Common use of Target Capital Structure Clause in Contracts

Target Capital Structure. (a) The authorized capital stock of Target consists of 50,000,000 shares of Target Common Stock and 2,000,000 shares of Preferred Stock, $.001 par value ("Target Preferred Stock"). As of November 13, 1997: (i) 14,515,265 shares of Target Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable; (ii) no shares of Target Common Stock were held in the treasury of Target or by Subsidiaries of Target; (iii) 3,662,570 shares of Target Common Stock were reserved for issuance under the Target Employee Option Plan, 3,153,814 of which were subject to outstanding options and 508,756 shares of which were reserved for future option grants; (iv) 291,194 shares of Target Common Stock were reserved for issuance pursuant to the Target Individual Options; (v) 200,000 shares of Target Common Stock were reserved for issuance under the Target Director Option Plan, 60,000 shares of which were subject to outstanding options; (vi) 327,579 shares of Target Common Stock were reserved for future issuance under the Target Purchase Plan, (vii) 96,385 shares of Target Common Stock were reserved for future issuance under the Target Incentive Plan and (viii) no shares of Target Preferred Stock were outstanding. No change in such capitalization has occurred between November 13, 1997 and the date of this Agreement other than the exercise and termination of outstanding stock options and the accrual of rights under the Target Purchase Plan. All shares of Target Common Stock 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. There are no obligations, contingent or otherwise, of Target or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Target Common Stock or the capital stock or other equity securities of any Target Subsidiary or provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of bank obligations of such Subsidiaries entered into in the ordinary course of business. All of the outstanding shares of capital stock and all other outstanding equity securities of each of Target's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable, and all such shares and other equity securities (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by Target or another Target Subsidiary free and clear of all security interests, liens, claims, pledges, agreements, limitations on Target's voting rights, charges or other encumbrances of any nature, except as imposed by law, rule or regulation.

Target Capital Structure. (a) The authorized capital stock of Target ------------------------ consists of 50,000,000 100,000,000 shares of Common Stock, par value $0.0001 per share, of which there were 7,638,480 shares issued and outstanding as of November 15, 2000 (none of which were held by Target in its treasury), and 10,000,000 shares of Preferred Stock, par value $0.01 per share, of which there are authorized 2,000,000 shares of Series A Preferred, of which there were 750,000 shares issued and outstanding as of November 15, 2000, and 4,000,000 shares of Series B Preferred, of which there were no shares issued and outstanding as of November 15, 2000. All outstanding shares of Target Stock are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights created by statute, the Articles of Incorporation or Bylaws of Target or any agreement or document to which Target is a party or by which it or its assets is bound. As of November 15, 2000, (i) Target had reserved an aggregate of 4,000,000 shares of Target Common Stock for issuance pursuant to Target's 1999 Employee Incentive Compensation Plan, and (ii) there were options ("Target ------ Options") outstanding to purchase an aggregate of 3,332,700 shares of Target ------- Common Stock pursuant to Target's 1999 Employee Incentive Compensation Plan. As of November 15, 2000, there are warrants ("Target Warrants") outstanding to --------------- purchase 1,000,000 shares of Target Common Stock and 2,000,000 shares of Preferred Stock, $.001 par value ("Target Preferred Stock"). As of November 13, 1997: (i) 14,515,265 1,000,000 shares of Target Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable; (ii) no shares of Target Common Stock were held in the treasury of Target or by Subsidiaries of Target; (iii) 3,662,570 shares of Target Common Stock were reserved for issuance under upon the exercise of the Target Employee Option Plan, 3,153,814 of which were subject to outstanding options and 508,756 shares of which were reserved for future option grants; (iv) 291,194 shares of Target Common Stock were reserved for issuance pursuant to the Target Individual Options; (v) 200,000 shares of Target Common Stock were reserved for issuance under the Target Director Option Plan, 60,000 shares of which were subject to outstanding options; (vi) 327,579 shares of Target Common Stock were reserved for future issuance under the Target Purchase Plan, (vii) 96,385 shares of Target Common Stock were reserved for future issuance under the Target Incentive Plan and (viii) no shares of Target Preferred Stock were outstanding. No change in such capitalization has occurred between November 13, 1997 and the date of this Agreement other than the exercise and termination of outstanding stock options and the accrual of rights under the Target Purchase PlanWarrants. All shares of Target Common Stock subject to issuance as specified aboveaforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall would be duly authorized, validly issued, fully paid and nonassessable. There are no obligations, contingent The Target Disclosure Schedules list for each person who held Target Options or otherwise, of Target or any of its Subsidiaries Warrants to repurchase, redeem or otherwise acquire any shares of Target Common Stock as of November 15, 2000, the name of the holder of such option or warrant, the capital stock exercise price of such option or other equity securities 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 and whether the exercisability of such option or warrant will be accelerated in any way by the transactions contemplated by this Agreement, and indicates the extent of acceleration, if any. Except as set forth in Schedule 2.2 of the Target Disclosure Schedules, consummation of the Merger, whether coupled with a termination of employment or not, will not result in the acceleration of any Target Subsidiary or provide funds to or make any investment (in the form vesting of a loan, capital contribution or otherwise) in any such Subsidiary Target Options or any other entity other than guarantees of bank obligations of such Subsidiaries entered into in the ordinary course of business. All of the outstanding shares of capital stock and all other outstanding equity securities of each of Target's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable, and all such shares and other equity securities (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by Target or another Target Subsidiary free and clear of all security interests, liens, claims, pledges, agreements, limitations on Target's voting rights, charges or other encumbrances of any nature, except as imposed by law, rule or regulationWarrants.

Target Capital Structure. (ai) The authorized capital stock ------------------------ of Target TARGET consists of 50,000,000 15,000,000 shares of Target Common Stock Stock, $.0001 par value, of which there were 9,299,017 shares issued and 2,000,000 outstanding as of November 8, 1999 and 1,000,000 shares of Preferred Stock, $.001 .01 par value ("Target TARGET Preferred ---------------- Stock"). No shares of TARGET Preferred Stock are issued and outstanding as of ----- the date hereof. As of November 13the date hereof, 1997: (i) 14,515,265 25,000 shares of Target Common TARGET Preferred Stock were issued and outstandinghave been designated Series A Junior Preferred Stock, all of which have been reserved for issuance under TARGET Rights Plan. As of November 8, 1999, no shares of TARGET Common Stock were held by TARGET in treasury. All outstanding shares of capital stock of TARGET are duly authorized, validly issued, fully paid and nonassessable; (ii) no non-assessable and are not subject to any preemptive rights. As of November 8, 1999, TARGET had reserved 608,390 shares of Target TARGET Common Stock for issuance to employees, consultants and directors pursuant to TARGET's 1992 Stock Option Plan (the "1992 Option Plan"), under which options were held in the treasury of Target or by Subsidiaries of Target; (iii) 3,662,570 outstanding for ---------------- 568,384 shares of Target TARGET Common Stock were as of November 8, 1999. As of November 8, 1999, TARGET had reserved 1,413,722 shares of TARGET Common Stock for issuance to employees, consultants and directors pursuant to TARGET's 1996 Omnibus Stock Plan (the "Omnibus Plan"), under the Target Employee Option Plan, 3,153,814 of which options were subject to outstanding options and 508,756 for 1,292,837 ------------ shares of which were TARGET Common Stock as of November 8, 1999. As of November 8, 1999, TARGET had reserved for future option grants; (iv) 291,194 150,000 shares of Target TARGET Common Stock for issuance to non- employee Directors of TARGET pursuant to TARGET's 1996 Non-Employee Director Stock Plan (the "Director Plan"), under which ------------- options were outstanding for 95,000 shares of TARGET Common Stock as of November 8, 1999. As of November 8, 1999, TARGET had reserved 150,000 shares of TARGET Common Stock for issuance pursuant to TARGET's 1996 Employee Stock Purchase Plan. For the Target Individual Options; six month offering period ending December 31, 1999, if all current participants continue to contribute at current levels (v) 200,000 assuming the purchase price of such shares to be 85% of Target the fair market value of TARGET Common Stock were reserved for issuance under on the Target Director Option Planfirst day of such offering period), 60,000 there would be an aggregate of approximately 40,000 shares of which were subject issuable pursuant to outstanding options; (vi) 327,579 shares of Target Common TARGET's 1996 Employee Stock were reserved for future issuance under the Target Purchase Plan, (vii) 96,385 and, in any event, no more than 50,000 shares of Target Common Stock were reserved issuable for future issuance under the Target Incentive Plan and (viii) no shares of Target Preferred Stock were outstanding. No change in such capitalization has occurred between November 13, 1997 and the date of this Agreement other than the exercise and termination of outstanding stock options and the accrual of rights under the Target Purchase Planoffering period. All shares of Target TARGET Common Stock subject to issuance as specified aboveaforesaid, 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 paid, nonassessable and nonassessable. There are no obligations, contingent or otherwise, of Target or not subject to any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Target Common Stock or the capital stock or other equity securities of any Target Subsidiary or provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of bank obligations of such Subsidiaries entered into in the ordinary course of business. All of the outstanding shares of capital stock and all other outstanding equity securities of each of Target's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable, and all such shares and other equity securities (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by Target or another Target Subsidiary free and clear of all security interests, liens, claims, pledges, agreements, limitations on Target's voting preemptive rights, charges or other encumbrances of any nature, except as imposed by law, rule or regulation.

Target Capital Structure. (a) The authorized capital stock of Target consists of 50,000,000 13,500,000 shares of Target Common Stock and 2,000,000 1,500,000 shares of Preferred Stock, $.001 par value ("Target of which 1,500,000 shares are designated as Series A Preferred Stock"). As of November 13the date of this Agreement, 1997: there are (i) 14,515,265 7,367,624 shares of Target Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable and 1,759,061 of which are subject to repurchase rights, (ii) 1,500,000 shares of Series A Preferred Stock issued and outstanding, all of which are validly issued, fully paid and nonassessable; , and each share of which is convertible into one and a half shares of Target Common Stock, (iiiii) no 2,250,000 shares of Target Common Stock were held in reserved for future issuance upon conversion of the treasury of Target or by Subsidiaries of TargetPreferred Stock; (iiiiv) 3,662,570 1,500 shares of Target Common Stock were reserved for issuance under the yet to be issued pursuant to an outstanding Target Employee Option Plan, 3,153,814 of which were subject to outstanding options Common Stock purchase agreement; and 508,756 shares of which were reserved for future option grants; (ivv) 291,194 250,500 shares of Target Common Stock were reserved for future issuance pursuant to Target Options granted and outstanding as of the date of this Agreement under the Target Individual Options; (v) 200,000 1997 Stock Option Plan and no shares available for grant thereunder. The Target 1997 Stock Option Plan is referred to herein as the "Target Stock Option Plan." The issued and outstanding shares of Target Common Stock were reserved for issuance under the Target Director Option Plan, 60,000 shares of which were subject to outstanding options; (vi) 327,579 shares of Target Common Stock were reserved for future issuance under the Target Purchase Plan, (vii) 96,385 shares of Target Common Stock were reserved for future issuance under the Target Incentive Plan and (viii) no shares of Target Preferred Stock were outstanding. No change in such capitalization has occurred between November 13, 1997 are held of record by the shareholders of Target as set forth and the date identified on Schedule 3.2(a) of this Agreement other than the exercise and termination of outstanding stock options and the accrual of rights under the Target Purchase PlanDisclosure Schedule. The issued and outstanding Target Options are held of record by the option holders identified on, in the amounts, with exercise prices and subject to the vesting schedules set forth on, Schedule 3.2(a) of the Target Disclosure Schedule. All shares of Target Common Stock subject to issuance as specified above, upon issuance on the terms and conditions (including payment) specified in the instruments pursuant to which they are issuable, shall be duly authorized, validly issued, fully paid and nonassessable. All shares of Target Common Stock subject to issuance upon the exercise of Target Options, upon issuance on the terms and conditions (including payment) specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. All outstanding shares of Target Common Stock, Target Preferred Stock and outstanding Target Options (collectively "Target Securities") were issued in compliance with applicable federal and state securities laws. There are no obligations, contingent or otherwise, of Target or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Target Common Stock or the capital stock or other equity securities of any Target Subsidiary or provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of bank obligations of such Subsidiaries entered into entity. An updated Schedule 3.2(a) reflecting changes permitted by this Agreement in the ordinary course capitalization of business. All of Target between the outstanding shares of capital stock date hereof and all other outstanding equity securities of each of Target's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable, and all such shares and other equity securities (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned Effective Time shall be delivered by Target or another Target Subsidiary free and clear of all security interests, liens, claims, pledges, agreements, limitations to Acquiror on Target's voting rights, charges or other encumbrances of any nature, except as imposed by law, rule or regulationthe Closing Date.

Target Capital Structure. (a) The authorized capital stock of Target consists of 50,000,000 15,000,000 shares of Target Common Stock and 2,000,000 5,006,393 shares of Target Preferred Stock, $.001 par value ("Target of which 2,000,000 shares are designated as Series A Preferred Stock and 3,006,393 shares are designated as Series B Preferred Stock"). As of November 13the date of this Agreement, 1997: there are (i) 14,515,265 3,862,500 shares of Target Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable; , (ii) no 2,000,000 shares of Series A Preferred Stock issued and outstanding, all of which are validly issued, fully paid and nonassessable, and each share of which is convertible into 1.5 shares of Target Common Stock, (iii) 2,321,461 shares of Series B Preferred Stock issued and outstanding, all of which are validly issued, fully paid and nonassessable, and each share of which is convertible into 1.5 shares of Target Common Stock, (iv) 6,482,191 shares of Target Common Stock were held in reserved for future issuance upon conversion of the treasury of Target or by Subsidiaries of TargetPreferred Stock; (iiiv) 3,662,570 1,997,875 shares of Target Common Stock were reserved for future issuance pursuant to Target Options granted and outstanding under the Target Employee Option Plan, 3,153,814 of which were subject to outstanding options ; and 508,756 shares of which were reserved for future option grants; (ivvi) 291,194 391,625 shares of Target Common Stock were reserved for issuance pursuant upon exercise of options available to be granted in the future under the Target Individual Options; (v) 200,000 Option Plan. The issued and outstanding shares of Target Common Stock were reserved for issuance under the Target Director Option Plan, 60,000 shares of which were subject to outstanding options; (vi) 327,579 shares of Target Common Stock were reserved for future issuance under the Target Purchase Plan, (vii) 96,385 shares of Target Common Stock were reserved for future issuance under the Target Incentive Plan and (viii) no shares of Target Preferred Stock were outstanding. No change in such capitalization has occurred between November 13, 1997 are held of record by the shareholders of Target as set forth and the date identified on Schedule 3.2(a) of this Agreement other than the exercise and termination of outstanding stock options and the accrual of rights under the Target Purchase PlanDisclosure Schedule. The issued and outstanding Target Options are held of record by the option holders identified on, in the amounts and subject to the vesting schedules set forth on, Schedule 3.2(a) of the Target Disclosure Schedule. All shares of Target Common Stock and Target Preferred Stock subject to issuance as specified above, upon issuance on the terms and conditions (including payment) specified in the instruments pursuant to which they are issuable, shall be duly authorized, validly issued, fully paid and nonassessable. There All shares of Target Common Stock subject to issuance upon the exercise of Target Options, upon issuance on the terms and conditions (including payment) specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. All outstanding shares of Target Common Stock, Target Preferred Stock and outstanding Target Options (collectively "TARGET SECURITIES") were issued in compliance with applicable federal and state securities laws. Except as set forth in the Target Disclosure Schedule, there are no obligations, contingent or otherwise, of Target or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Target Common Stock or the capital stock or other equity securities of any Target Subsidiary or provide funds to Preferred Stock or make any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of bank obligations of such Subsidiaries entered into entity. An updated Schedule 3.2(a) reflecting changes permitted by this Agreement in the ordinary course capitalization of business. All of Target between the outstanding shares of capital stock date hereof and all other outstanding equity securities of each of Target's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable, and all such shares and other equity securities (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned Effective Time shall be delivered by Target or another Target Subsidiary free and clear of all security interests, liens, claims, pledges, agreements, limitations to Acquiror on Target's voting rights, charges or other encumbrances of any nature, except as imposed by law, rule or regulationthe Closing Date.

Target Capital Structure. (a) The authorized capital stock of Target consists of 50,000,000 1,000,000 shares of Target Common Stock, par value $0.01 per share. As of the date of this Agreement, there are (a) 375,559 shares of Target Common Stock and 2,000,000 shares of Preferred Stock, $.001 par value ("Target Preferred Stock"). As of November 13, 1997: (i) 14,515,265 shares of Target Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable; (ii) no shares of Target Common Stock were held in the treasury of Target or by Subsidiaries of Target; (iii) 3,662,570 shares of Target Common Stock were reserved for issuance under the Target Employee Option Plan, 3,153,814 of which were subject to outstanding options and 508,756 shares of which were reserved for future option grants; (iv) 291,194 shares of Target Common Stock were reserved for issuance pursuant to the Target Individual Options; (v) 200,000 shares of Target Common Stock were reserved for issuance under the Target Director Option Plan, 60,000 shares of which were subject to outstanding options; (vi) 327,579 shares of Target Common Stock were reserved for future issuance under the Target Purchase Plan, (vii) 96,385 shares of Target Common Stock were reserved for future issuance under the Target Incentive Plan and (viii) no shares of Target Preferred Stock were outstanding. No change in such capitalization has occurred between November 13, 1997 and the date of this Agreement other than the exercise and termination of outstanding stock options and the accrual of rights under the Target Purchase Plan. All shares of Target Common Stock 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 nonassessablenonassessable and none of which are subject to repurchase rights, (b) options (the "Target Options") to purchase 47,167 shares of Target Common Stock issued pursuant to Target's 1995 Nonqualified Stock Option Plan of Southern Research Technologies, Inc. and 128,225 shares of Target Common Stock issued pursuant to Target's 1993 Stock Option Plan of Southern BioSystems, Inc. (each a "Target Option Plan") and (c) warrants to purchase 24,174 shares of Target Common Stock issuable pursuant to warrant agreements. There The issued and outstanding shares of Target Common Stock, Target Options and warrants to purchase shares of Target Common Stock ("Target Warrants") are held of record by the persons set forth and identified on Schedule 3.2(a) of the Target Disclosure Schedule as of the date hereof. All outstanding shares of Target Common Stock and all options or warrants to purchase Target Common Stock (collectively "Target Securities") were issued in compliance with applicable federal and state securities laws. Except as set forth in the Target Disclosure Schedule, there are no obligations, contingent or otherwise, of Target or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Target Common Stock or the capital stock or other equity securities of any Target Subsidiary or provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of bank obligations of such Subsidiaries entered into entity. An updated Schedule 3.2(a) reflecting changes permitted by this Agreement in the ordinary course capitalization of businessTarget between the date hereof and the Effective Time shall be delivered by Target to Acquiror on the Closing Date. All of Except as set forth in the Target Disclosure Schedule, no outstanding shares of capital stock and all other outstanding equity securities of each of Target's Subsidiaries are duly authorizedCommon Stock were, validly at the time they were issued, fully paid and nonassessable, and all such shares and other equity securities (other than directors' qualifying shares in the case subject to a right of foreign Subsidiaries) are owned repurchase by Target or another Target Subsidiary free and clear of all security interests, liens, claims, pledges, agreements, limitations on Target's voting rights, charges or other encumbrances of under any nature, except as imposed by law, rule or regulationcircumstances.

Target Capital Structure. (a) The authorized capital stock of Target TARGET consists of 50,000,000 shares of Target common stock, par value $0.01 per share ("TARGET Common Stock Stock"), and 2,000,000 10,000,000 shares of Preferred Stock, $.001 par value $0.01 per share ("Target TARGET Preferred Stock"). As of November 13October 31, 1997: (i) 14,515,265 16,323,074 shares of Target TARGET Common Stock were issued and outstanding, all of which are duly authorized, validly issued, fully paid and nonassessable; , (ii) there were options and rights outstanding under the TARGET Stock Option Plans, entitling the optionees thereunder upon valid exercise to acquire in the aggregate 1,342,556 shares of TARGET Common Stock, (iii) there were warrants outstanding entitling the holders thereof upon valid exercise to acquire in the aggregate 1,306,133 shares of TARGET Common Stock at the exercise prices set forth on the TARGET Disclosure Schedule, and (iv) no shares of Target TARGET Common Stock were held in the treasury by any Subsidiary of Target or by Subsidiaries of Target; (iii) 3,662,570 shares of Target Common Stock were reserved for issuance under the Target Employee Option Plan, 3,153,814 of which were subject to outstanding options and 508,756 shares of which were reserved for future option grants; (iv) 291,194 shares of Target Common Stock were reserved for issuance pursuant to the Target Individual Options; (v) 200,000 shares of Target Common Stock were reserved for issuance under the Target Director Option Plan, 60,000 shares of which were subject to outstanding options; (vi) 327,579 shares of Target Common Stock were reserved for future issuance under the Target Purchase Plan, (vii) 96,385 shares of Target Common Stock were reserved for future issuance under the Target Incentive Plan and (viii) no shares of Target Preferred Stock were outstandingTARGET. No change in such capitalization has occurred between November 13, 1997 and the since such date of this Agreement other than the exercise and termination of outstanding stock options outstanding. No shares of TARGET Preferred Stock were issued and the accrual of rights under the Target Purchase Planoutstanding. All shares of Target TARGET Common Stock 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. There are no obligations, contingent or otherwise, of Target TARGET or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of Target TARGET Common Stock or the capital stock or other equity securities of any Target TARGET Subsidiary or provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any such Subsidiary or any other entity other than guarantees of bank obligations of such Subsidiaries entered into in the ordinary course of business. All of the outstanding shares of capital stock and all other outstanding equity securities of each of Target's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable, and all such shares and other equity securities (other than directors' qualifying shares in the case of foreign Subsidiaries) are owned by Target or another Target Subsidiary free and clear of all security interests, liens, claims, pledges, agreements, limitations on Target's voting rights, charges or other encumbrances of any nature, except as imposed by law, rule or regulationentity.