
ISSUED IN COMPLIANCE WITH SECTION 5 OF THE SECURITIES ACT. THE COMPANY HAS NOT
ISSUED ANY OTHER OPTIONS, WARRANTS, SCRIPT RIGHTS TO SUBSCRIBE TO, CALLS OR
COMMITMENTS OF ANY CHARACTER WHATSOEVER RELATING TO, OR SECURITIES, RIGHTS OR
OBLIGATIONS CONVERTIBLE INTO OR EXERCISABLE OR EXCHANGEABLE FOR, OR ENTERED INTO
ANY AGREEMENT GIVING ANY PERSON ANY RIGHT TO SUBSCRIBE FOR OR ACQUIRE, ANY
SHARES OF COMMON STOCK, OR SECURITIES OR RIGHTS CONVERTIBLE OR EXCHANGEABLE INTO
SHARES OF COMMON STOCK. EXCEPT FOR CUSTOMARY ADJUSTMENTS AS A RESULT OF STOCK
DIVIDENDS, STOCK SPLITS, COMBINATIONS OF SHARES, REORGANIZATIONS,
RECAPITALIZATIONS, RECLASSIFICATIONS OR OTHER SIMILAR EVENTS, THERE ARE NO
ANTI-DILUTION OR PRICE ADJUSTMENT PROVISIONS CONTAINED IN ANY SECURITY ISSUED BY
THE COMPANY (OR IN ANY AGREEMENT PROVIDING RIGHTS TO SECURITY HOLDERS) AND THE
ISSUANCE AND SALE OF THE SECURITIES WILL NOT OBLIGATE THE COMPANY TO ISSUE
SHARES OF COMMON STOCK OR OTHER SECURITIES TO ANY PERSON (OTHER THAN THE
INVESTORS) AND WILL NOT RESULT IN A
6
RIGHT OF ANY HOLDER OF SECURITIES TO ADJUST THE EXERCISE, CONVERSION, EXCHANGE
OR RESET PRICE UNDER SUCH SECURITIES. TO THE KNOWLEDGE OF THE COMPANY, NO PERSON
OR GROUP OF RELATED PERSONS BENEFICIALLY OWNS (AS DETERMINED PURSUANT TO RULE
13D-3 UNDER THE EXCHANGE ACT), OR HAS THE RIGHT TO ACQUIRE, BY AGREEMENT WITH OR
BY OBLIGATION BINDING UPON THE COMPANY, BENEFICIAL OWNERSHIP OF IN EXCESS OF 5%
OF THE OUTSTANDING COMMON STOCK, IGNORING FOR SUCH PURPOSES ANY LIMITATION ON
THE NUMBER OF SHARES OF COMMON STOCK THAT MAY BE OWNED AT ANY SINGLE TIME.
(G)
CONSENTS. NONE OF THE COMPANY NOR ANY OF ITS SIGNIFICANT
SUBSIDIARIES IS REQUIRED TO OBTAIN ANY CONSENT, AUTHORIZATION OR ORDER OF, OR
MAKE ANY FILING OR REGISTRATION WITH, ANY COURT, GOVERNMENTAL AGENCY OR ANY
REGULATORY OR SELF-REGULATORY AGENCY OR ANY OTHER PERSON IN ORDER FOR IT TO
EXECUTE, DELIVER OR PERFORM ANY OF ITS OBLIGATIONS UNDER OR CONTEMPLATED BY THE
TRANSACTION DOCUMENTS, IN EACH CASE IN ACCORDANCE WITH THE TERMS HEREOF OR
THEREOF. ALL CONSENTS, AUTHORIZATIONS, ORDERS, FILINGS AND REGISTRATIONS (WHICH
THE COMPANY IS REQUIRED TO OBTAIN PURSUANT TO THE PRECEDING SENTENCE) HAVE