A rocket consists of 10 subsystems. Each subsystem operates as intended or does not operate as intended upon demand. Upon demand, i.e., firing the rocket, the rocket could malfunction due to the malfunctioning of any of its subsystems. The state of the rocket upon demand is defined by the operational successes and failures of its subsystems. How many states does the rocket have upon demand?

Assume that in order for the rocket to operate properly, only two or less subsystem malfunctioning is permitted? How many states of two or less subsystem malfunctioning?