As of the date hereof, the authorized capital stock of Delphax consists of (i) 50,000,000 shares of Common Stock, par value $.10 per share, of which 6,919,465 shares are issued and outstanding; 2,856,167 shares are reserved for issuance under the Option Plans; and no shares are reserved for issuance pursuant to any other securities (other than securities issued under the Option Plans) and (ii) 3,000,000 shares of preferred stock, par value $.10 per share, none of which are issued and outstanding. All of such outstanding shares of capital stock have been, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. No shares of capital stock of Delphax, including the Warrant Shares, are subject to preemptive rights or any other similar rights of the other shareholders of Delphax or any liens or encumbrances imposed through the actions or failure to act of Delphax. Except for stock options granted under the Option Plans, and the transactions contemplated hereby, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into, exercisable for, or exchangeable for any shares of capital stock of Delphax, or arrangements by which Delphax is or may become bound to issue additional shares of capital stock of Delphax; (ii) there are no agreements or arrangements under which Delphax is obligated to register the sale of any of its securities under the Securities Act ; and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by Delphax (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Securities. Delphax has furnished to Air T true and correct copies of the terms of all securities convertible into or exercisable for Common Stock of Delphax and the material rights of the holders thereof in respect thereto. Delphax has delivered to Air T true and correct copies of Delphax’s Articles of Incorporation, as amended, and By-laws, each as in effect on the date of this Agreement .