The authorized capital stock of EXAD consists of (a) 200,000,000 shares of common stock of which 196,909,600 shares are presently issued and outstanding, and (b) 15,000,000 shares of preferred stock, $.001 par value, of which 5 million shares are designated as Series A Convertible Preferred, and 650,000 are issued and outstanding, 5 million are designated as Series B Redeemable Preferred, and 5 million designated as Blank Check Preferred.  Except as contemplated by this Agreement, EXAD has not granted, issued or agreed to grant, issue or make available any warrants, options, subscription rights or any other commitments of any character relating to the unissued shares of capital stock of EXAD.  All of the issued and outstanding capital stock of EXAD has been duly authorized and validly issued, fully paid and non-assessable, and was issued in compliance with applicable securities laws.