Common use of Capitalization, Etc Clause in Contracts

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: (i) 20,000,000 shares of Common Stock (par value $.001 per share), of which 4,102,892 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 shares of Preferred Stock (par value $.001 per share), 1,689,124 of which have been designated "Series A Preferred Stock," of which 1,689,124 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 of which have been designated "Series C Preferred Stock," of which 862,068 have been issued and are outstanding as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 of the Disclosure Schedule provides an accurate and complete description of the terms of each repurchase option which is held by the Company and to which any of such shares is subject. (b) The Company has reserved 2,268,915 shares of Company Common Stock for issuance under its Stock Option Plan, of which options to purchase 865,570 shares are outstanding as of the date of this Agreement. Part 2.3 of the Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "incentive stock option" as defined in Section 422

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: (i) 20,000,000 50,000,000 shares of Company Common Stock (par value $.001 per share)Stock, of which 4,102,892 7,009,003 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 30,000,000 shares of Preferred Stock (par value $.001 per share), 1,689,124 A) 1,000,000 of which have been designated "“Series A Preferred Stock," ” of which 1,689,124 735,294 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 Agreement and (B) 16,000,000 of which have been designed "designated “Series B Preferred Stock," ” of which 1,655,629 15,941,179 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 of which have been designated "Series C Preferred Stock," of which 862,068 have been issued and are outstanding as of the date of this Agreement. Each outstanding share of Series A Preferred Stock is convertible into one share of Company Common Stock. Each outstanding share of Series B Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Capital Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 2.3(a) of the Disclosure Schedule (i) provides an accurate and complete description of the terms of each repurchase option which is held by the Company and to which any of such shares is subjectsubject and (ii) sets forth all issued and outstanding shares of the Company Capital Stock as of the date of this Agreement. (b) The Company has reserved 2,268,915 7,319,635 shares of Company Common Stock for issuance under its Stock Option Plan, of which options to purchase 865,570 6,670,353 shares are outstanding as of the date of this Agreement. The Company has reserved an additional (i) 147,060 shares of Company Common Stock for issuance upon exercise of Common Stock Company Warrants; and (ii) 683,125 shares of Series B Preferred Stock for issuance upon exercise of Series B Company Warrants. The Company has delivered to Parent accurate and complete copies of the Company Warrants. The exercise price of the Common Stock Company Warrants is $0.34 per share. The exercise price of the Series B Company Warrants is between $0.05 and $0.20 per share. Part 2.3 of the Disclosure Schedule accurately sets forth, with respect to each Company Option and Company Warrant that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company OptionOption or Company Warrant; (ii) the total number of shares of Company Common Stock or Series B Preferred Stock, as applicable, that are subject to such Company Option or Company Warrant and the number of shares of Company Common Stock or Series B Preferred Stock with respect to which such Company Option or Company Warrant is immediately exercisable; (iii) the date on which such Company Option or Company Warrant was granted and the term of such Company OptionOption or Company Warrant; (iv) the vesting schedule for such Company OptionOption or Company Warrant; (v) the exercise price per share of Company Common Stock or Series B Preferred Stock purchasable under such Company OptionOption or Company Warrant; and (vi) whether such Company Option has been designated an "“incentive stock option" ” as defined in Section 422422 of the Code. Except for the Company Options and Company Warrants and except as set forth in Part 2.3(b) of the Disclosure Schedule, there is no: (A) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of the Company; (B) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of the Company; (C) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities; or (D) to the best Knowledge of the Company, condition or circumstance that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities of the Company. (c) All outstanding shares of Company Capital Stock and all outstanding Company Options and Company Warrants, have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in applicable Contracts. (d) Except as set forth in Part 2.3(d) of the Disclosure Schedule, the Company has never repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities of the Company. All securities so reacquired by the Company were reacquired in compliance with (i) the applicable provisions of the DGCL and all other applicable Legal Requirements, and (ii) all requirements set forth in applicable restricted stock purchase agreements and other applicable Contracts. (e) Immediately prior to the Effective Time, and following: (i) the filing of a Certificate of Amendment of Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware to increase the authorized number of shares of Series B Preferred Stock from 16,000,000 to 29,000,000, (ii) conversion of all principal and accrued interest on certain indebtedness of Greylock IX, Limited Partnership into shares of Series B Preferred Stock, and (iii) conversion of all issued and outstanding shares of Preferred Stock into shares of Company Common Stock, the authorized capital stock of the Company shall consist of: (A) 50,000,000 shares of Company Common Stock, of which 34,775,725 shares shall be issued and are outstanding; and (B) 30,000,000 shares of Preferred Stock (x) 1,000,000 of which have been designated “Series A Preferred Stock,” none of which shall be issued and outstanding and (y) 29,000,000 of which have been designated “Series B Preferred Stock,” none of which shall be issued and outstanding.

Capitalization, Etc. (a) The authorized capital stock of the Company Capital Stock consists of: (i) 20,000,000 150,000,000 shares of Company Common Stock (par value $.001 per share)Stock, of which 4,102,892 6,329,326 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 43,350,000 shares of Company Preferred Stock Stock, (par value $.001 per share), 1,689,124 A) 33,000,000 of which have been designated "Series A Preferred Stock," , of which 1,689,124 31,321,048 shares have been issued and are outstanding as of the date of this Agreement and (B) 10,350,000 of which have been designated Series B Preferred Stock, of which 9,604,878 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as . Part 2.3 of the date Company Disclosure Schedule sets forth a complete and accurate list of this Agreement, and 900,000 the record ownership of which have been designated "Series C Preferred Stock," all of which 862,068 have been issued and are outstanding the shares of Company Capital Stock as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Capital Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 of the Company Disclosure Schedule provides an accurate and complete description of the terms of identifies each repurchase option which that is held by the Company and to which any of such shares is subject. . (b) The Company has reserved 2,268,915 19,400,000 shares of Company Common Stock for issuance under its the Company Stock Option PlanPlans, of which options to purchase 865,570 8,176,853 shares are outstanding as of the date of this Agreement. Part 2.3 of the Company Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "“incentive stock option" ” as defined in Section 422422 of the Code. Except as set forth in Part 2.3 of the Company Disclosure Schedule, for options granted under the Company Plans from and after the date of this Agreement in compliance with Section 4.2 of this Agreement or other securities issued from and after the date of this Agreement in compliance with Section 4.2 of this Agreement, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of Company Capital Stock or other securities of the Acquired Corporations; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of Company Capital Stock or other securities of any Acquired Corporation; (iii) Contract under the terms of which any Acquired Corporation is or may become obligated to sell or otherwise issue any shares of Company Capital Stock or any other securities of any Acquired Corporation; or (iv) to the Knowledge of the Company, condition or circumstance that will or could reasonably give rise to or provide a reasonable basis for the assertion of a meritorious claim by any Person to the effect that such Person is entitled to acquire or receive any shares of Company Capital Stock or other securities of any Acquired Corporation.

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: (i) 20,000,000 100,000 shares of Company Common Stock (par value $.001 per share)Stock, of which 4,102,892 9,212.74 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 4,210.35 shares of Company Preferred Stock (par value $.001 per share)Stock, 1,689,124 all of which have been designated "Series A Preferred Stock," of which 1,689,124 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 of which have been designated "Series C Preferred Stock," of which 862,068 have been issued and are outstanding as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 of the Disclosure Schedule provides an accurate and complete description of the terms of each repurchase option which is held by the Company or any holder thereof and to which any of such shares is subject. (b) The Company has reserved 2,268,915 2,800 shares of Company Common Stock for issuance under its 2000 Stock Option Plan (the “Option Plan”), of which options to purchase 865,570 1,976 shares are outstanding as of the date of this AgreementAgreement (as set forth in detail in Part 2.3 of the Disclosure Schedule). The Company has reserved 9,686.79 shares of Company Common Stock for issuance upon exercise of outstanding Company Warrants (as set forth in detail in Part 2.3 of the Disclosure Schedule). Part 2.3 of the Disclosure Schedule accurately sets forth, with respect to each Company Option or Company Warrant that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company OptionOption or Company Warrant; (ii) the total number of shares of Company Common Stock that are subject to such Company Option or Company Warrant and the number of shares of Company Common Stock with respect to which such Company Option or Company Warrant is immediately exercisable; (iii) the date on which such Company Option or Company Warrant was granted and the term of such Company OptionOption or Company Warrant; (iv) the vesting schedule for such Company OptionOption or Company Warrant; and (v) the exercise price per share of Company Common Stock purchasable exercisable under such Company Option; and (vi) whether such Option or Company Warrant. No Company Option has been designated an "“incentive stock option" ” as defined in Section 422422 of the Code. Except for outstanding Company Options granted

Capitalization, Etc. (aA) The authorized capital stock of the Company consists of: (i) 20,000,000 of 33,000,000 shares of Common Stock (no par value $.001 per share), of which 4,102,892 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 shares of Preferred Stock (par value $.001 per share), 1,689,124 of which have been designated "Series A Preferred Stock," of which 1,689,124 12,861,496 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 1,142,295 shares of Series A Preferred Stock (no par value per share), of which have been designed "Series B Preferred Stock," of which 1,655,629 767,295 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 912,500 shares of Series B Preferred Stock (no par value per share), of which have been designated "Series C Preferred Stock," of which 862,068 855,000 shares have been issued and are outstanding as of the date of this AgreementAgreement and 10,025,000 shares of Series C Preferred Stock (no par value per share), of which 1,373,750 shares have been issued and are outstanding as of the date of this Agreement (the Company's Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock shall be collectively referred to herein as the "COMPANY PREFERRED STOCK" and, together with the Company Common Stock, shall be referred to as the "COMPANY STOCK"). Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 As of the date of this Agreement, the outstanding shares of Company Stock are held by the Persons, with the addresses of record and in the amounts set forth in Part 2.3(a) of the Company Disclosure Schedule. Part 2.3(a) of the Company Disclosure Schedule also provides an accurate and complete description of the terms of each repurchase option which is held by the Company and to which any of such shares is subject. (bB) The Company has reserved 2,268,915 6,137,499 shares of Company Common Stock for issuance under its 1998 Stock Option Plan, of which options to purchase 865,570 3,239,894 shares are outstanding as of the date of this Agreement. Part 2.3 2.3(b) of the Company Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "incentive stock option" as defined in Section 422ISO. (C) Part 2.3(c)(i) of the Company Disclosure Schedule accurately sets forth, with respect to each convertible debenture issued to any Person: (A) the name of the holder of such convertible debenture; (B) the total number of shares of Company Stock that are subject to such convertible debenture; (C) the number of shares of Company Stock with respect to which such convertible debenture is immediately exercisable and (D) the term of such convertible debenture.

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: (i) 20,000,000 100,000,000 shares of Common Stock (par value $.001 per share)Stock, of which 4,102,892 21,392,852 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 30,000,000 shares of Preferred Stock (par value $.001 per share)Stock, 1,689,124 of which 9,600,000 have been designated "Series A Preferred Stock," , all of which 1,689,124 are issued and are outstanding; 2,000,000 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "designated Series B Preferred Stock," , all of which 1,655,629 are issued and outstanding; 1,500,000 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 of which have been designated "Series C Preferred Stock," , none of which 862,068 are issued and outstanding; and 5,000,000 shares have been designated Series D Preferred Stock, 2,000,000 of which are issued and are outstanding as of the date of this Agreementoutstanding. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 of the Disclosure Schedule provides an accurate and complete description of the terms of each repurchase option which is held by the Company and to which any of such shares is subject. (b) The Company has reserved 2,268,915 7,277,742 shares of Company Common Stock for issuance under its 1996 Stock Option Plan and 1998 Stock Option Plan, of which options to purchase 865,570 2,218,894 shares are outstanding as of the date of this Agreement. Part 2.3 of the Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "incentive stock option" as defined in Section 422422 of the Code. Except as set forth in Part 2.3 of the Disclosure Schedule, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: (i) 20,000,000 25,000,000 shares of Common Stock (par value $.001 0.001 per share), of which 4,102,892 6,649,183 shares have been issued and are outstanding as of the date of this Agreement; Agreement (which includes 350,000 shares to be issued to JMW Capital or JMW Capital's designees prior to the Closing of this Agreement as payment for services rendered relating to the Merger) and (ii) 7,500,000 10,000,000 shares of Preferred Stock (par value $.001 0.001 per share), 1,689,124 1,000,000 of which have been designated "Series A Preferred Stock," , of which 1,689,124 703,534 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 of which have been designated "Series C Preferred Stock," of which 862,068 have been issued and are outstanding as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-non- assessable. Part 2.3 of the Company Disclosure Schedule provides an accurate and complete description of the terms of each repurchase option which is held by the Company and to which any of such shares is subject. (b) The Company has reserved 2,268,915 1,700,000 shares of Company Common Stock for issuance under its Stock Option Plan, of which options to purchase 865,570 1,350,500 shares are outstanding as of the date of this Agreement, of which 299,183 shares of Company Common Stock have been issued as a result of the exercise of options. Part 2.3 of the Company Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether or not such Company Option has been designated an "incentive stock option" as defined in Section 422422 of the Code. Except as set forth in Part 2.3 of the Company Disclosure Schedule, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of the Company; (iii) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities; or (iv) to the knowledge of the Company and the Key Shareholders, condition or circumstance that may give rise to or provide a basis for the assertion of a valid claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities of the Company. (c) All outstanding shares of Company Common Stock and Company Preferred Stock and all outstanding Company Options have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in applicable Contracts. (d) The Company has never repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities of the Company.

Capitalization, Etc. (a) The authorized capital stock of the Company Capital Stock consists of: (i) 20,000,000 150,000,000 shares of Company Common Stock (par value $.001 per share)Stock, of which 4,102,892 6,329,326 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 43,350,000 shares of Company Preferred Stock Stock, (par value $.001 per share), 1,689,124 A) 33,000,000 of which have been designated "Series A Preferred Stock," , of which 1,689,124 31,321,048 shares have been issued and are outstanding as of the date of this Agreement and (B) 10,350,000 of which have been designated Series B Preferred Stock, of which 9,604,878 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as . Part 2.3 of the date Company Disclosure Schedule sets forth a complete and accurate list of this Agreement, and 900,000 the record ownership of which have been designated "Series C Preferred Stock," all of which 862,068 have been issued and are outstanding the shares of Company Capital Stock as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Capital Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 of the Company Disclosure Schedule provides an accurate and complete description of the terms of identifies each repurchase option which that is held by the Company and to which any of such shares is subject. (b) The Company has reserved 2,268,915 19,400,000 shares of Company Common Stock for issuance under its the Company Stock Option PlanPlans, of which options to purchase 865,570 8,176,853 shares are outstanding as of the date of this Agreement. Part 2.3 of the Company Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "“incentive stock option" ” as defined in Section 422422 of the Code. Except as set forth in Part 2.3 of the Company Disclosure Schedule, for options granted under the Company Plans from and after the date of this Agreement in compliance with Section 4.2 of this Agreement or other securities issued from and after the date of this Agreement in compliance with Section 4.2 of this Agreement, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of Company Capital Stock or other securities of the Acquired Corporations; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of Company Capital Stock or other securities of any Acquired Corporation; (iii) Contract under the terms of which any Acquired Corporation is or may become obligated to sell or otherwise issue any shares of Company Capital Stock or any other securities of any Acquired Corporation; or (iv) to the Knowledge of the Company, condition or circumstance that will or could reasonably give rise to or provide a reasonable basis for the assertion of a meritorious claim by any Person to the effect that such Person is entitled to acquire or receive any shares of Company Capital Stock or other securities of any Acquired Corporation. (c) All outstanding shares of Company Common Stock and Company Preferred Stock, and all outstanding Company Options and Company Warrants, have been issued and granted in compliance with (i) all applicable securities laws or pursuant to valid exemptions therefrom and other applicable Legal Requirements and (ii) all requirements set forth in applicable Contracts. (d) None of the Acquired Corporations has ever repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities of the Company other than pursuant to restricted stock purchase agreements or stock option agreements providing for the repurchase of such securities at the original issuance price of such securities. All securities so reacquired by the Company were reacquired in compliance with (i) the applicable provisions of the DGCL and other applicable Legal

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: : (i) 20,000,000 37,000,000 shares of Company Common Stock (par value $.001 per share)Stock, of which 4,102,892 6,130,419 shares have been issued and are outstanding as of the date of this Agreement; and and (ii) 7,500,000 13,317,683 shares of Preferred Stock (par value $.001 per share), 1,689,124 of which have been designated "Series A Preferred Stock," Stock of Company, of which 1,689,124 11,670,574 shares have been issued and are outstanding as of the date of this Agreement. (iii) 11,086,513 authorized shares of Series A-1 Preferred Stock of Company, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 8,878,136 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 of which have been designated "Series C Preferred Stock," of which 862,068 have been issued and are outstanding as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. . (b) All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 Other than shares that are subject to the Restricted Stock Award Agreements, no shares of the Disclosure Schedule provides an accurate and complete description of the terms of each Company’s equity securities are subject to any repurchase option which is held by the Company and to which any of such shares is subjectCompany. (bc) The Company has reserved 2,268,915 5,026,456 shares of Company Common Stock for issuance under its the Company Stock Option Plan, of which options to purchase 865,570 1,460,239 shares of Company Common Stock are outstanding as of the date of this Agreement. Part 2.3 Section 2.2(c) of the Disclosure Schedule Schedules accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "“incentive stock option" ” as defined in Section 422422 of the Code. There is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of Company; (iii) Contract under which Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities; or (iv) condition or circumstance that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities of Company. (d) All outstanding shares of Company Stock and all outstanding Company Options have been issued and granted and/or terminated and settled in compliance with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in applicable Contracts and (with respect to any stock options, the terms of the Company Stock Plan). (e) Other than the repurchase of unvested shares of Company Common Stock subject to repurchase in favor of Company, Company has never repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities of Company. All securities so reacquired by Company were reacquired in compliance with (i) the applicable provisions of the DGCL and all other applicable Legal Requirements, and (ii) all requirements set forth in applicable restricted stock purchase agreements and other applicable Contracts.

Capitalization, Etc. (a) The authorized capital stock shares of the Company consists of: Conduct consist of (i) 20,000,000 shares of Common Stock (par value $.001 per share)14,371,965 ordinary shares, of which 4,102,892 3,911,875 shares have been are issued and are outstanding as of the date of this Agreement; Agreement and (ii) 7,500,000 shares of 7,349,285 Preferred Stock (par value $.001 per share)Shares, 1,689,124 2,096,250 of which have been are designated "as Series A Preferred Stock," Preferred, 2,096,250 of which 1,689,124 shares have been are issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 5,253,035 of which are designated Series B Preferred Stock, 4,625,000 of which are issued and outstanding as of the date of this Agreement. The authorized capital stock of Subsidiary consists of 1,000 shares of common stock, of which 100 shares are issued and outstanding as of the date of this Agreement and all of which are owned by Conduct. Exhibit A to this Agreement sets forth the names of Conduct's --------- Shareholders as of the date of this Agreement and the number of Conduct Ordinary Shares and Conduct Preferred Shares owned of record by each of such Conduct Shareholders as of the date of this Agreement. Conduct has reserved an additional 1,875,000 Conduct Ordinary Shares for issuance under its 1998 Share Option Plan (the "Option Plan") to employees, advisory board members, officers or directors of, or consultants to, Conduct, of which options to acquire 739,063 Ordinary Shares have been designated "Series C Preferred Stock," of which 862,068 have been issued granted and are outstanding as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock Agreement (and Company Preferred Stock 8,125 have been duly authorized and validly issued, and are fully paid and non-assessableexercised at the date hereof). Part 2.3 2.3(a)(1) of the Disclosure Schedule provides an accurate sets forth a true and complete description list as of the terms date hereof of all holders of outstanding Conduct Options, including the number of Conduct Ordinary Shares subject to each repurchase option which is held by such Conduct Option, the Company exercise and to which any of such shares is subject. (b) The Company vesting schedule, and the exercise price per share. Conduct has reserved 2,268,915 an additional 628,035 shares of Company Common Conduct Series B Preferred Stock for issuance under its Stock Option Plan, pursuant to outstanding warrants as of which options the date of this Agreement to purchase 865,570 shares are of Conduct Series B Preferred Stock and pursuant to convertible unsecured promissory notes. Part 2.3(a)(2) of the Disclosure Schedule sets forth the names of Conduct's warrant holders as of the date of this Agreement and the number of shares issuable upon exercise of outstanding warrants as of the date of this Agreement and the names of the Conduct Noteholders, the aggregate principal amounts of such notes and the number of shares issuable upon conversion in full of such note as of the date of this Agreement. Part 2.3 . (b) All of the Disclosure Schedule accurately sets forthoutstanding Conduct Ordinary Shares and Conduct Preferred Shares have been duly authorized and validly issued and are fully paid and nonassessable. Except as set forth on Part 2.3(b), with respect there are no preemptive rights applicable to each Company Option that is outstanding any capital shares of Conduct or Subsidiary. (c) Except as identified in Section 2.3(a), as of the date of this Agreement, there is no: (i) the name outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the holder capital shares or other securities of such Company OptionConduct or Subsidiary; or (ii) the total number of outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of Company Common Stock that are subject to such Company Option the capital shares or other securities of Conduct or Subsidiary. (d) No capital shares or other securities have been repurchased, redeemed or otherwise reacquired by Conduct. (e) All outstanding Conduct Capital Shares have been issued in compliance with (i) all applicable securities laws and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; other applicable Legal Requirements, and (viii) whether such Company Option has been designated an "incentive stock option" as defined all requirements set forth in Section 422applicable Contracts.

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: (i) 20,000,000 22,500,000 shares of Common Stock (par value $.001 per share)Stock, of which 4,102,892 8,398,845 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 shares of Preferred Stock (par value $.001 per share)Stock, 1,689,124 2,500,000 of which have been designated "Series A Preferred Stock," of which 1,689,124 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 2,352,950 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 5,000,000 of which have been designated "Series C B Preferred Stock," of which 862,068 4,558,822 shares have been issued and are outstanding as of the date of this Agreement. Each outstanding share of Series A Preferred Stock is convertible into approximately 1.08 shares of Company Common Stock and each share of Series B Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 of the Company Disclosure Schedule (i) sets forth the name of each Shareholder of the Company and the number and type of all shares of Company Common Stock, Series A Preferred Stock and Series B Preferred Stock held by such Shareholder and (ii) provides an accurate and complete description of the terms of each repurchase option which is held by the Company and to which any of such shares is subject. (b) The Company has reserved 2,268,915 4,750,000 shares of Company Common Stock for issuance under its Stock the Company Option Plan, of which options to purchase 865,570 shares are outstanding as . As of the date of this Agreement, of such reserved shares of Company Common Stock, options to purchase 3,045,958 shares have been granted and are outstanding, 1,067,595 shares have been granted and exercised and 636,447 shares remain available for issuance to officers, directors, employees and consultants pursuant to the Company Option Plan. Part 2.3 2.3(b) of the Company Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "incentive stock option" as defined in Section 422422 of the Code. Each Company Option designated as an "incentive stock option" as defined in Section 422 of the Code on the applicable books and records of the Company qualified as an "incentive stock option" within the meaning of Section 422 of the Code on the date of grant of such Company Option. Except as set forth in Part 2.3(b) of the Company Disclosure Schedule, there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of the Company; (iii) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities; or (iv) to the knowledge of the Company, condition or circumstance that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities of the Company. (c) All outstanding shares of Company Stock and all outstanding Company Options have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in applicable Contracts. (d) Except as set forth in Part 2.3(d) of the Company Disclosure Schedule, the Company has never repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities of the Company. All securities so reacquired by the Company were reacquired in compliance with (i) the applicable provisions of the Washington Business Corporation Act and all other applicable Legal Requirements, and (ii) all requirements set forth in applicable restricted stock purchase agreements and other applicable Contracts.

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: (i) 20,000,000 shares of Common Stock (par value $.001 per share), of which 4,102,892 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 7,500,000 shares of Preferred Stock (par value $.001 per share), 1,689,124 of which have been designated "Series A Preferred Stock," of which 1,689,124 shares have been issued and are outstanding as As of the date of this Agreement, 1,700,000 the authorized capital stock of which have been designed "Series B Replidyne consists of: 100,000,000 shares of Replidyne Common Stock and 5,000,000 shares of Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as , par value $0.001 per share. As of the date of this Agreement, 27,109,545 shares of Replidyne Common Stock and 900,000 no shares of which have been designated "Series C Replidyne Preferred Stock," of which 862,068 have been Stock are issued and are outstanding as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stockoutstanding. All of the outstanding shares of Company Replidyne Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-non assessable. Part 2.3 3.3(a) of the Replidyne Disclosure Schedule provides an accurate and complete description of the terms of each repurchase option which is held by the Company Replidyne and to which any shares of capital stock of Replidyne is subject and identifies the Contract underlying such right. Except as provided in the Replidyne Certificate of Amendment, Replidyne has not authorized shares is subjectother than as set forth in this Section 3.3(a) and as of the date of this Agreement there are no issued and outstanding shares of Replidyne’s capital stock other than the shares of Replidyne Common Stock as set forth in this Section 3.3(a). There are no declared but unpaid dividends with respect to any shares of capital stock of Replidyne. As of the date of this Agreement, there are 49,882 shares of capital stock of Replidyne held in Replidyne’s treasury. (b) The Company As of the date of this Agreement, Replidyne has reserved 2,268,915 7,946,405 shares of Company Replidyne Common Stock for issuance under its Stock Option the Replidyne 2006 Equity Incentive Plan, of which options to purchase 865,570 3,385,617 shares of Replidyne Common Stock are outstanding as of the date of this Agreement. Part 2.3 Each grant of the Disclosure Schedule accurately sets forth, with respect to each Company a Replidyne Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) was duly authorized no later than the date on which the grant of such Company Replidyne Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "incentive stock option" as defined in Section 422by its terms to be effective by all necessary corporate action,

Capitalization, Etc. (a) The authorized capital stock of the Company consists of: (i) 20,000,000 6,500,000 shares of Common Stock (par value $.001 0.01 per share), of which 4,102,892 2,911,217 shares have been issued and are outstanding as of on the date of this Agreement; and (ii) 7,500,000 shares of Preferred Stock (par value $.001 per share), 1,689,124 of which have been designated "Series A Preferred Stock," of which 1,689,124 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 of which have been designated "Series C Preferred Stock," of which 862,068 have been issued and are outstanding as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Stock and Company Preferred Stock have been duly authorized and validly issued, and are fully paid and non-assessable. Part 2.3 of the Company Disclosure Schedule provides an accurate and complete description of the terms of each repurchase option which that is held by the Company and to which any of such shares is subject. All of the outstanding shares of the Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable, and are owned beneficially and of record by the Company. (b) The Company has reserved 2,268,915 600,000 shares of Company Common Stock for issuance under its Stock the Company Option Plan, of which options to purchase 865,570 434,000 shares are reserved for issuance upon exercise of outstanding as of the date of this Agreementoptions. Part 2.3 of the Company Disclosure Schedule accurately sets forth, with respect to each Company Option that is outstanding as of the date of this Agreement: (i) the name of the holder of such Company Option; (ii) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect to which such Company Option is immediately exercisable; (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (v) the exercise price per share of Company Common Stock purchasable under such Company Option; and (vi) whether such Company Option has been designated an "“incentive stock option" ” as defined in Section 422422 of the Code. The Company has reserved 2,229,843 shares of Company Common Stock for issuance upon conversion of the Bridge Notes, Petrus Note, Convertible Almi Note and Petrus Interest immediately prior to the Merger and an additional 1,147,421 shares for issuance upon exercise of Company Investor Warrants issuable upon such conversion. The Company has reserved 171,219 shares of Company Common Stock for issuance upon exercise of Existing Warrants. Except as set forth in this Section 2.3(b), there is no: (i) outstanding subscription, option, call, warrant or right (whether or not currently exercisable) to acquire any shares of the capital stock or other securities of the Company; (ii) outstanding security, instrument or obligation that is or may become convertible into or exchangeable for any shares of the capital stock or other securities of the Company; (iii) Contract under which the Company is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities; or (iv) except as set forth in Part 2.3(b) of the Company Disclosure Schedule, to the knowledge of the Company, condition or circumstance that may give rise to or provide a basis for the assertion of a claim by any Person to the effect that such Person is entitled to acquire or receive any shares of capital stock or other securities of the Company. (c) All outstanding shares of Company Common Stock, all outstanding Company Options and all outstanding Existing Warrants, Bridge Notes, the Petrus Note and the Convertible Almi Note have been issued or granted, and all Company Investor Warrants and shares issuable upon conversion of the Bridge Notes, the Petrus Note and the Convertible Almi Note will be issued or granted, in compliance in all material respects with (i) all applicable securities laws and other applicable Legal Requirements, and (ii) all requirements set forth in applicable Contracts. (d) The Company has never repurchased, redeemed or otherwise reacquired any shares of capital stock or other securities of the Company. (e) As of the date hereof, the date the Information Statement is delivered to the Company’s stockholders and the Closing Date, each Person that held shares of Company Common Stock immediately prior to the Closing is a resident of the state or foreign country, as the case may be, set forth opposite such Person’s name on Part 2.3(e) of the Company Disclosure Schedule, as such Schedule may be updated from time to time prior to the Closing to reflect any relocations by Company stockholders that may occur.

Capitalization, Etc. (a) The authorized capital stock Section 3.3(a) of the Company consists Disclosure Schedule contains a true, correct and complete list of: (i) 20,000,000 , and the numbers and series of shares owned by, the record holders of the outstanding shares of Common Company Capital Stock (par value $.001 per share), of which 4,102,892 shares have been issued and are outstanding including Company Common Stock) as of the date of this Agreement; Agreement and (ii) 7,500,000 shares of Preferred Stock (par value $.001 per share), 1,689,124 of which have been designated "Series A Preferred Stock," of which 1,689,124 shares have been issued and are outstanding as of the date of this Agreement, 1,700,000 of which have been designed "Series B Preferred Stock," of which 1,655,629 shares have been issued and are outstanding as of the date of this Agreement, and 900,000 of which have been designated "Series C Preferred Stock," of which 862,068 have been issued and are outstanding as of the date of this Agreement. Each outstanding share of Company Preferred Stock is convertible into one share of Company Common Stock. All of the outstanding shares of Company Common Capital Stock that are subject to Down-Round Protection. The rights, preferences, privileges and restrictions of the Company Series A Preferred Stock have are as stated in the Company’s certificate of incorporation and bylaws that were each previously provided to LEC. Excluding Accredited Investors, the outstanding shares of Company Capital Stock are held by fewer than thirty five (35) Persons. * The Company Disclosure Schedule has been duly authorized omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of such schedule will be furnished supplementally to the Securities and validly issued, and are fully paid and non-assessableExchange Commission upon request. Part 2.3 Further explanation of the contents of the omitted portion of the Company Disclosure Schedule provides an accurate and complete description can be found in the section of the terms of each repurchase option which is held this agreement referenced by the Company and to which any of such shares is subjectSchedule number. (b) The Company has reserved 2,268,915 Twelve million two hundred sixty two thousand four hundred seventy-five (12,262,475) shares of Company Common Stock are reserved for issuance under its Stock Option Planthe Company Warrants, of which options to purchase 865,570 zero (0) shares are outstanding as have been issued upon exercise of the date of this AgreementCompany Warrants. Part 2.3 Section 3.3(b) of the Company Disclosure Schedule accurately sets forth, forth the following information with respect to each outstanding Company Option that is outstanding Warrant as of the date of this Agreement: (iA) the name of the holder of such the Company OptionWarrant; (iiB) the total number of shares of Company Common Stock that are subject to such Company Option and the number of shares of Company Common Stock with respect subject to which each such Company Option is immediately exercisableWarrant; and (iii) the date on which such Company Option was granted and the term of such Company Option; (iv) the vesting schedule for such Company Option; (vC) the exercise price per share of Company Common Stock purchasable under such Company Option; Warrant as of the date of this Agreement and (vi) whether such as would be amended by a Warrant Cancellation Agreement. The Company Option has been designated an "incentive stock option" as defined Warrants outstanding on the date hereof consist solely of those warrants set forth in Section 4223.3(b)