Common use of Capital Stock Clause in Contracts

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measure.

Capital Stock. The authorized capital stock of the Company Holdco consists solely of 50,000,000 75,000,000 shares of Voting Common Stock, 25,000,000 shares of non-voting common stock, par value $0.01 .01 per share (the "Company Nonvoting Common Stock," and together with the Voting Common Stock, the "Common Stock"), and 25,000,000 7,800,000 shares of preferred stock. At the Closing, par value $0.01 per share ("Company Preferred there shall only be 9,972,827 shares of Voting Common Stock"). As , 2,152,988 shares of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Nonvoting Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company 4,782,692 Preferred Stock are Shares issued and outstanding. All of the issued and outstanding shares of Company Common Stock arehave been, and at the Closing, all shares reserved for issuance (including of the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) issued pursuant to the Second Step Merger Agreement will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issuedissued and outstanding, fully paid and nonassessable. Except pursuant At the Closing, (i) the Initial Warrants entitle the holders thereof to this Agreement and purchase 1,445,368 shares of the Company Rights AgreementCommon Stock of Holdco, representing 7.875% of the shares of Common Stock of Holdco on a fully diluted basis, and except (ii) the Subsequent Warrants will entitle the holders thereof to purchase 697,964 shares of the Common Stock of Holdco, representing 3.375% of the shares of Common Stock of Holdco on a fully-diluted basis. Except as disclosed set forth in Schedule 2(d), none of the Disclosure outstanding shares of Common Stock have been issued in violation of, or are subject to, any preemptive or similar rights under any provision of applicable law, the certificate of incorporation or by-laws of Holdco or any agreement, contract or instrument to which Holdco is a party or by which it or any of its properties or assets is bound. Except as set forth on Schedule (as defined in Section 8.112(d), there are no outstanding subscriptionswarrants, options, warrantsrights, rights (including "phantom" stock rights), preemptive rights convertible or exchangeable securities or other contractscommitments (other than those contemplated by this Agreement) (i) pursuant to which Holdco is or may become obligated to issue, commitmentssell, understandings purchase, return or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell redeem any shares of capital Common Stock or its preferred stock or (ii) that give any person the right to receive any benefits or rights similar to any rights enjoyed by or accruing to the holders of shares of Common Stock or its preferred stock of Holdco. There are no shares of Common Stock or preferred stock reserved for issuance by Holdco for any purpose except for securities reserved for issuance for the Company or to grantpurposes set forth on Schedule 2(d). Except as set forth in Schedule 2(d), extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stockthere are no outstanding bonds, assetsdebentures, revenues notes or other similar measureindebtedness having the right to vote on any matters on which stockholders of Holdco may vote.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 25,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 1,000,000 shares of preferred stock, par value $0.01 0.001 per share ("the “Company Preferred Stock"”). As of July 10the close of business on June 29, 20022021 (the “Measurement Date”), 15,316,062 shares (i) 1,840,641 Shares (including restricted stock issued Shares subject to employees of the Company but which shares have not been issued in certificated formRestricted Stock Awards and excluding treasury shares) of Company Common Stock were issued and outstanding; no shares , (ii) 1,387 Shares were held by the Company in the treasury of the Company. Since such dateits treasury, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, (iii) no shares of Company Preferred Stock are issued and outstanding. All of the were issued and outstanding and no shares of Company Common Preferred Stock were held by the Company in its treasury, (iv) 399,618 Shares were reserved for issuance pursuant to the Company Stock Plan, and (v) 10,206,151 Shares were reserved for issuance upon conversion of the 5.00% Convertible Senior Unsecured PIK Notes due 2025 (the “Convertible Notes”). All outstanding shares of capital stock of the Company are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuablewhen issued, duly authorized, validly issued, fully paid and nonassessablenonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company Charter, the Company Bylaws or any Contract to which the Company is a party or is otherwise bound. No shares of capital stock of the Company are owned by any Subsidiary of the Company. All outstanding shares of capital stock and other voting securities or equity interests of each Subsidiary of the Company have been duly authorized and validly issued and are fully paid, nonassessable and not subject to any preemptive rights. All outstanding shares of capital stock and other voting securities or equity interests of each such Subsidiary are owned, directly or indirectly, by the Company, free and clear of all Encumbrances. Except pursuant to this Agreement and for the Convertible Notes, neither the Company Rights Agreementnor any of its Subsidiaries has outstanding any bonds, and except debentures, notes or other obligations having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) with the stockholders of the Company or such Subsidiary on any matter. Except as disclosed set forth above in the Disclosure Schedule (as defined in this Section 8.113.2(a), there are no outstanding (i) shares of capital stock or other voting securities or equity interests of the Company, (ii) securities of the Company or any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock of the Company or other voting securities or equity interests of the Company or any of its Subsidiaries, (iii) stock appreciation rights, “phantom” stock rights, performance units, interests in or rights to the ownership or earnings of the Company or any of its Subsidiaries or other equity equivalent or equity-based awards or rights, (iv) subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contractscalls, commitments, understandings Contracts or arrangementsother rights to acquire from the Company or any of its Subsidiaries, including any right or obligations of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell issue, any shares of capital stock of the Company or any of its Subsidiaries, voting securities, equity interests or securities convertible into or exchangeable or exercisable for capital stock or other voting securities or equity interests of the Company or any of its Subsidiaries or rights or interests described in the preceding clause (iii) or (v) obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, grant, extend deliver or enter into sell, or cause to be issued, granted, delivered or sold, any Option such securities. Except for the Voting and Support Agreement, there are no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or of which the Company has knowledge with respect thereto to the holding, voting, registration, redemption, repurchase or "phantom" stock rights disposition of, or otherwise provide that restricts the transfer of, any payment or compensation based on "phantom" capital stock or measured by the value other voting securities or equity interests of the Company's stock, assets, revenues Company or other similar measureany of its Subsidiaries.

Capital Stock. The Professional’s authorized capital stock consists of the Company consists solely 70,000,000 shares consisting of (i) 50,000,000 shares of common stockClass A Voting Common Stock with a par value of $0.01 per share, of which, as of June 30, 2022, 14,623,395 are validly issued and 13,742,381 shares are outstanding (such amount inclusive of 277,210 shares of restricted stock awards), (ii) 10,000,000 shares of Class B Non-Voting Common Stock, par value $0.01 per share share, of which, as of June 30, 2022, no shares are issued or outstanding and ("Company Common Stock"), and 25,000,000 iii) 10,000,000 shares of preferred stock, par value $0.01 per share ("of which, as of June 30, 2022, no shares are issued or outstanding. Set forth in Section 3.3(c) of the Company Preferred Disclosure Letter is a true and complete schedule of all outstanding Rights to acquire shares of Professional Common Stock"), including grant date, vesting schedule, exercise price, expiration date and the name of the holder of such Rights. As of July 10June 30, 20022022, 15,316,062 shares (including there were 713,863 options, 277,210 restricted stock issued to employees awards, 904,500 stock appreciation rights and no warrants outstanding for shares of Professional Common Stock granted and vested in accordance with the Professional Stock Plans. Except as set forth in this Section 3.3(c) or as set forth in Section 3.3(c) of the Company but which Disclosure Letter, there are no other equity securities of Professional outstanding and no outstanding Rights relating to Professional Common Stock, and no Person has any Contract or any right or privilege (whether pre-emptive or contractual) capable of becoming a Contract or Right for the purchase, subscription or issuance of any securities of Professional. All of the outstanding shares of Professional Common Stock are duly and validly issued and outstanding and are fully paid and, except as expressly provided otherwise under applicable Law, nonassessable under the FBCA. None of the outstanding shares of Professional Common Stock have not been issued in certificated form) violation of Company Common Stock were issued and outstanding; no shares were held in any preemptive rights of the treasury current or past shareholders of the Company. Since such dateExcept as set forth in Section 3.3(c) of the Company Disclosure Letter, there has are no Contracts among Professional and its shareholders or by which Professional is bound with respect to the voting or transfer of Professional Common Stock or the granting of registration rights to any holder thereof. All of the outstanding shares of Professional Common Stock and all Rights to acquire shares of Professional Common Stock have been no change issued in the number of compliance with all applicable federal and state Securities Laws. All issued and outstanding shares of Company Common Stock or shares capital stock of Company Common Stock held in treasury its Subsidiaries have been duly authorized and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenonassessable and have been issued in compliance with all legal requirements and are not subject to any preemptive or similar rights. Except pursuant to this Agreement and as set forth in Section 3.3(c) of the Company Rights AgreementDisclosure Letter, and except as disclosed in all of the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of its Subsidiaries are owned by Professional or a wholly-owned Subsidiary thereof, free and clear of all Liens. Except as set forth on Section 3.3(c) of the Company Disclosure Letter, neither Professional nor any of its Subsidiaries has any direct or indirect ownership interest in any firm, corporation, bank, joint venture, association, partnership or other entity (other than the Bank and the Subsidiaries), nor are they under any current or prospective obligation to grantform or participate in, extend provide funds to, make any loan, capital contribution, guarantee, credit enhancement or enter into other investment in, or assume any Option liability or obligation of, any Person other than lending transactions which occur in the ordinary course of business consistent with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value past practice. Except as set forth in Section 3.3(c) of the Company's stockCompany Disclosure Letter, assetsProfessional does not have any outstanding bonds, revenues debentures, notes or other similar measureobligations having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) with the shareholders of Professional on any matter.

Capital Stock. The Company has authorized capital stock consisting of the Company consists solely of 50,000,000 15,000,000 shares of common stockCompany Common Stock and 1,000,000 shares of Preferred Stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 0.001 per share ("Company Preferred Stock"), of which only 440,000 shares have been designated Series A Junior Participating Preferred Shares. As of July 10April 17, 2002, 15,316,062 2000: (a) 7,605,640 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; , (b) no shares of Company Preferred Stock were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding outstanding, (c) 901,261 shares of Company Common Stock or were held as treasury shares, and (d) 1,181,219 shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Incentive Plan (the "Plan") and the Outside Directors' Stock Option Plan and Parallel Non-Qualified Savings (the "Directors' Plan" and, together with the Plan, respectivelythe "Company Stock Plans") (including (i) 1,107,219 shares reserved for issuance under the Plan, 861,675 of which were subject to outstanding options and 236,721 of which were reserved for future option grants, and (ii) 74,000 shares reserved for issuance under the Directors' Plan, all of which were subject to outstanding options. As Since April 17, 2000, no additional shares of capital stock have been reserved for issuance by the Company and the only issuances of shares of capital stock of the date hereof, no shares Company have been issuances of Company Preferred Common Stock are issued and outstandingupon the exercise of outstanding Company stock options. All of the issued and outstanding shares of Company Common Stock are, have been duly authorized and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer are validly issued and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issuedoutstanding, fully paid and nonassessable. Except pursuant to this Agreement , and were issued in compliance with all applicable federal and state securities laws, and all of such treasury shares were acquired by the Company Rights Agreementin compliance with all applicable laws, including, without limitation, all applicable federal and except as disclosed in state securities laws. No shares of capital stock issued by the Disclosure Schedule (as defined in Section 8.11), there Company are or were at the time of their issuance subject to preemptive rights. There are no outstanding existing subscriptions, options, warrants, rights (including "phantom" stock rights)convertible securities, preemptive calls, commitments, agreements, conversion rights or other contractsrights of any character (contingent or otherwise) calling for or requiring the issuance, commitmentstransfer, understandings sale or arrangementsother disposition of any shares of the capital stock of the Company, including or calling for or requiring the issuance of any right of conversion securities or exchange under any outstanding security, instrument rights convertible into or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any exchangeable for shares of capital stock of the Company, in any case except as set forth in the Company Schedule. There are no securities, rights, warrants, options or to grantother instruments outstanding which, extend after consummation of the Merger, would be convertible into or enter into any Option exercisable for securities of the Surviving Entity, and all outstanding options and warrants of the Company will become options or warrants solely with respect thereto to Parent Common Stock on the terms described in Section 1.5 hereof. There are no voting trusts or "phantom" stock rights other agreements or otherwise provide any payment or compensation based on "phantom" stock or measured by understandings to which the value Company is a party, nor, to the knowledge of the Company's stock, assetsto which any stockholder of the Company is a party, revenues or other similar measurewith respect to the voting of capital stock of the Company.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 two hundred million (200,000,000) shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 ten million (10,000,000) shares of preferred stock, par value $0.01 1.00 per share ("the “Company Preferred Stock"”). As of July 10the close of business on February 28, 20022011, 15,316,062 (i) 56,118,357 shares of Company Common Stock (including restricted stock excluding treasury shares) were issued to employees and outstanding (of the which 2,972,648 shares were shares of Company but which Restricted Stock), (ii) 134,125 shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held by the Company in the treasury of the Company. Since such dateits treasury, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, (iii) no shares of Company Preferred Stock are issued and outstanding. All of the were issued and outstanding and no shares of Company Preferred Stock were held by the Company in its treasury, (iv) 7,335,822 shares of Company Common Stock were reserved for issuance pursuant to Company Stock Plans (of which 4,208,037 shares were subject to outstanding Company Stock Options) and (v) 254,475 shares were reserved for issuance pursuant to the Company ESPP. All of the outstanding shares of capital stock of the Company are, and all shares reserved for issuance as noted in clause (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereofiv) or (v) above will be, upon issuance when issued in accordance with the terms specified in the instruments or agreements pursuant to which they are issuablethereof, duly authorized, validly issued, fully paid and nonassessablenonassessable (subject to the personal liability which may be imposed on shareholders by former Section 180.0622(2)(b) of the WBCL, as judicially interpreted, for debts incurred prior to June 14, 2006 owing to employees for services performed, but not exceeding six months service in any one case) and not subject to any preemptive rights. No shares of capital stock of the Company are owned by any Subsidiary of the Company. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) with the shareholders of the Company on any matter. Except pursuant to as set forth above in this Agreement and the Company Rights Agreement, Section 3.2(a) and except for changes since February 28, 2011 resulting from the exercise or forfeiture of Company Stock Options or the forfeiture of Company Restricted Stock awards, in each case, as disclosed in the Disclosure Schedule (as defined described in Section 8.113.2(b), there are no outstanding (A) shares of capital stock or other voting securities or equity interests of the Company, (B) securities of the Company or any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock of the Company or other voting securities or equity interests of the Company, (C) stock appreciation rights, “phantom” stock rights, performance units, interests in or rights to the ownership or earnings of the Company or other equity equivalent or equity-based award or right, (D) subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contractscalls, commitments, understandings Contracts or arrangementsother rights to acquire from the Company or any of its Subsidiaries, including any right or obligations of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell issue, any shares of capital stock of the Company, voting securities, equity interests or securities convertible into or exchangeable or exercisable for capital stock or other voting securities or equity interests of the Company or rights or interests described in clause (C) or (E) obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, grant, extend deliver or enter into sell, or cause to be issued, granted, delivered or sold, any Option such securities. Except for the Support Agreement, there are no shareholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or on file with the Company with respect thereto to the holding, voting, registration, redemption, repurchase or "phantom" stock rights disposition of, or otherwise provide that restricts the transfer of, any payment or compensation based on "phantom" capital stock or measured by the value other equity interest of the Company's stock, assets, revenues or other similar measure.

Capital Stock. The authorized capital stock of the Company as of the date of this Agreement consists solely of 50,000,000 (a) 200,000,000 shares of common stock, par value $0.01 per share Common Stock and ("Company Common Stock"), and 25,000,000 b) 5,000,000 shares of preferred stock, par value $0.01 per share ("Company the “Preferred Stock"”), 100,000 of which shares of Preferred Stock are designated as Series A Junior Participating Preferred Stock, and as of Closing shall consist of (a) 10,000,000,000 shares of Common Stock and (b) 5,000,000 shares of Preferred Stock, 100,000 of which shares of Preferred Stock are designated as Series A Junior Participating Preferred Stock. As of July April 10, 20022024 (the “Measurement Date”), 15,316,062 (i) 53,156,369 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no outstanding (exclusive of shares held in treasury), all of which were validly issued, fully paid and nonassessable and were free of preemptive rights, (ii) 2,683,797 shares of Common Stock were held in treasury, (iii) no shares of Preferred Stock were outstanding and (iv) an aggregate of 3,390,515 shares of Common Stock were subject to or otherwise deliverable in connection with outstanding Company equity awards issued pursuant to the treasury Company’s equity incentive plan (“Company Equity Awards”). Except (i) as set forth above, (ii) for changes since the Measurement Date resulting from the vesting or settlement of Company Equity Awards outstanding on such date, and (iii) for the execution of the Rights Agreement and issuance of rights thereunder, as of the date of this Agreement, (A) there are not outstanding or authorized any (1) shares of capital stock or other voting securities of the Company, (2) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company or (3) options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company, (B) there are no outstanding obligations of the Company to repurchase, redeem or otherwise acquire any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company and (C) there are no other options, calls, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company or any of its Subsidiaries to which the Company or any of its Subsidiaries is a party. Since such date, there has been no change in Each of the number of issued and outstanding shares of Company Common Stock or shares capital stock of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under each of the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, ’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement nonassessable and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there all such shares are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating owned by the Company or any of its Subsidiaries to issue or sell any shares of capital stock another wholly-owned Subsidiary of the Company or to grantand are owned free and clear of all security interests, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stockliens, assetsclaims, revenues pledges, agreements, limitations in voting rights, charges or other similar measureencumbrances of any nature whatsoever, except where any such failure to own any such shares free and clear would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Capital Stock. The Immediately prior to the Closing, the authorized capital stock of the Company consists solely of (a) 50,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 of which 7,692,500 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding, (b) 5,000,000 shares of Series A Preferred Stock, of which 5,000,000 shares are issued and outstanding, and (c) 617,979 shares of Series B Preferred Stock, none of which has been issued. The Company has no authority to issue any other capital stock. All of the issued and outstanding shares of capital stock of the Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement The offer, issuance and sale of such shares of Series A Preferred Stock and Common Stock were (a) exempt from the Company Rights Agreementregistration and prospectus delivery requirements of the Securities Act, (b) registered or qualified (or were exempt from registration or qualification) under the registration or qualification requirements of all applicable state securities laws, and except as disclosed (c) accomplished in conformity with all other federal and applicable state securities laws, rules and regulations. The Company has (A) reserved a total of 1,250,000 shares of Common Stock for issuance under the Disclosure Schedule Company's 1997 Stock Incentive Plan (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including the "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "OptionsStock Plan"), obligating under which options to purchase a total of 1,095,875 shares have been granted, (B) reserved a total of 71,250 shares for issuance upon exercise of outstanding Stock Purchase Warrants issued by the Company, (C) reserved a total of 1,000,000 shares of Common Stock upon conversion of the Series A Preferred Stock, (D) reserved a total of 617,979 shares of Common Stock upon conversion of the Series B Preferred Stock, and (E) is obligated to issue 25,000 shares of Common Stock to Xxxxx Xxxxxx. Except as expressly provided in this Agreement or the Certificate, the Company has no outstanding subscription, option, warrant, call, contract, demand, commitment, convertible security or other instrument, agreement or arrangement of any character or nature whatsoever under which the Company is or may be obligated to issue Common Stock, preferred stock or other Equity Security (as hereinafter defined) of any kind. Neither the offer nor the issuance or sale of the Securities constitutes or will constitute an event, under any Equity Security or any anti-dilution or similar provision of its Subsidiaries any agreement or instrument to issue or sell any shares of capital stock of which the Company is a party or to grantby which it is bound or affected, extend which shall either increase the number of shares or enter into units of Equity Securities issuable upon conversion of any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" securities (whether stock or measured Indebtedness for Borrowed Money (as hereinafter defined)) or upon exercise of any warrant or right to subscribe to or purchase any stock or similar security (including Indebtedness for Borrowed Money), or decrease the consideration per share or unit of Equity Security to be received by the value of the Company's stock, assets, revenues Company upon such conversion or other similar measureexercise.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 75,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 3,000,000 shares of preferred stock, without par value $0.01 per share ("Company Preferred Stock"). As of July 10November 7, 20021996, 15,316,062 34,884,299 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; outstanding and no shares were held in the treasury of the CompanyCompany and 4,045,738 shares were held in reserve pursuant to the Company Option Plans or Company Benefit Plans as set forth in the Company SEC Reports and of which, on the date hereof, options for 3,371,194 shares of Company Common Stock were outstanding. Since such date, except as set forth in Section 3.02 of the Company Disclosure Letter, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were or reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectivelyissuance. As of the date hereof, no shares of Company Preferred Stock are issued and outstandingoutstanding and 375,000 shares are designated Series A Junior Participating Preferred Stock ("Company Series A Preferred Stock") and are reserved for issuance in accordance with the Rights Agreement dated as of March 15, 1996, by and between the Company and First Chicago Trust Company of New York, as Rights Agent (the "Company Rights Agreement"), pursuant to which the Company has issued rights (the "Company Rights") to purchase shares of Company Series A Preferred Stock. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, Agreement and except as disclosed in the Disclosure Schedule (as defined set forth in Section 8.11)3.02 of the Company Disclosure Letter, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 5,500,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 1,000,000 shares of preferred stock, par value $0.01 .01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees the date hereof and as of the Company but which Closing (except as otherwise permitted in Section 6.01(b)(C)), 4,674,314 shares have not been issued in certificated form) of Company Common Stock were were, and will be, issued and outstanding; , no shares were held in the treasury and no shares were reserved for issuance except as set forth in Section 4.02 of the CompanyCompany Disclosure Letter. Since such date, except as set forth in Section 4.02 of the Company Disclosure Letter, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were or reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectivelyissuance. As of the date hereof, no No shares of Company Preferred Stock are issued and outstanding and 35,000 shares are designated Series A Junior Participating Preferred Stock ("Company Series A Preferred Stock") and are reserved for issuance in accordance with the Rights Agreement dated as of April 13, 1995, as amended as of June 15, 1995, and as amended as of October 30, 1996, by and between the Company and Fleet National Bank, as Rights Agent (the "Company Rights Agreement"), pursuant to which the Company has issued rights (the "Company Rights") to purchase shares of Company Series A Preferred Stock. No bonds, debentures, notes or other instruments or evidence of indebtedness having the right to vote (or convertible into, or exercisable or exchangeable for, securities having the right to vote) on any matters on which the Company stockholders may vote ("Company Voting Debt") are issued or outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, Agreement and except as disclosed in the Disclosure Schedule (as defined set forth in Section 8.11)4.02 of the Company Disclosure Letter, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any Company Voting Debt or shares of capital stock or other securities of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 a) 1,000,000 shares of preferred stock, par value $0.01 per share 1.00, of which, as of the date of this Agreement, no shares are issued and outstanding and ("b) 30,000,000 shares of Company Preferred Common Stock"), of which, as of the date of this Agreement, 9,898,102 shares were issued and outstanding. As of July 10the date of this Agreement, 2002, 15,316,062 there are outstanding Company Options to purchase an aggregate of 1,118,012 shares (including restricted stock issued to employees of the Company but which Common Stock. 3,058,356 shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in shall be issuable upon the treasury conversion of the Companyall outstanding Notes. Since such date, there has been no change in the number of issued and All outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury have been duly authorized and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and as set forth in Section 4.5 of the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)Letter, there are no outstanding subscriptionsoutstanding, optionsand there have not been reserved for issuance any, warrants(i) shares of capital stock or other voting securities of the Company or its Subsidiaries; (ii) securities of the Company or its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities of the Company or its Subsidiaries; (iii) rights or options to acquire from the Company or its Subsidiaries, or obligations of the Company or its Subsidiaries to issue, any shares of capital stock, voting securities or securities convertible into or exchangeable for shares of capital stock or voting securities of the Company or its Subsidiaries, as the case may be; or (iv) equity equivalent interests in the ownership or earnings of the Company or its Subsidiaries or other similar rights (including "phantom" stock rightsthe items in clauses (i) through (iv) collectively, the “Securities”). There are no outstanding obligations of the Company or its Subsidiaries to repurchase, preemptive rights redeem or otherwise acquire any Securities. There are no stockholder agreements, voting trusts or other contracts, commitments, agreements or understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries are bound relating to issue the voting or sell registration of any shares of capital stock of the Company or to grant, extend any of its Subsidiaries or enter into any Option preemptive rights with respect thereto thereto. There are no outstanding stock appreciation rights, “phantom” stock rights, restricted stock units, performance units or "phantom" stock other rights or otherwise provide any payment or compensation based on "phantom" stock or measured by that are linked to the value of Company Common Stock. Section 4.5 of the Company's stockCompany Disclosure Letter sets forth a true, assetscomplete and correct list of all persons who, revenues or other similar measureat the close of business on the date hereof, hold outstanding Company Options under the Company Equity Plans indicating, with respect to each Company Option then outstanding, the number of shares of Company Common Stock subject to such Company Option, and the exercise price, date of grant, vesting schedule and expiration date thereof, including the extent to which any vesting had occurred as of the date of this Agreement. There are no Company Options intended to qualify as an “incentive stock option” under Section 422 of the Code, and the exercise price of each Company Option is no less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Option.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 5,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of and the Company but which has no authority to issue any other capital stock. No shares of Preferred Stock have not been issued in certificated form) of Company Common Stock were issued and outstandingprior to the Closing; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding only 7,692,500 shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all such shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement The offer, issuance and sale of such shares of Common Stock were (a) exempt from the Company Rights Agreementregistration and prospectus delivery requirements of the Securities Act, (b) registered or qualified (or were exempt from registration or qualification) under the registration or qualification requirements of all applicable state securities laws, and except as disclosed (c) accomplished in conformity with all other federal and applicable state securities laws, rules and regulations. The Company has (A) reserved a total of 1,250,000 shares of Common Stock for issuance under the Disclosure Schedule Company's 1997 Stock Incentive Plan (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including the "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "OptionsStock Plan"), obligating under which options to purchase a total of 860,375 shares have been granted, (B) reserved a total of 71,250 shares for issuance upon exercise of outstanding Stock Purchase Warrants issued by the Company and (C) is obligated to issue 25,000 shares of Common Stock to Xxxxx Xxxxxx. Except as expressly provided in this Agreement or the Certificate, the Company has no outstanding subscription, option, warrant, call, contract, demand, commitment, convertible security or other instrument, agreement or arrangement of any character or nature whatsoever under which the Company is or may be obligated to issue Common Stock, preferred stock or other Equity Security (as hereinafter defined) of any kind. Neither the offer nor the issuance or sale of the Securities constitutes or will constitute an event, under any Equity Security or any anti-dilution or similar provision of its Subsidiaries any agreement or instrument to issue or sell any shares of capital stock of which the Company is a party or to grantby which it is bound or affected, extend which shall either increase the number of shares or enter into units of Equity Securities issuable upon conversion of any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" securities (whether stock or measured Indebtedness for Borrowed Money (as hereinafter defined)) or upon exercise of any warrant or right to subscribe to or purchase any stock or similar security (including Indebtedness for Borrowed Money), or decrease the consideration per share or unit of Equity Security to be received by the value of the Company's stock, assets, revenues Company upon such conversion or other similar measureexercise.

Capital Stock. (a) The authorized capital stock of the Company Corel consists solely of 50,000,000 an unlimited number of shares of common stockCorel Common Stock and an unlimited number of preferred shares, par value $0.01 per share issuable in series . As of the close of business on January 31, 2000, 65,733,135 shares of Corel Common Stock and no preferred shares are issued and outstanding, and, except as disclosed in Section 4.02 of the Disclosure Letter, 3,083,166 shares are reserved for issuance upon the exercise of options under the Corel Stock Option Plan as last amended as of January 31, 2000 (the "Company Common StockCorel Stock Option Plan") and 4,000,000 shares are reserved for issuance under the Corel Stock Option Plan 2000 as amended and restated as of February 2, 2000 (the "Corel Stock Option Plan 2000"), of which options for 2,836,410 shares were granted and 25,000,000 are outstanding under the Corel Stock Option Plan, and 13,000,000 shares of preferred stockCorel Common Stock are reserved for issuance pursuant to the Stock Option Agreement dated as of the date hereof by and between Corel, par value $0.01 per share Inprise and Sub (the "Company Preferred StockCorel Stock Option Agreement"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Corel Common Stock or shares of Company Corel Common Stock held in treasury and 413,398 and 775,644 shares were or (other than pursuant to the Stock Option Agreements) reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstandingsince such date. All of the issued and outstanding shares of Company Corel Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement, the Corel Rights Agreement and the Company Rights Agreement, Corel Stock Option Agreement and except as disclosed in the Disclosure Schedule (as defined set forth in Section 8.11)4.02 of the Corel Disclosure Letter, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), Options obligating the Company Corel or any of its Subsidiaries to issue or sell any shares of capital stock of the Company Corel or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 200,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 3,000,000 shares of preferred stock, par value $0.01 per share ("the “Company Preferred Stock"”). As of the close of business on July 1011, 20022014 (the “Measurement Date”), 15,316,062 (i) 69,012,375 shares of Company Common Stock (including restricted stock excluding treasury shares) were issued to employees of the Company but which and outstanding, (ii) 19,828,119 shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held by the Company in the treasury of the Company. Since such dateits treasury, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, (iii) no shares of Company Preferred Stock are issued and outstanding. All of the were issued and outstanding and no shares of Company Preferred Stock were held by the Company in its treasury, and (iv) 3,158,996 shares of Company Common Stock are, and all shares were reserved for issuance pursuant to Company Equity Plans (including the of which no shares were subject to outstanding options to purchase shares of New Preferred Stock issuable in the Offer and the Company Common Stock, 1,392,278 were restricted stock unit awards with respect to shares of Company Common Stock issuable that vest based solely on conversion thereof) will bethe continued service of the holder of such award, 94,989 were Company Deferred Stock that were vested upon issuance grant, 294,640 were TB Restricted Stock, 1,082,091 were restricted stock unit awards with respect to shares of Company Common Stock that are subject, in accordance with the terms specified whole or in the instruments or agreements pursuant part, to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreementperformance-based vesting, and except as disclosed in the Disclosure Schedule 294,998 were PB Restricted Stock (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (such awards taken together, "Options"the “Company Equity Awards”), obligating the Company or any of its Subsidiaries to issue or sell any ). All outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable and are not subject to or issued in violation of any purchase option, call option, right of first refusal, right of first offer, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company Charter, the Company Bylaws or any Contract to grant, extend which the Company is a party or enter into is otherwise bound. No shares of capital stock of the Company are owned by any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value Subsidiary of the Company's stock. All outstanding shares of capital stock and other voting securities or equity interests of each Subsidiary of the Company have been duly authorized and validly issued, assetsare fully paid, revenues nonassessable and not subject to any preemptive rights. All outstanding shares of capital stock and other voting securities or equity interests of each such Subsidiary are owned, directly or indirectly, by the Company, free and clear of all pledges, claims, liens, charges, options, rights of first refusal or of first offer, encumbrances and security interests of any kind or nature whatsoever (including any limitation on voting, sale, transfer or other similar measuredisposition or exercise of any other attribute of ownership) (collectively, “Liens”), other than transfer restrictions imposed by applicable securities laws. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) with the stockholders of the Company or such Subsidiary on any matter.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 5,000,000 shares of common stock, par value $0.01 per share ("Company Preferred Stock and 15,000,000 shares of Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10the date of this agreement, 2002there were (i) no shares of Company Preferred Stock outstanding, 15,316,062 (ii) 2,064,106 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; , (iii) 5,301 shares of unvested restricted stock, (iv) no shares were held in treasury, (v) no shares held by Company Subsidiaries, and (vi) 45,740 shares reserved for future issuance pursuant to outstanding Options granted under the treasury of the CompanyCompany Equity Plans. Since such date, there has been no change in the number of issued and The outstanding shares of Company Common Stock have been duly authorized and are validly issued and are fully paid and non-assessable. Company Disclosure Schedule 3.03 sets forth the name of each holder of an unvested award of restricted stock or outstanding Option granted under the Company Equity Plans, identifying the nature of the award; as to Options, the number of shares of Company Common Stock held in treasury subject to each Option, the grant, vesting and 413,398 expiration dates and 775,644 shares were reserved the exercise price relating the Options held; and for issuance under restricted stock awards, the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As number of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock aresubject to each award, and all shares reserved for issuance the grant and vesting dates. There are no options, warrants or other similar rights, convertible or exchangeable securities, “phantom stock” rights, stock appreciation rights, stock based performance units, agreements, arrangements, commitments or understandings to which Company is a party, whether or not in writing, of any character relating to the issued or unissued capital stock or other securities of Company or any of Company’s Subsidiaries or obligating Company or any of Company’s Subsidiaries to issue (including the shares whether upon conversion, exchange or otherwise) or sell any share of New Preferred Stock issuable capital stock of, or other equity interests in the Offer and the or other securities of, Company or any of Company’s Subsidiaries other than those listed in Company Disclosure Schedule 3.03. All shares of Company Common Stock issuable on conversion thereof) will besubject to issuance as set forth in this Section 3.03 or Company Disclosure Schedule 3.03 shall, upon issuance in accordance with on the terms and conditions specified in the instruments or agreements pursuant to which they are issuable, be duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there There are no outstanding subscriptionsobligations, optionscontingent or otherwise, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Company’s Subsidiaries to issue repurchase, redeem or sell otherwise acquire any shares of Company Common Stock or capital stock of any of Company’s Subsidiaries or any other securities of Company or any of Company’s Subsidiaries or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity. All of the outstanding shares of capital stock of the each of Company’s Subsidiaries are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights, and all such shares are owned by Company or to grantanother Subsidiary of Company free and clear of all security interests, extend liens, claims, pledges, taking actions, agreements, limitations in Company’s voting rights, charges or enter into other encumbrances of any Option with respect thereto or "phantom" stock rights or otherwise provide nature whatsoever, except as set forth in Company Disclosure Schedule 3.03. Neither Company nor any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues its Subsidiaries has any trust capital securities or other similar measuresecurities outstanding.

Capital Stock. The Mutual’s authorized capital stock consists of (i) 1,000,000 shares of Mutual Common Stock, $0.01 par value per share, of which 363,719 shares are issued and outstanding as of the Company consists solely date of 50,000,000 this Agreement (including the allocated and unallocated shares of common stockMutual Common Stock held under the ESOP, par value $0.01 per share as defined in Section 6.09 hereof); and ("Company Common Stock"), and 25,000,000 ii) 250,000 shares of preferred stock, $0.01 par value $0.01 per share ("Company Preferred Stock"). As share, of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of are issued and outstanding shares as of Company Common Stock or shares the date of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectivelythis Agreement. As of the date hereofof this Agreement, no Mutual has 25,214 shares of Company Preferred Mutual Common Stock reserved for issuance under employee and director stock option plans, pursuant to which options covering 25,214 shares of Mutual Common Stock are issued and outstanding. All As of the date of this Agreement, Mutual has no outstanding warrants. As of the date of this Agreement, 46 shares of Mutual Common Stock are held by Mutual’s Management Recognition Plan (the “MRP”). Shares of Mutual Common Stock that are held by the MRP shall not be considered to be outstanding and shall be cancelled (and not converted) by virtue of the Merger at the Effective Time. Each of the issued and outstanding shares of Company Mutual Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereofi) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, has been duly authorized, is validly issued, issued and outstanding and is fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except (ii) has not been issued in violation of the preemptive rights of any shareholder. The Mutual Common Stock has been registered with the Federal Deposit Insurance Corporation (“FDIC”) under the Securities Exchange Act of 1934, as disclosed in amended (the Disclosure Schedule (as defined in Section 8.11“Exchange Act”), there and Mutual is subject to the registration and reporting requirements of the Exchange Act. Mutual owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other equity ownership interests of Service Corporation free and clear of any liens, pledges, charges, encumbrances and security interests whatsoever (“Liens”), and all of such shares, equity or membership ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. Service Corporation has no, and is not bound by any outstanding subscriptions, options, warrants, rights (including "phantom" stock rights)calls, preemptive rights commitments or other contracts, commitments, understandings agreements of any character calling for the purchase or arrangements, including any right issuance of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock or any other equity security of such Subsidiary or any securities representing the Company or right to grant, extend or enter into any Option with respect thereto or "phantom" stock rights purchase or otherwise provide receive any payment or compensation based on "phantom" shares of capital stock or measured by the value any other equity security of the Company's stock, assets, revenues or other similar measuresuch Subsidiary. There are no fractional shares of Mutual Common Stock issued and outstanding.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 10,000,000 common shares, of which 1,126,700 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were are issued and outstanding; no all of these shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, issued and are fully paid and nonassessable. Except In addition, there are outstanding warrants to purchase 39,166 common shares, additional options and warrants may be issued to purchase up to 10,000 common shares pursuant to this Agreement a Private Placement Memorandum previously authorized by the Company's Board of Directors, and options have been and will be granted to one of the members of the Company's Board of Directors. Other than the foregoing and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)Amended 1995 Note, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights)calls, preemptive rights or other contracts, demands, commitments, understandings or arrangementsother securities which are at any time directly or indirectly convertible or exchangeable for shares of common stock of the Company (collectively, including "Convertible Securities") or other agreements or arrangements of any right character or nature whatever, except as otherwise disclosed in the Disclosure Schedule or as contemplated by this Agreement, under which the Company is or may be obligated to issue capital stock or other securities of conversion any kind representing an ownership interest or exchange contingent ownership interest in the Company. Except for the foregoing, neither the offer nor the issuance or sale of the Notes or the Conversion Stock constitutes an event, under any outstanding security, instrument anti-dilution provisions of any securities issued or agreement (together, "Options"), obligating issuable by the Company or any agreements with respect to the issuance of its Subsidiaries securities by the Company, which will either increase the number of shares issuable pursuant to issue such provisions or sell decrease the consideration per share to be received by the Company pursuant to such provisions. No holder of any shares of capital stock security of the Company is entitled to any preemptive or similar rights to grantpurchase securities from the Company except as otherwise contemplated by this Agreement, extend provided, however, that nothing in this Section 5.12 shall affect, alter or enter into diminish any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by right granted to Digi in this Agreement. To the value best of the Company's stockknowledge, assets, revenues all outstanding securities of the Company have been issued in full compliance with an exemption or other similar measureexemptions from the registration and prospectus delivery requirements of the Securities Act and from the registration and qualification requirements of all applicable state securities laws.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 80,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 5,000,000 shares of preferred stock, par value $0.01 per share ("the “Company Preferred Stock"”). As of July 10the close of business on August 24, 20022017 (the “Company Capitalization Date”), 15,316,062 (i) 32,610,410 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding (ii) 5,773,341 shares of Company Common Stock were held in treasury, (iii) no shares of Company Preferred Stock were issued or outstanding, (iv) 4,706,250 shares of Company Common Stock held were subject to outstanding Company Stock Options, (v) the amount of accumulated payroll deductions in treasury and 413,398 and 775,644 respect of the Company ESPP Offering Period equaled $374,049.76 in the aggregate, (vi) 1,461,000 shares of Company Common Stock were reserved for issuance for future grants of awards or rights under the Company Equity Plans, (vii) 70,648 shares of Company Common Stock were reserved for issuance under the Company's 1993 Stock Option Plan Company ESPP, and Parallel Non-Qualified Savings Plan, respectively. As (viii) no other shares of capital stock or other voting securities of the date hereofCompany were issued, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including or outstanding. Except for the shares of New Preferred Company Stock issuable in Options outstanding on the Offer date hereof and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and rights outstanding under the Company Rights AgreementESPP, and except in each case, as disclosed set forth in the Disclosure Schedule (as defined in this Section 8.113.2(a), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights)calls, preemptive rights convertible securities, exchangeable securities or other contractssimilar rights, commitments, understandings agreements or arrangements, including commitments to which the Company or any right of conversion its Subsidiaries is a party (whether or exchange under any outstanding security, instrument or agreement not currently exercisable) (together, "Options"), A) obligating the Company or any of its Subsidiaries to issue (1) issue, transfer, exchange, sell or sell register for sale any shares of capital stock or other equity interests of the Company or any Subsidiary of the Company or securities convertible into or exchangeable for such shares or equity interests, (2) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (3) redeem or otherwise acquire any such shares of capital stock or other equity interests or (4) make any payment to any person the value of which is derived from or calculated based on the value of Company Common Stock or Company Preferred Stock, or (B) granting any preemptive or antidilutive or similar rights with respect to any security issued by the Company or its Subsidiaries. All outstanding shares of Company Common Stock are, and shares of Company Common Stock reserved for issuance with respect to Company Stock Options and shares of Company Common Stock reserved for issuance under the Company ESPP, when issued in accordance with the respective terms thereof, will be, duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. No Subsidiary of the Company owns any shares of capital stock of the Company. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other indebtedness, the holders of which have the right to vote (or which are convertible or exchangeable into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter. There are no voting trusts or other agreements or understandings to which the Company or to grant, extend or enter into any Option of its Subsidiaries is a party (x) with respect thereto to the voting or "phantom" registration of the capital stock rights or other equity interest of the Company or any of its Subsidiaries or (y) that restrict any person from purchasing, selling, pledging or otherwise provide disposing of any payment or compensation based on "phantom" stock or measured by the value shares of the Company's stock, assets, revenues or other similar measureCompany Common Stock.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock")200,000,000 Shares. As of July 10February 19, 20022016, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated formi) of Company Common Stock 38,627,839 Shares were issued and outstanding; , (ii) no shares Shares were held in treasury, (iii) an aggregate of 1,139,969 Shares were subject to or otherwise deliverable in connection with the treasury settlement of outstanding Company RSUs, (iv) an aggregate of 2,305,438 Shares were reserved for issuance in connection with the Company. Since such date, there has been no change in the number exercise or settlement of issued outstanding Company SARs and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares (v) 1,880,231 Shares were reserved for issuance under the Company's 1993 Stock Option Plan Company ESPP. Except as set forth above and Parallel Non-Qualified Savings Planexcept for changes since February 19, respectively. As of 2016 resulting from (A) the date hereofexercise, no shares vesting or settlement of Company Preferred Stock are issued and outstanding. All of the issued and Equity Awards outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance such date in accordance with the terms specified thereof and (B) purchases of Shares under the Company ESPP prior to such date in accordance with the instruments terms of the ESPP and subject to the terms of Section 2.2(d), as of the date of this Agreement, (1) there are not outstanding or agreements pursuant authorized any (a) shares of capital stock or other equity securities or voting securities of the Company, (b) securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or other equity securities or voting securities of the Company or (c) options, warrants or other rights to which they are issuableacquire from the Company, duly authorizedor obligations, validly commitments or Contracts of the Company to issue, exchange, transfer, deliver or sell (or causes to be issued, fully paid and nonassessable. Except pursuant to this Agreement and transferred, delivered or sold) any capital stock, equity securities, voting securities or securities convertible into or exchangeable or exercisable for capital stock, equity securities or voting securities of the Company Rights AgreementCompany, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), 2) there are no outstanding subscriptionsobligations of the Company to repurchase, redeem or otherwise acquire any capital stock, equity securities, voting securities or securities convertible into or exchangeable or exercisable for capital stock, equity securities or voting securities of the Company, (3) there are no other options, warrantscalls, rights (including "phantom" stock rights), preemptive rights warrants or other contractsrights, commitmentsContracts, understandings arrangements or arrangements, including commitments of any right of conversion character relating to the issued or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of unissued capital stock of the Company or to which the Company is a party, and (4) neither the Company nor any of its Subsidiaries is obligated to grant, extend extend, accelerate the vesting of, otherwise modify or amend or enter into any Option with respect thereto option, warrant, right, obligation, commitment or "phantom" stock rights Contract to issue, exchange, transfer, deliver or otherwise provide sell (or causes to be issued, transferred, delivered or sold) any payment capital stock, equity securities, voting securities or compensation based on "phantom" stock securities convertible into or measured by the value exchangeable or exercisable for capital stock, equity securities or voting securities of the Company's . Neither the Company nor any of its Affiliates is a party to or is bound by any Contracts or understandings with respect to the voting (including voting trusts and proxies) or sale or transfer (including Contracts imposing transfer restrictions) of any capital stock, assetsequity securities, revenues voting securities or other similar measuresecurities convertible into or exchangeable or exercisable for capital stock, equity securities or voting securities of the Company. There are no registration rights with respect to any capital stock, equity securities or voting securities of the Company.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no the authorized capital stock of GNN consists of (i) 10,000,000 shares of Company Preferred Stock GNN Common Stock, of which 1,915,235 shares are issued and outstanding and none of which are held as treasury shares, and (ii) 10,000,000 shares of GNN Preferred Stock, of which (a) 1,913,044 shares are designated Series A Preferred Stock, of which 1,913,044 are issued and outstanding and none of which are held as treasury shares, (b) 109,765 shares are designated Series B Preferred Stock, of which 109,765 are issued and outstanding and none of which are held as treasury shares and (c) 500,000 shares are designated Series C Preferred Stock, of which 388,747 are issued and outstanding and none of which are held as treasury shares. GNN has no other capital stock authorized, issued or outstanding. All of the such shares are duly and validly issued and outstanding shares of Company Common Stock areoutstanding, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable, and were issued pursuant to a valid exemption from registration under the 1933 Act and all applicable state securities Laws. Except pursuant as set forth in Section 5.3 of the GNN Disclosure Letter, there are no outstanding warrants, options, rights (including outstanding rights to this Agreement and demand registration or to sell in connection with a registration by GNN under the Company Rights Agreement1933 Act), calls or other commitments of any nature relating to the GNN Capital Stock to which GNN is a party, and except there are no outstanding securities of GNN convertible into or exchangeable for shares of GNN Capital Stock or any other capital stock ("GNN Equity Rights"). If Newco is the Purchaser or if WebMD is the Purchaser and makes the WebMD Election as disclosed provided in the Disclosure Schedule Section 10.15, neither GNN nor Purchaser nor any of their Affiliates will have any obligations under any GNN Registration Rights Agreement (as defined in Section 8.11)11.2) after the Effective Time and any such agreements will have no further force and effect after the Effective Time. Neither GNN nor Purchaser nor any of their Affiliates will have any obligations under the Stockholder Agreement (as defined in Section 11.2) after the Effective Time and such agreement will have no further force and effect after the Effective Time. All of such GNN Equity Rights were issued or granted pursuant to a valid exemption from registration under the 1933 Act and all applicable state securities Laws. Except as set forth in Section 5.3 of the GNN Disclosure Letter, there are GNN has no outstanding subscriptionsknowledge of any voting agreements or voting trusts between or among any Person or Persons relating to GNN or the GNN Capital Stock. Except as provided in the GNN Stock Plan and the Warrants, optionsGNN is not obligated to issue or repurchase any shares of GNN Capital Stock for any purpose, warrantsand to the knowledge of GNN no Person has entered into any Contract or option or any right or privilege (whether preemptive or contractual) capable of becoming a Contract or option for the purchase, rights (including "phantom" stock rights)subscription or issuance of any unissued shares, preemptive rights or other contractssecurities of GNN. As a result of the Merger and the other transactions contemplated herein, commitmentsimmediately prior to the Effective Time, understandings or arrangements, including any right (i) pursuant to the Certificates of conversion or exchange under any outstanding security, instrument or agreement Designations of the Series A Convertible Preferred Stock of GNN (together, the "OptionsGNN Series A Preferred Stock") and the Series B Convertible Preferred Stock of GNN (the "GNN Series B Preferred Stock"), obligating the Company or any of its Subsidiaries to issue or sell any all outstanding shares of capital stock GNN Series A Preferred Stock and Series B Preferred Stock will convert into shares of GNN Common Stock as set forth in their respective Certificates of Designations, and (ii) pursuant to the Certificate of Designation of the Company or to grantSeries C Convertible Preferred Stock of GNN (the "GNN Series C Preferred Stock"), extend or enter all outstanding shares of GNN Series C Stock will convert into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured shares of GNN Common Stock as set forth in the Certificate of Designations of the GNN Series C Preferred Stock so long as a majority of GNN's Board of Directors (other than those Directors elected by the value holders of GNN Series A Preferred Stock) and a majority of the Company's stockholders of the GNN Common Stock and the GNN Series B Preferred Stock, assetsvoting together as a class, revenues or other similar measureapprove an adjustment to the conversion price of the GNN Series C Preferred Stock such that the transactions described herein will be deemed a "Qualified Sale"" as defined in the Certificate of Designations for the GNN Series C Preferred Stock.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), 50,000,000 shares of Class A Common Stock and 25,000,000 10,000,000 shares of preferred stock, par value $0.01 .01 per share ("Company Preferred Stock"). As of July 10June 13, 20022001, 15,316,062 55,799,958 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no outstanding (of which 21,574,958 were shares of Common Stock and 34,225,000 were held in shares of Class A Common Stock), and 6,000,000 shares of Common Stock were reserved for issuance under stock option plans that provide for the treasury grant of options to purchase shares of Company Common Stock to non-employee directors, officers and employees of the CompanyCompany (the "Company Option Plans"). Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were or reserved for issuance issuance, except for shares that have been issued upon the exercise of options previously granted under the Company's 1993 Stock Company Option Plan Plans and Parallel Non-Qualified Savings Plan, respectivelywhich are listed in Section 3.02 of the Company Disclosure Letter. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and except as set forth in this Section 3.02 or in Section 3.02 of the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)Letter, there are no outstanding subscriptions, options, warrants, rights rights, calls, (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or any Subsidiary or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. The entire authorized capital stock of the Company Target consists solely of 50,000,000 60,000,000 shares of common stock, par value $0.01 per share ("Company Target Common Stock"), 10,000,000 shares of Target Nonvoting Common Stock, and 25,000,000 5,000,000 shares of preferred stock, par value $0.01 per share ("Company Target Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock There are issued and outstanding, 45,768,587 shares of Target Common Stock, 1,655,502 shares of Target Nonvoting Common Stock, and no shares of Target Preferred Stock. All of the issued and outstanding shares of Company Target Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Target Nonvoting Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenon-assessable and are free of any Liens other than any Liens created by or imposed upon the holders thereof, and are not subject to preemptive rights or rights of first refusal created by statute, the Certificate of Incorporation or Bylaws of Target or any agreement to which Target is a party or by which it is bound or of which it has Knowledge. There are 3,564,495 shares of Target Nonvoting Common Stock reserved for issuance under the Target 2013 Equity Incentive Plan (the “Target Option Plan”), of which 151,802 shares have been issued pursuant to exercise of options, 3,211,322 shares were subject to outstanding options and 201,371 shares were reserved for future option grants immediately prior to the Effective Time. Target has made available in the Data Room true and complete copies of each form of agreement or stock option plan evidencing each Target Option. Except for the rights created pursuant to this Agreement and the Company Rights Agreement, and except as rights disclosed in the Disclosure Schedule (as defined in this Section 8.113.6(a), there are no outstanding subscriptions, other options, warrants, rights (including "phantom" stock calls, rights), preemptive rights securities, commitments or other contracts, commitments, understandings agreements of any character to which Target is a party or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options")by which it is bound, obligating the Company Target to issue, deliver, sell, repurchase or any of its Subsidiaries redeem or cause to issue be issued, delivered, sold, repurchased or sell redeemed, any shares of capital stock of the Company Target Capital Stock or obligating Target to grant, extend extend, accelerate the vesting of, change the price of, or otherwise amend or enter into any Option such option, warrant, call, right, security, commitment or agreement. There are no other contracts, commitments or agreements relating to voting, purchase or sale of Target Capital Stock (a) between or among Target and any of its stockholders; and (b) to Target’s Knowledge, between or among any of Target’s stockholders. All shares of outstanding Target Common Stock and Target Nonvoting Common Stock and rights to acquire Target Capital Stock were issued in compliance with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value all applicable Laws. Section 3.6(a) of the Company's stock, assets, revenues Target Disclosure Schedule sets forth a correct and complete list of holders of Target Capital Stock and options or other similar measurerights to purchase Target Capital Stock, including the number of shares of Target Capital Stock owned by or issuable upon exercise of Target Options held by each Holder. The applicable holders of Target Capital Stock and Target have entered into an agreement or agreements terminating (or have validly consented to the termination of), effective as of the Effective Time, the Amended and Restated Investors’ Rights Agreement dated as of July 9, 2014, among Target and the holders of Target Capital Stock named therein. The Amended and Restated Voting Agreement and Amended and Restated Right of First Refusal and Co-sale Agreement, each dated as of July 9, 2014, among Target and the holders of Target Capital Stock named therein, will terminate in accordance with their respective terms and without any action on the part of any party to this Agreement or any other Person at the Effective Time. Target as Subsidiary’s sole owner has not approved and it and the Subsidiary have not entered into any preliminary and/or final agreements for sale/pledge of Subsidiary’s shares and/or commercial enterprise (business as an on-going concern) and/or parts thereof.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 19,500,000 Common Shares and 500,000 preferred shares, without par value, of which 100,000 shares of common stockhave been designated as “Series A Preferred Shares without par value” and 5,000 shares have been designated as “Series B Preferred Shares without par value” (collectively, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("the “Company Preferred Stock"Shares”). As of July 10February 15, 20022007, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated formi) of Company 9,307,015 Common Stock Shares were issued and outstanding; no shares outstanding (including 64,600 Restricted Shares), (ii) 95,347 Common Shares were held in the treasury of the Company. Since such datetreasury, there has been no change in the number of issued and outstanding shares of Company (iii) 550,977 Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares Shares were reserved for issuance under the Company's 1993 Stock Option Plan employee and Parallel Non-Qualified Savings Plan, respectively. As director stock plans of the date hereofCompany (the “Company Share Plans”), (iv) 78,000 Common Shares were reserved for issuance upon the exercise of options to purchase Common Shares granted as an inducement to hire and (v) no shares of Company Preferred Stock are Shares were issued and or outstanding. All of the issued and outstanding shares of Company Common Stock areShares, and all shares Common Shares reserved for issuance as noted in clauses (including the shares of New Preferred Stock issuable in the Offer iii) and the shares of Company Common Stock issuable on conversion thereof) will be(iv), upon issuance when issued in accordance with the respective terms specified in the instruments thereof, are or agreements pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessablenon-assessable and free of pre-emptive or similar rights and issued in compliance in all material respects with all applicable securities Laws. Except pursuant to this Agreement All Company Stock Options and the Company Rights AgreementRestricted Shares are evidenced by stock option agreements, restricted share agreements or other award agreements, and except as disclosed in the Disclosure Schedule (as defined in true and correct copies of each such agreement have been delivered to Parent. Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock 3.2(a) of the Company or Disclosure Schedule sets forth a true, complete and correct list of all persons who, as of the date hereof, hold outstanding Company Stock Options indicating, with respect to each Company Stock Option then outstanding, the number of shares of Common Shares subject to such Company Stock Option, and the exercise price, date of grant, extend or enter into any Option with respect thereto or "phantom" vesting schedule and expiration date thereof. There are no Company Stock Options intended to qualify as an “incentive stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value option” under Section 422 of the Company's stockCode. Section 3.2(a) of the Company Disclosure Schedule sets forth a true, assetscomplete and correct list of all persons who, revenues or other similar measureas of the date hereof, hold outstanding Restricted Shares, indicating the number of Restricted Shares held, date of grant and vesting schedule thereof. Section 3.2(a) of the Company Disclosure Schedule sets forth a true, complete and correct list of all persons who, as of the date hereof, hold outstanding Company Share-Based Awards, indicating the number of Company Share-Based Awards held and vesting schedule thereof.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 (i) 500,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), of which an aggregate of 215,583,176 shares of Common Stock were issued and outstanding as of the close of business on February 23, 2001, and 25,000,000 (ii) 5,000,000 shares of preferred stock, $.001 par value $0.01 per share ("Company Preferred Stock")share, of which none were issued and outstanding as of the close of business on February 23, 2001. As of July 10the close of business on February 23, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date2001, there has been no change in the number of issued and were outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 stock option and incentive plans (collectively, the "Company Stock Option Plan and Parallel Non-Qualified Savings PlanPlans"), respectively. As options to acquire an aggregate of the date hereof, no 28,948,780 shares of Company Preferred Common Stock are issued and outstanding(subject to adjustment on the terms set forth therein) at a weighted average exercise price of $25.88 per share. All of the issued and outstanding shares of Company Common Stock are, have been duly authorized and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, and are fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure set forth on Schedule (as defined in Section 8.112.1(d), there are no preemptive or similar rights on the part of any holders of any class of securities of the Company or of any of its Subsidiaries. Except for the Common Stock or as set forth on Schedule 2.1(d), the Company has outstanding subscriptionsno bonds, debentures, notes or other obligations or securities the holders of which have the right to vote (or are convertible or exchangeable into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter. Except as set forth above or on Schedule 2.1(d), as of the date of this Agreement, there are no securities convertible into or exchangeable for, or options, warrants, rights (including "phantom" stock calls, subscriptions, rights), preemptive rights or other contracts, commitments, arrangements or understandings of any kind to which the Company or arrangements, including any right of conversion its Subsidiaries is a party or exchange under by which any outstanding security, instrument or agreement (together, "Options"), of them is bound obligating the Company or any of its Subsidiaries contingently or otherwise to issue issue, deliver or sell sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of the Company or of any of its Subsidiaries. Except as set forth on Schedule 2.1(d), there are no outstanding agreements of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measureits Subsidiaries.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 175,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 11,000,000 shares of preferred stock, par value $0.01 0.001 per share ("“Company Preferred Stock"”). As At the close of July 10business on January 6, 20022017 (the “Capitalization Date”) (except with respect to clause (ii), 15,316,062 shares (including restricted stock issued to employees which representation is made as of the Company but which date of this Agreement and as of the Closing Date), (i) 81,573,526 shares have not been issued in certificated form) of Company Common Stock (including 341,138 shares of Company Restricted Stock) were issued and outstanding; (ii) no shares of Company Preferred Stock were issued and outstanding; (iii) no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or Company Preferred Stock were held by the Company or any of its Subsidiaries in its or their treasury; and (iv) an aggregate of 1,111,113 shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance pursuant to outstanding awards and rights under the Company's 1993 Company Stock Option Plan and Parallel Non-Qualified Savings PlanPlans, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding which 441,245 shares of Company Common Stock are, were underlying outstanding and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer unexercised Company Options and the 669,868 shares of Company Common Stock issuable were underlying unvested Restricted Stock Units. Except as set forth in the preceding sentence or as set forth on conversion thereofSection 4.2(a) of the Company Disclosure Schedule, at the close of business on the Capitalization Date, no shares of capital stock or other voting securities of or equity interests in the Company were issued, reserved for issuance or outstanding. From and after the Capitalization Date until and including the date hereof, the Company has not issued any shares of its capital stock (other than in respect of the valid exercise of Company Options or upon the valid settlement of Restricted Stock Units or Company Restricted Stock), has not granted any options, warrants, restricted stock, restricted stock units or stock appreciation rights or entered into any other agreements or commitments to issue any shares of its capital stock, or granted any other awards in respect of any shares of its capital stock and has not split, combined or reclassified any of its shares of capital stock. All of the outstanding Company Shares are, and all Company Shares that may be issued prior to the Effective Time will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuablewhen issued, duly authorized, validly issued, fully paid and nonassessablenonassessable and not subject to preemptive rights. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there There are no outstanding subscriptionsbonds, optionsdebentures, warrants, rights (including "phantom" stock rights), preemptive rights notes or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock Indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to grant, extend or enter into vote) on any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based matters on "phantom" stock or measured by the value which holders of the Company's stock, assets, revenues or other similar measureCompany Common Stock may vote.

Capital Stock. The authorized capital stock and the outstanding ------------- capital stock, of the Company consists in each case as of the date hereof solely of 50,000,000 the shares indicated on Exhibit C to this Agreement. All of common stockthe outstanding shares have been duly authorized, par value $0.01 per share are fully paid and nonassessable, and were issued in compliance with all applicable securities laws. An accurate list of the Company's shareholders and their holdings is set forth in Exhibit D to this Agreement. No one is entitled to preemptive or similar statutory or contractual rights with respect to any securities of the Company, except as set forth (i) in Section 4(d) of this Agreement, (ii) in Section 4(m) of the Purchase Agreement dated October 29, 1992 ("Series E Agreement") regarding the sale by the Company Common of its Series E Convertible Preferred Stock, (iii) in Section 4(l) of the Purchase Agreement dated June 30, 1993 regarding the sale by the Company of its Series E Convertible Preferred Stock ("Series E II Agreement"), and 25,000,000 shares (iv) under Section 6 of preferred stockthe Amended and Restated Stockholders Agreement dated November 19, par value $0.01 per share 1990 ("Company Preferred StockPrior Stockholders Agreement"). As All necessary and appropriate waivers of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares shareholders have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessableobtained. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)Exhibit E to this Agreement, there are no outstanding subscriptionswarrants, options, warrantsconvertible securities other than the Series A, rights (including "phantom" stock rights)Series B, preemptive rights Series C, Series D and Series E Convertible Preferred Stock listed in Exhibit C to this Agreement, or other contracts, commitments, understandings agreements or arrangements, including arrangements of any right of conversion or exchange character under any outstanding security, instrument or agreement (together, "Options"), obligating which the Company or any of its Subsidiaries subsidiary is or may be obligated to issue any equity securities of any kind, or to transfer any equity securities of any kind owned by them, and neither the Company nor any subsidiary has any present plan or intention to issue any equity securities of any kind, or to transfer any equity securities of any kind owned by them. Except as disclosed in Exhibit F, the Company does not know of any voting agreements, buy-sell agreements, option or right of first refusal or other agreements of any shares kind among any of capital stock the security holders of the Company or of any subsidiary relating to grantthe securities held by them. Neither the Company nor any subsidiary has agreed, extend or enter into has any Option with respect thereto present intention, to register any of its securities under the Securities Act of 1933, as amended (the "Securities Act"), except as provided in the Registration Rights Agreement dated October 29, 1992, as amended June 30, 1993 and on the date of this Agreement, a copy of which is attached hereto as Exhibit G (the "Registration Rights Agreement") or "phantom" stock as provided in warrants referred to in Item 2 of Exhibit E which have piggy-back rights to the Registration Rights Agreement. The voting powers, designations, preferences and relative, participating, optional and other rights of the Shares, and the qualifications, limitations or otherwise provide any payment or compensation based on "phantom" stock or measured by restrictions thereof are as fully set forth in the value Restated Certificate of Incorporation of the Company's stock, assets, revenues or other similar measureas amended (the "Certificate").

Capital Stock. The At May 31, 2001, the authorized capital stock of the Company consists solely consisted of 50,000,000 100,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), of which 48,533,903 shares were outstanding, and 25,000,000 10,000,000 shares of preferred stock, $.001 par value $0.01 per share ("Company Preferred Stock")share, of which no shares were outstanding. As of July 10May 31, 20022001, 15,316,062 8,007,229 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 stock option and purchase plans, 621,068 shares were reserved for issuance in connection with the Agritope 1997 Stock Option Award Plan and Parallel Non-Qualified Savings Planup to 929,478 shares were reserved for issuance in connection with the Share Exchange and Assignment Agreement by and among the Company and the stock and option holders of Artemis Pharmaceuticals GmbH. Except as set forth in the SEC Reports (including outstanding offer letters or commitments to issue Common Stock options under existing employee benefits plans), respectivelythere are no options, warrants, conversion privileges, preemptive rights, or other rights or agreements issued or binding on the Company for the purchase or acquisition of any shares of its capital stock other than an aggregate of 496,220 shares of Common Stock reserved for issuance pursuant to outstanding warrants. As Except for shares of the date hereofcapital stock issued pursuant to employee benefit plans, (a) no shares of Company Preferred Stock are issued and outstanding. All capital stock of the Company have been issued following May 31, 2001, and (b) all of the outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they Company's capital stock are issuable, duly authorized, validly issued, fully paid and nonassessablenonassessable and were issued in compliance with all applicable federal and state securities laws. Except pursuant to this Agreement and as set forth in the SEC Reports, the Company Rights Agreementhas not agreed to register the sale of any of its securities under the Securities Act, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights)calls, preemptive contracts, demands, commitments, conversion rights or other contracts, commitments, understandings agreements or arrangements, including arrangements of any right of conversion character or exchange nature whatever under any outstanding security, instrument or agreement (together, "Options"), obligating which the Company is or any of its Subsidiaries may be obligated to issue its Common Stock, preferred stock or sell warrants or options to purchase Common Stock or preferred stock. Except as set forth in the SEC Reports, no holder of any shares of capital stock security of the Company is entitled to any rights of first refusal, preemptive or similar rights to grant, extend or enter into purchase any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value securities of the Company's stockCompany (including, assetswithout limitation, revenues or other similar measurethe Shares).

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 of: 100,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, $0.001 par value $0.01 per share ("Company Preferred Stock")share. As At the close of July 10business on April 24, 2002, 15,316,062 2006: 9,800,253 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; , excluding shares of Company Common Stock held by the Company in its treasury, and (ii) no shares of Company Common Stock were issued and held by the Company in the treasury its treasury. No shares of Company Common Stock are owned or held by any Subsidiary of the Company. Since such date, there has been no change in the number of issued and All outstanding shares of Company Common Stock are duly authorized, validly issued, fully paid and non-assessable and are not subject to preemptive rights created by statute, the Company Charter Documents, or any agreement to which the Company is a party or by which it is bound. Company Options. As of the close of business on April 24, 2006: (i) 553,816 shares of Company Common Stock held are issuable upon the exercise of outstanding options to purchase Company Common Stock under the Company's 1997 Stock Option Plan (the "Company Stock Option Plan") (equity or other equity-based awards, whether payable in treasury cash, shares or otherwise granted under or pursuant to the Company Stock Option Plan are referred to in this Agreement as "Company Options"); (ii) as of April 24, 2006, 252,483 shares of Company Common Stock were available for future grant under the Company Stock Option Plan; (iii) 548,200 shares of Company Common Stock are issuable under the Company Purchase Plans; and 413,398 (iv) no shares of Company Common Stock are issuable pursuant to outstanding options to purchase Company Common Stock (A) which are issued other than pursuant to the Company Stock Option Plan and 775,644 (B) other than shares were reserved for issuance under the Company's 1993 Company Purchase Plans. Section 2.2(b) of the Company Disclosure Letter sets forth a list of each outstanding Company Option: (a) the particular Company Stock Option Plan and Parallel Non-Qualified Savings Plan(if any) pursuant to which any such Company Option was granted, respectively. As (b) the name of the date hereofholder of such Company Option, no shares (c) the number of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock aresubject to such Company Option, (d) the exercise price of such Company Option, and all shares reserved for issuance (including the shares of New Preferred Stock issuable e) in the Offer and case of Company Options, whether such Company Option is an incentive stock option as defined in Section 422 of the Code and/or is subject to Section 409 of the Code. All shares of Company Common Stock issuable on conversion thereof) will besubject to issuance under the Company Stock Option Plans and the Company Purchase Plans, upon issuance in accordance with on the terms and conditions specified in the instruments or agreements pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement for the Stock Option and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)Stock Purchase Plans, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights commitments or other contracts, commitments, understandings or arrangements, including agreements of any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), character to which the Company is bound obligating the Company or to accelerate the vesting of any of its Subsidiaries to issue or sell any shares of capital stock Company Option as a result of the Company Merger (whether alone or to grant, extend upon the occurrence of any additional or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value subsequent events). As of the Company's end of the most recent bi-weekly payroll period ending prior to the date hereof, the aggregate amount credited to the accounts of participants in the Company Purchase Plans was $26,970.15. There are no outstanding or authorized stock appreciation, phantom stock, assets, revenues profit participation or other similar measurerights with respect to the Company.

Capital Stock. The Immediately upon giving effect to the Articles and ------------- the issuance and sale of the Purchased Securities at the Phase I Closing pursuant to this Agreement, the authorized capital stock of the Company consists solely shall consist of 50,000,000 28,500,000 shares, of which 19,650,000 shares of common stock, par value $0.01 per share ("Company have been designated Common Stock"), and 25,000,000 2,396,800 shares of preferred stock, par value $0.01 per share ("Company have been designated Series A Convertible Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which 2,100,000 shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no designated Series B Convertible Preferred Stock, 3,679,053 shares were held in the treasury of the Company. Since such date, there has have been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company designated Series C Preferred Stock and 674,147 shares are undesignated. Of the Common Stock, 3,738,997 shares are issued and outstanding. Of the Series A Convertible Preferred Stock, 2,240,000 shares are issued and outstanding, and of the Series B Convertible Preferred Stock, 1,922,222 shares are issued and outstanding, and of the Series C Convertible Preferred Stock, 1,639,025 shares are issued and outstanding. All of the outstanding shares of capital stock of the Company were duly authorized and validly issued and are fully paid and nonassessable. There are no outstanding subscriptions, options, warrants, calls, contracts, demands, commitments, Convertible Securities (as hereinafter defined) or other agreements or arrangements of any character or nature whatever, except as otherwise disclosed on Schedule 5.13 hereto or as contemplated by this Agreement, under which the ------------- Company is or may be obligated to issue capital stock or other securities of any kind representing an ownership interest or contingent ownership interest in the Company. Schedule 5.13 sets forth the true and correct date of grant, term, ------------- number of underlying shares and strike price for any such subscriptions, options, warrants, calls, contracts, demands, commitments, Convertible Securities or other agreements set forth therein. Neither the offer nor the issuance or sale of the Purchased Securities, the Conversion Stock or the CVR Stock, constitutes an event, under any anti-dilution provisions of any securities issued or issuable by the Company or any agreements with respect to the issuance of securities by the Company, which will either increase the number of shares issuable pursuant to such provisions or decrease the consideration per share to be received by the Company pursuant to such provisions. All of the issued and outstanding shares of Company Common Stock are, capital stock of each of the Subsidiaries have been duly and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer validly authorized and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they issued and are issuable, duly authorized, validly issued, fully paid and nonassessable, and the Company owns of record and beneficially, free and clear of any security interests, claims, liens, proxies, equities or other encumbrances, all of the issued and outstanding shares of such stock. Except pursuant No holder of any security of the Company is entitled to any preemptive or similar rights to purchase securities from the Company except as otherwise contemplated by this Agreement, provided, however, that nothing in this Section 5.13 shall affect, alter or diminish any right granted to the Purchasers in this Agreement. All outstanding securities of the Company have been issued in full compliance with an exemption or exemptions from the registration and prospectus delivery requirements of the Securities Act and from the registration and qualification requirements of all applicable state securities laws. The Company is not a party or subject to any agreement or understanding, and to the knowledge of the Company, there is no agreement or understanding between any persons or entities or by a director of the Company, which affects or relates to the voting or giving of written consents with respect to, or purchase, sale, redemption, transfer or other disposition of, any security of the Company, other than warrants, options and debentures of the Company outstanding as of the date hereof and disclosed in Schedule 5.13, the ------------- Stockholders' Agreement and the Company Rights 1997 Stock Purchase Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measure.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 71,650 shares of common stock, par value $0.01 per share ("Company Class A Common Stock"), and 25,000,000 of which 71,650 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were are issued and outstanding; 33,350 shares of Class B Common Stock, of which no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding; and 7,000 shares of Preferred Stock, of which 7,000 shares are issued and outstanding. Other than the Warrants and except as set forth in Section 2.2 of the Disclosure Schedule as of the date of this Agreement only (it being understood that any existing as of the date of this Agreement will be extinguished on or prior to Closing), there are no subscriptions, options, warrants, calls, rights, contracts, commitments, understandings, restrictions or arrangements relating to the issuance, sale or transfer by Sellers, the Company or any of the Subsidiaries of any shares of such capital stock, including any rights of conversion or exchange under any outstanding securities or other instruments. All outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. All of the issued and outstanding shares of Company Common Stock areeach Included Subsidiary and, as of the date of this Agreement, of Whitecap, are owned by the Company, free and clear of all Encumbrances of any kind whatsoever (except as set forth in Section 2.2 of the Disclosure Schedule as of the date of this Agreement only (it being understood that any existing as of the date of this Agreement will be extinguished on or prior to Closing)), other than the restrictions imposed by the federal and state securities laws, and all such shares reserved for issuance (including the shares have been duly authorized and validly issued and are fully paid, nonassessable and free of New preemptive rights. The Preferred Stock issuable in is redeemable at the Offer and the shares option of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in will be redeemed on the Disclosure Schedule Closing Date. The CMI Assets (as defined in Section 8.11)7.13 hereof) constitute all of the assets of or related to Smartlink Development, there are no outstanding subscriptionsL.P. and Smartlink, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating Inc. held by the Company or any of its Subsidiaries to issue or sell any shares of capital stock of and the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measureIncluded Subsidiaries.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 shares of common stock, par value $0.01 per share ("Company Common StockCOMPANY COMMON STOCK"), 1,000,000 shares of restricted voting common stock, par value $.01 per share ("RESTRICTED VOTING COMMON STOCK"), and 25,000,000 10,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred StockCOMPANY PREFERRED STOCK"). As of July 10April 1, 2002, 15,316,062 16,960,139 shares (including restricted stock of Company Common Stock, 242,047 shares of Restricted Voting Common Stock and no shares of Company Preferred Stock were issued to employees of the Company but which and outstanding, and 2,550,000 shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no reserved for issuance pursuant to the Pentacon, Inc. 1998 Stock Plan (the "1998 STOCK PLAN"). No shares were of Company Common Stock, Restricted Voting Common Stock or Company Preferred Stock are held in the treasury of the Company. Since such dateApril 1, 2002, there has been no change in the number of issued and outstanding shares of Company Common Stock, Restricted Voting Common Stock or Company Preferred Stock, except for shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance issued upon the exercise of options granted under the Company's 1993 1998 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock and Restricted Voting Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and for shares reserved for issuance upon the Company Rights Agreement, and except as disclosed in exercise of currently outstanding options granted under the Disclosure Schedule (as defined in Section 8.11)1998 Stock Plan, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "OptionsSTOCK-RELATED AGREEMENTS"), obligating the Company or any of its Subsidiaries subsidiaries to issue or sell any shares of capital stock of the Company or any subsidiary or to grant, extend or enter into any Option Stock-Related Agreement with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's or any subsidiary's stock, assets, revenues or other similar measure.

Capital Stock. The (a) As of the date of this Agreement, the authorized capital stock of the Company C2 consists solely of 50,000,000 3,542,767.5 shares of common stock, par value $0.01 .10 per share share, of C2 ("Company C2 Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10February 17, 20021998, 15,316,062 2,683,888.9 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company C2 Common Stock were issued and outstanding; , no shares were held in the treasury of the CompanyC2 and 858,878.6 shares were reserved for issuance. Since such date, except as set forth in Section 4.2.2 of the C2 Disclosure Letter, there has been no change in the number of issued and outstanding shares of Company C2 Common Stock Stock, or the number of shares of Company C2 Common Stock held in treasury and 413,398 and 775,644 shares were or reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Planissuance, respectively. As other than as a result of the date hereof, no stock dividend described in Section 1.1.2 and shares issuable in connection with the issuance of Company Preferred Stock are issued and outstandingC1 Common Shares pursuant to the C1 Permissible Issuance Arrangements. All of the issued and outstanding shares of Company C2 Common Stock are, and all shares of C2 Common Stock reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined set forth in Section 8.11)4.2.2 of the C2 Disclosure Letter, as of the date hereof, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including Options obligating any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries C1/C2 Entity to issue or sell any shares of capital stock of the Company equity interest in C2 or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights thereto, other than in connection with the issuance of C1 Common Shares pursuant to C1 Permissible Issuance Arrangements. Except pursuant to this Agreement and except as set forth in Section 4.2.2 of the C2 Disclosure Letter, as of the date hereof, there are no outstanding contractual obligations of any C1/C2 Entity to repurchase, redeem or otherwise provide acquire any payment or compensation based on "phantom" stock or measured by equity interest 60 49 in C2 other than in connection with the value of the Company's stockredemption, assets, revenues repurchase or other similar measureacquisition of C1 Common Shares pursuant to C1 Permissible Redemption Arrangements.

Capital Stock. (i) The Company has an authorized capitalization consisting of (i) 30,500,000 shares of Common Stock, of which 10,751,609 shares are issued and outstanding and 0 shares are held in the Company’s treasury, (ii) 10,000,000 shares of preferred stock, of which 0 shares are issued and outstanding and 0 shares are held in the Company’s treasury, including 1,940,299 shares of preferred stock which have been designated as Series A Preferred Stock, of which 0 shares are issued and outstanding and 0 shares are held in the Company’s treasury. All such outstanding shares of capital stock are duly authorized, have been validly issued, and are fully paid and nonassessable and are not subject to, nor were they issued in violation of, any preemptive rights. Sufficient shares of Common Stock are reserved for issuance of the Warrant Shares. The Capitalization of the Company as of the date of this Agreement and after giving effect to the issuance and sale of the Units in the Initial Closing and the Second Closing contemplated by this Agreement, in each case assuming no other issuances or sales of securities by the Company in accordance with this Agreement, is as set forth on Schedule 3.1(g) attached hereto. Except as described above, no shares of capital stock of the Company consists solely of 50,000,000 shares of common stockare authorized, par value $0.01 per share ("Company Common Stock")issued, and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock")outstanding or reserved for issuance. As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held Except as described in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)SEC Filings, there are no outstanding subscriptions, or authorized options, warrants, rights (including "phantom" stock rights), preemptive rights subscriptions, agreements, obligations, convertible or exchangeable securities, or other contractscommitments contingent or otherwise, commitmentsrelating to the capital stock of, understandings or arrangementsother equity or voting interest in, including any right of conversion or exchange under any outstanding securitythe Company, instrument or agreement (together, "Options"), obligating pursuant to which the Company or any of its Subsidiaries is or may become obligated to issue issue, deliver or sell or cause to be issued, delivered or sold, shares of Common Stock, any other shares of the capital stock of, or other equity or voting interest in, the Company or any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the capital stock of of, or other equity or voting interest in, the Company Company. There are no outstanding or to grantauthorized stock appreciation, extend phantom stock, profit participation or enter into any Option similar rights with respect thereto to the capital stock of, or "phantom" stock rights other equity or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of voting interest in, the Company's stock. To the Company’s knowledge, assetsthere are no irrevocable proxies or voting agreements with respect to any equity or voting interest in, revenues or other similar measurethe Company.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 37,504,700 shares of common stock, par value $0.01 0.0001 per share ("Company Common Stock")share, and 25,000,000 11,788,047 shares of preferred stockSeries A Preferred Stock, par value $0.01 0.0001 per share ("Company and 15,090,799 shares of Series B Preferred Stock"), par value $0.0001 per share. As At the close of July 10business on the date hereof, 2002, 15,316,062 3,865,056 shares (including restricted of common stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were are issued and outstanding; , no shares of common stock were held in the treasury of the Company, no shares of common stock of the Company were held by the Subsidiaries of the Company, 482,597 shares of common stock of the Company are subject to issuance upon exercise of outstanding Options granted pursuant to the terms of the Stock Plans, 11,788,047 shares of Series A Preferred Stock are issued and outstanding and 15,090,789 shares of Series B Preferred Stock are issued and outstanding. Since such date, there Each Company Subsidiary has been no change in the number of capitalization set forth on Schedule 3.3. All issued and outstanding shares of capital stock or other equity interests of the Company Common Stock and each of the Company Subsidiaries, as applicable, have been duly authorized and validly issued and are fully paid and nonassessable, and are not subject to any preemptive (or shares similar) rights, and, except for the interests to be acquired in the Minority Interest Acquisition, each such share or interest of a Company Common Stock held in treasury Subsidiary is owned by the Company or another Subsidiary of the Company free and 413,398 and 775,644 shares were reserved for issuance under clear of all options, rights of first refusal, agreements, limitations on the Company's 1993 Stock Option Plan ’s or any of its Subsidiaries’ voting, dividend or transfer rights, charges and Parallel Non-Qualified Savings Planother encumbrances or Liens of any nature whatsoever. Except as set forth in this Section 3.3, respectively. As at the close of business on the date hereof, no shares of capital stock or other equity securities of the Company Preferred Stock are issued and were issued, reserved for issuance or outstanding. All Schedule 3.3 sets forth, as of the issued date of this Agreement, a complete and correct list of all outstanding Options under the Stock Plans or otherwise, all outstanding shares of restricted common stock of the Company Common granted under the Stock arePlans, and all shares reserved for the number of unpurchased Shares subject to issuance upon exercise of each such Option, the grant date, exercise price, vesting schedule, expiration date and name of holder of each such Option. Except as described in this Section 3.3 and as set forth on Schedule 3.3 and other than the Options, neither the Company nor any of the Company Subsidiaries is a party to, or has issued, any outstanding option, warrant, call, “phantom” stock right, stock appreciation right, stock-based compensatory award, subscription or other right (including the any preemptive right), agreement, security or commitment which obligates any of them to issue, sell or transfer, or repurchase, redeem or otherwise acquire, any shares of New Preferred Stock issuable the capital stock or other equity interest in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessableany Company Subsidiary. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there There are no outstanding subscriptionsbonds, optionsdebentures, warrants, rights (including "phantom" stock rights), preemptive rights notes or other contracts, commitments, understandings or arrangements, including any right indebtedness of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries having the right to issue vote (or sell convertible into, exchangeable for, securities having the right to vote) on any shares matters on which holders of capital Company common stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measuremay vote.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 30,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 1,000,000 shares of preferred stock, par value $0.01 0.1 per share ("Company Preferred StockCOMPANY PREFERRED STOCK"). As of July 10March 5, 20022001, 15,316,062 5,002,026 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no , 2,057,178 shares were held in the treasury of the Company and were reserved for issuance under the Company's Option Plans and the Company Warrants. Since such date, except as set forth in SECTION 3.02 of the Company Disclosure Letter, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were or reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectivelyissuance. As of the date hereof, no shares of Company Preferred Stock are issued and outstandingoutstanding and 89,400 shares are designated Series A Junior Preferred Stock ("COMPANY SERIES A PREFERRED STOCK") and are reserved for issuance in accordance with the Amended and Restated Rights Agreement dated as of February 8, 2000, as amended, by and between the Company and American Stock Transfer & Trust Company, as Rights Agent (the "COMPANY RIGHTS AGREEMENT"), pursuant to which the Company has issued rights (the "COMPANY RIGHTS") to purchase shares of Company Series A Preferred Stock. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, Agreement and except as disclosed set forth in SECTION 3.02 of the Company Disclosure Schedule (as defined in Section 8.11)Letter, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "OptionsOPTIONS"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. (a) The authorized capital stock equity securities of the Company consists solely of 50,000,000 150,000,000 Company Shares, of which 59,170,986 shares were issued and outstanding as of common stockthe close of business on December 11, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock")1998. As of July 10the close of business on December 11, 20021998, 15,316,062 shares (including restricted stock issued to employees of the 5,798,666 Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares Shares were held in the treasury of the CompanyCompany (including 184,262 Rabbi Trust Shares). Since such date, except as described in the Company SEC Reports filed prior to the date of this Agreement or in Section 4.02 of the Company Disclosure Letter, there has been no change in the number sum of the issued and outstanding shares of Company Common Stock or shares of Shares and Company Common Stock Shares held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstandingRabbi Trust. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they Shares are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement or as may be provided by the New England Electric System Companies' Incentive Share Plan, the New England Electric System Companies Incentive Thrift Plan I, the New England Electric System Companies Incentive Thrift Plan II, the New England Electric Companies Long-Term Performance Share Award Plan, and the New England Electric System Directors' annual retainer shares (the "Company Rights AgreementShare Plans"), and except as disclosed in the Disclosure Schedule (as defined described in Section 8.11)4.02 of the Company Disclosure Letter, on the date hereof there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock share appreciation rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock equity securities of the Company or to grant, extend or enter into any Option with respect thereto thereto. (b) Except as disclosed in the Company SEC Reports filed prior to the date of this Agreement or "phantom" Section 4.02 of the Company Disclosure Letter, all of the outstanding shares of capital stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured of each Subsidiary of the Company are duly authorized, validly issued, fully paid and nonassessable and are owned, beneficially and of record, by the value Company or a Subsidiary, which is wholly owned, directly or indirectly, by the Company, free and clear of any liens, claims, mortgages, encumbrances, pledges, security interests, equities and charges of any kind (each a "Lien"). Except as disclosed in the Company SEC Reports filed prior to the date of this Agreement or Section 4.02 of the Company Disclosure Letter, there are no (i) outstanding Options obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of any Subsidiary of the Company or to grant, extend or enter into any such Option or (ii) voting trusts, proxies or other commitments, understandings, restrictions or arrangements in favor of any person other than the Company or a Subsidiary which is wholly owned, directly or indirectly, by the Company with respect to the voting of, or the right to participate in, dividends or other earnings on any capital stock of any Subsidiary of the Company's stock. (c) Except as disclosed in the Company SEC Reports filed prior to the date of this Agreement or Section 4.02 of the Company Disclosure Letter, assetsthere are no outstanding contractual obligations of the Company or any Subsidiary of the Company to repurchase, revenues redeem or otherwise acquire any Company Shares or any capital stock of any Subsidiary of the Company or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary of the Company or any other person. (d) As of the date of this Agreement, no bonds, debentures, notes or other similar measure.indebtedness of the Company or any Company Subsidiary having the right to vote (or which are convertible into or exercisable for securities having the right to vote) (together "Voting Debt") on any matters on which Shareholders may vote are issued or outstanding nor are there any outstanding Options obligating the Company or any of its Subsidiaries to issue or sell any Voting Debt or to grant, extend or enter into any Option with respect thereto. 4.03

Capital Stock. The Company’s authorized capital stock consists of the Company consists solely 30,000,000 shares consisting of 50,000,000 (i) 10,000,00 shares of common stockClass A Common Stock, par value $0.01 5.00 per share share, of which, as of the date of this Agreement, 1,402,001 shares are validly issued and outstanding, and ("Company ii) 20,000,000 shares of Class B Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 1.00 per share ("Company Preferred Stock")share, of which, as of the date of this Agreement, 3,811,490 shares are validly issued and outstanding. As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees Set forth in Section 3.3(c) of the Company but which shares have not been issued in certificated form) Disclosure Letter is a true and complete schedule of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and all outstanding Rights to acquire shares of Company Common Stock or shares Stock, including grant date, vesting schedule, exercise price, expiration date and the name of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectivelyholder of such Rights. As of the date hereof, there were 658,399 options outstanding for shares of Company Common Stock granted and vested and unvested in accordance with the Company Stock Plans and such restricted shares represent all of the Rights issued under the Company Stock Plans. Except as set forth in this Section 3.3(c) or in Section 3.3(c) of the Company Disclosure Letter, there are no shares of Company Preferred Common Stock are issued or other equity securities of the Company outstanding and outstandingno outstanding Rights relating to Company Common Stock, and no Person has any Contract or any right or privilege (whether pre-emptive or contractual) capable of becoming a Contract or Right for the purchase, subscription or issuance of any securities of the Company. All of the issued and outstanding shares of Company Common Stock areare duly and validly issued and outstanding and are fully paid and, and all shares reserved for issuance (including except as expressly provided otherwise under applicable Law, nonassessable under the shares FBCA. None of New Preferred Stock issuable in the Offer and the outstanding shares of Company Common Stock issuable on conversion has been issued in violation of any preemptive rights of the current or past shareholders of the Company. There are no Contracts among the Company and its shareholders or by which the Company is bound with respect to the voting or transfer of Company Common Stock or the granting of registration rights to any holder thereof) will be, upon issuance . All of the outstanding shares of Company Common Stock and all Rights to acquire shares of Company Common Stock have been issued in accordance compliance with the terms specified in the instruments or agreements pursuant to which they all applicable federal and state Securities Laws. All issued and outstanding shares of capital stock of its Subsidiaries have been duly authorized and are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant The Company has no direct or indirect ownership interest in any firm, corporation, bank, joint venture, association, partnership or other entity, nor is it under any current or prospective obligation to this Agreement and the Company Rights Agreementform or participate in, and except as disclosed provide funds to, make any loan, capital contribution, guarantee, credit enhancement or other investment in, or assume any liability or obligation of, any Person other than lending transactions which occur in the Disclosure Schedule (as defined in Section 8.11)ordinary course of business consistent with past practice. The Company does not have any outstanding bonds, there are no outstanding subscriptionsdebentures, options, warrants, rights (including "phantom" stock rights), preemptive rights notes or other contractsobligations having the right to vote (or convertible into, commitmentsor exchangeable or exercisable for, understandings or arrangements, including any securities having the right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating to vote) with the Company or any of its Subsidiaries to issue or sell any shares of capital stock shareholders of the Company or to grant, extend or enter into on any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurematter.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 (i) 50,000 shares of common stockPreferred Stock (the "Preferred Stock"), par value $0.01 0.001 per share share, none of which are issued and outstanding and ("Company ii) 450,000 shares of Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 0.40 per share ("Company Preferred Stock"). As share, 111,642 of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of are issued and outstanding shares and are owned of Company Common Stock or shares of Company Common Stock held record by the Stockholders in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of amounts set forth on the date hereof, no shares of Company Preferred Stock are issued and outstandingStockholders Schedule. All of the issued and outstanding shares of Company Common Stock are, have been duly authorized and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessablenonassessable and not subject to preemptive rights created by statute, the Company Charter Documents or any agreement to which the Company is a party or by which it is bound and have been issued in compliance with all applicable Law. Except pursuant to this Agreement and as set forth on the Capital Stock Schedule, the Company Rights Agreementdoes not have any other capital stock, equity securities or securities containing any equity features authorized, issued or outstanding, and except there are no agreements, options, warrants or other rights or arrangements existing or outstanding which provide for the sale, issuance, repurchase or redemption of any of the foregoing by the Company. Except as disclosed in set forth on the Disclosure Schedule (as defined in Section 8.11)Capital Stock Schedule, there are no outstanding rights, subscriptions, warrants, options, warrants, rights (including "phantom" stock rights), preemptive conversion rights or other contractsagreements of any kind outstanding to purchase, commitments, understandings redeem or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell otherwise acquire any shares of capital stock or other equity securities of the Company of any kind. Except as set forth on the Capital Stock Schedule, there are no agreements or other obligations (contingent or otherwise) which require the Company to grantrepurchase, extend or enter into any Option with respect thereto or "phantom" stock rights redeem or otherwise provide acquire any payment or compensation based on "phantom" stock or measured by the value shares of the Company's stock, assets, revenues capital stock or other similar measureequity securities and there are no written agreements, arrangements or understandings to which the Company is a party pursuant to which the Company has the right to elect to satisfy any liability of the Company by issuing equity interests in the Company.

Capital Stock. The authorized capital stock As of the date of this Agreement, the Company consists solely of 50,000,000 has (i) 400,000,000 authorized shares of common stock, par value $0.01 per share ("Company Common Stock"), of which 146,748,399 shares were outstanding as of July 7, 2000, and 25,000,000 (ii) 20,000,000 authorized shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"), of which no shares are outstanding. As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees All of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury have been duly authorized and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed have not been issued in violation of any preemptive rights. Set forth on the Company's Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right is a list of conversion or exchange each Compensation and Benefit Plan under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell which any shares of capital stock of the Company or to grant, extend or enter into any Option Rights with respect thereto have been or may be awarded or issued ("phantom" stock rights Company Stock Plans"). As of July 7, 2000, the Company has outstanding Company Options representing the right to acquire 33,614,900 shares of Company Common Stock. Except as described in the immediately preceding sentence, the Company has no Company Common Stock authorized for issuance pursuant to any Company Stock Plans, except that, as of July 7, 2000, there were 15,014,217 shares of Company Common Stock authorized for issuance pursuant to the Company Stock Plans. Except as set forth above, there are no existing Rights of any kind with respect to the Company, and no securities or otherwise provide obligations evidencing such Rights are authorized, issued or outstanding. Except for the Convertible Debentures of the Company previously issued to certain key employees of the Company and its Subsidiaries in 2000 prior to the date hereof, the Company does not have outstanding any payment bonds, debentures, notes or compensation based other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on "phantom" stock or measured by any matter. (c) Subsidiaries. Exhibit 21 to the value Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 includes all the Subsidiaries of the Company which as of the date hereof are Significant Subsidiaries. No equity securities of any of the Company's Subsidiaries are or may become required to be issued (other than to the Company or a wholly owned Subsidiary of the Company) by reason of any Rights with respect thereto. There are no Contracts by which any of the Company"s Subsidiaries is or may be bound to sell or otherwise issue any shares of its capital stock, assetsand there are no Contracts relating to the rights of the Company to vote or to dispose of such shares. All of the shares of capital stock of each of the Company's Significant Subsidiaries are validly issued, revenues fully paid and nonassessable and subject to no Rights and are owned by the Company or other similar measurea Subsidiary of the Company free and clear of any Liens. Each of the Company's Significant Subsidiaries is in good standing under the laws of the jurisdiction in which it is organized, and is duly qualified to do business and in good standing (with respect to jurisdictions which recognize such concept) in each jurisdiction where its ownership or leasing of property or the conduct of its business requires it to be so qualified.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 1,000,000 shares of common stock, with a par value of Ten United States Cents ($0.01 .10) per share ("the “Company Common Stock"”), and 25,000,000 of which 874,584 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All Other than the Shares, there are no other shares of any capital stock of the Company issued or outstanding. Each Share is validly issued and outstanding and fully paid and non-assessable and owned (beneficially and of record) by the Shareholders, and is free and clear of all Liens (other than Liens arising from the Shareholders’ Agreement or securing Indebtedness, which Liens shall be discharged at or prior to Closing) and is not subject to, nor was issued in violation of, any preemptive rights or rights of first refusal or similar rights. Except as disclosed in Schedule 3.3, no shares of the Company Common Stock are, and all shares are reserved for issuance issuance, nor are there outstanding any options, warrants, calls, puts, rights to subscribe, convertible securities or other rights (including the including, without limitation, preemptive rights or stock appreciation rights) agreements or commitments to issue, dispose of or acquire shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessableStock. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)3.3, there are no outstanding subscriptionsor authorized stock appreciation, options, warrants, phantom stock or similar rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating with respect to the Company or any of its Subsidiaries the Subsidiaries. Except for the Shareholders’ Agreement (which shall be terminated prior to issue the Closing) and the Shareholders’ Agent Agreement, there are no voting trusts, proxies or sell any shares other agreements or understandings with respect to the voting of the capital stock of the Company or to grant, extend any of the Subsidiaries or enter into any Option otherwise with respect thereto to the capital stock of the Company or "phantom" stock rights any of the Subsidiaries. Except as disclosed in Schedule 3.3, neither the Company nor any of the Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise provide acquire or retire any payment or compensation based on "phantom" stock or measured by the value shares of the Company's its capital stock, assets, revenues or other similar measure.

Capital Stock. The 1. As of June 30, 2003, (i) the authorized capital stock Capital Stock of the Company consists consisted solely of 50,000,000 525,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock 209,092,579 were issued and outstanding; no , and 10,000,000 shares were held in the treasury of the Company. Since such datePreferred Stock, there has been no change in the number of which 1,000,000 shares are designated as Series A Senior Convertible Preferred Stock and all 1,000,000 shares are issued and outstanding outstanding, 500,000 shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company are designated as Series B Junior Participating Preferred Stock and none are issued and outstanding, and 6,900,000 shares are designated as Series C Senior Mandatory Convertible Stock of which 6,900,000 shares are issued and outstanding. All Associated with each outstanding share of Common Stock is a preferred stock purchase right issued pursuant to a Rights Agreement dated May 18, 2000 between the Company and American Stock Transfer & Trust Company, as Rights Agent. As of June 30, 2003, there were 19,465,812 shares of Common Stock reserved for issuance upon exercise of outstanding options issued under the Company's stock option and incentive plans. Each share of Capital Stock of the Company that is issued and outstanding shares of Company Common Stock areimmediately following the Closing, and all shares reserved for issuance (including without limitation the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with to be acquired by the terms specified in the instruments or agreements Holders pursuant to which they are issuablethis Agreement, will be duly authorized, authorized and validly issued, issued and fully paid and nonassessable, and the issuance thereof will not have been subject to any preemptive rights or made in violation of any Applicable Law. Since June 30, 2003, the Company has not issued any shares of Capital Stock except upon the exercise or conversion of securities outstanding on June 30, 2003 and securities whose aggregate proceeds have been less than $50 million. Except pursuant to this Agreement and the Company Rights Agreementas set forth above as of June 30, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)2003, there are (i) no outstanding subscriptions, options, warrants, rights (including "phantom" stock agreements, conversion rights), exchange rights, preemptive rights or other contractsrights (whether contingent or not) to subscribe for, commitments, understandings purchase or arrangements, including acquire any right issued or unissued shares of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating Capital Stock of the Company or any of its Subsidiaries to issue Subsidiary, and (ii) no restrictions upon, or sell any shares of capital stock Contracts or understandings of the Company or to grant, extend or enter into any Option Subsidiary with respect thereto to, the voting or "phantom" stock rights or otherwise provide transfer of any payment or compensation based on "phantom" stock or measured by the value shares of Capital Stock of the Company's stock, assets, revenues Company or any Subsidiary other similar measurethan the Shareholders Agreement.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 57,142,857 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 shares of preferred stock, par value $0.01 0.007 per share ("“Company Preferred Stock"”). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof: (i) 24,938,132 shares of Company Common Stock are issued and outstanding, (ii) 5,892,885 shares of Company Common Stock were reserved for issuance pursuant to the Option Plans and no shares of Company Preferred Stock are designated issued or outstanding, (iii) 357,143 shares of Company Common Stock were reserved for issuance upon the exercise of the Company Warrants and outstanding(iv) 9,785,492 shares of Company Common Stock are reserved for issuance upon the conversion of the Convertible Notes. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereofreserved for issuance as noted in clause (ii) will above shall be, upon issuance when issued in accordance with the respective terms specified in the instruments or agreements pursuant to which they are issuablethereof, duly authorized, validly issued, fully paid and nonassessablenon-assessable and free of pre-emptive rights. Except pursuant to this Agreement and Neither the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or nor any of its Subsidiaries to issue directly or sell indirectly own any shares of Company Common Stock. Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries has been duly authorized and validly issued and is fully paid and non-assessable and owned by the Company or to grant, extend by a direct or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value indirect wholly owned Subsidiary of the Company's stock, assetsfree and clear of any mortgage, revenues pledge, hypothecation, security interest, encumbrance, right of offset, claim, easement, lease, sublease, covenant, right of way, option, restriction on use or lien of any kind, or any rights or claims of ownership of others, however evidenced or created (including any agreement to grant any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of or agreement to file any financing statement under the lien notice records or other similar measurelegislation of any jurisdiction) (each, a “Lien”).

Capital Stock. The authorized capital stock As of the date of this Agreement, the Company consists solely of 50,000,000 has (i) 400,000,000 authorized shares of common stock, par value $0.01 per share ("Company Common Stock"), of which 146,748,399 shares were outstanding as of July 7, 2000, and 25,000,000 (ii) 20,000,000 authorized shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"), of which no shares are outstanding. As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees All of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury have been duly authorized and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed have not been issued in violation of any preemptive rights. Set forth on the Company's Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right is a list of conversion or exchange each Compensation and Benefit Plan under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell which any shares of capital stock of the Company or to grant, extend or enter into any Option Rights with respect thereto have been or may be awarded or issued ("phantom" stock rights Company Stock Plans"). As of July 7, 2000, the Company has outstanding Company Options representing the right to acquire 33,614,900 shares of Company Common Stock. Except as described in the immediately preceding sentence, the Company has no Company Common Stock authorized for issuance pursuant to any Company Stock Plans, except that, as of July 7, 2000, there were 15,014,217 shares of Company Common Stock authorized for issuance pursuant to the Company Stock Plans. Except as set forth above, there are no existing Rights of any kind with respect to the Company, and no securities or otherwise provide any payment obligations evidencing such Rights are authorized, issued or compensation based on "phantom" stock or measured by outstanding. Except for the value Convertible Debentures of the Company's stockCompany previously issued to certain key employees of the Company and its Subsidiaries in 2000 prior to the date hereof, assetsthe Company does not have outstanding any bonds, revenues debentures, notes or other similar measureobligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.

Capital Stock. The authorized capital stock capitalization of the Company consists solely as of 50,000,000 June 30, -------------- 2003 is as set forth in the most recent applicable Exchange Act Documents, increased as set forth in the next sentence. The Company has not issued any capital stock since that date other than pursuant to (i) employee benefit plans disclosed in the Exchange Act Documents, or (ii) the exercise of outstanding warrants, options or other securities disclosed in the Exchange Act Documents. The issued and outstanding shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 shares of the Company's preferred stock, par value $0.01 .001 per share (the "Company Preferred Stock"). As of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company and Common Stock were issued have been duly authorized and outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, are fully paid and nonassessable, were not issued in violation of or are not otherwise subject to any preemptive or other similar rights or other rights to subscribe for or purchase securities, and conform to the description thereof contained in the Exchange Act Documents. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)Exchange Act Documents, there are no the Company does not have outstanding subscriptionsany options or warrants to purchase, options, warrants, rights (including "phantom" stock rights), or any preemptive rights or other contractsrights to subscribe for or to purchase, commitmentsany securities or obligations convertible into, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries contracts or commitments to issue or sell sell, shares of its capital stock or other securities or any shares of capital stock or other securities of any subsidiary and there is no commitment, plan or arrangement to issue, any securities or obligations convertible into any shares of capital stock of the Company or to grantany such options, extend rights convertible securities or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value obligations. The description of the Company's capital stock, assetsstock bonus and other stock plans or arrangements and the options or other rights granted and exercised thereunder, revenues contained in the Exchange Act Documents accurately and fairly presents the information required to be shown with respect to such capital stock, plans, arrangements, options and rights. Except as disclosed in the Exchange Act Documents, there are no stockholders agreements, voting agreements or other similar measureagreements with respect to the capital stock of the Company to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

Capital Stock. The authorized capital stock of the Company consists solely of 50,000,000 of: (i) 400,000,000 shares of common stock, par value $0.01 per share Common Stock and ("Company Common Stock"), and 25,000,000 ii) 50,000,000 shares of preferred stock, par value $0.01 0.0001 per share ("Company the “Preferred Stock"”). As At the close of July 10business on August 21, 2002, 15,316,062 2020 (i) 46,132,245 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no (ii) 27,412,393 shares of Series AA Preferred Stock of the Company were issued and outstanding and (iii) 203,000 shares of Series D Preferred Stock of the Company were issued and outstanding. No shares of Common Stock are owned or held in the treasury by any Subsidiary of the Company. Since such dateNo Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as a result of the purchase and sale of the Company Securities, there has been are no change in the number outstanding options, warrants, scrip rights to subscribe to, calls or commitments of issued and outstanding any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Company Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Company Common Stock held in treasury or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As sale of the date hereof, no Company Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchaser). There are no outstanding securities or instruments of the Company Preferred Stock or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. There are issued no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and outstandingthere are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the issued and outstanding shares of capital stock of the Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement , have been issued in compliance with all federal and the Company Rights Agreementstate securities laws, and except as disclosed none of such outstanding shares was issued in the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), violation of any preemptive rights or other contractssimilar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, commitments, understandings the Company’s Board of Directors or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating others is required for the Company or any of its Subsidiaries to issue or sell any shares of capital stock issuance and sale of the Company Securities. There are no stockholders’ agreements, voting agreements or to grant, extend or enter into any Option other similar agreements with respect thereto or "phantom" to the Company’s capital stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by to which the value Company is a party or, to the knowledge of the Company's stock, assets, revenues between or other similar measureamong any of the Company’s stockholders.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 5,000,000 shares of preferred stock, no par value $0.01 per share ("Company Preferred Stock"), none of which Company Preferred Stock is issued and outstanding. As of July 10May 21, 20021999, 15,316,062 13,401,680 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; , no shares were held in the treasury of the Company, and the only shares reserved for issuance as of such date consisted of 796,947 shares which were reserved or held for issuance under the Company's Equity Incentive Plan, 9,525 shares which were reserved or held for issuance under the Company's Non-Employee Director Stock Plan, 528,516 shares which were reserved or held for issuance under the Texas-New Mexico Power Company Thrift Plan for Employees (such Plans, the "Company Option Plans"), and 939,526 shares which were reserved or held for issuance under the Company's Direct Stock Purchase Plan. Since such date, except as set forth in Section 3.02 of the Company Disclosure Letter, as of the date of this Agreement, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were or reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstandingissuance. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Amended and Restated Rights Agreement dated as of August 11, 1998, as amended, by and between the Company and The Bank of New York, as Rights Agent (the "Company Rights Agreement"), pursuant to which the Company has issued rights (the "Company Rights") to purchase shares of Company Common Stock, and except as disclosed in the Disclosure Schedule (as defined set forth in Section 8.113.02 of the Company Disclosure Letter (which includes, without limitation, a list of all currently outstanding awards under the Company Option Plans or under any other plan, program or arrangement providing for the issuance or grant by the Company or any of its Subsidiaries of any interest in respect of the capital stock of the Company or any of its Subsidiaries), as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. The Holding’s authorized capital stock consists of (i) 15,000,000 shares of Holding Common Stock, of which, as of the date of this Agreement, 3,266,481 shares are validly issued and outstanding, and (ii) 1,000,000 authorized shares of Holding Preferred Stock, of which, as of the date of this Agreement, (A) 300,000 shares of Holding Preferred A Stock are authorized, of which, as of the date of this Agreement, 235,421 shares are validly issued and outstanding, and (B) 10,000 shares of Holding Preferred B Stock, of which, as of the date of this Agreement, 1,481 shares are validly issued and outstanding. Set forth in Section 3.3(c) of the Company consists solely Disclosure Letter is a true and complete schedule of 50,000,000 all outstanding Rights to acquire shares of common stock, par value $0.01 per share ("Company Holding Common Stock"), including grant date, vesting schedule, exercise price, expiration date and 25,000,000 shares the name of preferred stock, par value $0.01 per share ("Company Preferred Stock")the holder of such Rights. As None of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees the Rights are “in the money” as of the date hereof. Except as set forth in this Section 3.3(c) or in Section 3.3(c) of the Company but which Disclosure Letter, there are no shares have not of Holding Common Stock or other equity securities of Holding outstanding and no outstanding Rights relating to the Holding Common Stock, and no Person has any Contract or any right or privilege (whether pre-emptive or contractual) capable of becoming a Contract or Right for the purchase, subscription or issuance of any securities of Holding. All of the outstanding shares of Holding Common Stock are duly and validly issued and outstanding and are fully paid and, except as expressly provided otherwise under applicable Law, nonassessable under the FBCA. None of the outstanding shares of Holding Common Stock has been issued in certificated form) violation of Company any preemptive rights of the current or past shareholders of Holding. There are no Contracts among Holding and its shareholders or by which Holding is bound with respect to the voting or transfer of Holding Common Stock were issued and outstanding; no shares were held in or the treasury granting of registration rights to any holder thereof. All of the Companyoutstanding shares of Holding Capital Stock and all Rights to acquire shares of Holding Capital Stock have been issued in compliance with all applicable federal and state Securities Laws. Since such date, there has been no change in the number of All issued and outstanding shares of Company Common Stock or shares capital stock of Company Common Stock held in treasury its Subsidiaries have been duly authorized and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and All of the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company its Subsidiaries are owned by Holding or a wholly owned Subsidiary thereof, free and clear of all Liens. None of its Subsidiaries has outstanding any Right to grant, extend or enter into acquire any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" shares of its capital stock or measured by the value any security convertible into such shares, or has any obligation or commitment to issue, sell or deliver any of the Company's foregoing or any shares of its capital stock. The outstanding capital stock of each of its Subsidiaries has been issued in compliance with all legal requirements and is not subject to any preemptive or similar rights. Neither Holding nor any of its Subsidiaries has any subsidiaries (other than the Bank and the Subsidiaries) or any direct or indirect ownership interest in any firm, assetscorporation, revenues bank, joint venture, association, partnership or other similar measureentity.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 100,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 5,000,000 shares of preferred stock, par value $0.01 0.0001 per share ("Company Preferred Stock"). As of July 1030, 20022001, 15,316,062 (i) 21,501,186 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; no outstanding (excluding 39,891 shares held in treasury), (ii) 2,683,938 shares were held reserved for issuance upon the exercise of outstanding warrants, (iii) 5,401,290 shares were reserved for issuance under the Company's stock option plans, of which options to purchase 4,664,739 shares were outstanding, and (iv) 2,505,991 shares were reserved for issuance upon the exercise of other options. Except as set forth in the treasury Section 2.03(a) of the Company. Since Company Disclosure Schedule, since such date, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectivelyStock. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares of Common Stock reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except pursuant to other Subscription Agreements entered into in connection with the Offering, as disclosed in the Disclosure Schedule Company SEC Reports (as defined below) filed prior to the date of this Agreement or as set forth in Section 8.11)2.03(a) of the Company Disclosure Schedule, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or of any Subsidiary or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. The At the date hereof the authorized capital stock of the Company consists solely of 50,000,000 5,000,000 shares of common stock, $.01 par value $0.01 per share (the "Company Common Stock"), of which 1,919,716 shares are issued and 25,000,000 outstanding, which such shares are owned by the persons and in the amounts indicated on Schedule 4.q. hereto, and 5,000,000 shares of preferred stock, par value $0.01 per share ("Company Series A Preferred Stock", none of which are outstanding (without giving effect to the sale of Preferred Shares offered hereby). As All of July 10, 2002, 15,316,062 the outstanding shares (including restricted of capital stock issued to employees of the Company but which shares were duly authorized and validly issued and are fully paid and nonassessable, except that (i)stock certificates have not been issued and delivered by the Company to purchasers of Common Stock in certificated form) the private placement of Company Common Stock were issued common stock sold in March and outstanding; no April 1999, and (ii) common shareholders approved the increase of authorized common stock to five million shares were held in the treasury of June 1999, effective April 20, 1999, after an amendment to the Company's articles of incorporation were filed on April 20, 1999. Since such date, there has been no change in the number of issued and Except with respect to outstanding options to purchase 251,250 shares of Company Common Stock or shares of common stock held by Company Common Stock held in treasury employees and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)consultants, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights)calls, preemptive rights or other contracts, demands, commitments, understandings convertible securities or arrangementsother agreements or arrangements of any character or nature whatever, including other than as contemplated by this Agreement under which the Company is obligated to issue any right securities of conversion any kind representing an ownership interest in the Company. Neither the offer nor the issuance or exchange sale of the Preferred Shares or the Conversion Shares constitute, or will constitute, an event under any outstanding security, instrument anti-dilution provisions of any securities issued or agreement (together, "Options"), obligating issuable by the Company or any agreements with respect to the issuance of its Subsidiaries securities by the Company, which will either increase the number of shares issuable pursuant to issue such provisions or sell decrease the consideration per share to be received by the Company pursuant to such provisions. Except as contemplated by this Agreement, no holder of any shares of capital stock security of the Company is entitled to any preemptive or similar rights to grant, extend or enter into purchase any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value securities of the Company from the Company's stock; provided, assetshowever that nothing in this Section 4.q. shall affect, revenues alter or other similar measurediminish any right granted to the Subscriber in this Agreement. All outstanding securities of the Company have been issued in full compliance with an exemption or exemptions from the registration and prospectus delivery requirements of the Securities Act and from the registration and qualification requirements of all applicable state securities laws.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 90,000,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), Stock and 25,000,000 10,000,000 shares of preferred stock, par value $0.01 0.0001 per share ("Company Preferred Stock"). As of July 10June 30, 2002, 15,316,062 (i) 44,966,267 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; , (ii) 11,270,041 shares were reserved for issuance upon the exercise of outstanding warrants, (iii) 8,000,000 shares were reserved for issuance under the Company's stock option plans, of which options to purchase 4,725,417 shares were outstanding, and (iv) no shares were held in reserved for issuance upon the treasury exercise of other options. As of the Companydate hereof, 50 shares of Preferred Stock are issued and outstanding. Since Except as contemplated by Sections 5.01(d) and (e) hereof, since such date, date there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstandingStock. All of the issued and outstanding shares of Company Common Stock areand Preferred Stock and, and except for the Preferred Stock to be repurchased pursuant to Section 5.01(d) hereof, all shares of Common Stock reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to as contemplated by this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or of any Subsidiary or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 20,000,000 shares of common stock, par value $0.01 per share ("Company Class A Common Stock"), 25,000 shares of Class B Common Stock, and 25,000,000 12,000,000 shares of Company Series A Preferred Stock (and no other shares of preferred stock, par value $0.01 per share ("Company Preferred Stock"). As of July 10December 31, 20021999, 15,316,062 2,260,997 shares (including restricted stock issued to employees of Company Series A Preferred Stock, 3,237,158 shares of Class A Common Stock and 20,500 shares of Class B Common Stock of the Company but which shares have not been issued in certificated form) of Company Common Stock were issued and outstanding; , 1,871,603 shares of Company Series A Preferred Stock, 1,871,603 shares of Class A Common Stock and no shares of Class B Common Stock of the Company were held in the treasury of the CompanyCompany and no shares of Company Series A Preferred Stock, no shares of Class A Common Stock and no shares of Class B Common Stock of the Company were reserved for issuance. Since such date, except as set forth in Section 3.02 of the Company Disclosure Letter, there has been no change in the number of issued and outstanding shares of Company Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were or reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereof, no shares of Company Preferred Stock are issued and outstandingissuance. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and except as set forth in Section 3.02 of the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)Letter, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. (a) The authorized capital stock of the Company consists solely of 50,000,000 150,000,000 shares of common stockClass A Common Stock, 2,000,000 shares of Class B Common Stock, par value $0.01 .01 per share ("Company Class B Common Stock"), 13,000,000 shares of Class C Common Stock, and 25,000,000 10,000,000 shares of preferred stock, par value $0.01 .01 per share ("Company Preferred Stock"). As of July 10February 25, 20022000, 15,316,062 10,083,485 and 5,126,163 shares (including restricted stock issued to employees of the Company but which shares have not been issued in certificated form) of Company Class A Common Stock and Class C Common Stock, respectively, were issued and outstanding; no , 13,245 and 28,969 shares of Class A Common Stock and Class C Common Stock, respectively, were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding 5,126,163 shares of Company Class A Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance upon conversion of outstanding shares of Class C Common Stock and 1,487,025 shares of Class A Common Stock were reserved for issuance upon exercise of options outstanding under the Company's 1993 Stock Company Option Plan and Parallel Non-Qualified Savings Plan, respectivelyPlans. As of the date hereof, no shares of Class B Common Stock or Company Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and except as set forth in Section 4.02 of the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11)Letter, there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights or "shareholder rights" or "poison pills"), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company or to grant, extend or enter into any Option with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by the value of the Company's stock, assets, revenues or other similar measurethereto.

Capital Stock. The (a) Immediately prior to the filing of the Restated Charter, the authorized capital stock of the Company consists solely of 50,000,000 2,500,000 shares of common stock, par value $0.01 per share ("Company Common Stock"), and 25,000,000 3,500,000 shares of preferred stockClass A Common Stock, par value $0.01 per share ("Company 1,500,000 shares of Class B Common Stock, 5,725 shares of Series A Preferred Stock and 39,000 shares of Series B Preferred Stock"). As Immediately prior to the consummation of July 10, 2002, 15,316,062 shares (including restricted stock issued to employees any of the Company but which Transactions, 1,488,905 shares have not been issued in certificated form) of Company Common Stock were issued and are outstanding; no shares were held in the treasury of the Company. Since such date, there has been no change in the number of issued and outstanding 2,350,000 shares of Company Class A Common Stock or shares of Company Common Stock held in treasury and 413,398 and 775,644 shares were reserved for issuance under the Company's 1993 Stock Option Plan and Parallel Non-Qualified Savings Plan, respectively. As of the date hereofare outstanding, no shares of Company Class B Common Stock are outstanding, 5,725 shares of Series A Preferred Stock are issued outstanding and 34,816 shares of Series B Preferred Stock are outstanding. All of the issued and foregoing outstanding shares of Company Common Stock are, and all shares reserved for issuance (including the shares of New Preferred Stock issuable in the Offer and the shares of Company Common Stock issuable on conversion thereof) will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. Except pursuant to this Agreement and the Company Rights Agreement, and except as disclosed in the Disclosure Schedule (as defined in Section 8.11), there are no outstanding subscriptions, options, warrants, rights (including "phantom" stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, "Options"), obligating the Company or any of its Subsidiaries to issue or sell any shares of capital stock of the Company are owned of record by the Shareholders in the amounts set forth in Schedule 4.3. All of such shares are validly issued, fully paid and non-assessable and have been issued in compliance with all applicable Laws including, without limitation, applicable securities Laws. Except as set forth in Schedule 4.3 or on Schedule II, there are no securities of the Company presently outstanding, and on the Closing Date there will not be any outstanding securities of the Company, which are convertible into, exchangeable for, or carrying the right to grantacquire, extend equity securities of the Company, or enter into subscriptions, warrants, options, calls, puts, convertible securities, registration or other rights, arrangements or commitments obligating the Company to issue, sell, register, purchase or redeem any Option of its equity securities or any ownership interest or rights therein. Except as set forth in Schedule 4.3, there are no voting trusts or other agreements or understandings to which the Company is bound with respect thereto or "phantom" stock rights or otherwise provide any payment or compensation based on "phantom" stock or measured by to the value voting of the Company's capital stock. There are no stock appreciation rights, assets, revenues phantom stock rights or other similar measurerights or arrangements outstanding.