Common use of Company Capital Structure Clause in Contracts

Company Capital Structure. In the case of the Company, the authorized capital stock of the Company consists of 500,000,000 shares of Company Common Stock and 50,000,000 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.

Company Capital Structure. In the case of the Company, the The authorized capital stock of the Company consists of 500,000,000 50,000,000 shares of Common Stock, $0.01 par value per share (the "Company Common Stock"), of which there were an aggregate of 13,362,540 shares issued and outstanding as of the close of business on July 27, 1998 (with no shares held in treasury) plus shares of Company Common Stock to be issued due to the exercise of Options since July 14, 1998, and 50,000,000 2,000,000 shares of preferred stockPreferred Stock, $0.01 par value $0.01 per share (“Company Preferred Stock”)share, of which no shares are issued or outstanding. As All outstanding shares of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been are duly authorized, validly issued, fully paid and nonassessable and free are not subject to preemptive rights created by statute, the Certificate of preemptive rightsIncorporation or Bylaws of the Company or any agreement or document to which the Company is a party or by which it is bound. The As of July 27, 1998, the Company has no reserved an aggregate of 4,552,000 shares of the Company Common Stock, net of exercises, for issuance pursuant to the Company Stock Plans and is obligated to issue 22,511 shares of Company Common Stock or Company Preferred pursuant to the Company's Employee Stock reserved for issuancePurchase Plan during the current purchase period. As of July 27, except that, as of the Measurement Date1998, there were Options outstanding to purchase an aggregate of 2,818,386 (a) 3,913,542 minus shares of Company Common Stock reserved for future issuance under issued upon exercise of Options since July 14, 1998) shares of the Company Common Stock pursuant to the Company Stock Plans. As of July 27, (b) 867,802 1998, there were Warrants outstanding to purchase an aggregate of 59,668 shares of the Company Common Stock. All shares of the Company Common Stock subject to outstanding Company Option Awardsissuance as aforesaid, upon issuance on the terms and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, would be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable. The Company Schedule lists for each person who held Options or Warrants as of July 27, and each 1998, the name of the outstanding holder, the exercise price of such Option or Warrant, the number of shares as to which such Option or Warrant had vested at such date, the vesting schedule for such Option or Warrant, whether the exercisability of capital stock such Option or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record Warrant will be accelerated in any way by the Company or transactions contemplated by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights and the extent of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company such acceleration; provided that such schedule does not have outstanding any bondsreflect Option exercises since July 14, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter1998.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 shares of Company Common Stock and of: (i) 50,000,000 shares of preferred stockVoting Common Stock, no par value value, of the Company (the "Company Voting Common Stock") and 1,000,000 shares of Non Voting Common Stock, no par value, of the Company (the "Company Non Voting Common Stock" and, together with the Company Voting Common Stock, the "Company Common Stock"); (ii) 500,000 shares of Class A Convertible 8% Cumulative Preferred Stock, no par value, of the Company (the "Class A Preferred Stock"); (iii) 500,000 shares of Class B Convertible 8% Cumulative Preferred Stock, no par value, of the Company, ("Class B Preferred Stock"); and (iv) 100,000 shares of 133/4 Senior Cumulative Exchangeable Preferred Stock, $0.01 per share par value, of the Company (“Company Preferred Stock”"Exchangeable Preferred"). As of the Measurement Datedate hereof, (ix) 228,209,888 3,728,666.2150 shares of Company Voting Common Stock; 552,271.8965 shares of Company Non Voting Common Stock; 1554.8710 shares of Class A Preferred Stock (excluding treasury shares) and 65,668.2 shares of Exchangeable Preferred were issued and outstanding (including 119,422 outstanding, all of which were validly issued, fully paid and nonassessable, and no shares of Company Common Class B Preferred Stock subject to outstanding Company Restricted Stock Awards), were issued and outstanding; (iiy) no shares of Company Common Stock were held by in the treasury of the Company in its treasury or by Subsidiaries of the Company; and (iiiz) no 6,518,486.6 shares of Company Preferred Voting Common Stock were reserved for issuance pursuant to the following: (A) 145,235.8330 shares pursuant to the 1998 Employee Stock Option Plan; (B) 140,375 shares pursuant to the 1998 Key Management Stock Option Plan; (C) 331,200 shares pursuant to the 1998 Stock Option Agreement entered into between the Company and each of Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxx; (D) 575,758.5360 shares pursuant to the 1997 Stock Option Plan; (E) 53,640 shares pursuant to the Company 1999 Stock Incentive Plan; (F) subjection to the provisions of Section 6.21 hereof, 599,916 shares pursuant to the Company 1999 ISP Stock Plan; (G) 97,830.00 shares pursuant to the Company ISP Employee Stock Option Plan; (H) 322,000.00 shares pursuant to an option agreement entered into with Xxxxxx X. Xxxxxx dated December 10 , 1999; (I) 1,554,871 shares pursuant to the conversion of the Class A Preferred Stock; (J) 3,016,060.35 shares pursuant to Warrants (as defined below), of which 1,308,195.65 are attributable to Warrants issued in connection with the Class A Preferred Stock, 438,870 are attributable to Warrants issued in connection with the Exchangeable Preferred, 18,994.7 are attributable to Warrants issued to Xxxx, Xxxxxx & Company and outstanding1,250,000 are attributable to the LaSalle Options (as defined below). As used herein, the term "Warrants" means (i) warrants to purchase Company Common Stock and (ii) options (the "LaSalle Options") issued pursuant to a Contribution and Indemnity Agreement, dated June 24, 1996, and any amendments thereto. All of the outstanding shares of Company Voting Common Stock have been subject to issuance as specified above, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be duly authorized, validly issued, fully paid and nonassessable and free nonassessable. There are no obligations, contingent or otherwise, of preemptive rights. The the Company has no or any of its Subsidiaries to repurchase, redeem or otherwise acquire any such shares of Company Common Stock capital stock or Company Preferred Stock reserved for issuance, except that, as the capital stock of any of the Measurement DateCompany's Subsidiaries or make any investment (in the form of a loan, there were (acapital contribution or otherwise) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and in any such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash)Subsidiary or any other entity. Each All of the outstanding shares of capital stock or other securities of each Subsidiary of the Company’s Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding all such shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is are owned beneficially and of record by the Company or by a direct or indirect wholly owned another Subsidiary of the Company, Company free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Actall security interests, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreementliens, as of the date of this Agreementclaims, there are no outstanding subscriptionspledges, options, warrants, puts, call agreements, understandingslimitations on voting rights, claims limitations on transfer, charges or other agreements, commitments or rights encumbrances of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not nature (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any mattercollectively "Liens").

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 of: (i) 100,000,000 shares of Company Common Stock Stock, of which 52,676,876 shares had been issued and 50,000,000 were outstanding as of the date hereof; and (ii) 4,000,000 shares of preferred stock, par value $0.01 0.001 per share share, of which (“Company A) no shares are outstanding as of the date of this Agreement and (B) 350,000 shares of which have been designated as Series E-3 Preferred Stock and 250,000 shares of which have been designated as Series F Junior Participating Preferred Stock”). As of the Measurement Datedate hereof, (i) 228,209,888 an aggregate of $5.0 million principal amount of convertible promissory notes are outstanding, which are convertible into shares of Company Common Stock based on the market price of the Company Common Stock. All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued, and are fully paid and nonassessable. As of the date of this Agreement, there are no shares of Company Common Stock held in treasury by the Company. Upon consummation of the Merger, (excluding treasury sharesA) were the shares of Parent Common Stock issued in exchange for any shares of Company Common Stock that are subject to a Contract pursuant to which the Company has the right to repurchase, redeem or otherwise reacquire any shares of Company Common Stock will, without any further act of Parent, the Company or any other person, become subject to the restrictions, conditions and other provisions contained in such Contract, and (B) Parent will automatically succeed to and become entitled to exercise the Company's rights and remedies under any such Contract. (b) As of the date of this Agreement: (i) 10,967,436 shares of Company Common Stock are subject to issuance pursuant to outstanding options to purchase Company Common Stock under the Company Stock Option Plans(excluding options granted pursuant to Section 5.9(d) hereof) for an aggregate exercise price of $224,746,618; and (including 119,422 ii) 680,665 shares of Company Common Stock are reserved for future issuance under the Company Purchase Plan. (Stock options granted by the Company pursuant to the Company Stock Option Plans are referred to in this Agreement as "COMPANY OPTIONS"). Part 2.2(b) of the Company Schedules sets forth the following information with respect to each Company Option outstanding as of the date of this Agreement: (i) the name of the optionee; (ii) the particular plan pursuant to which such Company Option was granted; (iii) the number of shares of Company Common Stock subject to outstanding such Company Restricted Stock Awards), Option; (iiiv) no shares the exercise price of such Company Common Stock were held Option; (v) the date on which such Company Option was granted or assumed; (vi) the date on which such Company Option expires and (vii) whether the exercisability of such option will be accelerated in any way by the Company in its treasury transactions contemplated by this Agreement, and (iii) no shares indicates the extent of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been duly authorized, validly issued, fully paid and nonassessable and free of preemptive rightsacceleration. The Company has no shares made available to Parent accurate and complete copies of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under all stock option plans pursuant to which the Company Stock Planshas granted stock options that are currently outstanding, (b) 867,802 the form of all stock option agreements evidencing such options and the applicable vesting schedule for each such option. All shares of Company Common Stock subject to outstanding Company Option Awardsissuance as aforesaid, upon issuance on the terms and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, would be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable. Except as set forth in Part 2.2(b)(i) of the Company Schedules, there are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Company Option as a result of the Merger. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and each of the all outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities subsidiary of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.been

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of: (i) 30,000,000 shares of 500,000,000 Company Common Stock, $0.01 par value, of which 13,006,557 shares have been issued and are outstanding as of the date of this Agreement; and (ii) 5,000,000 shares of preferred stock, $0.01 par value, of which no shares are outstanding as of the date of this Agreement. All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued, and are fully paid and nonassessable. As of the date of this Agreement, there are no shares of Company Common Stock and 50,000,000 held in treasury by the Company. Upon consummation of the Merger, (A) the shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 Parent Common Stock issued in exchange for any shares of Company Common Stock that are subject to a Contract pursuant to which the Company has the right to repurchase, redeem or otherwise reacquire any shares of Company Common Stock will, without any further act of Parent, the Company or any other person, become subject to the restrictions, conditions and other provisions contained in such Contract, and (excluding treasury sharesB) were issued Parent will automatically succeed to and become entitled to exercise the Company's rights and remedies under any such Contract. (b) As of the date of this Agreement: (i) 836,814 shares of Company Common Stock are subject to issuance pursuant to outstanding options to purchase Company Common Stock under the Company Stock Option Plans; (including 119,422 ii) 300,000 shares of Company Common Stock are reserved for future issuance under the Company Purchase Plan; and (iii) 1,334,050 shares of Company Common Stock are subject to issuance pursuant to warrants to purchase Company Common Stock as set forth on Part 2.2 of the Company Schedules. Stock options granted by the Company pursuant to the Company Stock Option Plans are referred to in this Agreement as "COMPANY OPTIONS". Part 2.2(b) of the Company Schedules sets forth the following information with respect to each Company Option outstanding as of the date of this Agreement: (i) the name of the optionee; (ii) the particular plan pursuant to which such Company Option was granted; (iii) the number of shares of Company Common Stock subject to outstanding such Company Restricted Stock Awards), Option; (iiiv) no shares the exercise price of such Company Common Stock were held Option; (v) the date on which such Company Option was granted; (vi) the applicable vesting schedule; (vii) the date on which such Company Option expires and (viii) whether the exercisability of such option will be accelerated in any way by the Company in its treasury transactions contemplated by this Agreement, and (iii) no shares indicates the extent of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been duly authorized, validly issued, fully paid and nonassessable and free of preemptive rightsany such acceleration. The Company has no shares made available to Parent accurate and complete copies of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under all stock option plans pursuant to which the Company Stock Plans, (b) 867,802 has granted stock options that are currently outstanding and the form of all stock option agreements evidencing such options. All shares of Company Common Stock subject to outstanding Company Option Awardsissuance as aforesaid, upon issuance on the terms and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, would be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable. Except as set forth in Part 2.2(b)(i) of the Company Schedules, there are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Company Option as a result of the Merger. (c) All outstanding shares of Company Common Stock, all outstanding Company Options, and each of the all outstanding shares of capital stock or other securities of each subsidiary of the Company’s Significant Subsidiaries is owned beneficially Company have been issued and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free granted in compliance with (i) all applicable securities laws and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions)Legal Requirements (as defined below) and (ii) all requirements set forth in applicable Contracts. Except for For the Company Stockholders Agreement, as of the date purposes of this Agreement, there are no outstanding subscriptions"LEGAL REQUIREMENTS" means any federal, optionsstate, warrantslocal, putsmunicipal, call agreements, understandings, claims foreign or other agreementslaw, commitments statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or rights requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not Governmental Entity (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterdefined below).

Company Capital Structure. In the case of the Company, the The authorized capital stock of the Company consists of 500,000,000 30,000,000 shares of Common Stock, $0.01 par value per share, of which there were 12,902,565 shares issued and outstanding as of the date of this Agreement and 5,000,000 shares of Preferred Stock, $0.01 par value per share, of which no shares are issued or outstanding as of the date of this Agreement. All outstanding shares of the Company Common Stock and 50,000,000 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been are duly authorized, validly issued, fully paid and nonassessable and free are not subject to preemptive rights created by statute, the Certificate of preemptive rightsIncorporation or Bylaws of the Company or any agreement or document to which the Company is a party or by which it is bound. The As of the date of this Agreement, the Company has no had reserved an aggregate of 3,120,084 shares of the Company Common Stock or Company Preferred Stock reserved for issuanceissuance to employees, except thatconsultants and non-employee directors pursuant to the 1989 Plan, the 1992 Plan, the 1998 Plan and the Assumed Orchid Options, of which, as of the Measurement Datedate of this Agreement, there options for an aggregate of 831,867 shares had been exercised, options to purchase an aggregate of 1,317,244 shares were outstanding and an aggregate of 970,973 shares remained available for future grants. There are no shares reserved for issuance or issuable under the Company's Employee Stock Purchase Plan (a) 3,913,542 the "ESPP"). All shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject issuance pursuant to outstanding Company RSU Awardsstock options or purchase agreements entered into in connection with such plans, upon issuance on the terms and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, would be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable. The Company Schedules list for each person who held restricted stock or options, and each the name of the outstanding holder of such shares or option, the exercise price of capital stock such option, the number of shares which will have vested at such date, the vesting schedule for such shares or other securities of each option and whether the lapsing of the Company’s Significant Subsidiaries is owned beneficially and 's repurchase rights or exercisability of record such option will be accelerated in any way by the Company or transactions contemplated by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptionsand indicate the extent of acceleration, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterif any.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 42,619,321 shares of Company Common Stock Stock, of which 7,993,658 shares are issued and 50,000,000 outstanding on the date hereof; 4,518,903 shares of preferred stockCompany Series A Preferred Stock, par value $0.01 per all of which are issued and outstanding; 9,391,931 shares of Company Series B Preferred Stock, all of which are issued and outstanding; 8,563,815 shares of Company Series C Preferred Stock, all of which are issued and outstanding; and 4,933,623 shares of Company Series D Preferred Stock, all of which are issued and outstanding. Each share (“of Company Preferred Stock is convertible on a one-share-for-one-share basis into Company Common Stock”). As of the Measurement Datedate hereof, (i) 228,209,888 shares of the Company Common Capital Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were is held by the Company Persons and in its treasury the amounts set forth in Section 2.5(a) of the Disclosure Schedule which further sets forth for each such Person the number of shares held, class and/or series of such shares, the number of the applicable stock certificates representing such shares and (iii) no shares the domicile addresses of Company Preferred Stock were issued and outstandingrecord of such Persons. All of the outstanding shares of Company Common Capital Stock have been are duly authorized, validly issued, fully paid and nonassessable non-assessable and free are not subject to preemptive rights created by statute, the Charter Documents, or any agreement to which the Company is a party or by which it is bound. (b) All outstanding shares of preemptive Company Capital Stock (including Company Restricted Stock), Company Options, Company RSUs and Company Warrants have been issued or repurchased (in the case of shares that were outstanding and repurchased by the Company or any stockholder of the Company) in compliance with all applicable Legal Requirements, and were issued, transferred and repurchased (in the case of shares that were outstanding and repurchased by the Company or any stockholder of the Company) in accordance with any right of first refusal or similar right or limitation Known to the Company. No Stockholder has exercised any right of redemption, if any, provided in the Certificate of Incorporation with respect to shares of the Company Preferred Stock, and the Company has not received notice that any Stockholder intends to exercise such rights. There are no declared or accrued but unpaid dividends with respect to any shares of Company Capital Stock. Other than the Company Capital Stock set forth in Section 2.5(a) of the Disclosure Schedule, the Company has no other capital stock authorized, issued or outstanding. (c) Section 2.5(c) of the Disclosure Schedule sets forth for all holders of Company Restricted Stock, the name of the holder of such Company Restricted Stock, the date of purchase of such Company Restricted Stock, the purchase price of such Company Restricted Stock, the repurchase price of such Company Restricted Stock, whether such Company Restricted Stock was acquired pursuant the exercise of an incentive stock option (as defined in Section 422 of the Code) and the vesting schedule for such Company Restricted Stock (including whether the vesting of such Company Restricted Stock is subject to acceleration as a result of the transactions contemplated by this Agreement or any other events), and whether, to the Knowledge of the Company, the holder has made a timely election with the Internal Revenue Service under Section 83(b) of the Code with respect to such Company Restricted Stock. (d) All holders of Company Restricted Stock are current employees of the Company. To the Knowledge of the Company, each holder of Company Restricted Stock has made a timely election with the Internal Revenue Service under Section 83(b) of the Code with respect to such Company Restricted Stock. (e) Except for the Plan, neither the Company nor any Subsidiary has ever adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity-related compensation to any person (whether payable in shares, cash or otherwise). The Company has no reserved 6,185,132 shares of Company Common Stock for issuance to employees and directors of, and consultants to, the Company upon the issuance of stock or Company Preferred Stock reserved for issuance, except that, as the exercise of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance options or restricted stock units granted under the Company Stock PlansPlan, of which (bi) 867,802 3,894,570 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreementare issuable, as of the date hereof, upon the exercise of this Agreementoutstanding, there are no unexercised options or restricted stock units granted under the Plan, (ii) 1,104,792 shares have been issued upon the exercise of options or purchase of restricted stock granted under the Plan and remain outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights as of any type relating to the issuance, sale, redemption or transfer by date hereof and (iii) 1,185,770 shares remain available for future grant. Each Company Option was originally granted with an exercise price that the Company Board of any equity securities Directors of the Company or its Subsidiariesin good faith, nor are there outstanding any securities which are convertible into or exchangeable for any shares based on a reasonable valuation method utilized at the time of capital stock grant, determined to be at least equal to the fair market value of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares a share of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through on the date of grant. The terms of the Plan and the applicable agreements for each Company Option or Company RSU permit the assumption or substitution of options to purchase Parent Common Stock or Parent RSUs, as applicable, and the termination of Company Options and Company RSUs as provided in this Agreement, without the consent or approval of the holders of such securities, the Stockholders or otherwise and without any acceleration of the exercise schedules or vesting provisions in effect for such Company Options or Company RSUs. True and complete copies of all agreements and instruments relating to or issued under the Plan have been Made Available and such agreements and instruments have not been amended, modified or supplemented, and there are no agreements to amend, modify or supplement such agreements or instruments from the forms thereof Made Available. No holder of Company Options has not (A) issued the ability to early exercise any Company Options for shares of Company Common Restricted Stock under the Plan or any other Contract relating to such Company Options. (other than f) Section 2.5(f) of the Disclosure Schedule sets forth for each outstanding Company Option, Company RSU and Company Warrant, the name of the holder, the type of entity of such holder, the domicile address of record of such holder, whether such holder is an employee of the Company, the number of shares of Company Capital Stock issuable upon the exercise of such option, restricted stock unit or settlement warrant (as applicable), the date of Company Equity Awards outstanding grant, the exercise price (if any), the vesting schedule, including the extent vested to date and whether such vesting is subject to acceleration as a result of the Measurement Datetransactions contemplated by this Agreement or any other events, and, for any option, whether such option is a nonstatutory option or intended to qualify as an incentive stock option as defined in Section 422 of the Code. (g) There are no outstanding loans or Indebtedness involving, on the one hand, the Company and on the other hand, any of the Stockholders. (Bh) granted any Company Equity Awards or similar awards. The Company does not have outstanding any No bonds, debentures, notes or other obligations indebtedness of the holders of which have Company or any Subsidiary (i) having the right to vote on any matters on which stockholders may vote (or which is convertible into into, or exercisable for exchangeable for, securities having such right) or (ii) the right value of which is in any way based upon or derived from capital or voting stock of the Company, are issued or outstanding as of the date hereof. (i) As of the date hereof, an aggregate of 1,542,492 shares of Company Common Stock are issuable upon the exercise of outstanding Company Warrants and no shares of Company Preferred Stock are issuable upon the exercise of outstanding Company Warrants. Except for the Company Options, Company RSUs and Company Warrants, there are no options, warrants, calls, rights, convertible securities, commitments or agreements of any character, written or oral to vote) with which the stockholders Company or any Subsidiary is a party or by which the Company is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Company on or obligating the Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any mattersuch option, warrant, call, right, commitment or agreement. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to the Company or any Subsidiary (whether payable in shares, cash or otherwise). Except as contemplated hereby, there are no voting trusts, proxies, or other agreements or understandings with respect to the voting stock of the Company or any Subsidiary, and there are no agreements to which the Company or any Subsidiary is a party relating to the registration, sale or transfer (including agreements relating to rights of first refusal, co-sale rights or “drag-along” rights) of any Company Capital Stock. As a result of the Merger, Parent will be the sole record and beneficial holder of all issued and outstanding Company Capital Stock and all rights to acquire or receive any shares of Company Capital Stock, whether or not such shares of Company Capital Stock are outstanding. (j) The allocation of the Total Consideration set forth in Article I hereof is consistent with the certificate of incorporation of the Company as amended as of immediately prior to the Effective Time. (k) The Company represents and warrants that Section 2.5(k) of the Disclosure Schedule is true and correct. (l) Section 2.5(l) of the Disclosure Schedule sets forth the Company’s current good faith best estimate of the Stockholders that are Unaccredited Investors.

Company Capital Structure. In the case of the Company, the (a) The authorized share capital stock of the Company consists of 500,000,000 50,000,000 shares of Company Common Stock Capital Stock, of which 18,729,571 shares were issued and 50,000,000 outstanding as of the close of business on October 27, 2021. The Company held no shares of preferred stockits capital stock in treasury as of the close of business on October 27, par value $0.01 per share (“Company Preferred Stock”)2021. As of the Measurement Dateclose of business on October 27, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) 2021, there were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Capital Stock were held by the Company in its treasury and reserved for issuance, except (iiii) no 334,579 shares of Company Preferred Capital Stock reserved for issuance under the Company Stock Plan, of which (A) 105,471 shares of Company Capital Stock were issued reserved for issuance upon the settlement or vesting of outstanding Company RSUs, including outstanding Company deferred stock units and outstanding. (B) 229,108 shares of Company Capital Stock were reserved for issuance upon the settlement or vesting of outstanding Company PSUs (assuming achievement of applicable performance goals at maximum value) and (ii) 3,484 shares of Company Capital Stock reserved for issuance under the ESPP. (b) All of the outstanding shares of Company Common Capital Stock have been duly authorized, authorized and are validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance pledge, lien, charge, option, hypothecation, mortgage, security interest, adverse right, restriction, prior assignment, license, sublicense or any other encumbrance of any kind or nature whatsoever, whether contingent or absolute, or any agreement, option, right or privilege (whether by Law, Contract or otherwise) capable of becoming any of the foregoing (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions, an “Encumbrance”, and any action of correlative meaning, to “Encumber”). Except for the Company Stockholders Agreement, as As of the date of this Agreement, except as set forth in this Section 4.3, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating that obligate the Company to the issuanceissue, sale, redemption sell or transfer by the Company of any equity securities of the Company or its SubsidiariesCompany, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its SubsidiariesCompany. The shares class of Company Common Capital Stock are is registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders shareholders of the Company on any matter. Section 4.3 of the Company Disclosure Letter sets forth, as of the date of this Agreement, the amount of cash dividends accrued with respect to Company RSUs and Company PSUs.

Company Capital Structure. In the case of the Company, the The authorized capital stock of the Company consists of 500,000,000 shares of Company Common Stock and 50,000,000 shares of preferred stockCommon Stock, $.01 par value $0.01 per share (“Company Preferred Stock”). As value, of the Measurement Date, (i) 228,209,888 which 21,520,965 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 and 512,708 shares were held in the Company's treasury as of May 4, 2001, and 5,000,000 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards)Preferred Stock, (ii) no shares $0.01 par value, all of Company Common Stock were held by the Company in its treasury which are undesignated and (iii) no shares none of Company Preferred Stock were which is issued and or outstanding. All of the issued and outstanding shares of Company Common Stock have been duly authorized, and all such issued and outstanding shares have been validly issued, are fully paid and nonassessable nonassessable, are not subject to any preemptive rights (and were not issued in violation of any preemptive rights) and are free of preemptive rightsany liens or encumbrances other than any liens or encumbrances created by or imposed upon the holders thereof. The Company has no Each of the outstanding shares of Company Common Stock and outstanding shares of capital stock or Company Preferred Stock reserved for issuance, except that, as other equity interests of the Measurement DateCompany's subsidiaries was issued in compliance with all applicable federal and state laws concerning the issuance of securities. No bonds, there were debentures, notes or other indebtedness of the Company having the right to vote on any matters on which stockholders of the Company may vote are issued or outstanding. As of May 21, 2001, the Company had reserved (ai) 3,913,542 17,200,000 shares of Company Common Stock reserved for future issuance under to employees, directors and consultants pursuant to the Company Stock Option Plans, under which options were outstanding for 10,823,483 shares and 2,553,284 shares remained available for future option grants and (bii) 867,802 750,000 shares of Common Stock for issuance pursuant to the Company ESPP. All shares of Company Common Stock subject to outstanding Company Option Awardsissuance as aforesaid, upon issuance on the terms and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, shall be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each . The Company Schedules include a list of the outstanding shares all issuances of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary since January 1, 1998 (other than issuances pursuant to options under the Company Stock Option Plans and the Company ESPP) and also list for each outstanding option at May 4, 2001, the name of the Company, free and clear holder of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Actoption, the “blue sky” Laws number of shares subject to such option, the exercise price of such option, the number of shares as to which such option will have been vested at May 4, 2001 and, if the exercisability of such option will be accelerated in any way by the transactions contemplated by this Agreement or for any other reason, an indication of the various States extent of such acceleration. Such list also describes any repricing of options which has taken place since January 1, 1998. The Company Schedules also include a list of all the United States or similar Law of other applicable jurisdictions). Except for participants in the Company Stockholders Agreement, as ESPP and the number of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under which will be issuable to the Exchange Actparticipants therein for the offering period ending June 30, 2001 if all current participants continue to contribute at current levels (assuming the purchase price of such shares to be 85% of the fair market value of the Company Common Stock on the first day of the current offering period). Since May 4, 2001, there have been no changes in the Measurement Date and through the date capital structure of this Agreement, the Company has not (A) issued any shares other than issuances of Company Common Stock (other than i) upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) options granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of under the Company on any matterStock Option Plans and (ii) pursuant to the Company ESPP.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 300,000,000 shares, consisting of 100,000,000 shares of Company Common Stock Stock, par value $0.001 per share, and 50,000,000 25,000,000 shares of preferred stock, par value $0.01 0.001 per share (“share. The Company has approximately 5,666,420 shares of Common Stock, 10 shares of Series A Preferred Stock”). As , and no of the Measurement DateSeries B Preferred Stock, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares as of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares the date of Company Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were issued and outstandingthis Agreement. All of the outstanding shares of Company Common Stock, Series A Preferred Stock have been and Series B Preferred Stock are duly authorized, validly issued, fully paid and nonassessable and free are not subject to preemptive rights created by statute, the Articles of preemptive rights. The Incorporation (or other applicable charter document) or Bylaws (or other corporate governance document) of the Company has or any agreement or document to which the Company is a party or by which it is bound. (b) As of the date of this Agreement, 1,041,400 shares of Company Common Stock are reserved for future issuance for the future exercise of warrants and no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock are reserved for future issuance under the Company’s Stock Option Plans (Stock options granted by the Company pursuant to the Company Stock Plans, Option Plans are referred to in this Agreement as “COMPANY STOCK OPTIONS”). Section 2.2(b) of the Company Disclosure Letter sets forth the following information with respect to each Company Stock Option and warrant outstanding as of the date of this Agreement: (bi) 867,802 the name of the optionee; (ii) the particular plan pursuant to which such Company Stock Option was granted; (iii) the number of shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average Stock Option; (iv) the exercise price of $21.03 per share, such Company Stock Option; (cv) 5,311,304 the date on which such Company Stock Option was granted; and (vi) the date on which such Company Stock Option expires. The Company has made available to Parent accurate and complete copies of the Company Stock Option Plans and the forms of all agreements evidencing the Company Stock Options. All shares of Company Common Stock subject to outstanding Company RSU Awardsissuance as aforesaid, upon issuance on the terms and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, would be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each . Except as set forth in Section 2.2(b)(i) of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this AgreementDisclosure Letter, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights agreements of any type relating character to the issuance, sale, redemption or transfer by which the Company is bound obligating the Company to accelerate the vesting of any equity securities Company Stock Option as a result of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterMerger.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 100,000,000 shares of Company Common Stock and 50,000,000 3,000,000 shares of preferred stockPreferred Stock, $.01 par value $0.01 per share (“"Company Preferred Stock”"). As of the Measurement DateFebruary 12, 1998: (i) 228,209,888 15,519,944 shares of Company Common Stock (excluding treasury shares) were issued and outstanding outstanding, all of which are validly issued, fully paid and nonassessable; (including 119,422 ii) no shares of Company Common Preferred Stock subject to outstanding Company Restricted Stock Awards), were issued or outstanding; (iiiii) no shares of Company Common Stock were held by in the treasury of the Company in its treasury or by Subsidiaries of the Company; and (iiiiv) no 1,082,284 shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock were reserved for issuanceissuance under Company Stock Plans (including (A) 6,925 shares reserved for issuance under the 1982 Stock Option Plan, except that, as of the Measurement Date, there which 6,925 were subject to outstanding options and none of which were reserved for future option grants and (aB) 3,913,542 1,075,359 shares of Company Common Stock reserved for future issuance under the 1993 Equity Compensation Plan, as amended and restated, 755,114 of which were subject to outstanding options and 320,245 of which were reserved for future option grants. Since February 12, 1998, (i) no additional shares of capital stock have been reserved for issuance by the Company and (ii) the only issuances of shares of capital stock of the Company have been issuances of Company Common Stock upon the exercise of outstanding Company Stock Plans, Options (bas defined below) 867,802 listed in Item 3.3 of the Company Letter. All of the shares of Company Common Stock subject to outstanding Company Option Awardsissuance as specified above, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that upon issuance pursuant to their the terms may only and conditions specified in the instruments pursuant to which they are issuable, shall be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each . Except as provided in Item 3.3 of the outstanding Company Letter, there are no obligations, contingent or otherwise, of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Company Common Stock. (b) Except as set forth in this Section 3.3, there are no equity securities of any class of the Company or any of its Subsidiaries, or any security exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding. Except for the stock options issued pursuant to the Company Stock Plans (the "Company Stock Options") as set forth in this Section 3.3, there are no options, warrants, equity securities, calls, rights, commitments or agreements of any character to which the Company or any of its Subsidiaries is a party or by which it is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of the Company or any of its Subsidiaries or any security or other securities instrument convertible into shares of each capital stock of the Company or any of its Subsidiaries or obligating the Company or any of its Subsidiaries to grant, extend, accelerate the vesting of or enter into any such option, warrant, equity security, call, right, commitment or agreement, and, to the best knowledge of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptionsvoting trusts, options, warrants, puts, call agreements, understandings, claims proxies or other agreements, commitments agreements or rights of any type relating understandings with respect to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities Company. Item 3.3 of the Company or its Subsidiaries. The Letter sets forth for each of the Senior Officers (as defined below) by name, and for each other holder of options (i) the number of shares of Company Common Stock are registered under subject to each Company Stock Option held by such holder, (ii) the Exchange Act. Since dates of grant of Company Stock Options to such holder, (iii) the Measurement Date and through the date of this Agreement, vesting schedule for the Company has not Stock Options held by such holder, (Aiv) issued any shares the exercise prices for the Company Stock Options held by such holder and (v) the expiration dates of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awardsOptions held by such holder. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders Item 3.3 of the Company on any matterLetter contains all forms of stock option agreements pursuant to which Company Stock Options have been issued.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 100,000,000 shares of Common Stock, $.001 par value, and 2,000,000 shares of Preferred Stock, $.001 par value, ("Company Preferred ----------------- Stock"). As of March 9, 2000 (without giving effect to the 100% stock ----- dividend to be distributed by Company on or about March 13, 2000), (i) 30,599,129 shares of Company Common Stock and 50,000,000 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares outstanding, all of Company Common Stock subject to outstanding Company Restricted Stock Awards)which are validly issued, fully paid and nonassessable and (ii) no shares of Company Common Stock were held in the treasury of Company or by its Subsidiaries. The Company Disclosure Schedule sets forth the number of shares of Company Common Stock reserved for future issuance pursuant to stock options granted and outstanding as of March 9, 2000 (without giving effect to the 100% stock dividend to be distributed by Company on or about March 13, 2000) and the plans under which such options were granted (collectively, the "Company Stock Plans"). No ------------------- material change in its treasury such capitalization has occurred between March 9, 2000 and (iii) no the date of this Agreement, except as a result of the exercise of stock options. As of the date of this Agreement, none of the shares of Company Preferred Stock were is issued and outstanding. All shares of Company Common Stock subject to issuance as specified above are duly authorized and, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Company or its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Company Common Stock or the capital stock of any Subsidiary or to loan funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any Subsidiary or any other entity other than (i) guarantees of bank obligations of its Subsidiaries entered into in the ordinary course of business, and (ii) repurchase rights of Company under the Company Stock Plans, or under any stock option agreements pursuant to which options were granted under such plans. All of the outstanding shares of Company Common Stock have been capital stock of Company's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable and all such shares (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by Company or another Subsidiary free and clear of preemptive all security interests, liens, claims, pledges, agreements, limitations on Company's voting rights. The Company has no shares , charges or other encumbrances of any nature other than security interests, liens, claims, pledges, agreements, limitations, charges or other encumbrances that (A) relate to any taxes or other governmental charges or levies that are not yet due and payable, (B) relate to, were created, arose or exist in connection with any legal proceeding that is being contested in good faith, or (C) individually or in the aggregate would not materially interfere with the ability of Company Common Stock and each of its Subsidiaries to conduct their business as currently conducted. (b) Except as set forth in this Section 3.02 or Company Preferred Stock as reserved for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved ------------ for future issuance grants of options under the Company Stock Plans, as of March 9, 2000, (bi) 867,802 shares there were no equity securities of any class of Company Common Stock subject to outstanding Company Option Awardsor its Subsidiaries, and or securities exchangeable into or exercisable for such Company Option Awards have a weighted average exercise price of $21.03 per shareequity securities, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awardsissued, reserved for issuance or outstanding, and (dii) 5,494,388 shares there were no options, warrants, equity securities, calls, rights, commitments or agreements of any character to which Company Common Stock subject or any of its Subsidiaries was a party or by which it was bound obligating Company or any of its Subsidiaries to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant issue, deliver or sell, or cause to their terms may only be settled in cash). Each of the outstanding issued, delivered or sold, additional shares of capital stock of Company or any of its Subsidiaries or obligating Company or any of its Subsidiaries to grant, extend, accelerate the vesting of or enter into any such option, warrant, equity security, call, right, commitment or agreement. There are no voting trusts, proxies or other securities of each of voting agreements or understandings with respect to the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each Company to which Company is a party. The terms of the Company’s Significant Subsidiaries is owned beneficially Company Stock Plans and the agreements evidencing the outstanding options thereunder will permit the assumption of record such options by Parent in the manner contemplated in Section 6.09, without the approval or consent of ------------ the holders of such options, the Company stockholders or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance other party. (excluding such transfer restrictions of general applicability c) The current "Offering Periods" (as may be provided defined under the Securities Act, Company 1996 Employee Stock Purchase Plan (the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions"Company ESPP"). Except for the Company Stockholders Agreement, ) in ------------ effect as of the date of this AgreementAgreement began on August 16, 1998, February 16, 1999, August 16, 1999 and February 16, 2000, and will end on August 15, 2000, February 15, 2001, August 15, 2001 and February 15, 2002, respectively. Except for the purchase rights granted under the Company ESPP on August 16, 1998, February 16, 1999, August 16, 1999, and February 16, 2000 to the current participants in the Offering Periods that commenced on those dates, there are no other purchase rights or options outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights as of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, Agreement under the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterESPP.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 (i) 15,000,000 shares of Company Common Stock and 50,000,000 (ii) 10,650,000 shares of preferred stock, par value $0.01 0.001 per share (“Company share, of which 4,000,000 shares are designated Series A Preferred Stock”), 3,570,810 are designated Series B Preferred Stock and 2,919,382 are designated Series C Preferred Stock. As of the Measurement Datedate of this Agreement, (i) 228,209,888 1,998,093 shares of Company Common Stock are issued and outstanding, of which (excluding treasury sharesA) 1,935,093 shares were issued upon the exercise of Options ("Purchased Shares") and outstanding are subject to repurchase rights of the Company (including 119,422 "Purchased Share Repurchase Rights") pursuant to the Company Stock Plan and the applicable Purchase Agreement thereunder (each, a "Purchase Agreement") to the extent unvested, (B) no shares were issued pursuant to the Stock Issuance Program provided for in Article Three of the Company Stock Plan ("Restricted Shares") and remain subject to repurchase rights of the Company (Restricted Share Repurchase Rights and, together with Purchased Share Repurchase Rights, "Company Repurchase Rights") in accordance with a Stock Issuance Agreement thereunder (a "Stock Issuance Agreement"), and (C) no shares of Company Common Stock subject to outstanding Company Restricted Stock Awards)are held in the treasury of the Company, (ii) no 4,000,000, 3,570,810 and 2,919,382 shares of Company Common Stock were held by are reserved for future issuance upon conversion of the Company in its treasury Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, respectively; (iii) no 75,918 shares of Common Stock remain authorized and reserved for issuance pursuant to the Company Stock Plan, and 1,698,716 shares are reserved for issuance upon the exercise of currently outstanding Options; (iv) 4,000,000 shares of Series A Preferred Stock were are issued and outstanding; (v) 3,570,810 shares of Series B Preferred Stock are issued and outstanding; and (vi) 2,919,382 shares of Series C Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock the Company's capital stock have been duly authorized, and are valid issued, fully paid, nonassessable and free of preemptive rights. None of the issued and outstanding shares of the Company's capital stock has been issued in violation of any applicable federal or state law or any preemptive rights or rights to subscribe for or purchase securities. All shares of Company Stock subject to issuance as specified above, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable paid, nonassessable, and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except thatand, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future assuming such issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating prior to the issuanceEffective Time, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does will not have outstanding any bonds, debentures, notes or other obligations the holders been issued in violation of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.any

Company Capital Structure. In the case (a) As of the CompanyAgreement Date, other than de minimis changes resulting from the exercise of Company Options, the authorized capital stock of the Company consists of 500,000,000 (i) 90,000,000 shares of Company Common Stock and 50,000,000 Stock, $0.0001 par value, of which 15,357,091 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were are issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards)outstanding, and (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no 58,834,395 shares of Company Preferred Stock, $0.0001 par value, (A) 11,383,245 shares of which are designated Series Z Preferred Stock were and all of which are issued and outstanding, (B) 9,762,720 shares of which are designated Series 1 Preferred Stock and all of which are issued and outstanding, (C) 8,743,807 shares of which are designated Series 2 Preferred Stock and all of which are issued and outstanding, (D) 11,458,545 shares of which are designated Series 3 Preferred Stock and all of which are issued and outstanding and (E) 17,486,078 shares of which are designated Series D Preferred Stock and all of which are issued and outstanding. All Each share of the Company Preferred Stock is convertible on a one-share for one-share basis into Company Common Stock, and there are no other issued and outstanding shares of Company Common Capital Stock have been and no commitments or Contracts to issue any shares of Company Capital Stock other than pursuant to the conversion provisions related to the Company Preferred Stock pursuant to the Certificate of Incorporation, the exercise of Company Options under the Company Equity Plan and the Company Warrant that are, in each case, outstanding as of the Agreement Date. The Company holds no treasury shares. Section 3.2(a) of the Disclosure Schedule sets forth, as of the Agreement Date, a correct and complete list of the Company Stockholders and the number and type of such shares so owned by each such Company Stockholder, and any beneficial holders thereof. All issued and outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid and nonassessable non-assessable and are free of any Liens, outstanding subscriptions, preemptive rightsrights or “put” or “call” rights created by statute, the Charter Documents or any Contract to which the Company is a party or by which the Company or any of its assets is bound. The Company has never declared or paid any dividends on any shares of Company Capital Stock. There is no Liability for dividends accrued and unpaid by the Company. The Company is not under any obligation to register under the Securities Act or any other Law any shares of Company Capital Stock, any Company Securities or any other securities of the Company, whether currently outstanding or that may subsequently be issued. All issued and outstanding shares of Company Capital Stock and all Company Options were issued in compliance with Law and all requirements set forth in the Charter Documents and any applicable Contracts to which the Company is a party or by which the Company or any of its assets is bound. No shares of Company Capital Stock are subject to vesting, reverse vesting, forfeiture, a right of repurchase or to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code, except for the shares of Company Common Stock set forth on Section 3.2(a) of the Disclosure Schedule (such shares set forth, or required to be set forth, on Section 3.2(a)-1 of the Disclosure Schedule, the “Restricted Shares”). Each Contract pursuant to which any Restricted Shares are subject to vesting or a right of repurchase or a substantial risk of forfeiture is set forth in Section 3.2(a)-1 of the Disclosure Schedule. (b) As of the Agreement Date, the Company has reserved 18,976,150 shares of Company Common Stock for issuance to Company Service Providers pursuant to the Company Equity Plans, of which 13,173,850 shares are subject to outstanding and unexercised Company Options, and 849,545 shares remain available for issuance thereunder. Section 3.2(b)-1 of the Disclosure Schedule sets forth, as of the Agreement Date, a correct and complete list of all Company Optionholders, and each Company Option, whether or not granted under the Company Equity Plan, including the number of shares of Company Capital Stock subject to each Company Option, the number of such shares that are vested or unvested, the “date of grant” of such Company Option (as defined under Treasury Regulation 1.409A-1(b)(5)(vi)(B)), the vesting commencement date, the vesting schedule (and the terms of any acceleration thereof), the exercise price per share, the Tax status of such Company Option under Section 422 of the Code (or any applicable foreign Tax Law), the term of each Company Option, any special post-termination exercise period, the equity plan from which such Company Option was granted (if any), whether such Company Option was granted with an “early exercise” right in favor of the holder, and the country and state of residence of such Company Optionholder. All Company Options listed on Section 3.2(b)-1 of the Disclosure Schedule that are denoted as incentive stock options under Section 422 of the Code so qualify. Section 3.2(b)-2 of the Disclosure Schedule indicates, as of the Agreement Date, which Company Optionholders are Persons that are not employees of the Company or any of its Subsidiaries (including non-employee directors, consultants, advisory board members, vendors, service providers or other similar Persons), including a description of the relationship between each such Person and the Company. (c) With respect to the Company Options, (i) each grant of an option was duly authorized no later than the date on which the grant of such option was by its terms to be effective by all necessary corporate action, (ii) no Company Options differ in any material respect from the standard form of award agreement under the applicable Company Equity Plan, a correct and complete copy of such award agreement has been made available to Parent (other than any vesting acceleration provisions contained therein as indicated in Section 3.2(b) of the Disclosure Schedule) and (iii) there is no agreement, arrangement or understanding (written or oral) to amend, modify or supplement any such award agreement in any case from the form made available to Parent. No shares of Company Capital Stock are subject to vesting as of the Agreement Date and no Company Options are “early exercisable” as of the Agreement Date. No Company Option is subject to Section 409A of the Code. The treatment of Company Options under Section 2.1 is permitted under the Company Equity Plans, applicable Laws, and the underlying individual agreements for such equity awards. The Company has no outstanding commitments to grant Company Options or other awards, other than the Promised Options. Except as set forth on Section 3.2(b) of the Disclosure Schedule, no Company Option that was granted so as to qualify as an incentive stock option as defined in Section 422 of the Code was early exercised by the holder of such Company Option. (d) As of the Agreement Date, there are no authorized, issued or outstanding Company Securities other than shares of Company Common Capital Stock set forth on Section 3.2(a) of the Disclosure Schedule, Company Options set forth on Section 3.2(b)-1 of the Disclosure Schedule and the Company Warrant. Other than pursuant to the Company Warrant or Company Preferred Stock reserved for issuanceas set forth on Section 3.2(a), except thatSection 3.2(b)-1, Section 3.2(c) or Section 3.2(e) of the Disclosure Schedule, as of the Measurement Agreement Date, there were no Person holds any Company Securities, or is party to any Contract of any character to which the Company or an Company Security Holder is a party or by which it or its assets is bound, (ai) 3,913,542 shares obligating the Company or such Company Security Holder to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any Company Securities or other rights to purchase or otherwise acquire any Company Securities, whether vested or unvested or (ii) obligating the Company to grant, extend, accelerate the vesting or repurchase rights of (other than any vesting acceleration provisions contained therein as indicated in Section 3.2(b)-1 of the Disclosure Schedule), change the price of, or otherwise amend or enter into any Company Option or other Company Security. (e) Section 3.2(e) of the Disclosure Schedule identifies as of the Agreement Date each Person with an offer letter or other Contract that contemplates a grant of Company Common Stock reserved for future Options or grant or issuance under of other securities of the Company Stock Plans(including the number, series and class of shares, exercise price, vesting commencement date and vesting schedule (b) 867,802 shares of including, any accelerated vesting)), or who has otherwise been promised Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock Options or other securities of each of the Company’s Subsidiaries is duly authorized, validly issuedwhich Company Options have not been granted, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each have not been granted or issued, as of the Company’s Significant Subsidiaries Agreement Date (each such individual required to be set forth on Section 3.2(e) of the Disclosure Schedule, an “Agreement Date Committed Equity Individual”). (f) There is owned beneficially and no Indebtedness of record by the Company (i) granting its holder the right to vote on any matters on which any Company Security Holder may vote (or by a direct that is convertible into, or indirect wholly owned Subsidiary exchangeable for, securities having such right) or (ii) the value of which is in any way based upon or derived from capital or voting stock of the Company (collectively, “Company Voting Debt”). (g) There are no Contracts relating to voting, purchase, sale or transfer of any Company Capital Stock (i) between or among the Company, on the one hand, and any Company Security Holder, on the other hand, and (ii) to the Knowledge of the Company, free and clear of between or among any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company Security Holders. Except as set forth on Section 3.2(b) of the Disclosure Schedule, no Company Equity Plan nor any Contract of any character to which the Company is a party to or its Subsidiaries, nor are there outstanding any securities by which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has assets is bound relating to any obligation to issue Company Options requires or otherwise provides for any additional securities accelerated vesting of any Company Options or to pay for the acceleration of any other benefits thereunder, in each case in connection with the transactions contemplated by this Agreement or repurchase any securities upon termination of employment or service with the Company or its Subsidiaries. The shares of Company Common Stock are registered under Parent, or any other event, whether before, upon or following the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise Effective Time or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterotherwise.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 (i) 97,000,000 shares of Company Common Stock and 50,000,000 Stock, 75,000,000 of which are shares of preferred stockCommon Stock, no par value $0.01 per share (“the "COMMON STOCK"), 3,000,000 of which are shares of Common Stock Series B, no par value per share (the "SERIES B COMMON STOCK"), 1,500,000 of which are shares of Common Stock Series C, no par value per share (the "SERIES C COMMON STOCK"), 15,000,000 of which are shares of Common Stock Series D, no par value per share (the "SERIES D COMMON STOCK"), and 2,500,000 of which are shares of Common Stock Series E, no par value per share (the "SERIES E COMMON STOCK"); and (ii) 10,000,000 shares of Company Preferred Stock”). As of the Measurement Datedate of this Agreement, (i) 228,209,888 2,500,000 shares of Company Common Stock (excluding treasury shares) were are issued and outstanding; 1,400,000 shares of Series B Common Stock are issued and outstanding; 1,500,000 shares of Series C Common Stock are issued and outstanding; 5,654,192 shares of Series D Common Stock would be issued and outstanding assuming (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (iiA) no shares of Series F Preferred Stock are tendered to Microsoft pursuant to the Offer to Purchase (as defined in Section 2.5(c)) and (B) no Company Options or Warrants are exercised in order to effect a tender of the Series F Preferred Stock to Microsoft ("No Tender or Exercise") and 12,164,916 would be issued and outstanding assuming (A) all shares of Series F Preferred Stock are tendered to Microsoft pursuant to the Offer to Purchase and (B) the Company Options or Warrants are exercised in order to effect a full tender of the Series F Preferred Stock to Microsoft ("Full Tender and Exercise"); and 2,100,000 shares of Series E Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were are issued and outstanding. As of the date of this Agreement, 1,600,000 shares of Series A Convertible Preferred Stock, no par value per share (the "SERIES A PREFERRED STOCK"), are authorized, of which 1,131,000 would be issued and outstanding assuming No Tender or Exercise and 1,191,000 would be issued and outstanding, assuming a Full Tender and Exercise; 3,400,000 shares of Series B Convertible Preferred Stock, no par value per share (the "SERIES B PREFERRED STOCK"), are authorized, of which 3,036,596 would be issued and outstanding assuming No Tender or Exercise and 3,048,871 would be issued and 16 outstanding assuming a Full Tender and Exercise; 2,000,000 shares of Series C Convertible Preferred Stock, no par value per share (the "SERIES C PREFERRED STOCK"), are authorized, of which 1,008,750 would be issued and outstanding assuming No Tender or Exercise, and 1,108,750 would be issued and outstanding assuming a Full Tender and Exercise; 200,000 shares of Series D Convertible Preferred Stock, no par value per share (the "SERIES D PREFERRED STOCK"), are authorized, of which 200,000 are issued and outstanding; 792,000 shares of Series E Preferred Stock are authorized, of which 184,604 are issued and outstanding; and 1,180,000 shares of Series F Preferred Stock are authorized of which 751,546 shares would be issued and outstanding assuming No Tender or Exercise and 1,034,725 shares would be issued and outstanding assuming a Full Tender and Exercise. Subject to the assumptions set forth above, there are no other authorized, issued or outstanding shares of capital stock of the Company. All of the outstanding shares of Company Common Capital Stock have been duly authorized, authorized and validly issued, and are fully paid and nonassessable and free nonassessable. As of preemptive rights. The Company has the date of this Agreement, there are no shares of Company Capital Stock held in treasury by the Company. Upon consummation of the Merger, (A) the shares of Parent Common Stock or Company Preferred Stock reserved issued in exchange for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 any shares of Company Common Capital Stock reserved for future that are subject to a Contract pursuant to which the Company has the right to repurchase, redeem or otherwise reacquire any shares of Company Capital Stock will, without any further act of Parent, the Company or any other person, become subject to the restrictions, conditions and other provisions contained in such Contract, and (B) Parent will automatically succeed to and become entitled to exercise the Company's rights and remedies under any such Contract. (b) As of the date of this Agreement and assuming No Tender or Exercise, 8,869,896 shares of Company Capital Stock are subject to issuance pursuant to outstanding options to purchase Company Capital Stock under the Company Stock PlansOption Plans of which (i) 6,916,272 shares of Series D Common Stock are subject to issuance (and reserved for issuance) pursuant to outstanding options to purchase Series D Common Stock under the 1997 Plan, (bii) 867,802 311,535 shares of Series D Common Stock are subject to issuance (and reserved for issuance) pursuant to options to purchase Series D Common Stock under the Director Plan, (iii) 257,489 shares of Series B Preferred Stock are subject to issuance (and reserved for issuance) pursuant to outstanding options to purchase Series B Preferred Stock under the DMK Plan and the SHN Plan and (iv) 1,384,600 shares of Series D Common Stock are subject to issuance (and reserved for issuance) pursuant to outstanding options to purchase Series D Common Stock under the Arnoxx Xxxloyment Agreement (stock options granted by the Company pursuant to the Company Stock Option Plans are referred to in this Agreement as "COMPANY OPTIONS"). As of the date of this Agreement and assuming a Full Tender and Exercise, 7,800,592 shares of Company Capital Stock are subject to issuance pursuant to outstanding options to purchase Company Capital Stock under the Company Stock Option Plans. As of the date of this Agreement and assuming No Tender or Exercise, 13,157,283 shares of Company Capital Stock are subject to issuance pursuant to the exercise of warrants as set 17 forth on Part 2.2 of the Company Schedules, of which (i) 12,494,916 shares of Series D Common Stock are subject to issuance pursuant to the exercise of warrants as set forth on Part 2.2 of the Company Schedules; (ii) 260,000 shares of Series A Preferred Stock are subject to issuance pursuant to the exercise of warrants as set forth on Part 2.2 of the Company Schedules; (iii) 12,286 shares of Series B Preferred Stock are subject to issuance pursuant to the exercise of warrants as set forth on Part 2.2 of the Company Schedules; (iv) 200,000 shares of Series C Preferred Stock are subject to issuance pursuant to the exercise of warrants as set forth on Part 2.2 of the Company Schedules, and (v) 190,081 shares of Series F Preferred Stock are subject to issuance pursuant to the exercise of warrants as set forth on Part 2.2 of the Company Schedules. As of the date of this Agreement and assuming a Full Tender and Exercise, 856,538 shares of Company Capital Stock are subject to issuance pursuant to the exercise of the Warrants. Each Company Option and Warrant by its terms may be treated in and by virtue of the Merger strictly in accordance with the terms of Section 5.9(a) or 5.9(c) as appropriate, without any requirement that any holder of any such Warrant or Company Option (or any other party) receive any notice or be required to consent in any manner. Part 2.2(b) of the Company Schedules sets forth the following information with respect to each Company Option outstanding as of the date of this Agreement assuming No Tender or Exercise and a Full Tender and Exercise: (i) the name and address of the optionee; (ii) the particular plan pursuant to which such Company Option was granted; (iii) the number of shares of Company Common Stock subject to outstanding such Company Option Awards, and Option; (iv) the exercise price of such Company Option; (v) the date on which such Company Option Awards have a weighted average exercise price was granted; (vi) the applicable vesting schedule; (vii) the date on which such Company Option expires; and (viii) whether the exercisability of $21.03 per sharesuch option will be accelerated in any way by the transactions contemplated by this Agreement, (c) 5,311,304 and indicates the extent of acceleration. The Company has made available to Parent accurate and complete copies of all stock option plans pursuant to which the Company has granted stock options that are currently outstanding and the form of all stock option agreements evidencing such options. All shares of Company Common Capital Stock subject to outstanding Company RSU Awardsissuance as aforesaid, upon issuance on the terms and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, would be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable. Except as set forth in Part 2.2(b)(i) of the Company Schedules, there are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Company Option as a result of the Merger. As of the date of this Agreement the following conversion ratios (the "CONVERSION RATIOS") are applicable to the Company Preferred Stock, (a) each share of Series A Preferred Stock, each share of Series B Preferred Stock and each share of Series C Preferred Stock converts into one share of Company Common Stock, (b) each share of Series D Preferred Stock converts into five shares of Company Common Stock and (c) each share of Series E Preferred Stock and each share of Series F Preferred Stock converts into ten shares of Company Common Stock. The number of additional shares of Company Capital Stock that would be issuable as a result of any adjustments in such Conversion Ratios between the date of this Agreement and the Effective Time shall not exceed 400,000 shares of Company Common Stock on an as-converted basis. (c) All outstanding shares of Company Capital Stock, all outstanding Company Options, all outstanding warrants and all outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities subsidiary of the Company or its Subsidiaries, nor are there outstanding any have been issued and granted in compliance with (i) all applicable securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries laws and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiariesother applicable Legal Requirements (as defined below) and (ii) all requirements set forth in applicable Contracts. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.For

Company Capital Structure. In the case (a) As of the Companydate of this Agreement, the authorized capital stock of the Company consists of 500,000,000 entirely of: (i) 265,000,000 shares of Company Class A Common Stock and 50,000,000 Stock, (ii) 15,000,000 shares of preferred stockClass B Common Stock, par value $0.01 per share and (“Company Preferred iii) 25,000,000 shares of Class C Common Stock”). . (b) As of the Measurement Datedate of this Agreement, (i) 228,209,888 149,894,661 shares of Company Class A Common Stock (excluding treasury shares) were are issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards)outstanding, (ii) no 910,367 shares of Company Class B Common Stock were held by the Company in its treasury are issued and outstanding, and (iii) no zero shares of Company Preferred Class C Common Stock were are issued and outstanding. All of the outstanding , and 24,549,656 shares of Company Class C Common Stock have been duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock are reserved for issuanceissuance upon the exercise of outstanding Company Options, except that, as of the Measurement Date, there were (a) 3,913,542 shares of which 20,709,348 are subject to outstanding and unexercised Company Common Stock reserved Options and 3,840,308 remain available for future issuance under the Company Stock Plans, (bthereunder. Section 2.6(b)(i) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders AgreementDisclosure Schedule lists, as of the date of this Agreement, there are no outstanding subscriptionsa true, optionscorrect, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights and complete list of any each holder of Company Capital Stock and the number and type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Capital Stock are registered under so owned by each such Company Stockholder. Section 2.6(b)(ii) of the Exchange Act. Since the Measurement Date and through Disclosure Schedule lists, as of the date of this Agreement, a true, correct and complete list of each holder of Company Options, and each Company Option including the number of shares of Company Capital Stock subject to each Company Option, the number of such shares that are vested or unvested, the “date of grant” of such Company Option (as defined under Treasury Regulation 1.409A-1(b)(5)(vi)(B)), the vesting commencement date, the vesting schedule (and the terms of any acceleration thereof), the exercise price per share and the plan from which such Company Option was granted (if other than the Company has not (AEquity Plan). Except as set forth on Section 2.6(b) issued of the Disclosure Schedule, there are no securities or rights of the Company, or Contracts, commitments, understandings or arrangements by which the Company is bound obligating the Company to redeem, repurchase, or otherwise transfer, retire or acquire any shares of Company Common Capital Stock or other equity interests of the Company. (c) All outstanding shares of Company Capital Stock (other than upon x) have been duly authorized and validly issued and are fully paid, non-assessable and are not subject to any preemptive rights, right of first refusal or similar rights created under the exercise Company’s Organizational Documents, any Contract to which the Company or settlement any of its Subsidiaries is a party or is otherwise bound, or pursuant to applicable Laws, and (y) have been offered, sold, issued and delivered by the Company in all material respects in compliance with the terms of any applicable Contract to which the Company is a party, the Organizational Documents of the Company and all applicable Laws. (d) Except as set forth in Section 2.6(a) and Section 2.6(b) (and on the corresponding sections of the Disclosure Schedule), neither the Company nor any Subsidiary (i) has any outstanding options, warrants, purchase rights, calls, puts, pledges, Contracts, rights of conversion, agreements or commitments of any character whatsoever relating to, or securing rights convertible into, any shares of capital stock (or securities containing any equity features) of the Company, or Contracts, commitments, understandings or arrangements, by which the Company is or may be bound to issue any additional shares of Company Equity Awards Capital Stock or other equity interests or options, warrants, purchase rights, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of Company Capital Stock or other equity interests, (ii) there are no issued or outstanding as options, equity-based awards, equity-linked securities, phantom stock, warrants, puts, calls, subscription rights, preemptive rights, redemption rights or securities convertible or exchangeable into Company Capital Stock or other equity securities of the Measurement DateCompany that have been granted by the Company, and (iii) except as set forth on Section 2.6(d) of the Disclosure Schedule, neither the Company nor any Subsidiary is party to any Contract obligating the Company to issue, transfer or sell any shares of Company Capital Stock or other equity interests of the Company or securities convertible into or exchangeable or exercisable for Company Capital Stock. (Be) granted Section 2.6(e) of the Disclosure Schedule lists each Contract to which the Company or any Subsidiary is a party that restricts the transfer of, that relates to (or that provide a proxy for) the voting of, that provides registration rights in respect of, or that obligates repurchase of, any shares of Company Equity Awards Capital Stock or similar awardsother equity interest of the Company or any of its Subsidiaries. The Company does not have outstanding any There are no bonds, debentures, notes or other obligations indebtedness of the holders of which have Company or any Subsidiary having the right to vote (or convertible into into, or exercisable for exchangeable for, securities having the right to vote) with the stockholders on any matters on which holders of the Company on Capital Stock may vote. There are no accrued and unpaid dividends with respect to any matteroutstanding shares of Company Capital Stock or other equity interests of the Company or any of its Subsidiaries.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 100,000,000 shares of Common Stock, $.001 par value, and 2,000,000 shares of Preferred Stock, $.001 par value, ("Company Preferred ----------------- Stock"). As of March 9, 2000 (without giving effect to the 100% stock ----- dividend to be distributed by Company on or about March 13, 2000), (i) 30,599,129 shares of Company Common Stock and 50,000,000 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares outstanding, all of Company Common Stock subject to outstanding Company Restricted Stock Awards)which are validly issued, fully paid and nonassessable and (ii) no shares of Company Common Stock were held in the treasury of Company or by its Subsidiaries. The Company Disclosure Schedule sets forth the number of shares of Company Common Stock reserved for future issuance pursuant to stock options granted and outstanding as of March 9, 2000 (without giving effect to the 100% stock dividend to be distributed by Company on or about March 13, 2000) and the plans under which such options were granted (collectively, the "Company Stock Plans"). No ------------------- material change in its treasury such capitalization has occurred between March 9, 2000 and (iii) no the date of this Agreement, except as a result of the exercise of stock options. As of the date of this Agreement, none of the shares of Company Preferred Stock were is issued and outstanding. All shares of Company Common Stock subject to issuance as specified above are duly authorized and, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. There are no obligations, contingent or otherwise, of Company or its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Company Common Stock or the capital stock of any Subsidiary or to loan funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any Subsidiary or any other entity other than (i) guarantees of bank obligations of its Subsidiaries entered into in the ordinary course of business, and (ii) repurchase rights of Company under the Company Stock Plans, or under any stock option agreements pursuant to which options were granted under such plans. All of the outstanding shares of Company Common Stock have been capital stock of Company's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable and all such shares (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by Company or another Subsidiary free and clear of preemptive all security interests, liens, claims, pledges, agreements, limitations on Company's voting rights. The Company has no shares , charges or other encumbrances of any nature other than security interests, liens, claims, pledges, agreements, limitations, charges or other encumbrances that (A) relate to any taxes or other governmental charges or levies that are not yet due and payable, (B) relate to, were created, arose or exist in connection with any legal proceeding that is being contested in good faith, or (C) individually or in the aggregate would not materially interfere with the ability of Company Common Stock and each of its Subsidiaries to conduct their business as currently conducted. (b) Except as set forth in this Section 3.02 or Company Preferred Stock as reserved for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved ------------ for future issuance grants of options under the Company Stock Plans, (b) 867,802 shares as of Company Common Stock subject to outstanding Company Option AwardsMarch 9, and such Company Option Awards have a weighted average exercise price of $21.03 per share2000, (ci) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are were no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the any class of Company or its Subsidiaries, nor are there outstanding any or securities which are convertible exchangeable into or exchangeable exercisable for such equity securities, issued, reserved for issuance or outstanding, and (ii) there were no options, warrants, equity securities, calls, rights, commitments or agreements of any character to which Company or any of its Subsidiaries was a party or by which it was bound obligating Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has or obligating Company or any obligation of its Subsidiaries to issue grant, extend, accelerate the vesting of or enter into any additional securities such option, warrant, equity security, call, right, commitment or agreement. There are no voting trusts, proxies or other voting agreements or understandings with respect to pay for or repurchase any securities the shares of capital stock of Company to which Company is a party. The terms of the Company Stock Plans and the agreements evidencing the outstanding options thereunder will permit the assumption of such options by Parent in the manner contemplated in Section 6.09, without the approval or its Subsidiaries. The shares consent of Company Common Stock are registered under ------------ the Exchange Act. Since the Measurement Date and through the date holders of this Agreementsuch options, the Company has not (A) issued stockholders or any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterparty.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 (i) 15,000,000 shares of Company Common Stock and 50,000,000 (ii) 10,650,000 shares of preferred stock, par value $0.01 0.001 per share (“Company share, of which 4,000,000 shares are designated Series A Preferred Stock”), 3,570,810 are designated Series B Preferred Stock and 2,919,382 are designated Series C Preferred Stock. As of the Measurement Datedate of this Agreement, (i) 228,209,888 1,998,093 shares of Company Common Stock are issued and outstanding, of which (excluding treasury sharesA) 1,935,093 shares were issued upon the exercise of Options ("Purchased Shares") and outstanding are subject to repurchase rights of the Company (including 119,422 "Purchased Share Repurchase Rights") pursuant to the Company Stock Plan and the applicable Purchase Agreement thereunder (each, a "Purchase Agreement") to the extent unvested, (B) no shares were issued pursuant to the Stock Issuance Program provided for in Article Three of the Company Stock Plan ("Restricted Shares") and remain subject to repurchase rights of the Company (Restricted Share Repurchase Rights and, together with Purchased Share Repurchase Rights, "Company Repurchase Rights") in accordance with a Stock Issuance Agreement thereunder (a "Stock Issuance Agreement"), and (C) no shares of Company Common Stock subject to outstanding Company Restricted Stock Awards)are held in the treasury of the Company, (ii) no 4,000,000, 3,570,810 and 2,919,382 shares of Company Common Stock were held by are reserved for future issuance upon conversion of the Company in its treasury Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, respectively; (iii) no 75,918 shares of Common Stock remain authorized and reserved for issuance pursuant to the Company Stock Plan, and 1,698,716 shares are reserved for issuance upon the exercise of currently outstanding Options; (iv) 4,000,000 shares of Series A Preferred Stock were are issued and outstanding; (v) 3,570,810 shares of Series B Preferred Stock are issued and outstanding; and (vi) 2,919,382 shares of Series C Preferred Stock are issued and outstanding. All of the issued and outstanding shares of Company Common Stock the Company's capital stock have been duly authorized, and are valid issued, fully paid, nonassessable and free of preemptive rights. None of the issued and outstanding shares of the Company's capital stock has been issued in violation of any applicable federal or state law or any preemptive rights or rights to subscribe for or purchase securities. All shares of Company Stock subject to issuance as specified above, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable paid, nonassessable, and free of preemptive rights. The Company has no shares , and, assuming such issuance prior to the Effective Time, will not have been issued in violation of Company Common Stock any applicable federal or Company Preferred Stock reserved state law or any preemptive rights or rights to subscribe for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, or purchase securities. (b) 867,802 shares of Company Common Stock subject to outstanding Company Option AwardsExcept as set forth in Section 3.2(a), and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other there are no equity securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock any class or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary series of the Company, free and clear of or any Encumbrance security directly or indirectly convertible into or exchangeable or exercisable for any such equity securities (excluding such transfer restrictions of general applicability as may be provided under the Securities Act"Convertible Securities"), the “blue sky” Laws of the various States of the United States issued, reserved for issuance or similar Law of other applicable jurisdictions)outstanding. Except for the Company Stockholders Agreement, as of the date of this Agreementset forth in Section 3.2(a), there are no outstanding subscriptions, options, warrants, putscalls, call agreements, understandings, claims or other agreementsrights, commitments or rights agreements of any type relating character to the issuance, sale, redemption or transfer by which the Company of any equity securities of is a party, or by which the Company is bound, obligating the Company to issue, deliver or its Subsidiariessell, nor are there outstanding any securities which are convertible into or exchangeable for any cause to be issued, delivered or sold, additional shares of capital stock of the Company Company, or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities security directly or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or indirectly convertible into or exchangeable or exercisable for securities having any such shares of capital stock, or obligating the right Company to vote) with grant, extend or accelerate the vesting of or enter into any such option, warrant, call, right, commitment or agreement ("Equity Rights"). Except for the Voting Agreement being entered into by certain stockholders of the Company and the Buyer on the date hereof substantially in the form of Exhibit D hereto (the "Voting Agreement"), there are no voting trusts, proxies or other agreements or understandings with respect to any matterCompany Stock to which the Company or, to the knowledge of the Company, any other Person is a party or by which it or any such other Person is bound. There are no obligations, contingent or otherwise, of the Company to repurchase, redeem or otherwise acquire any Company Stock or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any entity. (c) Section 3.2(c) of the Disclosure Schedule sets forth lists of (i) all holders of Company Stock as of the Record Date (as defined in Section 3.3(b)), the address of each such holder, as well as the class, series and number of shares of Company Stock held by each such holder and, if applicable, the number of such shares held by each such holder which are Purchased Shares, the vesting schedule with respect thereto (including a description of the circumstances under which such vesting schedule can or will be accelerated) and (ii) all holders of Options, Convertible Securities or Equity Rights as of the date hereof, the number of shares of Common Stock subject thereto, the vesting schedule with respect thereto (including a description of the circumstances under which such vesting schedule can or will be accelerated) and the exercise, conversion or exchange price per share of each such Option, Convertible Security or Equity Right. No action is required to be taken by the Company, its Board of Directors, the Plan Administrator (as such term is defined in the Company Stock Plan) or any holder of Options, Purchased Shares or Restricted Shares to effect the treatment of Options, Purchased Shares and Restricted Shares described in Section 6.7. No Options (or any portion thereof, and including after the Buyer's assumption thereof as described in Section 6.7) will vest, and no Company Repurchase Rights will lapse or terminate with respect to any Purchased Shares or Restricted Shares (including after conversion of such shares in the Merger into shares of Buyer Common Stock), solely as a result of the Merger. (d) The Company has delivered to the Buyer an instrument duly executed by the Warrant Holder, irrevocably agreeing with the Company to exercise the Warrant for a number of shares of Common Stock equal to the number of shares of Series B Preferred Stock for which the Warrant was exercisable, effective immediately prior to the Effective Time. (e) The Company has never declared, nor is there accrued, any dividend or other distribution with respect to any Company Stock.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 22,000,000 shares of authorized Company Common Stock and 50,000,000 of which 5,338,736 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were are issued and outstanding (including 119,422 as of the date hereof, and 5,018,202 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no authorized Preferred Stock. 56,452 shares of Company Common the Company's Preferred Stock were are designated Class A Preferred Stock, of which 56,452 shares are issued and outstanding as of the date hereof. 50,000 shares of the Company's Preferred Stock are designated Class B Preferred Stock, of which 36,069 shares are issued and outstanding as of the date hereof. 43,000 shares of the Company's Preferred Stock are designated as Class C Preferred Stock, of which 11,420 shares are issued and outstanding as of the date hereof. 2,768,750 shares of the Company's Preferred Stock are designated Class D Preferred Stock, of which 2,768,750 shares are issued and outstanding as of the date hereof. 2,100,000 shares of the Company's Preferred Stock are designated Class E Preferred Stock, of which 2,100,000 shares are issued and outstanding on the date hereof. The Company's capital stock is held by the Company persons, with the domicile addresses, to the extent available, and in its treasury and (iiithe amounts set forth in Section 3.3(a) no shares of Company Preferred Stock were issued and outstanding. All of the Disclosure Schedule. Except as set forth in Section 3.3(a) of the Disclosure Schedule, all outstanding shares of Company Common Stock have been the Company's capital stock are duly authorized, validly issued, fully paid and nonassessable non-assessable and free not subject to preemptive rights created by statute, the Certificate of preemptive rightsIncorporation, Certificates of Designation or Bylaws of the Company or any agreement to which the Company is a party or by which it is bound, and all such shares have been issued in compliance with all applicable federal and state securities laws. There are no declared or accrued unpaid dividends with respect to any shares of the Company's capital stock. There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter which stockholders of the Company may vote. Based on the representations made by each of the stockholders of the Company at the time of their investment in the Company, to the Knowledge of the Company each of the Stockholders who shall receive any Parent securities as a portion of the Total Merger Consideration in connection with the Merger is an "accredited investor" as defined under Regulation D promulgated pursuant to the Securities Act of 1933, as amended (the "1933 ACT"). (b) Except for the Company's 1984 Stock Option Plan, 1987 Stock Option Plan, 1989 Stock Option Plan, 1993 Stock Option Plan and 1994 Stock Option Plan (collectively the "Option Plans") the Company has never adopted or maintained any formal stock option plan or other plan providing for equity compensation of any person. The Company has no reserved an aggregate of 5,632,400 shares of Company Common Stock or Company Preferred Stock reserved for issuanceissuance to employees and consultants pursuant to the Option Plans, except that, of which as of the Measurement Datedate hereof 1,505,216 shares have been exercised and 3,964,516 shares are subject to outstanding, there were (aunexercised options. Section 3.3(b) 3,913,542 shares of the Disclosure Schedule sets forth for each outstanding Company Common Stock reserved for future issuance Option awarded under one of the Company Stock PlansPlans the name of the holder of such option, (b) 867,802 the domicile address of such holder, the number of shares of Company Common Stock subject to outstanding Company Option Awardssuch option, and such Company Option Awards have a weighted average the exercise price of $21.03 per sharesuch option and the vesting schedule for such option, (c) 5,311,304 shares of Company Common Stock subject including the extent vested to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions)date. Except for the such Company Stockholders Agreement, as Options listed in Section 3.3(b) of the date of this AgreementDisclosure Schedule, there are no outstanding subscriptions, options, warrants, putsrights, call agreements, understandings, claims or other agreementsconvertible securities, commitments or rights agreements of any type relating character, written or oral, to the issuance, sale, redemption or transfer by which the Company of any equity securities of is a party or by which it is bound obligating the Company to issue, deliver or its Subsidiariessell, nor are there outstanding any securities which are convertible into or exchangeable for cause to be issued, delivered or sold, any shares of capital stock of the Company or its Subsidiaries and neither obligating the, Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, right, convertible security, commitment or agreement. Section 3.3(b) of the Disclosure Schedule also sets forth the name of the holder of any shares of capital stock of the Company nor subject to vesting (including rights of repurchase with regard to shares of capital stock of the Company), the number of shares of capital stock of the Company subject to vesting and the vesting schedule for such shares of capital stock of the Company, including the extent vested to date. Except as described in Section 3.3(b) of the Disclosure Schedule, no vesting provisions applicable to any Company Option or share of its Subsidiaries has Company Stock will accelerate in connection with the transactions contemplated by the Merger or this Agreement. There are no rights, puts, commitments, agreements or other obligations outstanding requiring the Company or which could require the Company (with or without notice or lapse of time or both) to repurchase or redeem any obligation to issue any additional securities or to pay for or repurchase any securities shares of capital stock of the Company or its Subsidiariesany Company Options. The shares of Company Common Stock There are registered under no outstanding authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to the Exchange ActCompany. Since There are no voting trusts, proxies, or other agreements or understandings with respect to the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as voting stock of the Measurement Date) or (B) granted Company. Subject to the rights of any Company Equity Awards or similar awards. The Company does not have outstanding any bondsdissenting stockholders, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders as a result of the Company on Merger, Parent will be the record and sole beneficial owner of all outstanding capital stock of the Surviving Corporation and all rights to acquire or receive any mattercapital stock of the Surviving Corporation, whether or not such capital stock is outstanding.

Company Capital Structure. In the case of the Company, the The authorized capital stock of the Company consists of 500,000,000 1,500,000,000 shares of Company Common Stock and 50,000,000 10,000,000 shares of preferred stock, par value $0.01 0.001 per share share, (“Company Preferred Stock”). As At the close of the Measurement Datebusiness on December 20, 2002, (i) 228,209,888 162,847,127 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 outstanding, none of which shares of Company Common Stock are unvested or are subject to outstanding a repurchase option, risk of forfeiture or other condition providing that such shares may be forfeited or repurchased by the Company Restricted Stock Awards)or otherwise vest upon any termination of stockholder’s or grantee’s employment, directorship or other relationship with the Company or any of its subsidiaries under the terms of any restricted stock purchase agreement or other agreement with the Company, (ii) no shares of Company Common Stock were held by the Company in its treasury or by any direct or indirect subsidiary of the Company, and (iii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been are duly authorized, validly issued, fully paid and nonassessable and free are not subject to preemptive rights created under the DGCL, the certificate of preemptive rightsincorporation or bylaws of the Company or any agreement or document to which the Company is a party or by which it or its assets is bound. The Company has no As of December 20, 2002 (i) 20,276,299 shares of Company Common Stock or are subject to issuance pursuant to outstanding options to purchase Company Preferred Common Stock reserved for issuance, except that, as under the Company Option Plans and any other agreement of the Measurement DateCompany pursuant to which the Company has granted an option, there were each of which is set forth on Section 2.2 of the Company Disclosure Letter (acollectively, the “Non-Plan Option Agreements,”) 3,913,542 and (ii) 1,652,906 shares of Company Common Stock are reserved for future issuance under the ESPP (as defined in Section 5.7(c)). Section 2.2 of the Company Stock PlansDisclosure Letter sets forth the following information with respect to each Company Option outstanding as of the date of this Agreement, (bi) 867,802 the name of each person who held such Company Options, (ii) the particular Company Option Plan pursuant to which such Company Option was granted, (iii) the date on which such Company Option was granted or assumed, (iv) the exercise or base price of such Company Option, (v) the number of shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per shareor value covered thereby, (cvi) 5,311,304 the number of shares of Company Common Stock as to which such Company Option had vested at such date, (vii) the applicable vesting schedule for such Company Option, and (viii) the date on which such Company Option expires. The Company has made available to Parent an accurate and complete copy of each of the Company Option Plans, the Non-Plan Option Agreements, the ESPP and the standard forms of stock option agreements evidencing Company Options granted under the Company Option Plans. There are no options outstanding to purchase shares of Company Common Stock other than pursuant to the Company Options. All shares of Company Common Stock subject to outstanding Company RSU Awardsissuance as aforesaid, upon issuance on the terms and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, will be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable. All outstanding shares of Company Common Stock, all outstanding Company Options, and each of the all outstanding shares of capital stock or other securities of each subsidiary of the Company’s Significant Subsidiaries is owned beneficially Company have been issued and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free granted in compliance in all material respects with (i) all applicable securities laws and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims Legal Requirements and (ii) all requirements set forth in applicable agreements or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterinstruments.

Company Capital Structure. In the case (a) As of the CompanyOctober 31, 1998, the authorized capital stock of the Company consists consisted of 500,000,000 15,000,000 shares of authorized Company Common Stock and 50,000,000 of which 667,997 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 and 10,000,000 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no authorized preferred stock consisting of 350,000 shares of Company Common Series A Convertible Preferred Stock were held by the Company in its treasury all of which are issued and (iii) no outstanding; 384,616 shares of Company Series B Convertible Preferred Stock all of which were issued and outstanding; 340,000 shares of Series C Convertible Preferred Stock all of which were issued and outstanding; 1,000,000 shares of Series D Convertible Preferred Stock all of which were issued and outstanding; 1,566,668 shares of Series E Convertible Preferred Stock all of which were issued and outstanding; and 3,900,000 shares of Series F Convertible Preferred Stock of which 1,100,000 shares were issued and outstanding; and 2,458,716 shares of undesignated preferred stock none of which was issued and outstanding. All of the outstanding shares of Company Common Capital Stock have been as of October 31, 1998 were duly authorized, validly issued, fully paid and nonassessable and free not subject to preemptive rights created by statute, the Certificate of preemptive rightsIncorporation or Bylaws of the Company or any agreement to which the Company was a party or by which it was bound and were issued in compliance with federal and state securities laws. The Company has no other Company Capital Stock authorized, issued or outstanding. (b) As of the date hereof, there are 5,958,242 shares of Company Common Stock or outstanding. The Company Common Stock is held by the persons with the domicile addresses and in the amounts set forth in Section 3.03(b) of the Disclosure Schedule. All unexercised Cash-Out Options that were outstanding as of October 31, 1998 have been exercised or, to the extent not exercised, will be assumed by Parent at Closing, and if exercised the holders of the Cash-Out Options have executed the form of option exercise ("Option Exercise Notice") attached hereto as Exhibit T. As of the date hereof, each of the holders of Preferred Stock reserved for issuancehave executed a "Consent to Conversion of Preferred Stock" in the form of Exhibit Q, except that, as each of the Measurement Date, there were (a) 3,913,542 which consents are in full force and effect and have not been revoked. All outstanding shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is are duly authorized, validly issued, fully paid and nonassessablenonassessable and not subject to preemptive rights created by statute, and each the Certificate of the outstanding shares Incorporation or Bylaws of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or any agreement to which the Company is a party or by a direct which it is bound and have been issued in compliance with federal and state securities laws. There are no declared or indirect wholly owned Subsidiary accrued unpaid dividends with respect to any shares of the CompanyCompany Capital Stock. The Company has no other Company Capital Stock authorized, free and clear of any Encumbrance issued or outstanding. (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). c) Except for the Company's 1991 Stock Option Plan, as amended (the "Plan"), the Company Stockholders Agreementhas never adopted or maintained any stock option plan or other plan providing for equity compensation of any person. The Company has reserved 1,575,000 shares of Company Common Stock for issuance to directors, employees, consultants and attorneys pursuant to the Plan, of which, as of the date hereof, 1,559,781 shares have been issued and 983,000 shares are subject to outstanding Assumed Options. Section 3.03(c) of the Disclosure Schedule sets forth for each Assumed Option, the name of the holder of such Assumed Option, the domicile address of such holder, the number of shares of Company Common Stock subject to such Assumed Option, the exercise price of such Assumed Option, the vesting schedule for such Assumed Option, including the extent vested to date and whether the vesting of such Assumed Option will be accelerated by the transactions contemplated by this Agreement, and whether such Assumed Option is intended to qualify as an incentive stock option as defined in Section 422 of the Code. Section 3.03(c) of the Disclosure Schedule also sets forth the name of the holder of any Company Capital Stock subject to vesting, the number of shares of Company Capital Stock subject to vesting and the vesting schedule for such Company Capital Stock, including the extent vested to date and whether the vesting of such shares of Company Capital Stock will be accelerated by the transactions contemplated by this Agreement. Except for the Assumed Options and the GulfStar Warrant, there are no options, warrants, calls, rights, commitments or agreements of any character, written or oral, to which the Company is a party or by which it is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of Company Capital Stock or obligating the Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to Company Capital Stock. Other than the appointment of the Stockholders' Representatives as contemplated in the Indemnity and Escrow Agreement, there are no outstanding subscriptionsvoting trusts, optionsproxies, warrants, puts, call agreements, understandings, claims or other agreements, commitments agreements or rights of any type relating understandings with respect to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital voting stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterCompany.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 200,000,000 shares of Company Common Stock and 50,000,000 5,000,000 shares of preferred stockPreferred Stock, par value $0.01 .01 per share (“"Company Preferred Stock”"), of which 2,000,000 shares have been designated as "Series A Participating Preferred Stock". As of the Measurement DateAugust 9, 2004, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no 97,283,455 shares of Company Common Stock were held by the Company in its treasury issued and outstanding, all of which are validly issued, fully paid and nonassessable, (iiiii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding , and (iii) 3,071,380 shares of Company Common Stock have been duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as were held in the treasury of the Measurement Date, there were (a) 3,913,542 Company or by Subsidiaries of the Company. The Company Disclosure Letter shows the number of shares of Company Common Stock reserved for future issuance pursuant to warrants, stock options and other stock awards, and restricted stock awards granted and outstanding as of August 9, 2004 under the 2003 Equity Participation Plan, the Amended and Restated Stock Option Plan for Key Employees of Tuboscope Vetco International Corporation, the Stock Option Plan for Non-Employee Directors, the 1990 Stock Option Plan and the 1994 Directors' Stock Option Plan, in each case, as amended (collectively, the "Company Stock Plans"). Except for the issuance of shares of Company Common Stock in connection with Company Stock Plans (including the exercise of warrants, stock options or other stock awards thereunder), or pursuant to the Varco International, Inc. Employee Stock Purchase Plan (b) 867,802 the "Company Stock Purchase Plan"), or except as set forth in the Company Disclosure Letter, no change in such capitalization has occurred between August 9, 2004 and the date of this Agreement. All shares of Company Common Stock subject to outstanding Company Option Awardsissuance as specified above are duly authorized and, upon issuance on the terms and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, shall be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there There are no outstanding subscriptionsobligations, optionscontingent or otherwise, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreementrepurchase, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.redeem

Company Capital Structure. In the case (a) As of the Companydate of the execution hereof, the authorized capital stock of the Company consists of 500,000,000 shares of Company Common Stock and 50,000,000 of: (i) PREFERRED STOCK. 4,000,000 shares of preferred stockstock of the Company, par value $0.01 0.0001 per share (“the "COMPANY PREFERRED STOCK"), of which 11,000 shares have been designated as Series A 5% Convertible Redeemable Preferred Stock (the "SERIES A PREFERRED STOCK"), 11,000 shares have been designated as Series B 5% Convertible Redeemable Preferred Stock (the "SERIES B PREFERRED STOCK"), 248,000 shares have been designated as Series C 12% Convertible Redeemable Preferred Stock (the "SERIES C PREFERRED STOCK") and 3,500,000 shares have been designated as Series D 10% Convertible Redeemable ***REORGANIZATION AGREEMENT*** -11- Preferred Stock (the "SERIES D PREFERRED STOCK"). The following numbers of shares of each authorized series of Company Preferred Stock”). As of the Measurement Date, Stock are outstanding: (i) 228,209,888 shares 10,000 of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), Series A Preferred Stock; (ii) no 6,600 shares of Company Common Series B Preferred Stock; 200,000 shares of Series C Preferred Stock were held by the Company in its treasury and (iiiiv) no 2,063,023 shares of Series D Preferred Stock. The outstanding shares of Company Preferred Stock were have been duly and validly issued and are fully paid, nonassessable, free of liens, encumbrances and restrictions on transfer other than restrictions under applicable state and federal securities laws and are free of liens, encumbrances an preemptive or similar rights contained in the Company's Certificate of Incorporation or BYLAWS, or any agreement to which the Company is a party. The outstanding shares of Company Preferred Stock have been issued in accordance with the registration or qualification provisions of the Securities Act (defined below) and any relevant state securities laws or pursuant to valid exemptions therefrom. (ii) COMMON STOCK. 46,000,000 shares of Company Common Stock, of which 15,532,350 shares are issued and outstanding. All of the The outstanding shares of Company Common Stock have been duly authorizedand validly issued and are fully paid, validly issuednon-assessable, fully paid and nonassessable and free of liens, encumbrances and restrictions on transfer other than restrictions under applicable state and federal securities laws and are free of liens, encumbrances and preemptive rightsor similar rights contained in the Certificate of Incorporation or bylaws of the Company or in any agreement to which the Company is a party. The Company has no outstanding shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as have been issued in compliance with all provisions of the Measurement DateSecurities Act (defined below) and any relevant state securities laws or pursuant to valid exemptions therefrom. (iii) Parent understands and agrees that the Company may make certain changes to the capital structure at or prior to the Effective Time, there were including, but not limited to, effecting a stock split, stock dividend, reorganization or recapitalization, and may amend its certificate of incorporation and/or bylaws in connection thereunder. (ab) 3,913,542 The Company Capital Stock is held by the persons, with the domicile addresses and in the amounts set forth on Section 2.2(b) of the Company Disclosure Schedule. All outstanding shares of Company Common Capital Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable, non-assessable and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record not subject to preemptive rights created by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Actstatute, the “blue sky” Laws certificate of the various States of the United States incorporation or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities bylaws of the Company or its Subsidiaries, nor any agreement to which the Company is a party or by which it is bound. There are there outstanding any securities which are convertible into no declared or exchangeable for accrued but unpaid dividends with respect to any shares of Company Capital Stock. The Company has no other capital stock authorized, issued or outstanding. (c) The Company has reserved a total of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The 6,000,000 shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date for issuance to employees and through the date consultants upon exercise of this Agreementoptions, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bondswarrants and rights, debentures, notes or other obligations the holders of which have the right 3,150,995 shares are subject to vote (or convertible into or exercisable outstanding, unexercised options and 2,849,005 shares remain available for securities having the right to vote) with the stockholders of the Company on any matterfuture grant.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists solely of 500,000,000 307,314,457 shares of Company Common Stock and 50,000,000 153,806,918 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As , of the Measurement Date, (i) 228,209,888 which 86,453,346 shares of Company Common Stock (excluding treasury shares) were are issued and outstanding (including 119,422 on the date hereof; 38,167,927 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards)Series A-1 Preferred Stock, (ii) no of which 38,167,927 are issued and outstanding; 13,665,320 shares of Company Common Stock were held by the Company in its treasury Series A-2 Preferred Stock, of which 13,665,320 are issued and (iii) no outstanding; and 101,973,671 shares of Company Series B Preferred Stock were Stock, of which 100,928,060 are issued and outstanding. All As of the date hereof, the Company Capital Stock is held by the Persons and in the amounts set forth in Section 2.5(a) of the Disclosure Schedule which further sets forth for each such Person the number of shares held, class and/or series of such shares and the email addresses of record of such Persons. Section 2.5(a) of the Disclosure Schedule shall be updated solely to reflect any exercises of Company Options or Company Warrants occurring between the date of this Agreement and the Closing Date. All outstanding shares of Company Common Capital Stock have been are duly authorized, validly issued, fully paid and nonassessable non-assessable and free are not subject to preemptive rights created by any Legal Requirements, the Charter Documents, or any Contract to which the Company is a party or by which it is bound. (b) All outstanding shares of Company Capital Stock, Company Options and all Company Warrants have been issued or repurchased (in the case of shares that were outstanding and repurchased by the Company or any Stockholder) in compliance with all applicable Legal Requirements, and were issued, transferred and repurchased (in the case of shares that were outstanding and repurchased by the Company or any Stockholder) in accordance with, and not in violation of, any preemptive rightsright, right of first refusal, purchase option, subscription right or similar right or limitation. No shares of Company Capital Stock are subject to any right of repurchase, option or forfeiture provision or any restriction on transfer (other than restrictions on transfer imposed by virtue of applicable federal and state securities Legal Requirements). The Company does not have any liability (contingent or otherwise) or claim, loss, damage, deficiency, cost or expense relating to or arising out of the issuance or repurchase of any Company Capital Stock, or out of any agreements or arrangement relating thereto (including any amendment of the terms of any such agreement or arrangement). Except as set forth on Section 2.5(b) of the Disclosure Schedule, there are no declared but unpaid dividends with respect to any shares of Company Capital Stock. Other than the Company Capital Stock set forth in Section 2.5(a) of the Disclosure Schedule, the Company has no other capital stock authorized, issued or outstanding. (c) There are no, nor have there ever been, any shares of Company Restricted Stock issued or outstanding. (d) Except for the Plan, neither the Company nor any Subsidiary has ever adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity or equity-related compensation to any Person (whether payable in shares, cash or otherwise). As of the date hereof, the Company has reserved 79,621,920 shares of Company Common Stock for issuance to Employees and directors of the Company upon the issuance of stock or Company Preferred Stock reserved for issuancethe granting or purchase of restricted stock or the granting of restricted stock units granted under the Plan, except thatof which (i) 17,988,235 shares are issuable upon the exercise of outstanding, unexercised options granted under the Plan, (ii) 53,728,565 shares have been issued upon the exercise of options granted under the Plan and remain outstanding as of the Measurement Datedate hereof and (iii) 7,905,120 shares remain available for future grant. Each award agreement governing the grant of a Company Option was duly executed and delivered by each party thereto and is in full force and effect. Each grant of a Company Option has been authorized by all necessary corporate action, there were including, as applicable, approval by the Company Board (aor a duly constituted and authorized committee thereof) 3,913,542 and any required Stockholder approval by the necessary number of votes or written consents. Section 2.5(d) of the Disclosure Schedule sets forth, with respect to each Company Option, the name of each holder of Company Options, the email address of record of such holder, the maximum number of shares of Company Common Stock reserved for future issuance under that may be issued upon exercise or conversion of any Company Option held by such Optionholder, whether such holder is an Employee, and the grant date, exercise price, the vesting schedule, including whether such vesting is subject to acceleration as a result of the Transactions or any other events, and whether such Company Stock Plans, Option is a nonstatutory option qualifies as an incentive stock option as defined in Section 422 of the Code. Each Company Option (bx) 867,802 shares has an exercise price at least equal to the fair market value of the underlying share of Company Common Stock subject to outstanding as of the grant date, (y) has not had its exercise date or grant date delayed or “back-dated” and (z) has been issued in compliance in all material respects with all applicable Legal Requirements and properly accounted for in all material respects in accordance with GAAP. The terms of the Plan and the applicable agreements for each Company Option Awardsallow for the treatment of Company Options as provided in this Agreement, without the consent or approval of the holders of such securities, the Stockholders or otherwise and without any acceleration of the exercise schedules or vesting provisions in effect for such Company Options. True and complete copies of forms of all agreements and instruments relating to or issued under the Plan have been Made Available to Parent. (e) The Company has taken all actions necessary (under any the Plan, any applicable Legal Requirement, the stock option award agreements or otherwise) to effectuate the provisions of Section 1.6 and to ensure that, from and after the Effective Time, each individual who held a Company Option Awards at any time prior to the Effective Time shall cease to have a weighted average exercise price of $21.03 per shareany rights with respect thereto, except as specifically set forth in Section 1.6. (cf) 5,311,304 shares of Except for Company Common Stock subject to Options and Company Warrants, there are no outstanding Company RSU Awardsor authorized options, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital warrants, calls, stock appreciation, phantom stock, profit participation, or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by similar rights with respect to the Company or by a direct any Subsidiary (whether payable in shares, cash or indirect wholly owned Subsidiary otherwise) or any bonds, debentures, notes or other indebtedness of the CompanyCompany having the right to vote (or convertible into, free and clear or exchange for, securities having the right to vote) on any matters on which any Stockholder may vote. Except as contemplated hereby, there are no voting trusts, proxies, or other agreements or understandings with respect to the voting stock of the Company or any Subsidiary. Except as disclosed in Section 2.5(f) of the Disclosure Schedule, there are no agreements to which the Company or any Subsidiary is a party relating to the registration, sale or transfer (including agreements relating to rights of first refusal, co-sale rights or “drag-along” rights) of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws Company Capital Stock. Section 2.5(f) of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders AgreementDisclosure Schedule identifies, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims : (i) each Employee or other agreementsPerson with an offer letter or other Contract that contemplates the grant of an option or other equity award to purchase shares of Company Capital Stock or other securities of the Company, commitments or rights of who has otherwise been promised any type relating to the issuance, sale, redemption options or transfer by the Company of any equity awards or other securities of the Company (each such Employee or its Subsidiariesother Person, nor are there outstanding any a “Specified Person”), except for options or other equity awards that have been granted, or other securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation that have been issued prior to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this AgreementAgreement and reflected on Section 2.5(d) of the Disclosure Schedule, and (ii) the number of shares of Company Capital Stock or other securities of the Company, type of award, equity award or other security of the Company promised to such Specified Person. As a result of, and immediately following, the Merger, Parent will be the sole record and beneficial holder of all issued and outstanding Company has not (A) issued Capital Stock and all rights to acquire or receive any shares of Company Common Stock (other than upon the exercise Capital Stock, whether or settlement not such shares of Company Equity Awards Capital Stock are outstanding. (g) Section 2.5(g) of the Disclosure Schedule sets forth a list of all loans made by the Company to any Employee or Holder that is outstanding, together with the total amount of (i) outstanding principal and (ii) accrued interest, each as of the Measurement Datedate hereof. (h) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bondsPayment Spreadsheet is accurate, debenturescorrect and complete in all respects as of immediately prior to the Effective Time, notes or other obligations and it reflects an allocation of the holders of Merger Consideration which have the right to vote (or convertible into or exercisable for securities having the right to vote) is in all respects in accordance with the stockholders terms of the Company on any matterthis Agreement.

Company Capital Structure. In the case of the Company, the The authorized capital stock of the Company consists of 500,000,000 25,000,000 shares of Company Common Stock and 50,000,000 Stock, no par value, of which 7,475,944 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 as of June 2, 2000, and 2,000,000 shares of Preferred Stock, no par value, of which no shares are issued or outstanding. No shares of capital stock have been issued since June 2, 2000 except pursuant to option exercises. All outstanding shares of the Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been are duly authorized, validly issued, fully paid and nonassessable and free are not subject to preemptive rights created by statute, the Restated Certificate of preemptive rightsIncorporation or Bylaws of the Company or any agreement or document to which the Company is a party or by which it is bound. The As of the date of this Agreement, the Company has had reserved an aggregate of 1,600,000 shares of the Company Common Stock, net of exercises, for issuance to employees, consultants and non-employee directors pursuant to the 1984 Restated Nonqualified Stock Option Plan, 1984 Restated Stock Option Plan, 1987 Restated Stock Option Plan for Non-Employee Directors and the 1994 Option and Restricted Stock Plan for Employees (the "Option Plans"). (Stock options ------------ granted by the Company pursuant to the Option Plans or otherwise are referred to in this Agreement as "Company Options.") As of June 2, 2000, there were Company --------------- Options outstanding to purchase an aggregate of 1,572,416 shares of Common Stock, issued to employees, consultants and non-employee directors pursuant to the Option Plans. Except for 10,000 shares subject to options granted to Xxx Xxxxxx upon his election as a new director on June 9, 2000, no Company Options have been granted since June 2, 2000 and, except pursuant to the exercise of Company Options, no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as capital stock of the Measurement DateCompany have been issued by the Company since June 2, there were (a) 3,913,542 2000. All shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awardsissuance as aforesaid, upon issuance on the terms and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, would be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bondshas provided the Purchaser a complete and accurate list as of June 26, debentures2000 of each person who held restricted stock or options, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders name of the Company on any matterholder of such shares or option, the exercise price of such option, and the term of such shares or option.

Company Capital Structure. In the case of the Company, the The authorized capital stock of the Company consists of 500,000,000 200,000,000 shares of Company Common Stock and 50,000,000 10,000,000 shares of preferred stock, par value $0.01 0.0001 per share share, (“"Company Preferred Stock”"), 2,000,000 of which shares have been designated Series A Junior Participating Preferred Stock, all of which will be reserved for issuance upon the exercise of preferred stock purchase rights (the "Company Rights") issuable pursuant to the Rights Agreement between the Company and Mellon Investor Services LLC, dated as of March 20, 2002 (the "Company Rights Agreement"). As At the close of the Measurement Datebusiness on July 9, 2003, (i) 228,209,888 63,975,810 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares none of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock which were held by the Company in its treasury treasury) and (iiiii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been duly authorized and validly issued and are fully paid and nonassessable and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of the Company or any agreement or document to which the Company is a party or by which it or its assets is bound. As of the date hereof, (i) the Company had reserved an aggregate of 3,950,347 shares of Company Common Stock for future issuance pursuant to the Option Plans and (ii) at the close of business on July 9, 2003 there were (x) outstanding Company Options to purchase an aggregate of 11,608,105 shares of Company Common Stock pursuant to the Enumerated Option Plans (as defined in Section 5.8(a)), and (y) no outstanding Company Options to purchase shares of Company Common Stock pursuant to Option Plans other than the Enumerated Option Plans. As of the date hereof, the Company has reserved an aggregate of 2,800,892 shares of Company Common Stock for future issuance pursuant to the ESPP. All shares of Company Common Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, would be duly authorized, validly issued, fully paid and nonassessable and free of not subject to preemptive rights. The All of such Company Options have been granted to employees or directors of the Company in the ordinary course of business. Since March 31, 2003 and until the date hereof, the Company has no shares not granted any Company Options to officers or directors of the Company. Section 2.2 of the Company Common Stock or Disclosure Letter identifies (i) the name and location of each person who held Company Preferred Stock reserved for issuance, except that, Options as of the Measurement DateJuly 9, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans2003, (bii) 867,802 the particular Option Plan pursuant to which such Company Option was granted, (iii) the date on which such Company Option was granted, (iv) the exercise or base price of such Company Option, (v) the number of shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per shareor value covered thereby, (cvi) 5,311,304 the number of shares of Company Common Stock subject as to outstanding which such Company RSU AwardsOption had vested at such date, (vii) the applicable vesting schedule for such Company Option and whether the exercisability or vesting of such Company Option will be accelerated in any way by the Merger or the transactions contemplated hereby, and (dviii) 5,494,388 shares of the date on which such Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash)Option expires. Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as As of the date of this Agreementhereof, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights agreements of any type relating character to the issuance, sale, redemption or transfer by which the Company is bound obligating the Company to accelerate the vesting or exercisability of any equity securities Company Option as a result of the Company Merger, either alone or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares upon the occurrence of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any mattersubsequent events.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 (i) 175,000,000 shares of Company Common Stock Stock, of which 68,434,362 shares are issued and 50,000,000 outstanding as of the date hereof and (ii) 76,406,460 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”), 37,248,564 shares of which are designated Series A Preferred Stock, all of which are issued and outstanding as of the date hereof, 39,157,896 shares of which are designated Series B Preferred Stock, all of which are issued and outstanding as of the date hereof. Each share of Company Preferred Stock is convertible on a one-share for one-share basis into Company Common Stock. As of the Measurement Datedate hereof, (i) 228,209,888 shares of the Company Common Capital Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were is held by the Company Persons with the domicile addresses and in its treasury the amounts set forth on Section 2.2(a) of the Disclosure Schedule which further sets forth for each such Person the number of shares held by such Person, the applicable stock certificate number(s) representing such shares, the number of shares subject to repurchase, whether any such repurchase rights will lapse, in whole or in part, as a result of this Agreement and (iiithe transactions contemplated hereby, the vesting schedule for such shares and whether any of such shares were eligible for an election under Section 83(b) no shares of Company Preferred Stock were issued the Code, including the date of issuance of such shares, and outstandingwhether such election under Section 83(b) of the Code was timely made. All of the outstanding shares of Company Common Capital Stock have been are duly authorized, validly issued, fully paid and nonassessable non-assessable and free are not subject to preemptive rights created by statute, the Charter Documents, or any agreement to which the Company is a party or by which it is bound. Except as set forth in Section 2.2(a) of preemptive rightsthe Disclosure Schedule, there are no outstanding shares of Company Capital Stock that constitute unvested restricted stock or that are otherwise subject to a repurchase or redemption right. The There are no declared or accrued but unpaid dividends with respect to any shares of Company Capital Stock. Except as set forth in this Section 2.2(a), the Company has no other capital stock authorized, issued or outstanding. (b) All outstanding shares of Company Capital Stock and Company Options have been issued or repurchased (in the case of shares that were outstanding and repurchased by the Company) in compliance with all applicable federal, state, foreign, or local statutes, laws, rules, or regulations, including federal and state securities laws, and in accordance with the terms and conditions of the Plan, and were issued, transferred and repurchased (in the case of shares that were outstanding and repurchased by the Company) in accordance with any right of first refusal or similar right or limitation Known to the Company, including those in the Charter Documents. (c) Except for the Plan, the Company has never adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity compensation to any Person. The Plan has been duly authorized, approved and adopted by the Board and the Company Stockholders and is in full force and effect. As of the date hereof, the Company has reserved 29,958,894 shares of Company Common Stock for issuance to employees and directors of, and consultants to, the Company upon the issuance of stock or Company Preferred Stock reserved for issuancethe exercise of options granted under the Plan, except thatof which (i) 20,889,568 shares are issuable upon the exercise of outstanding, unexercised options granted under the Plan, (ii) 4,416,263 shares have been issued upon the exercise of options granted under the Plan and remain outstanding as of the Measurement Datedate hereof, there were (aiii) 3,913,542 no shares have been issued in the form of Company Common Stock reserved restricted stock granted under the Plan and remain outstanding as of the date hereof and (iv) 4,653,063 shares in the form of restricted stock or options remain available for future issuance under the Company Stock Plans, (bgrant. Section 2.2(c) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders AgreementDisclosure Schedule sets forth, as of the date hereof, for each outstanding Company Option or restricted stock award granted under the Plan, the name of the holder of such option or award, the type of entity of such holder, the domicile address of such holder, the type and number of shares of Company Capital Stock issuable upon the exercise of such option or award, the exercise price of such option or award, the date of grant of such option or award, the vesting schedule for such option or award, including the extent vested to date and whether (and to what extent) the vesting of such option or award is subject to acceleration as a result of the transactions contemplated by this Agreement and whether such option is a nonstatutory option or intended to qualify as an incentive stock option as defined in Section 422 of the Code and whether such option is subject to Section 409A of the Code and the guidance and regulations promulgated thereunder (“Section 409A”). True and complete copies of all agreements and instruments relating to or issued under the Plan have been made available to Parent, and such agreements and instruments have not been amended, modified or supplemented other than as provided in this Agreement or any Related Agreement, and there are no agreements to amend, modify or supplement such agreements or instruments from the forms thereof provided to Parent. (d) Other than as set forth in Section 2.2(c) of the Disclosure Schedule, as of the Closing, there are no outstanding subscriptions, options, warrants, putscalls, call agreementsrights, understandings, claims or other agreementsconvertible securities, commitments or rights agreements of any type relating character, written or oral, to the issuance, sale, redemption or transfer by which the Company of any equity securities of is a party or by which the Company is bound obligating the Company to issue, deliver, sell, repurchase or its Subsidiariesredeem, nor are there outstanding any securities which are convertible into or exchangeable for cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Company or its Subsidiaries and neither obligating the Company nor to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any of its Subsidiaries has any obligation such option, warrant, call, right, commitment or agreement. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to issue any additional securities the Company. (e) Except as contemplated hereby, there are no voting trusts, proxies, or other agreements or understandings with respect to pay for or repurchase any securities the voting stock of the Company to which the Company is a party or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, which the Company has not Knowledge. There are no agreements to which the Company is a party relating to the registration, sale or transfer (Aincluding agreements relating to rights of first refusal, co-sale rights or “drag along” rights) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matterCapital Stock.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 of: 30,000,000 shares of Company Common Stock and 50,000,000 shares of preferred stockStock, par value $0.01 0.001 per share (the “Company Common Stock”), of which, as of the date hereof, 6,227,438 shares are issued and outstanding; and 15,548,000 shares of Preferred Stock, par value $0.001 per share (the “Company Preferred Stock”). Of the authorized Company Preferred Stock: 11,818,000 shares have been designated Series 1 Preferred Stock (the “Series 1 Preferred Stock”), of which, as of the date hereof, 11,818,000 shares are issued and outstanding; and 3,730,000 shares have been designated Series 2 Preferred Stock (the “Series 2 Preferred Stock”), of which, as of the date hereof, 3,542,645 shares are issued and outstanding. As of the Measurement Datedate hereof, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no other shares of Company Preferred Stock were are issued and or outstanding. All of the The outstanding shares of Company Common Capital Stock, including all shares subject to the Company’s right of repurchase, are held of record and, to the knowledge of the Company, beneficially, by the Persons, with the addresses of record and in the amounts set forth on Schedule 3.3(a). All outstanding shares of Company Capital Stock have been (i) are duly authorized, validly issued, fully paid and nonassessable non-assessable and free of are not subject to preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock reserved for issuancerights created by statute, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares Certificate of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock Incorporation or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities By-laws of the Company or its Subsidiariesany agreement to which the Company is a party or by which it is bound, nor are there outstanding any securities which are convertible into or exchangeable for any shares and (ii) have been offered, sold and delivered by the Company in compliance in all material respects with all applicable Laws. All preferential rights of capital stock the Company Preferred Stock with respect to the payment of consideration in connection with the sale of substantially all of the assets of the Company or its Subsidiaries a merger involving the Company are set forth in the Company Certificate of Incorporation. There are no declared or accrued but unpaid dividends with respect to any shares of Company Capital Stock. (i) Except for the Company’s 1997 Stock Plan (as most recently amended and restated on May 27, 2005, the “Company Option Plan”), neither the Company nor any of its Subsidiaries has ever adopted, sponsored or maintained any obligation stock option plan or any other plan or agreement providing for equity compensation to issue any additional securities or to pay for or repurchase any securities of the Company or its SubsidiariesPerson. The Company Option Plan has been duly authorized, approved and adopted by the Company’s board of directors and its stockholders and is in full force and effect. The Company has reserved a total of 6,692,000 shares of Company Common Stock are registered for issuance to Employees and directors of, and consultants to, the Company under the Exchange ActCompany Option Plan, of which (i) 3,824,205 shares are issuable, as of the date hereof, upon the exercise of outstanding, unexercised stock options granted pursuant to the Company Option Plan (each a “Company Option”, and collectively, the “Company Options”), (ii) 42,273 shares are available for grant but have not yet been granted pursuant to the Company Option Plan, and (iii) 3,781,932 shares have been issued and are outstanding pursuant to the prior exercise of stock options or other stock rights granted pursuant to the Company Option Plan. Since No outstanding Company Option permits payment of the Measurement Date exercise price therefor by any means other than cash, check, under a formal cashless exercise program or with certain shares of the Company’s Common Stock that have been owned by the optionee for at least six (6) months. All outstanding Company Options have been offered, issued and through delivered by the Company in compliance in all material respects with all applicable Laws and with the terms and conditions of the Company Option Plan. Schedule 3.3(b) sets forth for each outstanding Company Option, the name of the record holder of such Company Option (and, to the knowledge of the Company, the name of the beneficial holder, if different), the domicile address of such holder as set forth on the books of the Company, an indication of whether such holder is an Employee, the date of this Agreementgrant or issuance of such option, the Company has not (A) issued any number of shares of Company Common Stock (other than upon subject to such option, the exercise price of such option, the vesting schedule for such option, including the extent vested to the date of this Agreement and whether and to what extent the exercisability of such option will be accelerated and become exercisable as a result of the transactions contemplated by this Agreement, and whether such option is a Nonstatutory Option or settlement an incentive stock option as defined in Section 422 of the Code. (ii) All Company Warrants have been offered, issued and delivered by the Company in compliance in all material respects with all applicable Laws. Schedule 3.3(b) sets forth for each outstanding Company Warrant, the name of the record holder of such Company Warrant (and, to the knowledge of the Company, the name of the beneficial holder, if different), the domicile address of such holder as set forth on the books of the Company, an indication of whether such holder is an Employee, the date of grant or issuance of such Company Warrant, the number of shares of Company Equity Awards outstanding Capital Stock (and the class and series thereof) subject to such Company Warrant, the exercise price of such Warrant, the vesting schedule, if any, for such Company Warrant, including the extent vested to the date of this Agreement and whether and to what extent the exercisability of such Company Warrant will be accelerated and become exercisable as a result of the Measurement Datetransactions contemplated by this Agreement. (iii) Except for the Company Options and Company Warrants set forth on Schedule 3.3(b), there are no options, warrants, calls, rights, convertible securities, commitments or (B) granted agreements of any character, written or oral, to which the Company or any of its Subsidiaries is a party, or by which the Company or any of its Subsidiaries is bound, obligating the Company or any of its Subsidiaries to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any Company Equity Awards Capital Stock or similar awardsany capital stock or equity interest of such Subsidiary or obligating the Company or any of its Subsidiaries to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. The Company does not have There are no outstanding any bondsor authorized stock appreciation, debenturesphantom stock, notes profit participation, or other obligations similar rights with respect to the holders Company or any of which have its Subsidiaries. (iv) Except as set forth in Schedule 3.3(b), (i) there are no voting trusts, proxies, or other agreements or understandings with respect to the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders voting stock of the Company on or any matterof its Subsidiaries to which the Company or any of its Subsidiaries is a party, by which the Company or any of its Subsidiaries is bound, or of which the Company has knowledge, and (ii) there are no agreements or understandings to which the Company or any of its Subsidiaries is a party, by which the Company or any of its Subsidiaries is bound, or of which the Company has knowledge relating to the registration, sale or transfer (including agreements relating to rights of first refusal, “co-sale” rights or “drag-along” rights) of any Company Capital Stock, or any other investor rights, including, without limitation, rights of participation (i.e., pre-emptive rights), co-sale, voting, first refusal, board observation, visitation or information or operational covenants (the items described in clauses (i) and (ii) being, collectively, the “Rights Agreements”). On or prior to the Effective Time, all Rights Agreements shall have been terminated and of no further force or effect.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 100,000,000 shares of Company Common Stock and 50,000,000 3,000,000 shares of preferred stockPreferred Stock, $.01 par value $0.01 per share (“"Company Preferred Stock”"). As of the Measurement DateFebruary 12, 1998: (i) 228,209,888 15,519,944 shares of Company Common Stock (excluding treasury shares) were issued and outstanding outstanding, all of which are validly issued, fully paid and nonassessable; (including 119,422 ii) no shares of Company Common Preferred Stock subject to outstanding Company Restricted Stock Awards), were issued or outstanding; (iiiii) no shares of Company Common Stock were held by in the treasury of the Company in its treasury or by Subsidiaries of the Company; and (iiiiv) no 1,082,284 shares of Company Preferred Stock were issued and outstanding. All of the outstanding shares of Company Common Stock have been duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock were reserved for issuanceissuance under Company Stock Plans (including (A) 6,925 shares reserved for issuance under the 1982 Stock Option Plan, except that, as of the Measurement Date, there which 6,925 were subject to outstanding options and none of which were reserved for future option grants and (aB) 3,913,542 1,075,359 shares of Company Common Stock reserved for future issuance under the 1993 Equity Compensation Plan, as amended and restated, 755,114 of which were subject to outstanding options and 320,245 of which were reserved for future option grants. Since February 12, 1998, (i) no additional shares of capital stock have been reserved for issuance by the Company and (ii) the only issuances of shares of capital stock of the Company have been issuances of Company Common Stock upon the exercise of outstanding Company Stock Plans, Options (bas defined below) 867,802 listed in Item 3.3 of the Company Letter. All of the shares of Company Common Stock subject to outstanding Company Option Awardsissuance as specified above, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that upon issuance pursuant to their the terms may only and conditions specified in the instruments pursuant to which they are issuable, shall be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each . Except as provided in Item 3.3 of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this AgreementLetter, there are no outstanding subscriptionsobligations, optionscontingent or otherwise, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities repurchase, redeem or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued otherwise acquire any shares of Company Common Stock Stock. (other than upon the exercise or settlement b) Except as set forth in this Section 3.3, there are no equity securities of Company Equity Awards outstanding as any class of the Measurement Date) Company or (B) granted any Company Equity Awards of its Subsidiaries, or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible security exchangeable into or exercisable for securities having such equity securities, issued, reserved for issuance or outstanding. Except for the right stock options issued pursuant to vote) with the stockholders of the Company on Stock Plans (the "Company Stock Options") as set forth in this Section 3.3, there are no options, warrants, equity securities, calls, rights, commitments or agreements of any matter.character to which the Company or any of its Subsidiaries is a party or by which it is bound obligating the Company or any of its Subsidiaries to issue, deliver or sell, or

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 30,000,000 shares of Company Common Stock and 50,000,000 25,000,000 shares of preferred stock, $.01 par value $0.01 per share (“"Company Preferred Stock”"), of which 7,500,000 shares are designated 14% Preferred Stock and 10,000,000 shares are designated 12% Preferred Stock. As of the Measurement Datedate of this Agreement, (i) 228,209,888 12,934,000 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were are issued and outstanding. All , all of the outstanding shares of Company Common Stock have been which are duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no nonassessable, (ii) 91,100 shares of Company Common Stock are held in the treasury of Company or Company by Subsidiaries of Company, (iii) 2,742,353.74 shares of 14% Preferred Stock reserved for issuanceare issued and outstanding, except that, as all of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is which are duly authorized, validly issued, fully paid and nonassessable, and (iv) 2,000,000 shares of 12% Preferred Stock are issued and outstanding, all of which are duly authorized, validly issued, fully paid and nonassessable, all of which are, on the date hereof, and will be on the Closing Date after consummation of the transactions contemplated by Section 1.5, owned beneficially and of record by the persons and in the amounts as set forth in Section 3.2 of the Company Disclosure Schedule. The Options constitute all options to purchase stock of Company which are outstanding as of the date of this Agreement and which will be outstanding immediately before or on the Closing Date under the plans under which such options were granted (collectively, the "Company Stock Plans") and set forth on Section 3.2 of the Company Disclosure Schedule is a complete and accurate list of all holders of Options, indicating the number of shares of Company Common Stock subject to each Option and the exercise price therefor. Section 3.2 of the Company Disclosure Schedule also shows the number of shares of Company Common Stock reserved for future issuance pursuant to the Warrants (which Warrants constitute all of the warrants to purchase shares of Company's capital stock) and which will be outstanding on the Closing Date and other outstanding rights to purchase shares of Company Common Stock outstanding as of the date of this Agreement and which will be outstanding immediately before or on the Closing Date and a description of the agreement or other document under which such Warrants or other rights were granted and sets forth a complete and accurate list of all holders of Warrants or other rights indicating the number and type of shares of Company Common Stock or Company Preferred Stock subject to Warrants or -------------------------------------------------------------------------------- AGREEMENT AND PLAN OF MERGER 11 other rights and the exercise price. All shares of Company Common Stock or Company Preferred Stock subject to issuance as specified above are duly authorized and reserved and the shares of Company Common Stock, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. Except as set forth in the Certificate of Incorporation of Company, there are no obligations, contingent or otherwise, of Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Company Common Stock or any other capital stock of Company or any of its Subsidiaries or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any Subsidiary of Company or any other entity other than guarantees of bank obligations of Subsidiaries of Company entered into in the ordinary course of business. All of the outstanding shares of capital stock or other securities of each of the Company’s Significant 's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares are owned beneficially and of record by the Company or by a direct or indirect wholly owned another Subsidiary of the Company, Company free and clear of all security interests, liens, claims, pledges, agreements, limitations in Company's voting rights, charges or other encumbrances of any Encumbrance nature. (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). b) Except for the Company Stockholders AgreementStock Plans, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any Warrants and shares of capital stock of Company issuable pursuant to any of the foregoing, the BT Note or the 12% Preferred Stock, (i) there are no equity securities of Company or any of its Subsidiaries Subsidiaries, or any security exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding and neither the (ii) there are no other options, warrants, equity securities, calls, rights, commitments or agreements of any character to which Company nor or any of its Subsidiaries has is a party or by which it or any obligation to issue any additional securities or to pay for or repurchase any securities of the its Subsidiaries is bound obligating Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of Company or any of its Subsidiaries or obligating Company or any of its Subsidiaries to grant, extend, accelerate the vesting of, otherwise modify or amend or enter into any such option, warrant, equity security, call, right, commitment or agreement. There are no voting trusts, proxies or other voting agreements or understandings with respect to the shares of capital stock of Company or any of its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 59,000,000 shares of Company Common Stock Stock, of which 10,437,639 shares are issued and 50,000,000 outstanding as of the date hereof, 44,030,658 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”), of which (i) 18,582,500 shares are designated as “Series A Convertible Preferred Stock,” of which 18,500,000 shares are issued and outstanding as of the date hereof, (ii) 10,798,158 shares are designated as “Series B Convertible Preferred Stock,” of which 10,526,316 shares are issued and outstanding as of the date hereof, (iii) 6,250,000 shares are designated as “Series C Convertible Preferred Stock,” of which 6,140,351 shares are issued and outstanding as of the date hereof and (iv) 8,400,000 shares are designated as “Series D Convertible Preferred Stock,” of which 8,012,822 shares are issued and outstanding as of the date hereof. As of the Measurement Datedate hereof, (ithe capitalization of the Company is as set forth in Section 3.2(a) 228,209,888 shares of the Disclosure Schedule. As of the date hereof, the Company Common Capital Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares is held of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were held record by the Company persons and in its treasury the amounts set forth in Section 3.2(a) of the Disclosure Schedule which further sets forth for each such person, to the Company’s Knowledge the type of entity of such person, the number of shares held, the class and/or series of such shares and (iii) no shares the number of Company Preferred Stock were issued and outstandingthe applicable stock certificates representing such shares. All of the outstanding shares of Company Common Capital Stock have been are duly authorized, validly issued, fully paid and nonassessable non-assessable and free are not subject to preemptive rights created by statute, the Charter Documents, or any Contract to which the Company or any of preemptive its Subsidiaries is a party or by which it is bound. (b) All outstanding shares of Company Capital Stock, Company Options and Company Warrants have been validly issued or repurchased (in the case of shares that were outstanding and repurchased by the Company, any of its Subsidiaries or any stockholder of the Company) in compliance in all material respects with all applicable federal, state, foreign, or local Laws, including federal and state securities Laws, and were issued, transferred and repurchased (in the case of shares that were outstanding and repurchased by the Company or any Company Stockholder) in accordance with any right of first refusal or similar right or limitation, including those in the Charter Documents. No Company Stockholder has exercised any right of redemption, if any, provided in the Certificate of Incorporation with respect to shares of the Company Preferred Stock, and the Company has not received notice that any Company Stockholder intends to exercise such rights. There are no declared or accrued but unpaid dividends with respect to any shares of Company Capital Stock. (c) As of the date hereof, Section 3.2(c) of the Disclosure Schedule sets forth for all holders of Company Restricted Stock, the name of the holder of each such Company Restricted Stock award, the repurchase price of such shares of Company Restricted Stock, the date of purchase of such shares of Company Restricted Stock and the vesting schedule for such Company Restricted Stock including the extent vested to date, whether the vesting of such Company Restricted Stock is subject to acceleration as a result of the transactions contemplated by this Agreement or any other events (including a complete description of any such acceleration provisions) and whether, to the Knowledge of the Company, the holder has made a timely election with the Internal Revenue Service under Section 83(b) of the Code with respect to such Company Restricted Stock. (d) Except for the Plan, the Company has never adopted, sponsored or maintained any stock option plan or any other plan, arrangement or agreement providing for equity compensation to any person. The Company has no reserved 11,362,000 shares of Company Common Stock or for issuance to employees and directors of, and consultants to, the Company Preferred Stock reserved for issuance, except that, as of upon the Measurement Date, there were (a) 3,913,542 shares issuance of Company Common Restricted Stock reserved for future issuance awards or the exercise of Company Options under the Company Stock PlansPlan, of which (bi) 867,802 5,617,3423 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreementare issuable, as of the date hereof, upon the exercise of outstanding, unexercised Company Options granted under the Plan, (ii) 5,137,314 shares have been issued upon the exercise of Company Options or purchase of Company Restricted Stock awards under the Plan and remain outstanding as of the date hereof and (iii) 607,344 shares remain available for future grant as of the date hereof. As of the date hereof, Section 3.2(d) of the Disclosure Schedule sets forth for each outstanding Company Option and Company Warrant, the name of the holder of such option or warrant, to the Company’s Knowledge the type of entity of such holder, the number of shares of Company Capital Stock issuable upon the exercise of such option or warrant, the exercise price of such option or warrant, the date of grant of such option or warrant, the vesting schedule for such option or warrant, including the extent vested to date and whether the vesting of such option or warrant is subject to acceleration as a result of the transactions contemplated by this AgreementAgreement or any other events (including a complete description of any such acceleration provisions), whether such option is a nonstatutory option or intended to qualify as an incentive stock option as defined in Section 422 of the Code, and whether such option is early exercisable. True and complete copies of all Contracts and instruments relating to or issued under the Plan have been made available to Parent, and such Contracts and instruments have not been amended, modified or supplemented, and there are no outstanding subscriptionsContracts to amend, options, warrants, puts, call agreements, understandings, claims modify or other agreements, commitments supplement such Contracts or rights instruments from the forms thereof provided to Parent. All holders of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities Options are current Employees of the Company or its Subsidiaries. (e) There are no outstanding loans made by the Company to any Company Securityholder. (f) As of the date hereof, nor an aggregate of 259,855 shares of Company Common Stock, 82,500 shares of Company Series A Preferred Stock and 268,421 shares of Company Series B Preferred Stock are issuable upon the exercise of outstanding Company Warrants. Except for the Company Options, Company Restricted Stock and Company Warrants listed on Section 3.2(f) or Section 3.2(d) or Section 3.2(c) of the Disclosure Schedule as of the date hereof, there outstanding are no options, warrants, calls, rights, convertible securities, restricted stock units, performance shares, phantom stock, stock appreciation rights, profit participation or similar commitments or Contracts of any securities character, written or oral, to which are convertible into the Company or exchangeable for any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of the Company or its Subsidiaries and neither obligating the Company nor to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or Contract. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to the Company. Except as contemplated hereby, to the Company’s Knowledge, there are no voting trusts, proxies, or other Contracts or understandings with respect to the voting stock of the Company. There are no Contracts to which the Company or any of its Subsidiaries has is a party relating to the registration, sale or transfer (including Contracts relating to rights of first refusal, co sale rights or “drag-along” rights) of any obligation to issue any additional securities or to pay for or repurchase any securities Company Capital Stock. As a result of the Merger, Parent will be the sole record and beneficial holder of all issued and outstanding Company Capital Stock and all rights to acquire or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued receive any shares of Company Common Stock (other than upon the exercise Capital Stock, whether or settlement not such shares of Company Equity Awards outstanding as Capital Stock are outstanding. (g) The allocation of the Measurement Dateaggregate Merger Consideration set forth in Section 2.7(d) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) is consistent with the stockholders certificate of incorporation of the Company on as amended as of immediately prior to the Effective Time. (h) To the Company’s Knowledge, none of the shares of Company Capital Stock owned by any matterCompany Stockholder are subject to any Liens or to a right of first refusal of any kind, and none of the Company Stockholders has granted any rights to purchase such Company Capital Stock to any other Person.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 200,000,000 shares of Company Common Stock and 50,000,000 5,000,000 shares of preferred stockPreferred Stock, par value $0.01 .01 per share (“Company Preferred Stock”), of which 2,000,000 shares have been designated as “Series A Participating Preferred Stock”. As of the Measurement DateAugust 9, 2004, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no 97,283,455 shares of Company Common Stock were held by the Company in its treasury issued and outstanding, all of which are validly issued, fully paid and nonassessable, (iiiii) no shares of Company Preferred Stock were issued and outstanding. All of the outstanding , and (iii) 3,071,380 shares of Company Common Stock have been duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as were held in the treasury of the Measurement Date, there were (a) 3,913,542 Company or by Subsidiaries of the Company. The Company Disclosure Letter shows the number of shares of Company Common Stock reserved for future issuance pursuant to warrants, stock options and other stock awards, and restricted stock awards granted and outstanding as of August 9, 2004 under the 2003 Equity Participation Plan, the Amended and Restated Stock Option Plan for Key Employees of Tuboscope Vetco International Corporation, the Stock Option Plan for Non-Employee Directors, the 1990 Stock Option Plan and the 1994 Directors’ Stock Option Plan, in each case, as amended (collectively, the “Company Stock Plans”). Except for the issuance of shares of Company Common Stock in connection with Company Stock Plans (including the exercise of warrants, stock options or other stock awards thereunder), or pursuant to the Varco International, Inc. Employee Stock Purchase Plan (b) 867,802 the “Company Stock Purchase Plan”), or except as set forth in the Company Disclosure Letter, no change in such capitalization has occurred between August 9, 2004 and the date of this Agreement. All shares of Company Common Stock subject to outstanding Company Option Awardsissuance as specified above are duly authorized and, upon issuance on the terms and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that conditions specified in the instruments pursuant to their terms may only which they are issuable, shall be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and each of the outstanding shares of capital stock or other securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). Except for the Company Stockholders Agreement, as of the date of this Agreement, there There are no outstanding subscriptionsobligations, optionscontingent or otherwise, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreementrepurchase, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.redeem

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 (i) 45,000,000 shares of Company Common Stock and 50,000,000 Stock, of which 3,599,250 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock”). As of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were are issued and outstanding (including 119,422 as of the date hereof, no shares are held in the treasury of the Company Common Stock subject as of the date hereof, 7,896,590 shares are reserved for future issuance pursuant to outstanding Company Restricted Options as of the date hereof, and 28,290,357 shares are reserved for future issuance pursuant to the terms of the outstanding Company Preferred Stock Awards)as of the date hereof, and (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no 27,259,137 shares of Company Preferred Stock were Stock, consisting entirely of (A) 12,793,070 shares of Series A Preferred Stock, of which 12,159,480 shares are issued and outstandingoutstanding as of the date hereof and 633,590 shares are reserved for future issuance pursuant to the terms of the Series A Warrants as of the date hereof, and (B) 15,457,016 shares of Series B Preferred Stock, of which 15,099,657 shares are issued and outstanding as of the date hereof and 357,359 shares are reserved for future issuance pursuant to the terms of the Series B Warrants as of the date hereof. Each share of Company Preferred Stock is convertible into one (1) share of Company Common Stock. All of the issued and outstanding shares of Company Common Capital Stock have been are duly authorized, validly issued, fully paid and nonassessable non‑assessable and free of are not subject to preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, Except as set forth on Section 3.2(d) of the Measurement DateCompany Disclosure Schedule, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each all of the issued and outstanding shares of capital stock or other equity securities of each subsidiary of the Company’s Subsidiaries is Company are duly authorized, validly issued, fully paid and nonassessable, non‑assessable and each are not subject to preemptive rights. As of the date hereof, the Company Capital Stock is held by the Persons with the domicile addresses and in the amounts set forth on Section 3.2(a) of the Company Disclosure Schedule, which further sets forth for each such Person the number, class and series of shares held by such Person, the percentage held by such Person relative to each class or series of shares such Person owns and the total issued and outstanding shares of Company Capital Stock as of the date hereof, and the number of the applicable stock certificates representing such shares. Except as set forth on Section 3.2(a) of the Company Disclosure Schedule (which provides an accurate and complete description of the vesting schedule and each repurchase and redemption right held by the Company to which any shares of Company Capital Stock are subject), there are no outstanding shares of Company Capital Stock or any equity securities of any subsidiary of the Company that constitute restricted stock or that are otherwise subject to a repurchase or redemption right. There are no declared or accrued but unpaid dividends with respect to any equity securities of the Company or any of its subsidiaries. Except as set forth in this Section 3.2(a), the Company has no other capital stock authorized, issued or other outstanding. (b) All outstanding shares of Company Capital Stock, equity securities of each of the Company’s Significant Subsidiaries is owned beneficially and of record by the Company or by a direct or indirect wholly owned Subsidiary subsidiary of the Company, free Company Options, and clear other equity or equity based awards of the Company or any Encumbrance (excluding such transfer restrictions subsidiary of general applicability as may be provided under the Securities ActCompany have been issued in compliance in all material respects with all applicable federal, the state, local or foreign statutes, laws, rules or regulations, including federal securities laws and any applicable state securities or “blue sky” Laws laws. (c) Except as set forth in Section 3.2(c) of the various States of the United States or similar Law of other applicable jurisdictionsCompany Disclosure Schedule and as set forth in this Section 3.2(c). Except for , the Company Stockholders Agreementhas never adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity or equity related compensation to any Person. The Company has reserved 9,270,103 shares of Company Common Stock for issuance under the Company’s 2009 Stock Option/Stock Issuance Plan (the “Stock Plan”), of which options to purchase 7,896,590 shares of Company Common Stock are outstanding as of the date of this Agreement. Section 3.2(c) of the Company Disclosure Schedule also accurately sets forth with respect to each Company Option that is outstanding and each Company Warrant that is outstanding: (i) the name and domicile address of the holder of such Company Option or Company Warrant; (ii) whether such Company Option or Warrant has been vested; (iii) the type and number of shares of Company Capital Stock issuable upon the exercise of such Company Option or Company Warrant; (iv) the respective grant date(s) of such Company Option or and the term of such Company Option or Company Warrant; (v) the exercise price per share of Company Capital Stock purchasable under such Company Option or Company Warrant; and (vi) whether such Company Option or Company Warrant has been designated an “incentive stock option” as defined in Section 422 of the Code. No Company Option or Company Warrant will by its terms require an adjustment in connection with the Merger, except as expressly contemplated by this Agreement. (d) Except as set forth in Sections 3.2(c) and 3.2(d) of the Company Disclosure Schedule, there are no outstanding subscriptions, options, warrants, putscalls, call agreementsrights, understandings, claims or other agreementsconvertible securities, commitments or rights agreements of any type relating character, written or oral, to the issuance, sale, redemption or transfer by which the Company or any subsidiary of the Company is a party or by which the Company or any subsidiary of the Company is bound obligating the Company or any subsidiary of the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of Company Capital Stock or any equity securities of any subsidiary of the Company or its Subsidiariesobligating the Company or any subsidiary of the Company to grant, nor extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or other similar rights with respect to the Company or any subsidiary of the Company. (e) Except as set forth in Section 3.2(e) of the Company Disclosure Schedule and except as contemplated hereby, there outstanding any securities which are convertible into no (i) voting trusts, proxies, or exchangeable for any shares of capital other agreements or understandings with respect to the voting stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities subsidiary of the Company or its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, (ii) agreements to which the Company has not (A) issued or any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders subsidiary of the Company on is a party relating to the registration, sale or transfer (including agreements relating to rights of first refusal, co sale rights or “drag along” rights) of any matterCompany Capital Stock or any equity securities of any subsidiary of the Company.

Company Capital Structure. In the case As of the Companydate hereof, the authorized capital stock of the Company consists of 500,000,000 (i) 20,000,000 shares of Company Common Stock of which (A) 6,687,091 shares are issued and 50,000,000 outstanding, (B) 1,758,000 shares are reserved for issuance under Company Options approved from time to time by the Board under the Company's stock option plan, and (C) 2,000,000 shares are reserved for issuance upon conversion of the Company Preferred Stock; and (ii) 5,000,000 shares of preferred stock, par value $0.01 0.001 per share share, of the Company of which as of the date hereof (“Company A) 2,200,000 shares have been designated Series A Preferred Stock”). As , 2,000,000 of the Measurement Date, (i) 228,209,888 shares of Company Common Stock (excluding treasury shares) were which are issued and outstanding and 119,998 of which are reserved for issuance upon exercise of Company Warrants and (including 119,422 B) 2,800,000 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares preferred stock of Company Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were remain undesignated. All issued and outstanding. All of the outstanding shares of Company Common Stock have been duly authorized, authorized and validly issued, fully paid issued and nonassessable and free of preemptive rights. The Company has no shares of Company Common Stock or Company Preferred Stock reserved for issuance, except that, as of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is duly authorized, validly issued, are fully paid and nonassessable, and each were not issued in violation of the outstanding shares of capital stock or subject to any preemptive right that was not validly waived, or other securities of each of the Company’s Significant Subsidiaries is rights to subscribe for or purchase shares, and are owned beneficially and of record on the date hereof, by the Company or by a direct or indirect wholly owned Subsidiary of holders set forth in Schedule 2.2 (the Company, "Holders") free and clear of any Encumbrance (excluding such transfer restrictions of general applicability as may be provided under the Securities Actpledge, the “blue sky” Laws of the various States of the United States lien, security interest, encumbrance, claim or similar Law of other applicable jurisdictions)equitable or third-party interest. Except for the Company Stockholders Agreement, as As of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating options to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any shares of capital stock of the Company or its Subsidiaries and neither the Company nor any of its Subsidiaries has any obligation to issue any additional securities or to pay for or repurchase any securities of the Company or its Subsidiaries. The purchase 1,758,000 shares of Company Common Stock are registered under granted and outstanding and are held by the Exchange Act. Since the Measurement Date optionees set forth in Schedule 2.2, and through the date of this Agreement, the Company has not (A) issued any options to purchase 616,394 shares of Company Common Stock (other are fully vested. Other than upon the exercise or settlement shares of Company Equity Awards Stock owned by the Holders, there are no other outstanding interests, existing or contingent or direct or indirect, in Company Common Stock. Other than the Preferred Stock, the Company Options and the Company Warrants, as contemplated by Sections 1.8(b) and 5.3(g), and the conversion of the Measurement Dateoutstanding promissory notes in the aggregate principal amount of $2,724,956 into shares of Company Common Stock at a value of $4.00 per share (the "Note Conversion") there are no rights ("Company Rights") of any character, written or (B) granted oral, to which the Company is a party or by which it is bound, obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of Company Equity Awards Stock or similar awards. The obligating the Company does not have outstanding to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any bondssuch rights, debentures, notes or other obligations the holders including in favor of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders employees of the Company on any matterCompany.

Company Capital Structure. In the case of the Company, the (a) The authorized capital stock of the Company consists of 500,000,000 30,000,000 shares of Company Common Stock and 50,000,000 25,000,000 shares of preferred stock, $.01 par value $0.01 per share (“"Company Preferred Stock”"), of which 7,500,000 shares are designated 14% Preferred Stock and 10,000,000 shares are designated 12% Preferred Stock. As of the Measurement Datedate of this Agreement, (i) 228,209,888 12,934,000 shares of Company Common Stock (excluding treasury shares) were issued and outstanding (including 119,422 shares of Company Common Stock subject to outstanding Company Restricted Stock Awards), (ii) no shares of Company Common Stock were held by the Company in its treasury and (iii) no shares of Company Preferred Stock were are issued and outstanding. All , all of the outstanding shares of Company Common Stock have been which are duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has no nonassessable, (ii) 91,100 shares of Company Common Stock are held in the treasury of Company or Company by Subsidiaries of Company, (iii) 2,742,353.74 shares of 14% Preferred Stock reserved for issuanceare issued and outstanding, except that, as all of the Measurement Date, there were (a) 3,913,542 shares of Company Common Stock reserved for future issuance under the Company Stock Plans, (b) 867,802 shares of Company Common Stock subject to outstanding Company Option Awards, and such Company Option Awards have a weighted average exercise price of $21.03 per share, (c) 5,311,304 shares of Company Common Stock subject to outstanding Company RSU Awards, and (d) 5,494,388 shares of Company Common Stock subject to outstanding Company PSU Awards (assuming maximum performance and excluding those Company PSU Awards that pursuant to their terms may only be settled in cash). Each of the outstanding shares of capital stock or other securities of each of the Company’s Subsidiaries is which are duly authorized, validly issued, fully paid and nonassessable, and (iv) 2,000,000 shares of 12% Preferred Stock are issued and outstanding, all of which are duly authorized, validly issued, fully paid and nonassessable, all of which are, on the date hereof, and will be on the Closing Date after consummation of the transactions contemplated by Section 1.5, owned beneficially and of record by the persons and in the amounts as set forth in Section 3.2 of the Company Disclosure Schedule. The Options constitute all options to purchase stock of Company which are outstanding as of the date of this Agreement and which will be outstanding immediately before or on the Closing Date under the plans under which such options were granted (collectively, the "Company Stock Plans") and set forth on Section 3.2 of the Company Disclosure Schedule is a complete and accurate list of all holders of Options, indicating the number of shares of Company Common Stock subject to each Option and the exercise price therefor. Section 3.2 of the Company Disclosure Schedule also shows the number of shares of Company Common Stock reserved for future issuance pursuant to the Warrants (which Warrants constitute all of the warrants to purchase shares of Company's capital stock) and which will be outstanding on the Closing Date and other outstanding rights to purchase shares of Company Common Stock outstanding as of the date of this Agreement and which will be outstanding immediately before or on the Closing Date and a description of the agreement or other document under which such Warrants or other rights were granted and sets forth a complete and accurate list of all holders of Warrants or other rights indicating the number and type of shares of Company Common Stock or Company Preferred Stock subject to Warrants or -------------------------------------------------------------------------------- AGREEMENT AND PLAN OF MERGER other rights and the exercise price. All shares of Company Common Stock or Company Preferred Stock subject to issuance as specified above are duly authorized and reserved and the shares of Company Common Stock, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be validly issued, fully paid and nonassessable. Except as set forth in the Certificate of Incorporation of Company, there are no obligations, contingent or otherwise, of Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Company Common Stock or any other capital stock of Company or any of its Subsidiaries or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any Subsidiary of Company or any other entity other than guarantees of bank obligations of Subsidiaries of Company entered into in the ordinary course of business. All of the outstanding shares of capital stock or other securities of each of the Company’s Significant 's Subsidiaries is are duly authorized, validly issued, fully paid and nonassessable and all such shares are owned beneficially and of record by the Company or by a direct or indirect wholly owned another Subsidiary of the Company, Company free and clear of all security interests, liens, claims, pledges, agreements, limitations in Company's voting rights, charges or other encumbrances of any Encumbrance nature. (excluding such transfer restrictions of general applicability as may be provided under the Securities Act, the “blue sky” Laws of the various States of the United States or similar Law of other applicable jurisdictions). b) Except for the Company Stockholders AgreementStock Plans, as of the date of this Agreement, there are no outstanding subscriptions, options, warrants, puts, call agreements, understandings, claims or other agreements, commitments or rights of any type relating to the issuance, sale, redemption or transfer by the Company of any equity securities of the Company or its Subsidiaries, nor are there outstanding any securities which are convertible into or exchangeable for any Warrants and shares of capital stock of Company issuable pursuant to any of the foregoing, the BT Note or the 12% Preferred Stock, (i) there are no equity securities of Company or any of its Subsidiaries Subsidiaries, or any security exchangeable into or exercisable for such equity securities, issued, reserved for issuance or outstanding and neither the (ii) there are no other options, warrants, equity securities, calls, rights, commitments or agreements of any character to which Company nor or any of its Subsidiaries has is a party or by which it or any obligation to issue any additional securities or to pay for or repurchase any securities of the its Subsidiaries is bound obligating Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of Company or any of its Subsidiaries or obligating Company or any of its Subsidiaries to grant, extend, accelerate the vesting of, otherwise modify or amend or enter into any such option, warrant, equity security, call, right, commitment or agreement. There are no voting trusts, proxies or other voting agreements or understandings with respect to the shares of capital stock of Company or any of its Subsidiaries. The shares of Company Common Stock are registered under the Exchange Act. Since the Measurement Date and through the date of this Agreement, the Company has not (A) issued any shares of Company Common Stock (other than upon the exercise or settlement of Company Equity Awards outstanding as of the Measurement Date) or (B) granted any Company Equity Awards or similar awards. The Company does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.