Common use of Capitalization and Related Matters Clause in Contracts

Capitalization and Related Matters. (a) The authorized capital stock of the Acquiree consists of 50,000 Ordinary Shares, of which 50,000 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Acquiree to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations (contingent or otherwise) of the Acquiree to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (b) The authorized capital stock of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization of each PRC Company is set forth on Schedule 5.07(c). There are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company as of the date hereof. The equity interest of each PRC Company is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any Law.

Capitalization and Related Matters. (a) The authorized capital stock of the Acquiree Company consists solely of 50,000 Ordinary Shares55,000,000 shares of Common Stock, of which 50,000 481,225 shares are issued and outstanding, 2,000,000 shares of Series 1 Preferred Stock, of which 1,711,572 shares are issued and outstanding and 43,000,000 shares of Series 2 Preferred Stock, of which 23,399,198 shares are issued and outstanding (each, a “Share” and, collectively, the “Shares”). Schedule 2.3(a) lists each holder of record of the Shares and the class and number of Shares owned by such holder. All of the Shares were duly authorized and validly issued and are fully paid and non-assessable. (b) Except as set forth on Schedule 2.3(b) (all of which will be terminated at the Closing) and Parent’s rights pursuant to this Agreement, (i) there are no authorized or outstanding (A) securities of the Company other than the Shares or (B) warrants, preemptive rights, other rights, or options with respect to any securities of the Company or any securities or right convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of the Company’s capital stock, and (ii) neither the Company nor any of the Securityholders is subject to any obligation to issue, sell, deliver, redeem, or otherwise transfer, acquire or retire the Shares or any other securities of the Company. There are no outstanding or authorized options, warrants, calls, purchase shareholder agreements, participation buy-sell agreements, subscription rights, conversion rights, exchange rights voting trust or other securities agreement or contracts understanding to which the Company is a party or to which it is bound with respect to the Shares. Schedule 2.3(b) sets forth a list of each outstanding and unexercised warrant, option or unit appreciation right exercisable for Shares in the Company and the exercise price of each such outstanding and unexercised warrant, option or stock appreciation right immediately prior to the Effective Time and separately, at the Effective Time as a result of the Merger reflecting any acceleration of vesting or adjustment to purchase price or exercise price of such option or warrant, the date of grant and the vesting schedule. There are no unpaid dividends (accrued but unpaid, declared but unpaid or otherwise) on the Shares. CONFIDENTIAL TREATMENT REQUESTED (c) Schedule 1.6(a) lists each holder of the Company Options and Schedule 1.6(b) lists each holder of the Company Warrants and the number of Shares that could require are issuable upon exercise of such Company Options or Company Warrants, respectively, immediately prior to the Acquiree Closing hereunder, together with the exercise price(s) applicable to issuesuch Company Options or Company Warrants. Following the Closing, sell none of the Company Options or otherwise cause to become outstanding any of its authorized but unissued the Company Warrants may be exercised for Shares or other shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive Company or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations (contingent or otherwise) of the Acquiree to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (b, and the only right of any holder of Company Options and Company Warrants upon the Closing is the right to receive the amount, if any, of Merger Consideration as set forth in Section 1.6(a) The authorized capital stock or Section 1.6(b), as the case may be. All of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are Options were duly authorized and were validly issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization of each PRC Company is set forth on Schedule 5.07(c). There are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company as of the date hereof. The equity interest of each PRC Company is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations terms of the Company’s 2003 Stock Plan or 2010 Equity Incentive Plan. All of the Company Warrants were duly authorized and requirements were validly issued in accordance with the terms of the warrant agreement with respect thereto. (d) All of the Shares, Company Options and Company Warrants and all necessary capital verification reports other securities of the Company have been duly issued in accordance with applicable federal and not revoked or withdrawnstate securities laws. The owners transactions contemplated by this Agreement are not subject to any preemptive rights. (e) Each of the equity interest amounts payable to the Securityholders under Section 1.5 or under Section 1.6(a) or Section 1.6(b) has been calculated and will be paid (when paid in accordance with and subject to the terms of each PRC this Agreement) in accordance with and subject to all terms of the Articles of the Company ownas in effect at the Effective Time, and have goodany other agreements binding upon the Company or to which the Company is subject (including, valid without limitation, the agreements or instruments evidencing Company Options and marketable title to, Company Warrants) and all equity interest applicable Laws. (f) Upon payment by the Company of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining amounts referenced in Section 6.6(a) to the equity interest of participants under the Management Carveout Plan, no Person shall have any PRC Company. None of further rights under such Management Carveout Plan and the outstanding equity interest of any PRC Company has been owned in violation of any rights of will have no further liability to any Person or in violation of any Lawwith respect to such Management Carveout Plan.

Capitalization and Related Matters. (a) The As of the date hereof, the authorized capital stock of the Acquiree Company consists of 50,000 Ordinary Shares25,000,000 shares of Company Common Stock, of which 50,000 8,555,686 shares are issued and outstanding, and 5,000,000 shares of Company Preferred Stock, of which no shares are issued and outstanding. There Schedule 5.6 sets forth (i) the names of the record owners of the Company Common Stock and the number of shares held by each owner and (ii) the names of all holders of warrants to purchase shares of Company Common Stock, the number of shares of Company Common Stock purchasable thereunder and the exercise price(s) therefor. The Company Common Stock (i) have been duly authorized and validly issued and are fully paid and nonassessable and (ii) were issued in compliance with all applicable federal and state securities laws. Except as set forth above or on Schedule 5.6, no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Acquiree to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or of the Company are outstanding; the Company does not have outstanding any securities convertible into, into or exchangeable for or carrying a right or option to purchase any shares of capital stock, including Company Options, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or known claims of any other character relating to the issuance of, any capital stock, or any stock or securities convertible into or exchangeable for any capital stock; and except with respect to createthe obligation to purchase the Company Warrants pursuant to a put right held by the Warrantholders with respect to the Company Warrants, authorize, issue, sell the Company is not subject to any obligation (contingent or otherwise) to repurchase or otherwise cause acquire or retire, or to become outstanding register under the Securities Act, any new class shares of capital stock. There are no The Company does not have outstanding stockholders’ agreementsany bonds, voting trusts or arrangementsdebentures, registration rights agreements, rights of first refusal notes or other contracts pertaining obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the capital stock right to vote) with the stockholders of the AcquireeCompany on any matter. The issuance True and correct copies of all each Company Warrant agreement and the form of Company Warrant thereto has been made available to Parent or its representatives, and such copies are accurate and complete as of the Ordinary Shares described in this Section 5.07(adate hereof. (b) has been in compliance with the laws All of the British Virgin Islands. All issued and outstanding shares of capital stock, or membership interests or other ownership interests of, each Subsidiary of the Acquiree’s capital stock are duly authorizedCompany, as applicable, is validly issued, fully paid and nonassessable and have not been issued in violation is owned of any preemptive record and beneficially by the Company, directly or similar rightsindirectly. The owners Company has, as of the Ordinary Shares of date hereof and shall have on the Acquiree own, and have goodClosing Date, valid and marketable title to, to all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations (contingent shares of capital stock of, or otherwise) membership interests or other ownership interests in, each Subsidiary of the Acquiree to retireCompany, repurchase, redeem or otherwise acquire free and clear of any Liens other than Permitted Liens. Such outstanding shares of capital stock of, or other ownership membership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (b) The authorized capital stock of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Subsidiaries of the Company, as applicable, are the sole outstanding securities of such Subsidiaries; the Subsidiaries of the Company do not have outstanding any securities convertible into or exchangeable for any capital stock of, or membership interests or other ownership interests in, such Subsidiaries, any rights to subscribe for or to provide funds to purchase or make any investment options for the purchase of, or any agreements providing for the issuance (in the form of a loan, capital contribution contingent or otherwise) in of, or any calls, commitments or claims of any other Person. character relating to the issuance of, any capital stock of, or membership interests or other ownership interests in, such Subsidiaries, or any stock or securities convertible into or exchangeable for any capital stock of, or membership interests or other ownership interests in, such Subsidiaries; and neither the Company or any of its Subsidiaries is subject to any obligation (ccontingent or otherwise) The capitalization of each PRC Company is set forth on Schedule 5.07(c). There are no outstanding optionsto repurchase or otherwise acquire or retire, warrants or commitments in respect of increase of registered to register under the Securities Act, any capital stock of, or transfer of equity interest of membership interests or other ownership interests in, any PRC Company as Subsidiary of the date hereof. The equity interest of each PRC Company is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any Law.

Capitalization and Related Matters. (ai) The authorized capital stock of the Acquiree CIR III consists of 50,000 Ordinary Shares(A) 1,000,000 common shares of beneficial interest, of which 50,000 277,458 are issued and outstanding and held beneficially and of record by the Sellers, and (B) 500 preferred shares of beneficial interest, with no par value (the “Preferred Shares”), of which 125 are issued and outstanding. There All such outstanding common shares and preferred shares have been duly authorized and are validly issued, fully paid and non-assessable. Schedule 4.1(aa)(i) sets forth the name, owner, jurisdiction of formation or organization (as applicable) of (A) each holder of CIR III Shares and the percentage of outstanding equity securities owned by each such holder and (B) each holder of Preferred Shares, each of whom holds one Preferred Share. (ii) Except as set forth in Schedule 4.1(aa)(ii), there are no outstanding or authorized options, warrants, callsconvertible securities or other securities, purchase rights, agreements, participation agreements, subscription rights, conversion rights, exchange rights arrangements or other securities commitments of any character (contingent or contracts that could require otherwise) relating to the Acquiree to issue, sell shares of beneficial interest of CIR III or otherwise cause to become outstanding any of its authorized but unissued Subsidiaries or obligating CIR III or any other Person to issue or sell any shares of beneficial interest of, or any other interest in, CIR III or any of its Subsidiaries. Neither CIR III nor any of its Subsidiaries has granted or authorized, and does not have outstanding, any securities (whether debt or equity) convertible into or exercisable or exchangeable for any shares of capital stock or equity interests in CIR III or any of its Subsidiaries, or any stock appreciation, phantom stock, profit participation or similar rights. Neither CIR III nor any of its Subsidiaries has any outstanding bonds, debentures, notes or other obligations the holders of which have the right to vote (or are convertible into or exchangeable or exercisable for securities convertible intohaving the right to vote) with a Seller on any matter. Neither CIR III nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire or to register under the Securities Act of 1933, exchangeable for or carrying a right or option to purchase as amended, and the rules and regulations promulgated thereunder, any shares of capital stock or to createequity interests. Schedule 4.1(aa)(ii) sets forth each voting trust, authorizeshareholder agreement, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal proxy or other contracts pertaining agreement or understanding with respect to the capital stock voting or transfer of any of the AcquireeCIR III Shares or any equity interests of any Subsidiary of CIR III and no such agreements shall remain in effect after Closing. The issuance Upon consummation of the transactions contemplated by this Agreement, the Buyer will own the CIR III Shares free and clear of all Liens other than general restrictions on transfer under securities Laws or any Lien created or consented to by the Buyer. Except as set forth in Schedule 4.1(aa)(ii), neither CIR III nor any of its Subsidiaries has any Indebtedness. (iii) Schedule 4.1(aa)(iii) sets forth a true, correct and complete list of each Subsidiary of CIR III. CIR III owns, directly or indirectly, all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws equity interests of the British Virgin Islandseach such Subsidiary, free and clear of any Liens. All issued and outstanding shares Except as set forth on Schedule 4.1(aa)(iii), neither CIR III nor any of the Acquiree’s its Subsidiaries directly or indirectly owns or holds any rights to acquire, any capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of or any preemptive other securities or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations (contingent or otherwise) of the Acquiree to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (b) The authorized capital stock . Each Subsidiary of CIR III is the HK Company consists type of 10,000 Ordinary Sharesentity set forth across from its name on Schedule 4.1(aa)(iii), of which 100 shares are issued is duly organized, validly existing and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require in good standing under the HK Company to issue, sell or otherwise cause to become outstanding any Laws of its authorized but unissued shares jurisdiction and has the requisite power and authority to own or lease its assets and to conduct its business as it is now being conducted, and each Subsidiary of capital stock CIR III is duly licensed or qualified in each jurisdiction in which the ownership or operation of its assets or the character of its activities is such as to require it to be so licensed or qualified, except, in each case, as would not result in a Material Adverse Effect. No Subsidiary of CIR III is in material violation of its Organizational Documents or has any securities convertible into, exchangeable for contingent or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining actual obligations unrelated to the capital stock ownership and operation of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization of each PRC Company is set forth on Schedule 5.07(c). There are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company as of the date hereof. The equity interest of each PRC Company is free of any Liens its properties other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase obligations arising under its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any LawOrganizational Documents.

Capitalization and Related Matters. 3.4.1 Section 3.4.1 of the Company Disclosure Schedule sets forth as of the date hereof, a complete list of the Membership Interests, including a true, correct and complete list of the record holders of the Membership Interests, listing for each Person: (i) his, her or its name, and if not a natural person, its type of entity and jurisdiction of incorporation or organization; and (ii) the percentage of the Company’s membership interests owned by such Person. 3.4.2 The Membership Interests represent all issued and outstanding equity interests of the Company. All of the issued and outstanding Membership Interests have been duly authorized and validly issued and are fully paid and non-assessable. Immediately after the Closing, Buyer shall own all of the outstanding Membership Interests, free and clear of any Liens or any other restrictions on transfer, other than Permitted Liens. Other than the Membership Interests, there are no issued, reserved for issuance or outstanding (a) The authorized capital stock of the Acquiree consists of 50,000 Ordinary Sharesmembership interests, of which 50,000 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Acquiree to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations (contingent or otherwise) of the Acquiree to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership equity or voting interests in, the Acquiree or to provide funds to or make any investment (in the form of a loanCompany, capital contribution or otherwise) in any other Person. (b) The authorized capital stock securities of the HK Company consists of 10,000 Ordinary Sharesconvertible into or exchangeable or exercisable for membership interests, of which 100 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership equity or voting interests in, the HK Company or to provide funds to containing any profit participation features, or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization options, warrants, restricted stock or stock units, profits interests, stock appreciation rights, phantom stock, calls, subscriptions or other rights to acquire from the Company or other obligations of each PRC the Company is set forth on Schedule 5.07(c)to issue or allot, any membership interests, capital stock or securities convertible into, or exchangeable or exercisable for, or evidencing the right to subscribe for, capital stock of, or other equity or voting interests in, the Company or any equity appreciation rights or phantom equity plans. There are no outstanding optionsobligations of the Company to repurchase, warrants redeem or commitments in otherwise acquire or retire for value any Membership Interests. There are no statutory or contractual equity holder preemptive or similar rights, rights of first refusal, rights of first offer or registration rights with respect of increase of registered capital to the Membership Interests. There are no agreements with respect to the voting or transfer of equity interest of the Membership Interests to which the Company or any PRC Seller is a party. 3.4.3 The Company as of the date hereof. The equity interest of each PRC Company is free of has not violated any Liens other than applicable federal or state securities Laws or any Liens created by preemptive or imposed upon the holder thereof, and is not subject to preemptive similar rights or rights of first refusal created by statute, their respective organizational documents document or agreement in connection with the offer, sale, issuance or allotment of any Membership Interests. The Company has no liability for, or obligation with respect to, the payment of dividends, distributions or similar participation interests, whether or not declared or accumulated, and there are no restrictions of any kind which prevent the payment of the foregoing by the Company other than applicable Law. No certificate or certificates have been issued representing any of the Membership Interests or any agreement to which other equity interest in the Acquiree Company. The Company has not at any time issued or such PRC Company is a party or by which it is boundgranted, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There there are no outstanding or authorized authorized, compensatory equity or equity-linked interests with respect to the common stock, preferred stock or other capital stock of, or the common units or preferred units of, or other equity or voting interests in the Company, including without limitation, any options, warrants, purchase agreements, participation agreements, subscription appreciation rights, conversion restricted stock or stock unit awards, profits interests, restricted units, phantom equity or similar awards or rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any Law.

Capitalization and Related Matters. (a) The authorized capital stock Section 3.02(a)(i) of the Acquiree consists Company Disclosure Letter sets forth all of 50,000 Ordinary Shares, of which 50,000 shares are the Company Units issued and outstanding, and the name of each holder thereof, in each case as of the date hereof. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Acquiree to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining After giving effect to the capital stock Restructuring and as of immediately prior to the Acquiree. The issuance of Closing, all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with Company Units will be owned by the laws Company Seller and the Blockers. All of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock Company Units are duly authorized, authorized and validly issued, fully paid and nonassessable (if applicable), and have not been issued in violation of any preemptive or similar rights. The owners , in each case, free and clear of all Liens (other than restrictions on transfer under the Securities Act or applicable state securities Laws or pursuant to the Organizational Documents of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations Company). (contingent or otherwiseb) Except as set forth on Section 3.02(b) of the Acquiree Company Disclosure Letter and except as contemplated by the Restructuring, (i) no Company Entity is subject to retireany obligation to issue, repurchase, redeem or otherwise acquire or retire any outstanding shares of capital stock ofequity securities, or other ownership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwiseii) in any other Person. (b) The authorized capital stock of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are issued and outstanding. There there are no outstanding statutory or authorized options, warrants, calls, purchase agreements, participation agreements, subscription contractual preemptive rights, conversion co-sale rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining similar rights or restrictions with respect to the capital stock Company Units or any other equity securities of any Company Entity and (iii) there are no agreements among the holders of the HK Company. The issuance Company Units or any other equity securities of all any Company Entity or among any other Persons, in each case, with respect to the voting or transfer of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation Units or any other equity securities of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other PersonEntity. (c) The capitalization Section 3.02(c)(i) of the Company Disclosure Letter sets forth the name of each PRC Subsidiary of the Company, the jurisdiction of its incorporation or other organization, as applicable, and all of the issued and outstanding equity securities of such Subsidiary. The Company is does not have any Subsidiaries except those set forth on Schedule 5.07(cSection 3.02(c). There are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company as of the date hereof. The equity interest of each PRC Company is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any Law.

Capitalization and Related Matters. (a) The authorized capital stock Schedule 3.2(a) sets forth all of the Acquiree consists authorized Shares and other equity securities of 50,000 Ordinary Sharesthe Company by class of Shares and other equity securities of the Company, the number of which 50,000 shares such equity securities of the Company that are issued and outstanding, and the names and percentage ownership of each record owner of such issued and outstanding equity securities of the Company. There The Shares constitute the only equity interests of the Company. Each of the record owners set forth on Schedule 3.2(a) has good and valid title to, and beneficial ownership of, such record owner's Shares and the Shares are no free and clear of all Encumbrances (other than restrictions on transfer arising under applicable securities Laws). All of the Shares have been duly authorized, are validly issued and are fully paid and, to the extent applicable, non-assessable. (b) Except as set forth on Schedule 3.2(a), the Company does not have any other authorized, issued or outstanding equity securities (or authorized options, warrants, callsphantom stock, purchase agreementsstock appreciation, profit participation agreementsor similar equity-based rights), subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Acquiree to issue, sell or otherwise cause to become including any outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option measured by reference to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal Shares or other contracts pertaining to the capital stock equity securities of the AcquireeCompany. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have Company is not been issued in violation of subject to any preemptive option or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations obligation (contingent or otherwise) of the Acquiree to retire, repurchase, redeem repurchase or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (b) The authorized capital stock of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding retire any of its authorized but unissued shares of capital stock stock, membership interests or other equity securities or any securities convertible intowarrants, exchangeable for options or carrying a right or option other rights to purchase shares acquire any of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of its capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal membership interests or other contracts pertaining to the capital stock of the HK Companyequity securities. The Company has not violated any federal, provincial or state securities Laws in connection with the offer, sale or issuance of all of the its capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued stock, membership interests or other equity securities, and outstanding shares of the HK Company’s capital stock no such equity securities are duly authorizedsubject to, validly issued, fully paid and nonassessable and have not been nor were they issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization of each PRC Company is set forth on Schedule 5.07(c). There are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company as of the date hereof. The equity interest of each PRC Company is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest securities Laws. Except as set forth on Schedule 5.07(c) constitutes all 3.2(b), there are no agreements with any Seller or any other Person with respect to the voting or transfer of any of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners securities of the Company, or with respect to any other aspect of the Company's affairs. (c) The Company does not have, and has never had, any Subsidiaries (nor has the Company taken any steps to incorporate or form any Subsidiaries) and does not own or hold any equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities security or contracts that could require interest (including the right to acquire any PRC Company such security or interest) in any Person nor have any obligation to increase its registered capital, sell or transfer its equity interest, or otherwise to cause make any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal capital contribution or other contracts pertaining investment in any Person. Except as set forth on Schedule 3.2(c), the Company is not party to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person joint venture, voting, proxy, partnership or in violation of any Lawother similar arrangement or relationship.

Capitalization and Related Matters. (a) The entire authorized capital stock and issued Equity Interests of the Acquiree Buyer consists of 50,000 Ordinary Shares1,000 authorized shares of common stock, par value $0.01 per share, of which 50,000 1,000 shares are issued and outstandingoutstanding and held beneficially and of record by SPI. There are Except as set forth in Schedule 4.2(a) attached hereto, Buyer has no outstanding Shares or authorized optionsstock or securities convertible or exchangeable for any shares of its Equity Interests or containing any profit participation features, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange nor any rights or other securities options to subscribe for or contracts that could require the Acquiree to issue, sell purchase its Equity Interests or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, into or exchangeable for its Equity Interests or carrying a right any stock appreciation rights or phantom stock plan. Except as set forth in Schedule 4.2(a) attached hereto, Buyer is not subject to any option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations obligation (contingent or otherwise) of the Acquiree to retire, repurchase, redeem repurchase or otherwise acquire or retire any of its Equity Interests or any warrants, options or other rights to acquire its Equity Interests. Buyer has not violated any foreign, federal or state securities laws in connection with the offer, sale or issuance of its Equity Interests. All of Buyer’s outstanding shares Equity Interests have been validly issued and are fully paid and nonassessable. There are no bonds, debentures, notes or other Indebtedness of capital stock ofBuyer outstanding having the right to vote (or convertible into, or other ownership interests inexchangeable for, securities having the Acquiree or right to provide funds to or make vote) on any investment (in the form matters on which any shareholders of a loan, capital contribution or otherwise) in any other PersonBuyer may vote. (b) The authorized capital stock entire issued and outstanding Equity Interests of SPI (after giving effect to the transactions contemplated hereby) consists of the HK Company consists number of 10,000 Ordinary Sharesoutstanding Class A Units set forth on Schedule 4.2(b). Schedule 4.2(b) attached hereto sets forth the name of the record holders of all outstanding Equity Interests of SPI and their ownerships of Equity Interests of SPI. Except as set forth in Schedule 4.2(a) attached hereto, of which 100 shares are issued and outstanding. There are SPI has no outstanding ownership interests or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights securities convertible or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding exchangeable for any of its authorized but unissued shares of capital Equity Interests or containing any profit participation features, nor any rights or options to subscribe for or to purchase its Equity Interests or any stock or any securities convertible into, into or exchangeable for its Equity Interests or carrying a right any ownership appreciation rights or phantom ownership plan. Except as set forth in Schedule 4.2(b) attached hereto, SPI is not subject to any option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations obligation (contingent or otherwise) of the HK Company to retire, repurchase, redeem repurchase or otherwise acquire or retire any outstanding shares of capital stock ofits Equity Interests or any warrants, options or other ownership interests inrights to acquire its Equity Interests. SPI has not violated any foreign, federal or state securities laws in connection with the HK Company offer, sale or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization of each PRC Company is set forth on Schedule 5.07(c). There are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company as issuance of the date hereof. The equity interest of each PRC Company is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any LawSPI Rollover Units.

Capitalization and Related Matters. 3.4.1 Section 3.4.1 of the Company Disclosure Schedule sets forth as of the date hereof, a complete list of the Interests, including a true, correct and complete list of the record holders of the Interests, listing for each Person: (i) his, her or its name, and if not a natural person, its type of entity and jurisdiction of incorporation or organization; and (ii) the percentage of the Company’s membership interests owned by such Person. 3.4.2 The Interests represent all issued and outstanding equity interests of the Company. All of the issued and outstanding Interests have been duly authorized and validly issued, and are fully paid and non-assessable. Immediately after the Closing, Buyer shall own all of the outstanding Interests, free and clear of any Liens or any other restrictions on transfer, other than restrictions on transfer arising under applicable federal and state securities Laws. Other than the Interests, there are no issued, reserved for issuance or outstanding (a) The authorized capital stock of the Acquiree consists of 50,000 Ordinary Sharesmembership interests, of which 50,000 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Acquiree to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations (contingent or otherwise) of the Acquiree to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership equity or voting interests in, the Acquiree or to provide funds to or make any investment (in the form of a loanCompany, capital contribution or otherwise) in any other Person. (b) The authorized capital stock securities of the HK Company consists of 10,000 Ordinary Sharesconvertible into or exchangeable or exercisable for membership interests, of which 100 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership equity or voting interests in, the HK Company or to provide funds to containing any profit participation features, or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization options, warrants, stock appreciation rights, phantom stock, calls, subscriptions or other rights to acquire from the Company or other obligations of each PRC the Company is set forth on Schedule 5.07(c)to issue or allot, any membership interests, capital stock or securities convertible into, or exchangeable or exercisable for, or evidencing the right to subscribe for, capital stock of, or other equity or voting interests in, the Company or any equity appreciation rights or phantom equity plans. There are no outstanding optionsobligations of the Company to repurchase, warrants redeem or commitments in otherwise acquire or retire for value any Interests. There are no statutory or contractual equity holder preemptive or similar rights, rights of first refusal, rights of first offer or registration rights with respect of increase of registered capital to the Interests. There are no agreements with respect to the voting or transfer of equity interest of the Interests to which the Company, any PRC Company as of the date hereofSubsidiary or any Seller is a party. The equity interest of each PRC Company is free of has not violated any Liens other than applicable federal or state securities Laws or any Liens created by preemptive or imposed upon the holder thereof, and is not subject to preemptive similar rights or rights of first refusal created by statute, their respective organizational documents document or agreement in connection with the offer, sale, issuance or allotment of any Interests. Except as provided on Section 3.4.2 of the Company Disclosure Schedule, the Company has no liability for, or obligation with respect to, the payment of dividends, distributions or similar participation interests, whether or not declared or accumulated, and there are no restrictions of any kind which prevent the payment of the foregoing by the Company. No certificate or certificates have been issued representing any of the Interests or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such other equity interest set forth on Schedule 5.07(c) constitutes all of in the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any Law.

Capitalization and Related Matters. (ai) The As of immediately before the Closing, the authorized capital stock of the Acquiree consists Company shall consist of: (x) 2,000,000 shares of 50,000 Ordinary SharesPreferred Stock, $.01 per share par value, of which 50,000 zero shares are issued and outstanding, and (y) 25,000,000 shares of Common Stock, $.01 per share par value, of which 6,348,603 shares are issued and outstanding. There are no As of immediately before the Closing, neither the Company nor any Subsidiary shall have outstanding or authorized any capital stock, options, warrantsconvertible securities, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require rights containing any profit participation features, or any stock appreciation right or phantom stock plan, except as set forth on Section 5B of the Acquiree Disclosure Schedule attached hereto (the "Disclosure Schedule"). Section 5B of the Disclosure Schedule accurately sets forth the following information with respect to issueall outstanding options and rights to acquire the Company's and the Subsidiaries' capital stock: the holder, sell the number of shares covered, the exercise price and the expiration date. As of immediately before the Closing, neither the Company nor any Subsidiary shall be subject to any obligation (contingent or otherwise) to repurchase or otherwise cause to become outstanding acquire or retire any shares of its authorized but unissued shares of capital stock or any securities convertible intowarrants, exchangeable for options or carrying a right or option other rights to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of acquire its capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock except as set forth on Section 5B of the AcquireeDisclosure Schedule. The issuance As of the Closing, all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s Company's capital stock are duly authorized, shall be validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. nonassessable. (ii) There are no outstanding statutory or, to the Company's Knowledge, contractual obligations (contingent stockholders' preemptive rights or otherwise) rights of refusal with respect to the issuance of the Acquiree to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (b) The authorized capital stock of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are issued . Assuming Purchaser's representations and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization of each PRC Company is warranties set forth on Schedule 5.07(c). There in Section 6 are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company true and correct as of the date hereof. The equity interest of each PRC , the Company is free has not violated any applicable federal or state securities laws in connection with the offer, sale or issuance of any Liens of its capital stock, and the offer, sale and issuance of the Shares do not require registration under the Securities Act or any applicable state securities laws. To the Company's Knowledge, other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any Law.Stockholders

Capitalization and Related Matters. (a) The authorized capital stock of the Acquiree Company consists solely of 50,000 Ordinary Shares55,000,000 shares of Common Stock, of which 50,000 481,225 shares are issued and outstanding, 2,000,000 shares of Series 1 Preferred Stock, of which 1,711,572 shares are issued and outstanding and 43,000,000 shares of Series 2 Preferred Stock, of which 23,399,198 shares are issued and outstanding (each, a “Share” and, collectively, the “Shares”). Schedule 2.3(a) lists each holder of record of the Shares and the class and number of Shares owned by such holder. All of the Shares were duly authorized and validly issued and are fully paid and non-assessable. (b) Except as set forth on Schedule 2.3(b) (all of which will be terminated at the Closing) and Parent’s rights pursuant to this Agreement, (i) there are no authorized or outstanding (A) securities of the Company other than the Shares or (B) warrants, preemptive rights, other rights, or options with respect to any securities of the Company or any securities or right convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of the Company’s capital stock, and (ii) neither the Company nor any of the Securityholders is subject to any obligation to issue, sell, deliver, redeem, or otherwise transfer, acquire or retire the Shares or any other securities of the Company. There are no outstanding or authorized options, warrants, calls, purchase shareholder agreements, participation buy-sell agreements, subscription rights, conversion rights, exchange rights voting trust or other securities agreement or contracts understanding to which the Company is a party or to which it is bound with respect to the Shares. Schedule 2.3(b) sets forth a list of each outstanding and unexercised warrant, option or unit appreciation right exercisable for Shares in the Company and the exercise price of each such outstanding and unexercised warrant, option or stock appreciation right immediately prior to the Effective Time and separately, at the Effective Time as a result of the Merger reflecting any acceleration of vesting or adjustment to purchase price or exercise price of such option or warrant, the date of grant and the vesting schedule. There are no unpaid dividends (accrued but unpaid, declared but unpaid or otherwise) on the Shares. (c) Schedule 1.6(a) lists each holder of the Company Options and Schedule 1.6(b) lists each holder of the Company Warrants and the number of Shares that could require are issuable upon exercise of such Company Options or Company Warrants, respectively, immediately prior to the Acquiree Closing hereunder, together with the exercise price(s) applicable to issuesuch Company Options or Company Warrants. Following the Closing, sell none of the Company Options or otherwise cause to become outstanding any of its authorized but unissued the Company Warrants may be exercised for Shares or other shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive Company or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations (contingent or otherwise) of the Acquiree to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (b, and the only right of any holder of Company Options and Company Warrants upon the Closing is the right to receive the amount, if any, of Merger Consideration as set forth in Section 1.6(a) The authorized capital stock or Section 1.6(b), as the case may be. All of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are Options were duly authorized and were validly issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization of each PRC Company is set forth on Schedule 5.07(c). There are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company as of the date hereof. The equity interest of each PRC Company is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations terms of the Company’s 2003 Stock Plan or 2010 Equity Incentive Plan. All of the Company Warrants were duly authorized and requirements were validly issued in accordance with the terms of the warrant agreement with respect thereto. (d) All of the Shares, Company Options and Company Warrants and all necessary capital verification reports other securities of the Company have been duly issued in accordance with applicable federal and not revoked or withdrawnstate securities laws. The owners transactions contemplated by this Agreement are not subject to any preemptive rights. (e) Each of the equity interest amounts payable to the Securityholders under Section 1.5 or under Section 1.6(a) or Section 1.6(b) has been calculated and will be paid (when paid in accordance with and subject to the terms of each PRC this Agreement) in accordance with and subject to all terms of the Articles of the Company ownas in effect at the Effective Time, and have goodany other agreements binding upon the Company or to which the Company is subject (including, valid without limitation, the agreements or instruments evidencing Company Options and marketable title to, Company Warrants) and all equity interest applicable Laws. (f) Upon payment by the Company of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining amounts referenced in Section 6.6(a) to the equity interest of participants under the Management Carveout Plan, no Person shall have any PRC Company. None of further rights under such Management Carveout Plan and the outstanding equity interest of any PRC Company has been owned in violation of any rights of will have no further liability to any Person or in violation of any Lawwith respect to such Management Carveout Plan.

Capitalization and Related Matters. 3.4.1 Section 3.4.1 of the Company Disclosure Schedule sets forth as of the date hereof, a complete list of the Interests, including a true, correct and complete list of the record holders of the Interests, listing for each Person: (i) his, her or its name, and if not a natural person, its type of entity and jurisdiction of incorporation or organization; and (ii) the percentage of the Company’s membership interests owned by such Person. 3.4.2 The Interests represent all issued and outstanding equity interests of the Company. All of the issued and outstanding Interests have been duly authorized and validly issued, and are fully paid and non-assessable. Immediately after the Closing, Buyer shall own all of the outstanding Interests, free and clear of any Liens or any other restrictions on transfer, other than restrictions on transfer arising under applicable federal and state securities Laws. Other than the Interests, there are no issued, reserved for issuance or outstanding (a) The authorized capital stock of the Acquiree consists of 50,000 Ordinary Sharesmembership interests, of which 50,000 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Acquiree to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations (contingent or otherwise) of the Acquiree to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership equity or voting interests in, the Acquiree or to provide funds to or make any investment (in the form of a loanCompany, capital contribution or otherwise) in any other Person. (b) The authorized capital stock securities of the HK Company consists of 10,000 Ordinary Sharesconvertible into or exchangeable or exercisable for membership interests, of which 100 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership equity or voting interests in, the HK Company or to provide funds to containing any profit participation features, or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization options, warrants, stock appreciation rights, phantom stock, calls, subscriptions or other rights to acquire from the Company or other obligations of each PRC the Company is set forth on Schedule 5.07(c)to issue or allot, any membership interests, capital stock or securities convertible into, or exchangeable or exercisable for, or evidencing the right to subscribe for, capital stock of, or other equity or voting interests in, the Company or any equity appreciation rights or phantom equity plans. There are no outstanding optionsobligations of the Company to repurchase, warrants redeem or commitments otherwise acquire or retire for value any Interests. There are no statutory or contractual equity holder preemptive or similar rights, rights of first refusal, rights of first offer or registration rights with respect to the Interests. Except as may be set forth in the organizational documents for the Company, there are no agreements with respect of increase of registered capital to the voting or transfer of equity interest of the Interests to which the Company, any PRC Company as of the date hereofSubsidiary or any Seller is a party. The equity interest of each PRC Company is free of has not violated any Liens other than applicable federal or state securities Laws or any Liens created by preemptive or imposed upon the holder thereof, and is not subject to preemptive similar rights or rights of first refusal created by statute, their respective organizational documents document or agreement in connection with the offer, sale, issuance or allotment of any Interests. The Company has no liability for, or obligation with respect to, the payment of dividends, distributions or similar participation interests, whether or not declared or accumulated, and there are no restrictions of any kind which prevent the payment of the foregoing by the Company. No certificate or certificates have been issued representing any of the Interests or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such other equity interest set forth on Schedule 5.07(c) constitutes all of in the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any Law.

Capitalization and Related Matters. (a) The entire authorized capital stock and issued Equity Interests of the Acquiree Company consists of 50,000 Ordinary Shares10,000 authorized shares of common stock, no par value per share, of which 50,000 1,000 shares are issued and outstanding. There are Schedule 3.2 attached hereto sets forth name of the record holders of all outstanding Equity Interests of the Company. Except as set forth in Schedule 3.2 attached hereto, the Company has no outstanding Shares or authorized optionsstock or securities convertible or exchangeable for any shares of its Equity Interests or containing any profit participation features, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange nor any rights or other securities options to subscribe for or contracts that could require the Acquiree to issue, sell purchase its Equity Interests or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, into or exchangeable for its Equity Interests or carrying a right any stock appreciation rights or phantom stock plan. Except as set forth in Schedule 3.2 attached hereto, the Company is not subject to any option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The owners of the Ordinary Shares of the Acquiree own, and have good, valid and marketable title to, all the Ordinary Shares of the Acquiree. There are no outstanding contractual obligations obligation (contingent or otherwise) of the Acquiree to retire, repurchase, redeem repurchase or otherwise acquire or retire any outstanding shares of capital stock ofits Equity Interests or any warrants, options or other ownership interests inrights to acquire its Equity Interests. The Company has not violated any foreign, federal or state securities laws in connection with the Acquiree offer, sale or to provide funds to or make any investment (in the form issuance of a loan, capital contribution or otherwise) in any other Person. (b) The authorized capital stock its Equity Interests. All of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are Company’s outstanding Equity Interests have been validly issued and outstandingare fully paid and nonassessable. There are no outstanding or authorized optionsbonds, warrantsdebentures, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights notes or other securities Indebtedness of the Company outstanding having the right to vote (or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, or exchangeable for or carrying a for, securities having the right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding vote) on any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock matters on which any shareholders of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kongmay vote. All issued outstanding Indebtedness (including amounts outstanding and outstanding shares of the HK Company’s capital stock are duly authorizedprepayment, validly issued, fully paid termination and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwisepenalties) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, the HK Company or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (c) The capitalization of each PRC Company and its Subsidiaries is set forth identified on Schedule 5.07(c). There are no outstanding options, warrants or commitments in respect of increase of registered capital or transfer of equity interest of any PRC Company as of the date hereof. The equity interest of each PRC Company is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights or rights of first refusal created by statute, their respective organizational documents or any agreement to which the Acquiree or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any Law3.2 attached hereto.

Capitalization and Related Matters. (a) The authorized capital stock All of the Acquiree consists of 50,000 Ordinary Shares, of which 50,000 shares outstanding Membership Units are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the Acquiree to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the Acquiree. The issuance of all of the Ordinary Shares described in this Section 5.07(a) has been in compliance with the laws of the British Virgin Islands. All issued and outstanding shares of the Acquiree’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation are held solely of any preemptive or similar rightsrecord and beneficially by the Seller, a wholly owned indirect subsidiary of Leucadia. The owners Seller has, as of the Ordinary Shares of date hereof and shall have on the Acquiree own, and have goodClosing Date, valid and marketable title to, to all the Ordinary Shares of the AcquireeMembership Units, free and clear of any Liens, other than those Liens under the Company's Credit Documents. There The Membership Units are no the sole outstanding contractual obligations securities of the Company; the Company does not have outstanding any securities convertible into or exchangeable for any Membership Units, any rights to subscribe for or to purchase or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any other character relating to the issuance of, any Membership Units, or any stock or securities convertible into or exchangeable for any Membership Units; and neither Leucadia, the Seller, any Affiliate of the Acquiree Seller nor the Company is subject to retire, repurchase, redeem any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire, or to register under the Securities Act, any Membership Units. (b) Except as set forth on Schedule 5.6(b), all of the outstanding shares of capital stock, or membership units or other ownership interests of, each Retained Subsidiary, as applicable, is validly issued, fully paid and nonassessable and is owned of record and beneficially by the Company or another Retained Subsidiary. Except as set forth on Schedule 5.6(b), the Company has, as of the date hereof and shall have on the Closing Date, valid and marketable title, directly or indirectly, to all of the shares of capital stock of, or membership units or other ownership interests in, each Retained Subsidiary, free and clear of any Liens, other than those Liens under the Company's Credit Documents. Such outstanding shares of capital stock of, or other ownership interests in, the Acquiree or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person. (b) The authorized capital stock of the HK Company consists of 10,000 Ordinary Shares, of which 100 shares are issued and outstanding. There are no outstanding or authorized options, warrants, calls, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights or other securities or contracts that could require the HK Company to issue, sell or otherwise cause to become outstanding any of its authorized but unissued shares of capital stock or any securities convertible into, exchangeable for or carrying a right or option to purchase shares of capital stock or to create, authorize, issue, sell or otherwise cause to become outstanding any new class of capital stock. There are no outstanding stockholders’ agreements, voting trusts or arrangements, registration rights agreements, rights of first refusal or other contracts pertaining to the capital stock of the HK Company. The issuance of all of the capital stock of the HK Company described in this Section 5.07(b) has been in compliance with the laws of Hong Kong. All issued and outstanding shares of the HK Company’s capital stock are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of any preemptive or similar rights. The Acquiree owns and has good, valid and marketable title to, all the ordinary shares of the HK Company. There are no outstanding contractual obligations (contingent or otherwise) of the HK Company to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, membership units or other ownership interests in, the HK Company Retained Subsidiaries, as applicable, are the sole outstanding securities of the Retained Subsidiaries; the Retained Subsidiaries do not have outstanding any securities convertible into or exchangeable for any capital stock of, or membership units or other ownership interests in, the Retained Subsidiaries, any rights to subscribe for or to provide funds to purchase or make any investment options for the purchase of, or any agreements providing for the issuance (in the form of a loan, capital contribution contingent or otherwise) in of, or any calls, commitments or claims of any other Person. (c) The capitalization of each PRC Company is set forth on Schedule 5.07(c). There are no outstanding optionscharacter relating to the issuance of, warrants any capital stock of, or commitments in respect of increase of registered membership units or other ownership interests in, the Retained Subsidiaries, or any stock or securities convertible into or exchangeable for any capital stock of, or transfer of equity interest of membership units or other ownership interests in, the Retained Subsidiaries; and neither Leucadia, the Seller, any PRC Company as Affiliate of the date hereof. The equity interest of each PRC Seller, the Company or any Retained Subsidiary is free of any Liens other than any Liens created by or imposed upon the holder thereof, and is not subject to preemptive rights any obligation (contingent or rights of first refusal created by statuteotherwise) to repurchase or otherwise acquire or retire, their respective organizational documents or to register under the Securities Act, any agreement to which the Acquiree capital stock of, or such PRC Company is a party or by which it is bound, and such equity interest set forth on Schedule 5.07(c) constitutes all of the equity interest of each PRC Company. All registered capital and other capital contributions regarding each PRC Company have been duly paid up in accordance with the relevant PRC regulations and requirements and all necessary capital verification reports have been duly issued and not revoked or withdrawn. The owners of the equity interest of each PRC Company own, and have good, valid and marketable title to, all equity interest of each PRC Company. There are no outstanding or authorized options, warrants, purchase agreements, participation agreements, subscription rights, conversion rights, exchange rights membership units or other securities or contracts that could require ownership interests in, any PRC Company to increase its registered capital, sell or transfer its equity interest, or otherwise to cause any change on the ownership of its equity interest. There are no outstanding stockholders’ agreements, voting trusts or arrangements, rights of first refusal or other contracts pertaining to the equity interest of any PRC Company. None of the outstanding equity interest of any PRC Company has been owned in violation of any rights of any Person or in violation of any LawRetained Subsidiary.