As of the Agreement Date, the authorized, issued and outstanding shares of Capital Stock of Borrower are as set forth on Schedule II hereto. As of the Closing Date, taking into account all issuances of Capital Stock pursuant to the Share Purchase Agreement, the authorized, issued and outstanding shares of Capital Stock of Borrower will be as set forth on Schedule II hereto. All of such outstanding shares are, validly issued, fully paid and nonassessable. Upon payment of any required consideration therefor, all such issuable shares, upon issuance, will be validly issued, fully paid and nonassessable. Except as disclosed in Schedule II hereto and except as provided in this Agreement and the Share Purchase Agreement: (A) no shares of Borrower’s Capital Stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by Borrower; (B) there are no outstanding Options or Convertible Securities, or contracts, commitments, understandings or arrangements by which Borrower is or may become bound to issue additional shares of Capital Stock, Options or Convertible Securities or commitments of any character whatsoever relating to any shares of Capital Stock, Options or Convertible Securities; (C) there are no agreements or arrangements under which Borrower is obligated to register the offer and/or sale of any of its securities under the Securities Act (except the Registration Rights Agreement); (D) there are no outstanding securities or instruments of Borrower which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which Borrower or any of its Affiliates is or may become bound to redeem a security of Borrower; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Exchange Shares; and (G) Borrower does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plans or agreements. The Exchange Shares will represent two percent (2%) of the Fully Diluted Shares. Borrower has furnished to each Lender true and correct copies of Borrower’s certificate of incorporation, as amended and as in effect on the date hereof (the “ Certificate of Incorporation ”), and Borrower’s bylaws, as amended and as in effect on the date hereof (the “ Bylaws ”), and the terms of all Options and Convertible Securities (including their exercise and conversion prices).