Common use of Capital Structure Clause in Contracts

Capital Structure. As of the date hereof, the authorized capital stock of the Company consists of 30,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 per share, of the Company ("Company Preferred Stock"). At the close of business on October 22, 1999 (except as otherwise indicated): (i) 18,183,374 shares of Company Common Stock were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. As of At the date hereof, the authorized capital stock of the Company consists of 30,000,000 90,000,000 shares of Company Common Stock Stock, and 10,000,000 5,000,000 shares of preferred stockPreferred Stock, $.01 par value $.01 per share, of the Company share ("Company Preferred Stock"). At the close of business on October 22January 16, 1999 (except as otherwise indicated): 1998, (i) 18,183,374 35,306,657 shares of Company Common Stock (and associated Rights) were issued and outstanding, (ii) 2,070,000 shares of Convertible Preferred Stock were issued and outstanding, (iii) no shares of Company Common Stock were held in the treasury of the Company or by its Subsidiaries, (iv) 6,307,000 shares of Company Common Stock were reserved for issuance pursuant to the Company Stock Compensation Program, as amended, options to purchase 5,485,743 shares of Company Common Stock had been issued and outstanding; were outstanding pursuant to such Stock Compensation Program, (iiv) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 1,000,000 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option 401(k) Plan, the Company's Service Center dated as of October 14, 1993, as amended, and as of December 31, 1997, no shares of Company Common Stock Option had been issued and were outstanding pursuant to such 401(k) Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iiivi) as of September 30, 1999, 2,166,451 6,742,671 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares Certificate of Company Common Stock upon the terms Designation, and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by reserved in connection with the Rights Agreement dated October 6, 1997 (the "Rights Agreement") between the Company in its treasury or by its wholly owned Subsidiaries; and Continental Stock Transfer & Trust Company pursuant to which the Company declared a dividend on October 6, 1997 of one preferred share purchase right (viia "Right") for each outstanding share of Company Common Stock. Except as set forth above, at the close of business on January 16, 1998, no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) capital stock or other voting securities of the Company Disclosure Schedule (were issued, reserved for issuance or outstanding. All the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 outstanding shares of Company Common Stock upon the terms were validly issued, fully paid and conditions nonassessable and free of preemptive rights. Except as otherwise set forth on Schedule 3.1(b)(viii) in a disclosure letter making reference to this section, there are no options, warrants, calls, rights or agreements to which the Company or any of its Subsidiaries is a party or by which any of them 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 Disclosure Scheduleor any of its Subsidiaries or obligating the Company or any of its Subsidiaries to grant, no Voting Debt extend or enter into any such option, warrant, call, right or agreement. Except as otherwise set forth in a disclosure letter making reference to this section, each outstanding share of capital stock of each Subsidiary of the Company that is a corporation is duly authorized, validly issued, fully paid and nonassessable and, except as disclosed in the Company SEC Documents (as defined belowin Section 3.5) was issued filed prior to the date of this Agreement, each such share that is owned by the Company or another Subsidiary of the Company, is owned free and outstandingclear of all Liens. The term "Voting Debt" means As of the date of this Agreement, the Company does not have outstanding any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as otherwise set forth on Schedule 3.1(b)(ix) in a disclosure letter making reference to this section, there are no outstanding contractual obligations of the Company Disclosure Scheduleor any of its Subsidiaries to repurchase, all outstanding redeem or otherwise acquire any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries. Exhibit 21 to the Company's Annual Report on Form 10-K for the year ended March 31, 1997, as filed with the SEC (the "Company Annual Report"), is a true, accurate and correct statement in all material respects of all the information required to be set forth therein by the rules and regulations of the SEC.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of the Company consists of 30,000,000 300,000,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stock, par value $.01 0.0001 per share, of the Company ("the “Company Preferred Stock"”). At the close of business on October 2218, 1999 2018 (except as otherwise indicated): the “Capitalization Date”), (iA) 18,183,374 (1) 176,542,812 shares of Company Common Stock (excluding treasury shares and Restricted Shares) were issued and outstanding; outstanding and (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii2) no shares of Company Preferred Stock were issued and outstanding; and , (viiiB) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 65,848,434 shares of Company Common Stock upon were held by the terms Company as treasury shares, (C) 23,155,610 shares of Company Common Stock were reserved and conditions set forth on Schedule 3.1(b)(viiiavailable for issuance in the aggregate pursuant to (x) the Company’s 2004 Long-Term Incentive Plan, as amended and restated August 9, 2012, (y) the Ansible, Inc. 2013 Stock Incentive Plan, as amended, (z) Inktank Storage, Inc. 2011 Equity Incentive Plan, and (aa) the Gluster, Inc. 2005 Stock Plan (amended and restated) and (D) 3,851,678 shares of Company Common Stock were reserved and available for issuance pursuant to the Company’s 2016 Employee Stock Purchase Plan (the “ESPP,” and collectively with the plans identified in clause (C), the “Company Stock Plans”), of which (1) 36,628 shares of Company Common Stock were subject to outstanding options (other than rights under the ESPP) to acquire shares of Company Common Stock from the Company (such options, together with any other stock options granted after the Capitalization Date, in each case whether granted pursuant to the Company Stock Plans or otherwise, the “Stock Options”), (2) 210,545 shares of Company Common Stock were subject to vesting or transfer restrictions and/or subject to forfeiture back to the Company or repurchase by the Company (such shares, together with any shares granted after the Capitalization Date that are so subject, the “Restricted Shares”), (3) 4,073,098 shares of Company Common Stock were subject to restricted stock units with service-based, but not performance-based, vesting or delivery requirements (such restricted stock units, together with any other restricted stock units granted after the Capitalization Date, in each case whether granted pursuant to the Company Stock Plans or otherwise, the “RSUs”), (4) a maximum of 1,304,837 shares of Company Common Stock were subject to outstanding restricted stock units with performance-based vesting or delivery requirements (such restricted stock units, together with any other restricted stock units with performance-based vesting or delivery requirements granted after the Capitalization Date, in each case whether granted pursuant to the Company Stock Plans or otherwise, the “PSUs”) and (5) 100,378 shares of Company Common Stock were subject to deferred stock units (such deferred stock units, together with any other deferred stock units granted after the Capitalization Date (including those held by members of the Company Disclosure ScheduleBoard), in each case whether granted pursuant to the Company Stock Plans or otherwise, the “DSUs”), (D) the maximum number of shares of Company Common Stock subject to issuance pursuant to outstanding Convertible Notes to the extent converted in accordance with their terms and giving effect to the Merger and the other transactions contemplated by this Agreement is 530,152 and (E) the maximum number of shares of Company Common Stock subject to issuance pursuant to the terms of the outstanding Warrants as of the date of this Agreement is 21,931,260 (subject to further adjustment pursuant to the terms in existence as of the date of this Agreement); to the Company’s knowledge, prior to the date of this Agreement, no Voting Debt event has occurred that gave the Hedge Counterparties the right to adjust such number of shares. (ii) All outstanding shares of capital stock of the Company are, and all shares that may be issued pursuant to the Company Stock Plans or in connection with the Convertible Notes or the Warrants will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as defined belowset forth in this Section 3.01(c), as of the close of business on the Capitalization Date, there are not issued or outstanding (A) was issued any shares of capital stock or other equity or voting securities of the Company or any of its Subsidiaries, (B) securities convertible into, or exchangeable or exercisable for, or options, warrants, shares of deferred stock, or restricted stock awards, or other rights to acquire any such capital stock or other equity or voting securities of the Company or any of its Subsidiaries and outstanding. The term "Voting Debt" means (C) bonds, debentures, notes or other indebtedness having Indebtedness of the Company or any of its Subsidiaries, in each case, that are linked to, or the value of which is in any way based upon or derived from, the value of the Company, any of its Subsidiaries or any part thereof, or any dividends or other distributions declared or paid on any shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries, or which have or which by their terms may have at any time (whether actual or contingent) the right to vote (or which are convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders shareholders of the Company or Parentany of its Subsidiaries may vote (the items referred to in clauses (A) and (C) collectively, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature“Equity Equivalents”). Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement3.01(c), there are outstanding: (i) no shares of capital stocksecurities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements Contracts of any kind to 8 18 which the Company or any Subsidiary of the Company its Subsidiaries is a party party, or by which it the Company or any of its Subsidiaries is bound in any case bound, obligating the Company or any Subsidiary of the Company its Subsidiaries to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt of, or other equity or voting interests in, or securities convertible into, or exchangeable or exercisable for, shares of capital stock of, or other equity or voting interests in, the Company or any of any Subsidiary of the Company, its Subsidiaries or obligating the Company or any Subsidiary of the Company its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment right or agreementContract. Except as contemplated by this Agreement, there There are not as of the date hereof and there will not be at the Effective Time any no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on holding, voting, registration, redemption, repurchase or disposition of, or that restricts the transfer of, or grants any preemptive rights, anti-dilutive rights or rights of first refusal or other similar rights with respect to, any shares of capital stock or Equity Equivalents of the Company to vote the stock of or any of its Subsidiaries. The Company has no rights plan, “poison pill” or other similar agreement or arrangement. (iii) Section 3.01(c)(iii) of the Company Letter contains a correct and complete list of outstanding Stock Options (other than pursuant to the ESPP), Restricted Shares, RSUs, PSUs and DSUs, including the date of grant, expiration (for Stock Options), number of shares of Company Common Stock underlying such award and, where applicable, exercise price. Each Stock Option granted by the Company was granted with an exercise price per share equal to or greater than the fair market value of a share of Company Common Stock on the effective date of such grant (as determined under Section 409A of the Code). All Stock Options, Restricted Shares, RSUs, PSUs and DSUs may, by their terms, be treated in accordance with Section 5.04(a), and all rights to purchase shares of Company Common Stock under the ESPP may, by their terms, be treated in accordance with Section 5.04(b). All outstanding Stock Options, Restricted Shares, RSUs, PSUs and DSUs (x) have been granted under the Company Stock Plans and (y) are evidenced by award agreements substantially in the forms previously made available to Parent. As of the date of this Agreement, other than the Restricted Shares, none of the issued and outstanding Company Common Stock is subject to vesting or forfeiture conditions or a right of repurchase by the Company. Other than the Company Stock Plans (or pursuant thereto), there is no Company plan or Contract providing for the grant of Stock Options, Restricted Shares, RSUs, PSUs or DSUs. No shares of Company Common Stock or Equity Equivalents are owned by any Subsidiary of the Company. As of the date of this Agreement, other than the outstanding Stock Options, Restricted Shares, RSUs, PSUs and DSUs and the rights under the ESPP, there are no outstanding rights of any person to receive Company Common Stock under the Company Stock Plans or otherwise, on a deferred basis or otherwise.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 20,000,000 shares of Company Common Stock and 10,000,000 2,000,000 shares of preferred stock, par value $.01 per share. At the close of business on March 31, 2003, (i) 7,870,203 shares of the Company Common Stock and no shares of preferred stock were issued and outstanding, (ii) 1,637,783 shares of the Company Common Stock were held by the Company in its treasury and (iii) 400,000 shares of Series A Junior Participating Preferred Stock, par value $.01 per share, of the Company (the "Company Series A Junior Participating Preferred Stock"). At the close of business on October 22, 1999 (except as otherwise indicated): (i) 18,183,374 shares of Company Common Stock were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance in connection with the rights (the "Rights") to purchase shares of Series A Junior Participating Preferred Stock, issued pursuant to the Company's 1996 Non-Employee Director Stock Option PlanRights Agreement, the Company's Service Center Stock Option Plandated as of April 14, the Company's 1996 Incentive Stock Plan1999, the Company's 1996 Employee Stock Purchase Planas amended on December 14, the Company's 1997 Non-Qualified Stock Purchase Plan 1999, and the Company's 1997 Non-Qualified Stock Option Plan as further amended on August 11, 2000 (collectively, the "Company Stock PlansRights Agreement"), respectively; (iii) between the Company and Equiserve Trust Company, N.A., as Rights Agent. As of September 30March 31, 19992003, 2,166,451 collectively, 1,638,294 shares of the Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants or other purchase rights (the "Company WarrantsStock Options") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance granted pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on grants described in Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii4.01(c) of the Company Disclosure Schedule (the "Company Convertible NotesIndividual Grants"), which is convertible into an aggregate and under the Restated 1985 Incentive Stock Option Plan (the "1985 Stock Option Plan"), the Amended and Restated 1996 Stock Option Plan (the "1996 Stock Option Plan") and the 2000 Employee Stock Purchase Plan (the "ESPP," and together with Individual Grants, the 1985 Stock Option Plan and the 1996 Stock Option Plan, the "Company Stock Plans"). As of 410,831 March 31, 2003, there were 2,218,304 shares of the Company Common Stock upon reserved for issuance under the terms and conditions Company Stock Plans. Except as set forth above, at the close of business on March 31, 2003, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights ("SARs") or rights (other than the Company Stock Options) to receive shares of the Company Common Stock on a deferred basis granted under the Company Stock Plans. Schedule 3.1(b)(viii4.01(c) of the Company Disclosure ScheduleSchedule sets forth a true and complete list, as of March 31, 2003, of all the Company Stock Options, the holders thereof, the number of shares subject to each such option, the grant dates and the exercise prices thereof. All outstanding shares of capital stock of the Company are, and all shares which may be issued pursuant to the Company Stock Plans will be, if and when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. As of the date of this Agreement, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote are issued or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rightsoutstanding. Except as set forth on Schedule 3.1(b)(ix) above, as of the Company Disclosure Schedule, all outstanding shares date of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt preemptive or other voting securities outstanding securities, options, warrants, calls, rights, conversion rights, redemption rights, repurchase rights, commitments, agreements, arrangements or undertakings of the Company; (ii) no securities of any kind to which the Company or any Subsidiary of its subsidiaries is a party or by which any of them is bound obligating the Company convertible into or exchangeable for any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, Voting Debt stock or other voting securities of the Company or any Subsidiary of the Company; and (iii) no optionsits subsidiaries, warrants, calls, rights (including preemptive rights), commitments or agreements giving any person a right to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem subscribe for or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or any of any Subsidiary of the Company, its subsidiaries or obligating the Company or any Subsidiary of the Company its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment conversion right, redemption right, repurchase right, commitment, agreement, arrangement or agreementundertaking. Except as contemplated by this Agreement, there There are not as no outstanding contractual obligations of the date hereof and there will not be at the Effective Time Company or any stockholder agreementsof its subsidiaries to repurchase, voting trusts redeem or other agreements or understandings to which otherwise acquire any shares of capital stock of the Company is a party or by which it is bound relating any of its subsidiaries. There are no outstanding contractual obligations of the Company to the voting vote or to dispose of any shares of the capital stock of the any of its subsidiaries. All outstanding shares of Company that will limit in any way the solicitation Common Stock, all outstanding Company Stock Options and all outstanding shares of proxies by or on behalf capital stock of each subsidiary of the Company from, or the casting of votes by, the stockholders of the Company have been issued and granted in compliance with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries(i) all applicable securities laws and other applicable laws and (ii) all requirements set forth in applicable contracts.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 36,310,000 shares of Company Common Stock Stock, 12,300,000 shares of nonvoting common stock, par value $0.01 per share (the "Company Nonvoting Common Stock") and 10,000,000 1,000,000 shares of preferred stock, par value $.01 0.01 per share, of share (the Company ("Company Preferred Stock"), of which 36,310 shares of Company Preferred Stock have been designated as Series A Junior Participating Preferred Stock (the "Company Series A Preferred Stock"). At As of the close of business on October 22April 30, 1999 (except as otherwise indicated): 2002, (i) 18,183,374 15,306,095 shares of Company Common Stock (excluding shares held by the Company as treasury shares) were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company as treasury shares, (iii) 1,458,610 shares of Company Common Stock were reserved and available for issuance pursuant to the 1994 Long-Term Incentive Plan, the 1997 Non-Employee Director Stock Option Plan and the 1997 Executive Deferred Compensation Stock Option Plan (such plans, collectively, the "Company Stock Plans"), (iv) 1,458,610 shares of Company Common Stock were subject to outstanding options or other rights to purchase shares of Company Common Stock granted under the Company Stock Plans (the "Company Stock Options"), (v) 36,310 shares of Company Series A Preferred Stock were authorized for issuance upon the exercise of the rights (the "Rights") distributed to the holders of Company Common Stock pursuant to the Rights Agreement dated as of December 28, 2000, between the Company and Mellon Investor Services LLC, as rights agent (the "Rights Agreement"), (vi) no shares of Company Nonvoting Common Stock were issued and outstanding or were held by the Company in its treasury or by its wholly owned Subsidiaries; and (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for outstanding or were held by the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viiiCompany in its treasury. Section 3.01(c) of the Company Disclosure Schedule (sets forth a true, complete and correct list, as of the "close of business on April 30, 2002, of all outstanding Company Convertible Notes")Stock Options, which is convertible into an aggregate the number of 410,831 shares of Company Common Stock upon subject to each Company Stock Option, the grant dates, exercise prices, expiration dates and vesting schedule of each Company Stock Option and the names of the holders thereof. All Company Stock Options may, by their terms, be converted into an option to acquire Parent Common Stock in accordance with and to the extent provided by Section 5.05. Each Company Stock Option intended to qualify as an "incentive stock option" under Section 422 of the Code so qualifies. Except as set forth above, as of the close of business on April 30, 2002, no shares of capital stock of, or other equity or voting interests in, the Company or options, warrants or other rights to acquire any such stock, securities or interests were issued, reserved for issuance or outstanding. During the period from April 30, 2002, to the date of this Agreement (A) there have been no issuances by the Company or any of its Subsidiaries of shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries, other than issuances of shares of Company Common Stock pursuant to the exercise of Company Stock Options outstanding on such date as required by their terms as in effect on the date of this Agreement, and (B) there have been no issuances by the Company or any of its Subsidiaries of options, warrants or other rights to acquire shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries. There are no outstanding stock appreciation rights, "phantom" stock rights, performance units or other rights (other than the Rights and the Company Stock Options) that are linked to the price of Company Common Stock granted under the Company Stock Plans or otherwise. All outstanding shares of Company Common Stock are, and all shares that may be issued pursuant to the Company Stock Plans will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, nonassessable and not subject to preemptive rights. There are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness of the Company or any of its Subsidiaries, and, except as set forth above, no securities or other instruments or obligations of the Company or any of its Subsidiaries, in each case having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, any of its Subsidiaries may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreementabove, there are outstanding: (i) no shares of capital stocksecurities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements Contracts of any kind to 8 18 which the Company or any Subsidiary of the Company its Subsidiaries is a party or by which it the Company or any of its Subsidiaries is bound in any case obligating the Company or any Subsidiary of the Company its Subsidiaries to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt of, or other equity or voting interests in, or securities convertible into, or exchangeable or exercisable for, shares of capital stock of, or other equity or voting interests in, the Company or any of any Subsidiary of the Company, its Subsidiaries or obligating the Company or any Subsidiary of the Company its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, rightright or Contract. There are not outstanding contractual obligations of the Company or any of its Subsidiaries to (1) repurchase, commitment redeem or agreementotherwise acquire any shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries or (2) vote or dispose of any shares of the capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries. Except as contemplated by As of the date of this Agreement, there are not as of the date hereof no irrevocable proxies and there will not be at the Effective Time any stockholder agreements, no voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating with respect to the voting of any shares of the capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries. As of the date of this Agreement, the outstanding indebtedness of the Company that will limit in any way the solicitation of proxies by or and its subsidiaries is as set forth on behalf Section 3.01(c) of the Company from, or the casting of votes by, the stockholders of the Company with respect to the MergerDisclosure Schedule. There are no restrictions on outstanding guarantees (or any similar instruments or contracts) of indebtedness by the Company to vote the stock of or any of its Subsidiariessubsidiaries.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 300,000,000 shares of Company Class A Common Stock, 150,000,000 shares of Company Class B Common Stock and 10,000,000 100,000,000 shares of preferred stock, par value $.01 per sharepar value, of the Company ("Company Preferred Stock"). At the close of business on October 22January 31, 1999 (except as otherwise indicated): 1997, (i) 18,183,374 44,957,557 shares of Company Class A Common Stock were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 51,407,868 shares of Company Class B Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Planissued and outstanding, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; , (iv) 300,300 shares of Company Class A Common Stock were held by the Company in its treasury, (v) 5,512,500 shares of Company Class A Common Stock were reserved for issuance pursuant to the Company s Amended and Restated 1991 Stock Option and Incentive Plan and the Company s Amended and Restated 1993 Stock Option and Incentive Plan (the "Company Stock Plans") and (viiivi) except 51,407,868 shares of Company Class A Common Stock were reserved for issuance upon conversion of Company Class B Common Stock in accordance with the $13,801,853 aggregate principal amount terms of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) Restated Certificate of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rightsIncorporation. Except as set forth above, at the close of business on Schedule 3.1(b)(ix) of the Company Disclosure ScheduleJanuary 31, all outstanding 1997, no shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be were issued, delivered, sold, purchased, redeemed reserved for issuance or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Mergeroutstanding. There are no restrictions on outstanding stock appreciation rights or rights (other than options to acquire Company Class A Common Stock granted under the Company Stock Plans ("Employee Stock Options")) to vote receive shares of Company Common Stock on a deferred basis granted under the stock Company Stock Plans or otherwise. Section 4.01(c) of any the Company Disclosure Schedule sets forth a complete and correct list, as of its Subsidiaries.January 31, 1997, of the holders of all Employee Stock Options, the number of shares subject to each such option and the exercise prices thereof. All

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 45,000,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stock, par value $.01 .001 per share, of the Company share ("Company Preferred Stock"). At the close of business on October 22January 14, 1999 (except as otherwise indicated): 2003, (i) 18,183,374 22,595,758 shares of Company Common Stock were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; treasury, (viiiii) 5,633,499 shares of Company Common Stock were reserved for issuance pursuant to the Equity Compensation Plan of the Company, as amended, and the 2000 Equity Compensation Plan of the Company, as amended (such plans, collectively, the "Company Stock Plans"), of which 3,884,538 shares of Company Common Stock were subject to outstanding Company Stock Options, and 47,787 shares of Company Common Stock were subject to vesting and restrictions on transfer (collectively, "Company Restricted Stock"), (iv) no shares of Company Preferred Stock were issued and outstanding; or outstanding or were held by the Company as treasury shares and (viiiv) except for warrants to acquire 106,329 shares of Company Common Stock from the $13,801,853 aggregate principal amount of Company pursuant to the Company's convertible subordinated notes identified warrant agreements set forth on Schedule 3.1(b)(viiiSection 3.01(c) of the Company Disclosure Schedule and previously delivered in complete and correct form to Parent (the "Company Convertible NotesWarrants") were issued and outstanding. Except as set forth above in this Section 3.01(c), which is convertible into an aggregate at the close of 410,831 business on January 14, 2003, no shares of capital stock or other voting securities or equity interests of the Company were issued, reserved for issuance or outstanding. There are no outstanding stock appreciation rights, "phantom" stock rights, performance units, rights to receive shares of Company Common Stock upon on a deferred basis or other rights (other than Company Stock Options and Warrants) that are linked to the terms value of Company Common Stock (collectively, "Company Stock-Based Awards"). Section 3.01(c) of the Company Disclosure Schedule sets forth a complete and conditions accurate list, as of January 14, 2003, of all outstanding options to purchase shares of Company Common Stock (collectively, "Company Stock Options") under the Company Stock Plans or otherwise, and all outstanding Warrants, the number of shares of Company Common Stock (or other stock) subject thereto, the grant dates, expiration dates, exercise or base prices (if applicable) and vesting schedules thereof and the names of the holders thereof. No shares of Company Common Stock are subject to repurchase by the Company at a fixed purchase price. All outstanding Company Stock Options are evidenced by stock option agreements, restricted stock purchase agreements or other award agreements, in each case in the forms set forth on Schedule 3.1(b)(viiiin Section 3.01(c) of the Company Disclosure Schedule, and no Voting Debt (as defined below) stock option agreement, restricted stock purchase agreement or other award agreement contains terms that are inconsistent with such forms. As of the close of business on January 14, 2003, there were outstanding Company Stock Options to purchase 1,162,531 shares of Company Common Stock with exercise prices on a per share basis lower than the Merger Consideration, and the weighted average exercise price of such Company Stock Options was equal to $2.67. As of the close of business on January 14, 2003, there were outstanding Warrants to purchase 101,829 shares of Company Common Stock with exercise prices on a per share basis lower than the Merger Consideration. Each Company Stock Option may, by its terms, be canceled in connection with the transactions contemplated hereby for a lump sum cash payment in accordance with and to the extent required by Section 5.04(a). All Warrants may, by their terms, be canceled in exchange for a lump sum cash payment in accordance with and to the extent required by Section 5.04(b). All outstanding shares of capital stock of the Company are, and all shares which may be issued pursuant to the Company Stock Options or the Warrants will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and outstandingnonassessable and not subject to preemptive rights. The term "Voting Debt" means There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ixabove in this Section 3.01(c), (x) of the Company Disclosure Schedulethere are not issued, all reserved for issuance or outstanding (A) any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct other voting securities or indirect wholly owned Subsidiary equity interests of the Company, free and clear of all liens, charges, encumbrances, claims and options of (B) any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests of the Company or (C) any warrants, calls, options or other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, Voting Debt voting securities, equity interests or other securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company or any Subsidiary of the Company; and (iiiy) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which there are not any outstanding obligations of the Company or any Subsidiary of the Company is a party its Subsidiaries to repurchase, redeem or by which it is bound in otherwise acquire any case obligating the Company such securities or any Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedany such securities. Neither the Company nor any of its Subsidiaries is a party to any voting agreement with respect to the voting of any such securities. Except as set forth above in this Section 3.01(c), redeemed there are no outstanding (1) securities of the Company or acquired, additional any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities of the Company or equity interests of any Subsidiary of the Company, (2) warrants, calls, options or obligating other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, voting securities, equity interests or securities convertible into or exchangeable or exercisable for capital stock or voting securities of any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock (3) obligations of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesSubsidiaries to repurchase, redeem or otherwise acquire any such outstanding securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 shares 100,000,000 Shares, of Company Common Stock which 38,717,765 Shares were outstanding as of the close of business on March 2, 2007, and 10,000,000 shares of preferred stock, par value $.01 per share, 500,000 of which are designated as "Series A Junior Participating Preferred Stock" and none of which are outstanding as of the date hereof. All of the outstanding Shares have been duly authorized and are validly issued, fully paid and nonassessable. Since March 2, 2007, the Company ("Company Preferred Stock"). At the close has not issued, sold, or disposed of business on October 22, 1999 (except as otherwise indicated): (i) 18,183,374 any shares of Company Common the Company's capital stock or equity securities, other than upon the exercise of outstanding options under the Stock were issued and outstanding; (ii) 100,000Plans. As of February 28, 333,2242007, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were other than 2,970,525 Shares reserved for issuance pursuant to under the Company's 1996 Stock Option Plan, as amended and restated as of June 30, 2005 (as so amended and as further amended from time to time, the "1996 Stock Plan"), 2001 Stock Incentive Plan, as amended and restated as of June 27, 2002 (as so amended and as further amended from time to time, the "2001 Stock Plan"), and 1994 Non-Employee Director Stock Option Plan (the "Director Stock Plan" and, together with the Company's Service Center 1996 Stock Option Plan, Plan and the Company's 1996 Incentive 2001 Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30the Company has no Shares reserved for issuance. Since February 28, 19992007, 2,166,451 the Company has not granted any options to acquire shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) capital stock of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) under any of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viiiPlans. Section 5.1(b) of the Company Disclosure Schedule contains a correct and complete list of options, restricted stock, performance stock units, restricted stock units and any other equity or equity-based awards (the "Company Convertible Notes"including cash-settled awards), if any, outstanding under the Stock Plans, including the holder, date of grant, term, number of Shares, the Stock Plan under which is convertible into an aggregate of 410,831 shares of Company Common Stock upon such award was granted and, where applicable, the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstandingexercise price. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock capital stock or other equity securities of each of the Company's Subsidiaries are duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liensany lien, chargescharge, encumbrancespledge, claims and options of any naturesecurity interest or other encumbrance (each, a "Lien"). Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreementabove, there are outstanding: (i) no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Company or any of its Subsidiaries to issue or sell any shares of capital stock, Voting Debt stock or other voting securities of the Company; (ii) no equity securities of the Company or any Subsidiary of the Company its Subsidiaries or any securities or obligations convertible or exchangeable into or exchangeable exercisable for, or giving any Person a right to subscribe for shares of capital stockor acquire, Voting Debt or other voting any equity securities of the Company or any of its Subsidiaries, or obligations of the Company or any of its Subsidiaries to make any payments directly or indirectly based (in whole or in part) on the price or value of the Shares or preferred shares, and no securities or obligations evidencing such rights are authorized, issued or outstanding. Upon any issuance of any Shares in accordance with the terms of the Stock Plans, such Shares will be duly authorized, validly issued, fully paid and nonassessable and free and clear of any Liens. The Company does not have outstanding any bonds, debentures, notes or other obligations for borrowed money 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 or any of its Subsidiaries on any matter. There are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any capital stock or other equity interests of the Company or any of its Subsidiaries. For purposes of this Agreement, a wholly owned Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or shall include any Subsidiary of the Company is a party or by of which it is bound in any case obligating the Company or any Subsidiary all of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or of such Subsidiary other voting securities of than director qualifying shares are owned by the Company (or of any a wholly owned Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries).

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 (i) 60,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 per shareStock, of the Company ("Company Preferred Stock"). At which 26,537,830 shares were outstanding at the close of business on October 22December 31, 1999 (except as otherwise indicated): (i) 18,183,374 shares of Company Common Stock were issued and outstanding; 2001, (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 1,009,126 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option PlanPreferred Stock, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan par value $0.01 per share (collectively, the "Company Stock PlansPreferred Shares"), respectively; (iii) as none of September 30, 1999, 2,166,451 shares of Company Common Stock which were subject to issuance pursuant to outstanding options under on the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) date hereof. All of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock have been duly authorized and are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except The Company has no shares of Company Common Stock or Preferred Shares reserved for issuance, except that, as set forth on Schedule 3.1(b)(ixof December 31, 2001, there were (i) 1,009,126 shares of Preferred Stock reserved for issuance pursuant to the Rights Agreement, dated May 18, 1995, as amended (the "Company Rights Agreement"), between the Company and EquiServe Trust Company, N.A. (the "Company Rights Agent"), (ii) 5,273,750 shares of Company Common Stock reserved for issuance pursuant to the Company Stock Option Plans, (iii) 700,000 shares of Company Common Stock reserved for issuance pursuant to the Company's 1999 Employee Stock Purchase Plan, as effective July 1, 1999 (the "1999 Stock Purchase Plan") and (iv) 494,674 shares of Company Common Stock reserved for issuance pursuant to the Company's existing 401(k) Plan (the "401(k) Plan"). As of the Company Disclosure Scheduledate of this Agreement, all outstanding except (i) 1,009,126 shares of capital stock of the Subsidiaries of Preferred Stock issuable pursuant to the Company are owned by Rights Agreement, (ii) 4,476,668 shares of Company Common Stock issuable upon exercise of Company Options, (iii) 426,811 shares of Company Common Stock issuable pursuant to the Company's 1999 Employee Stock Purchase Plan and (iv) 95,846 shares of Company Common Stock issuable pursuant to the 401(k) Plan, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth disclosed in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement3.01(d), there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements of any character to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this AgreementAfter the Effective Time, there are not as the Surviving Corporation will have no obligation to issue, transfer or sell any securities of the date hereof Surviving Corporation pursuant to any. The Board of Directors of the Company has taken all action to amend the Company Rights Agreement (subject only to execution of such amendment by the Company Rights Agent) to provide that, for so long as this Agreement is in full force and there effect, (i) none of the Parent and its subsidiaries (including Merger Sub) shall become an "Acquiring Person" and no "Share Acquisition Date" shall occur as a result of the execution, delivery and performance of this Agreement and the consummation of the Offer or the Merger, (ii) no "Distribution Date" shall occur as a result of the announcement of or the execution of this Agreement or any of the transactions contemplated hereby and (iii) each of Parent and Merger Sub will not be at an Acquiring Person as a result of the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which transactions contemplated hereby (each of "Acquiring Person," "Share Acquisition Date" and "Distribution Date" as defined in the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesRights Agreement).

Capital Structure. As of the date hereof, the The authorized capital stock of the Company RECO consists of 30,000,000 306 million shares of Company capital stock including (i) 270 million shares of RECO Common Stock and 10,000,000 Stock, (ii) 6 million shares of preferred stock, par value $.01 .10 per share, of the Company share ("Company RECO Preferred Stock"), and (iii) 30 million shares of series common stock, par value $.10 per share ("RECO Series Stock"). The authorized capital stock of OPCO consists of 306 million shares of capital stock including (x) 270 million shares of OPCO Common Stock, (y) 6 million shares of preferred stock, par value $.10 per share ("OPCO Preferred Stock"), and (z) 30 million shares of series common stock, par value $.10 per share ("OPCO Series Stock"). At the close of business on October 22December 23, 1999 (except as otherwise indicated): 1997, (i) 18,183,374 88,969,888 paired shares of Company RECO Common Stock and OPCO Common Stock were issued and outstanding; , (ii) 100,000no shares of RECO Preferred Stock and no shares of OPCO Preferred Stock were issued and outstanding, 333,224(iii) no shares of RECO Series Stock and no shares of OPCO Series Stock were issued and outstanding, 1,300,000(iv) no shares of RECO Common Stock and no shares of OPCO Common Stock were held by RECO or OPCO in their respective treasuries; provided, 350,000however, 150,000that, OPCO currently holds approximately 1.3 million shares of RECO Common Stock, (v) 5% of the issued and outstanding shares of RECO Common Stock and 5% of the issued and outstanding shares of OPCO Common Stock plus an additional 3,522,877 Paired Shares of each were reserved for issuance pursuant to equity plans filed as exhibits to or described in the RECO SEC Documents (collectively, the "RECO Stock Plans"), and 427,420 (vi) 3,350,746 shares of Company RECO Common Stock and 3,350,746 shares of OPCO Common Stock were reserved for issuance pursuant to upon the Companyconversion of RECO's 1996 Non-Employee Director Stock Option Planoutstanding convertible senior notes and convertible debentures described in Section 3.02(c) of the RECO Disclosure Schedule. At the close of business on the Representation Date, the Company's Service Center Stock Option Planexcept as set forth above, the Company's 1996 Incentive Stock Planthere were no outstanding stock options, the Company's 1996 stock appreciation rights or rights (other than employee stock options or other rights ("RECO Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company WarrantsOptions") to purchase or receive RECO and OPCO Common Stock granted under the RECO Stock Plans) to receive shares of Company RECO Common Stock upon on a deferred basis granted under the terms and conditions set forth on Schedule 3.1(b)(ivRECO Stock Plans or otherwise. Section 3.02(c) of the Company RECO Disclosure Schedule; (v) 20,000 Schedule sets forth a complete and correct list, as of the Representation Date, except as set forth above, of the number of Paired Shares subject to RECO Employee Stock Options. All outstanding shares of Company Common Stock are reserved for issuance capital stock of the RECO Companies are, and all shares which may be issued, including shares to be issued pursuant to restricted stock awards ("Restricted Stock Awards") having the terms this Agreement, will be, when issued, duly authorized, validly issued, fully paid and conditions set forth on Schedule 3.1(b)(v) nonassessable and not subject to preemptive rights. As of the Company Disclosure Schedule; (vi) close of business on the Representation Date, there were no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness or securities of the RECO Companies having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders shareholders of the Company or Parent, as the case may be, RECO and OPCO may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) above, as of the Company Disclosure Schedule, all outstanding shares close of capital stock of business on the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this AgreementRepresentation Date, there are outstanding: (i) were no shares of capital stockoutstanding securities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to 8 18 which the Company RECO Companies or any Subsidiary of the Company their respective Subsidiaries is a party or by which it any of them is bound in any case obligating the Company RECO Companies or any Subsidiary of the Company their respective Subsidiaries to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company RECO Companies or of any Subsidiary of the Company, their respective Subsidiaries or obligating the Company RECO Companies or any Subsidiary of the Company their respective Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment commitment, agreement, arrangement or agreementundertaking. Except for agreements entered into with respect to the RECO Stock Plans and except as contemplated by this Agreementset forth above, there are not as of the date hereof close of business on the Representation Date, and there will except as could not reasonably be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings expected to which the Company is a party or by which it is bound relating be required to be disclosed pursuant to the voting RECO SEC Documents, there were no outstanding contractual obligations of the RECO Companies or any of their respective Subsidiaries to issue, repurchase, redeem, exchange or otherwise acquire, or to register (under the federal or any state securities laws) for resale, any shares of capital stock of the RECO Companies or any of their respective Subsidiaries. As of the close of business on the Representation Date, there were no outstanding contractual obligations of the RECO Companies to vote or to dispose of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its their respective Subsidiaries. The Company maintains a shareholder rights plan.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of the Company consists of 30,000,000 140,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 1.00 per share, of share (the Company ("“Company Preferred Stock"”). At the close of business on October 2231, 1999 (except as otherwise indicated): 2014, (i) 18,183,374 (A) 56,705,062 shares of Company Common Stock were issued and outstanding; outstanding (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 which number includes 1,381,368 shares of Company Common Stock were reserved for issuance pursuant subject to vesting or other forfeiture conditions or repurchase by the Company's 1996 Non-Employee Director Stock Option PlanCompany (such shares, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan “Company Restricted Stock”)) and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iiiB) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 25,866,310 shares of Company Common Stock were held by the Company in its treasury treasury, (ii) 2,602,026 shares of Company Common Stock were subject to outstanding options (the “Company Stock Options”), (iii) 24,376 shares of Company Common Stock were issuable upon settlement or by its wholly owned Subsidiaries; vesting of outstanding Company restricted stock units (viithe “Company RSUs”), (iv) 32,356 shares of Company Common Stock were issuable upon settlement or vesting of outstanding Company Deferred Stock Units and (v) no shares of Company Preferred Stock were issued and or outstanding or held by the Company in its treasury. Except as set forth above, at the close of business on October 31, 2014, no shares of capital stock or other voting securities of the Company were issued or outstanding; and . Since December 31, 2013, the Company has not declared or paid any dividend or declared or made any distribution on any of its capital stock. Since October 31, 2014 to the date of this Agreement, (viiix) except for there have been no issuances by the $13,801,853 aggregate principal amount Company of shares of capital stock or other voting securities of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) , other than issuances of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon pursuant to the terms exercise of Company Stock Options or vesting of Company RSUs outstanding as of October 31, 2014 and conditions set forth on Schedule 3.1(b)(viii(y) there have been no issuances by the Company of options, warrants, other rights to acquire shares of capital stock of the Company Disclosure Scheduleor other rights that give the holder thereof any economic interest of a nature accruing to the holders of Company Common Stock. All outstanding shares of Company Common Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. No Subsidiary of the Company owns any shares of capital stock of the Company. There are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having of the Company that give the holders thereof the right to vote (or that are convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares holders of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rightsmay vote (“Voting Company Debt”). Except for any obligations pursuant to this Agreement or as otherwise set forth on Schedule 3.1(b)(ix) above, as of the Company Disclosure ScheduleOctober 31, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, 2014 there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive preemptive, conversion, stock appreciation, redemption or repurchase rights), commitments convertible or agreements exchangeable securities, stock-based performance units, Contracts or undertakings of any kind to 8 18 which the Company or any Subsidiary of the Company its Subsidiaries is a party or by which it any of them is bound in any case (1) obligating the Company or any such Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or other securities of, or equity interests in, or any Voting Debt security convertible or exchangeable for any capital stock or other voting securities of security of, or equity interest in, the Company or of any Subsidiary of the Companyits Subsidiaries or any Voting Company Debt, or (2) obligating the Company or any such Subsidiary of the Company to grantissue, extend grant or enter into any such option, warrant, call, right, commitment security, unit, Contract or agreementundertaking or (3) that give any person the right to subscribe for or acquire any securities of the Company or any of its Subsidiaries, or to receive any economic interest of a nature accruing to the holders of Company Common Stock or otherwise based on the performance or value of shares of capital stock of the Company or any of its Subsidiaries. Except as contemplated by As of the date of this Agreement, there are not as no outstanding obligations of the date hereof and there will not be at the Effective Time Company or any stockholder agreementsof its Subsidiaries to repurchase, voting trusts redeem or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any shares of capital stock, other than pursuant to the Company Stock Plans, or options, warrants or other rights to acquire shares of capital stock of the Company that will limit in or any way the solicitation of proxies by or on behalf such Subsidiary other than as described above. (ii) Section 3.01(c)(ii) of the Company fromDisclosure Letter sets forth a correct and complete listing of all outstanding Company Restricted Stock, or Company RSUs, Company Deferred Stock Units and Company Stock Options as of October 31, 2014, setting forth the casting of votes byholder’s participant identification number, the stockholders of the Company grant date and vesting schedule with respect to each award, and the Merger. There are no restrictions on the exercise price with respect to each Company to vote the stock of any of its SubsidiariesStock Option.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 shares of Company Common Stock and 10,000,000 Stock, 800,000 shares of preferred stockClass A Preferred Stock, $1.00 par value, and 2,000,000 shares of Class B Preferred Stock, $1.00 par value, of which (i) 333,333 shares have been designated as Class B Preferred Stock, Series 1987, $1.00 par value, (ii) 152,321 shares have been designated as Series C Preferred Stock, $1.00 par value, (iii) 100,000 shares have been designated as Series 1996 Preferred Stock, $1.00 par value, (iv) 100,000 shares have been designated as Series 1997 Preferred Stock, $1.00 par value $.01 per shareand (v) 4,000 shares have been designated as Series 1997-A Preferred Stock (collectively, of the Company ("Company Preferred StockCOMPANY PREFERRED STOCK"). At the close of business on October 22April 8, 1999 (except as otherwise indicated): 2003, (i) 18,183,374 9,304,159 shares of Company Common Stock were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 193,850 shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; and (viiiii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of outstanding or held in the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was treasury. All issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are duly authorized, validly issued, issued and fully paid and nonassessable nonassessable. SCHEDULE 4.01(C) sets forth a complete and correct list, as of the close of business on April 8, 2003, of the plans pursuant to which Options have been granted and are not outstanding (the "COMPANY STOCK PLANS"), the number of shares of Company Common Stock subject to preemptive rightsOptions and Warrants, and the exercise prices thereof. Except as set forth on Schedule 3.1(b)(ix) SCHEDULE 4.01(C), as of the Company Disclosure Scheduleclose of business on April 8, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement2003, there are outstanding: (i) were no shares of capital stockoutstanding securities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company its subsidiaries is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company its subsidiaries to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of its subsidiaries. As of the Companyclose of business on April 8, or obligating 2003, there were no outstanding contractual obligations of the Company or any Subsidiary of the Company its subsidiaries to grantrepurchase, extend redeem or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiariessubsidiaries. The Company has made available to Purchaser a complete and correct copy of the Rights Agreement dated as of August 1, 1995, as amended to date (the "COMPANY RIGHTS AGREEMENT"), between the Company and the rights agent thereunder relating to rights to purchase Company Common Stock (the "COMPANY RIGHTS"). All outstanding shares of Company Common Stock are duly included for trading on the Nasdaq SmallCap Market.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 shares of Company Common Stock and 10,000,000 Stock, 800,000 shares of preferred stockClass A Preferred Stock, $1.00 par value, and 2,000,000 shares of Class B Preferred Stock, $1.00 par value, of which (i) 333,333 shares have been designated as Class B Preferred Stock, Series 1987, $1.00 par value, (ii) 152,321 shares have been designated as Series C Preferred Stock, $1.00 par value, (iii) 100,000 shares have been designated as Series 1996 Preferred Stock, $1.00 par value, (iv) 100,000 shares have been designated as Series 1997 Preferred Stock, $1.00 par value $.01 per shareand (v) 4,000 shares have been designated as Series 1997-A Preferred Stock (collectively, of the Company ("Company Preferred Stock"). At the close of business on October 22April 8, 1999 (except as otherwise indicated): 2003, (i) 18,183,374 9,304,159 shares of Company Common Stock were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 193,850 shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; and (viiiii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of outstanding or held in the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was treasury. All issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are duly authorized, validly issued, issued and fully paid and nonassessable nonassessable. Schedule 4.01(c) sets forth a complete and correct list, as of the close of business on April 8, 2003, of the plans pursuant to which Options have been granted and are not outstanding (the "Company Stock Plans"), the number of shares of Company Common Stock subject to preemptive rightsOptions and Warrants, and the exercise prices thereof. Except as set forth on Schedule 3.1(b)(ix) 4.01(c), as of the Company Disclosure Scheduleclose of business on April 8, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement2003, there are outstanding: (i) were no shares of capital stockoutstanding securities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company its subsidiaries is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company its subsidiaries to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of its subsidiaries. As of the Companyclose of business on April 8, or obligating 2003, there were no outstanding contractual obligations of the Company or any Subsidiary of the Company its subsidiaries to grantrepurchase, extend redeem or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiariessubsidiaries. The Company has made available to Purchaser a complete and correct copy of the Rights Agreement dated as of August 1, 1995, as amended to date (the "Company Rights Agreement"), between the Company and the rights agent thereunder relating to rights to purchase Company Common Stock (the "Company Rights"). All outstanding shares of Company Common Stock are duly included for trading on the Nasdaq SmallCap Market.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 75,000,000 shares of Company Common Stock, of which 71,000,000 are authorized as Class A Stock and 10,000,000 4,000,0000 are authorized as Class B Stock, and 5,000,000 shares of preferred stock, par value $.01 0.001 per share, of share (the Company ("“Company Preferred Stock"”). At the close of business on October 22June 25, 1999 2021 (except as otherwise indicated): the “Measurement Date”), (i) 18,183,374 17,662,016 shares of Company Class A Common Stock and 3,344,775 shares of Class B Common Stock, respectively, were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 622,584 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company SARs (assuming a fair market value per share of Company Common Stock Plans; of $87.50), (iviii) 365,527 544,605 shares of Company Common Stock are reserved for issuance pursuant were subject to warrants Company RSUs, (the "Company Warrants"iv) to purchase 234,301 shares of Company Common Stock upon the terms were subject to Company PSUs (at “maximum” level of performance for PSUs granted in 2019 and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; 2021, and at actual performance for PSUs granted in 2020 for which performance has already been achieved), (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 192,605 shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; treasury, (vi) 2,381,264 additional shares of Company Common Stock were reserved and available for issuance pursuant to the Company Stock Plans, and (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for . Except as set forth above, at the $13,801,853 aggregate principal amount close of business on the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) Measurement Date, no shares of capital stock of the Company Disclosure Schedule were issued, reserved for issuance or outstanding. From the Measurement Date to the date of this Agreement, there have been no issuances by the Company of shares of capital stock of the Company or options, warrants, calls, puts, convertible or exchangeable securities, subscriptions, phantom stock, stock appreciation rights, stock-based performance units or other rights to acquire shares of capital stock of the Company or other rights that give the holder thereof any economic interest of a nature accruing to the holders of Company Common Stock, other than the rights under the Company Stock Plans and any related award agreements. The Company has provided to Parent a complete and accurate list of each outstanding Company equity award granted under the Company Stock Plans outstanding as of the Measurement Date and: (i) the "name of the holder of such Company Convertible Notes")Equity Award, which is convertible into an aggregate (ii) the number of 410,831 shares of Company Common Stock upon subject to such outstanding Company Equity Award, (iii) if applicable, the terms exercise price, purchase price, or similar pricing of such Company Equity Award, (iv) the date on which such Company equity award was granted or issued, and conditions set forth on Schedule 3.1(b)(viii(v) the applicable vesting, repurchase, or other lapse of restrictions schedule, and the extent to which such Company Equity Award is vested and exercisable as of the Company Disclosure Schedule, no Voting Debt Measurement Date. (as defined belowb) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock Stock, and all such shares that may be issued prior to the Effective Time when issued, (i) are or will be, as applicable, duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive or similar rights. Except as , purchase options, calls or rights of first refusal or similar rights and (ii) issued in compliance in all material respects with applicable securities Laws and other applicable Law and all requirements set forth on Schedule 3.1(b)(ixin applicable Contracts. (c) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) 4.2(a), as of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise date of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, puts, convertible or exchangeable securities, subscriptions, phantom stock, stock appreciation rights, stock-based performance units or other rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional acquire shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings Contracts to which the Company is a party or by which it the Company is bound relating (i) obligating the Company to the voting issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of, or any security convertible or exchangeable for any shares of capital stock of the Company, (ii) obligating the Company to issue, grant or enter into, as applicable, any such option, warrant, security, unit, right or Contract or (iii) that give any person the right to receive any economic interest of any nature accruing to the holders of Company Common Stock. As of the date of this Agreement, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company that will limit or options, warrants, calls, puts, convertible or exchangeable securities, subscriptions, phantom stock, stock appreciation rights, stock-based performance units or other rights to acquire shares of capital stock of the Company, except for (A) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans and (B) in connection with Company SARs, Company RSUs and Company PSUs upon settlement or forfeiture of awards or payment of the ▇▇▇▇▇ ▇▇▇▇▇ of Company SARs. Neither the Company nor any way the solicitation of proxies by Company Subsidiary is a party to any agreement pursuant to which any Person is entitled to elect, designate or on behalf nominate any director of the Company fromor any of the Company Subsidiaries. Neither the Company nor any Company Subsidiary has outstanding bonds, debentures, notes or other similar obligations, the casting holders of votes bywhich have the right to vote (or which are convertible into, exercisable for or exchangeable for securities having the right to vote) with the stockholders of the Company on any matter. (d) All Company SARs, Company RSUs and Company PSUs are evidenced by written award agreements, in each case substantially in the forms that have been made available to Parent, except that such agreements may differ from such forms with respect to the Merger. There are no restrictions on number of Company SARs, Company RSUs and Company PSUs or shares of Company Common Stock covered thereby, the Company to vote ▇▇▇▇▇ ▇▇▇▇▇ (if applicable), the stock of any of its Subsidiariesvesting schedule, the expiration date applicable thereto and other similar terms.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 150,000,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stock, par value $.01 0.01 per share, of the Company share ("“Company Preferred Stock"”). At the close of business on October 22February 25, 1999 (except as otherwise indicated): 2005 (i) 18,183,374 56,117,640 shares of Company Common Stock were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; treasury, (iii) 110,913 shares of Company Common Stock were subject to issuance upon exercise of Company Stock Options (as defined in Section 7.04) under the Company’s 1999 Employee Stock Purchase Plan at a weighted average exercise price of $4.6325 per share, (iv) 8,004,358 shares of Company Common Stock were subject to issuance upon exercise of Company Stock Options under the Company’s 1999 Equity Incentive Plan at a weighted average exercise price of $10.5900 per share, (v) 295,000 shares of Company Common Stock were subject to issuance upon exercise of Company Stock Options under the Company’s 1999 Director Stock Option Plan at a weighted average exercise price of $12.4510 per share, (vi) 1,208,325 shares of Company Common Stock were subject to issuance upon exercise of Company Stock Options under the Hightouch Technologies, Inc. 1999 Stock Option Plan at a weighted average exercise price of $5.9861 per share, (vii) 5,896,126 additional shares of Company Common Stock were reserved for issuance pursuant to the Company Stock Plans and (viii) no shares of Company Preferred Stock were issued issued. Except as set forth above and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock reserved for issuance upon the terms and conditions set forth exercise of the Top-Up Option, at the close of business on Schedule 3.1(b)(viii) February 28, 2005, no shares of capital stock or other voting securities of the Company Disclosure Schedulewere issued, reserved for issuance or outstanding. There are no Voting Debt outstanding Company SARs (as defined belowin Section 7.04). All outstanding shares of Company capital stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company Charter, the Company By-laws or any contract, lease, license, indenture, note, bond, agreement, permit, concession, franchise or other instrument (a “Contract”) was issued and outstandingto which the Company or any Company Subsidiary is a party or otherwise bound. The term "Voting Debt" means There are not any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares holders of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rightsmay vote (“Voting Company Debt”). Except as set forth on Schedule 3.1(b)(ix) above, as of the Company Disclosure ScheduleFebruary 28, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement2005, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or not any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, callsrights, rights (including preemptive convertible or exchangeable securities, “phantom” stock rights), commitments stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or agreements undertakings of any kind to 8 18 which the Company or any Company Subsidiary of the Company is a party or by which it any of them is bound in any case (x) obligating the Company or any Company Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or other equity interests in, or any Voting Debt security convertible or exercisable for or exchangeable into any capital stock of or other voting securities of equity interest in, the Company or of any Company Subsidiary of the Companyor any Voting Company Debt, or (y) obligating the Company or any Company Subsidiary of the Company to issue, grant, extend or enter into any such option, warrant, call, right, commitment security, unit, commitment, Contract, arrangement or agreementundertaking or (z) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of Company capital stock. As of February 28, 2005, there are not any outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary. No person is entitled to registration rights with respect to any shares of capital stock of the Company. Except as contemplated by in connection with the execution of this Agreement, there are not as of the date hereof and there will not be at the Effective Time any no stockholder agreements, voting trusts or other agreements agreements, Contracts or understandings to which the Company or any Company Subsidiary is a party or by to which it is bound relating to the voting of any shares of the capital stock of the Company or any Company Subsidiary. (b) The Company Board (as defined below) or a committee administering the Company Stock Plans has the power and authority to adjust the terms of all outstanding Company Stock Options and all outstanding Company SARs granted under any Company Stock Plan, by resolution or other action, to provide that each such Company Stock Option and Company SAR outstanding immediately prior to the Effective Time shall be cancelled in accordance with Section 7.04, with the holder thereof becoming entitled to receive the amount of cash specified in Section 7.04. Such cancellation of Company Stock Options and Company SARs in exchange for the cash payments described in Section 7.04 will limit extinguish any and all rights the holders of such Company Stock Options and Company SARs had or may have had in any way respect thereof. No consents of the solicitation of proxies by or on behalf holders of the Company fromStock Options or Company SARs are necessary to effectuate the foregoing. The Company Board or a committee administering the Company Stock Plans has the power and authority to cause (i) the Company Stock Plans to terminate as of the Effective Time and (ii) the provisions in any other Company Benefit Plan providing for the issuance, transfer or the casting grant of votes by, the stockholders any capital stock of the Company with or any interest in respect to the Merger. There are no restrictions on of any capital stock of the Company to vote be deleted as of the Effective Time. Following the Effective Time no holder of a Company Stock Option or Company SAR or any participant in any Company Stock Plan or other Company Benefit Plan will have any right thereunder to acquire any capital stock of any of its Subsidiariesthe Company or the Surviving Corporation.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 100,000,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stock, par value $.01 per share, of the Company ("Company Authorized Preferred Stock"), of which 1,000,000 shares have been designated as Company Series A Junior Participating Preferred Stock ("Company Preferred Stock") and no other shares of Company Authorized Preferred Stock have been designated. At the close of business on October 2229, 1999 (except as otherwise indicated): 2000: (i) 18,183,374 42,382,655 shares of Company Common Stock were issued and outstanding; (ii) 100,00010,376,039 shares of Company Common Stock were held by the Company in its treasury (such shares, 333,224, 1,300,000, 350,000, 150,000, "Company Treasury Stock") and 427,420 no shares of Company Common Stock were held by subsidiaries of the Company; (iii) no shares of Company Preferred Stock were issued and outstanding and 1,000,000 shares of Company Preferred Stock were reserved for issuance pursuant to the Rights Agreement; (iv) no shares of Company Preferred Stock were held by the Company in its treasury or were held by any subsidiary of the Company; and (v) 5,987,587 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director 1992 Warrant Plan, Vacation Break U.S.A., Inc. 1995 Stock Option Plan, the Company's Service Center 1997 Stock Option Plan, the Company's 1996 2000 Incentive Stock Plan, the Company's 1996 Vacation Break U.S.A. Inc. Directors' Plan, as amended, Warrant Agreements dated December 27, 1995, Warrant Agreements dated May 22, 1997 and Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 which 3,628,956 shares of Company Common Stock were are subject to issuance pursuant to outstanding employee and non-employee director stock options under (the "Company Stock Plans; (iv) 365,527 Options"), 1,745,510 shares of Company Common Stock are reserved for issuance pursuant subject to employee warrants (the "Company Warrants") ), 230,322 shares are subject to purchase shares awards of restricted Company Common Stock upon (collectively with Company Stock Options, Company Warrants and the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company described in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (Section 5.6(b), the "Company Convertible NotesAwards"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of capital stock of the Company Common Stock are are, and all shares thereof which may be issued prior to the Closing will be, when issued, duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b3.1(c) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 2231, 1999 2000 resulting from the exercise issuance of stock options granted shares of Company Common Stock pursuant toto and in accordance with Company Awards and other rights referred to above in this Section 3.1(c), or from issuances or purchases underoutstanding prior to October 31, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, 2000 (x) there are outstanding: not issued, reserved for issuance or outstanding (iA) no any shares of capital stock, Voting Debt stock or voting securities or other voting securities ownership interests of the Company; , (iiB) no any securities of the Company or any Subsidiary of the Company subsidiary convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or voting securities or other voting securities ownership interests of the Company, or (C) any warrants, calls, options or other rights to acquire from the Company or any Company subsidiary, or any obligation of the Company or any Subsidiary of its subsidiaries to issue, any capital stock, voting securities or other ownership interests in, or securities convertible into or exchangeable or exercisable for, capital stock or voting securities or other ownership interests of the Company; , and (iiiy) there are no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which outstanding obligations of the Company or any Subsidiary of the Company is a party its subsidiaries to repurchase, redeem or by which it is bound in otherwise acquire any case obligating the Company such securities or any Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed any such securities. There are no outstanding (A) securities of the Company or acquired, additional any of its subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt voting securities or other ownership interests in any subsidiary of the Company, (B) warrants, calls, options or other rights to acquire from the Company or any of its subsidiaries, or any obligation of the Company or any of its subsidiaries to issue, any capital stock, voting securities or other ownership interests in, or any securities convertible into or exchangeable or exercisable for, any capital stock, voting securities or other ownership interests in, any subsidiary of the Company or (C) obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any such outstanding securities of subsidiaries of the Company or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities. To the Company's knowledge, neither the Company nor any of its subsidiaries is a party to any agreement restricting the transfer of, relating to the voting of, requiring registration of, or granting any preemptive or antidilutive rights with respect to any of the securities of the Company or any of any Subsidiary its subsidiaries. To the knowledge of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, no voting trusts or other agreements or understandings to which the Company or any of its subsidiaries is a party or by which it is bound relating with respect to the voting of any shares of the capital stock of the Company that will limit in or any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiariessubsidiaries.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 (x) 200,000,000 shares of Company Common Stock and 10,000,000 (y) 40,000,000 shares of preferred stock, par value $.01 0.01 per share, of the Company share ("Company Preferred Stock"), of which, as of the date hereof, 2,000,000 shares of Company Preferred Stock have been designated as Series A Junior Participating Preferred Stock, of which 2,000,000 shares are reserved for issuance upon the exercise of preferred share purchase rights (the "Company Rights") issued pursuant to the Rights Agreement, dated as of November 19, 1999, between the Company and ChaseMellon Shareholder Services, L.L.C., as rights agent (which firm has been replaced as rights agent by ComputerShare Investor Services L.L.C.) (the "Rights Agent"), pursuant to the terms thereof) (the "Rights Agreement"). At the close of business on October 22June 29, 1999 (except as otherwise indicated): 2005, (i) 18,183,374 87,628,414 shares of Company Common Stock were issued and outstanding; outstanding (which number includes 977,619 Company Restricted Shares), (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury treasury, (iii) 14,753,323 shares of Company Common Stock were reserved for issuance pursuant to the Company Stock Plans and the Company Deferred Stock Plans (of which 7,647,807 shares of Company Common Stock were subject to outstanding Company Stock Options, 977,619 shares of Company Common Stock were subject to outstanding Company Restricted Shares, 1,256,443 shares of Company Common Stock were subject to outstanding Company RSUs and 641,969 shares of Company Common Stock were subject to outstanding Company DSUs), (iv) 6,428,566 shares of Company Common Stock were reserved for issuance upon conversion of the Company's 3% Convertible Subordinated Debentures due 2032 (the "Convertible Debentures") issued pursuant to an Indenture, dated as of November 22, 2002, between the Company and State Street Bank and Trust Company of California, N.A. (a complete and correct copy of which has been delivered or by its wholly owned Subsidiaries; made available to Parent) and (viiv) no shares of Company Preferred Stock were issued or outstanding. (b) The Company has delivered to Parent a correct and outstanding; complete list, as of June 24, 2005, of all outstanding Company Stock Options, Company Restricted Shares, Company RSUs, Company DSUs and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 any other rights to purchase or receive shares of Company Common Stock upon granted under the terms Company Stock Plans or otherwise, the number of shares of Company Common Stock subject thereto, whether or not a stock option is an incentive stock option, expiration dates and conditions exercise prices thereof, in each case broken down as to each plan, agreement or other arrangement and as to each individual holder. Except as set forth above in this Section 3.03, at the close of business on Schedule 3.1(b)(viii) June 24, 2005, no shares of capital stock or other voting securities of the Company Disclosure Schedulewere issued, no Voting Debt (as defined below) was issued and reserved for issuance or outstanding. The term "Voting Debt" means Except as set forth above in this Section 3.03, there are no outstanding stock appreciation rights, rights to receive shares of Company Common Stock on a deferred basis or other rights that are linked to the value of Company Common Stock granted under the Company Stock Plans or otherwise. All outstanding shares of capital stock of the Company are, and all shares which may be issued pursuant to the Company Stock Plans will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. (c) Except as set forth above in this Section 3.03, there are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth above in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 223.03, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stockthere are not issued, Voting Debt reserved for issuance or other voting securities of the Company; outstanding (iiA) no any securities of the Company or any Subsidiary of the Company its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of the Company or any Subsidiary of the Company; and its Subsidiaries or (iiiB) no options, any warrants, calls, options or other rights (including preemptive rights), commitments or agreements to 8 18 which acquire from the Company or any Subsidiary of the Company is a party its Subsidiaries, or by which it is bound in any case obligating obligation of the Company or any Subsidiary of its Subsidiaries to issue, any capital stock, voting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company or any of its Subsidiaries and (ii) there are not any outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of such securities. Neither the Company or nor any of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company its Subsidiaries is a party or by which it is bound relating to any voting agreement with respect to the voting of any shares of the capital stock such securities. (d) Section 3.03(d) of the Company that will limit in any way the solicitation of proxies by or on behalf Disclosure Letter sets forth a complete and correct list of the Company fromfollowing information, or the casting as of votes byJune 29, the stockholders of the Company 2005, with respect to the Merger. There are no restrictions on Convertible Debentures: (i) the Company to vote aggregate principal amount thereof, (ii) the stock aggregate amount of any accrued and unpaid interest thereon and (iii) the conversion price thereof as of its Subsidiariesthe date hereof.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 100,000,000 Shares and 20,000,000 preferred shares of Company Common Stock and 10,000,000 shares of preferred stockbeneficial interest, par value $.01 0.01 per share, of share (the “Company ("Company Preferred Stock"Authorized Preferred”). At the close of business on October 22September 11, 1999 (except as otherwise indicated): 2006, (i) 18,183,374 shares of Company Common Stock 21,123,733 Shares were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were including 76,100 Shares that are currently subject to issuance pursuant to outstanding options restricted stock awards under the Company Stock Plans; , (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (viii) no shares of Company Common Stock Shares were held by the Company in its treasury treasury, (iii) 680,766 Shares were reserved for issuance pursuant to outstanding options to purchase Company Common Shares (options to purchase Company Common Shares being “Company Stock Options”) granted under the Company’s Amended and Restated 2002 Stock Incentive Plan (or by its wholly owned Subsidiaries; predecessor 2002 Stock Incentive Plan) and Employee Share Purchase Plan (together, and each as amended, the “Company Stock Plans”), (iv) 2,100,000 Company Preferred Shares were issued and outstanding and 3,333,333 Company Common Shares were reserved for issuance upon conversion of Company Preferred Shares, (v) 1,492,853 Shares were reserved for the grant of additional awards under the Company Stock Plans, (vi) 2,990,709 Shares were reserved for issuance under the Company’s Direct Stock Purchase and Dividend Reinvestment Plan, (vii) no shares 339,458 Shares were reserved for issuance upon redemption of Company Preferred Stock were issued and outstanding; OP Units and (viii) 1,044,400 Shares were reserved for issuance under the Company’s Continuous Offering Program pursuant to the Company’s Registration Statement on Form S-3 (Registration No. 333-125213). As of the close of business on September 11, 2006, except as set forth above or under the Company’s Deferred Compensation Plan, no Shares were issued, reserved for issuance or outstanding, no Company Stock Options have been granted and there are not any phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any capital stock of the Company (“Stock Equivalents”). Since September 11, 2006 and on or prior to the date of this Agreement, except for the $13,801,853 aggregate principal amount exercise of any Company Stock Options referred to in clause (iii) above, the Company has not issued any Shares or made any grant of awards under the Company Stock Plans or the Company’s Deferred Compensation Plan or authorized or entered into any Contract to do any of the foregoing. There are no outstanding stock appreciation rights with respect to the capital stock of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) . Each outstanding Share is, and each Share which may be issued pursuant to the Company Stock Plans will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Other than the Company Common Shares and the Company Authorized Preferred, including the Company Preferred Shares, there are no other authorized classes of capital stock of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of Company. Other than the Company Disclosure SchedulePreferred Shares, there are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters matter on which stockholders holders of Company Common Shares may vote. Except as set forth above or in Section 3.3(a) of the Company Disclosure Letter, as of the date of this Agreement, there are no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any Company Subsidiary is a party or by which any of them is bound obligating the Company or any Company Subsidiary to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional shares of capital stock, Company Stock Options or other voting securities or Stock Equivalents of the Company or Parentof any of its Company Subsidiaries (other than Company OP) or obligating the Company or any Company Subsidiary (other than Company OP) to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. As of the date of this Agreement, other than as set forth in the case may beCompany OP Partnership Agreement, may vote. All the Subsidiary Organizational Documents, the Declaration or Section 3.3(a) of the Company Disclosure Letter, there are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of capital stock or other equity interest of the Company Common Stock or any Company Subsidiary. Other than the Support Agreements, the Subsidiary Organizational Documents or Section 3.3(a) of the Company Disclosure Letter, there are no outstanding agreements to which the Company, a Company Subsidiary or any of their respective officers or directors is a party concerning the voting of any capital stock of the Company or any of its Company Subsidiaries. (b) As of the date hereof, the issued and outstanding partnership interests of Company OP consist of 339,458 Company OP Units designated as common partnership units and 2,100,000 Company OP Units designated as 7.5% Series A cumulative convertible preferred limited partnership units. The Company is the sole general partner of Company OP and as of the date hereof holds Company OP Units representing 98.4184% of the outstanding Company OP Units. As of the close of business on September 11, 2006, except as set forth above, no Company OP Units were issued, reserved for issuance (other than in connection with the issuance of Shares by the Company as required by the Company OP Partnership Agreement) or outstanding and there are not any phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any Company OP Units. There are no outstanding stock appreciation or similar rights with respect to the Company OP Units. Each outstanding Company OP Unit is duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights, and any capital contributions required to be made by the holders thereof have been made. There are no outstanding bonds, debentures, notes or other indebtedness of Company OP having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which the holders of Company OP Units may vote. Except as set forth on Schedule 3.1(b)(ix) above or in the Company OP Partnership Agreement, as of the Company Disclosure Schedule, all outstanding shares date of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stocksecurities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to 8 18 which the Company or any Company Subsidiary of the Company is a party or by which it any of them is bound in any case obligating the Company or any Company Subsidiary of the Company to issue, deliver, sell, purchase, redeem deliver or acquiresell or create, or cause to be issued, delivered, sold, purchased, redeemed delivered or acquiredsold or created, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, OP Units or obligating the Company or any Company Subsidiary of the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment commitment, agreement, arrangement or agreement. Except as contemplated by this Agreementundertaking. (c) All dividends or distributions on the Company Common Shares, there are not as of Company Preferred Shares and Company OP Units which have been authorized or declared prior to the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating have been paid in full (except to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There extent such dividends have been publicly announced and are no restrictions on the Company to vote the stock of any of its Subsidiariesnot yet due and payable).

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 three hundred million (300,000,000) shares of voting common stock, par value $0.01 per share (the “Company Voting Stock”) and three hundred million (300,000,000) shares of non-voting common stock, par value $0.01 per share (together with the Company Voting Stock, the “Company Common Stock Stock”) and 10,000,000 one hundred million (100,000,000) shares of preferred stock, par value $.01 0.01 per share, of share (the Company ("“Company Preferred Stock"”). At the close of business on October 2216, 1999 (except as otherwise indicated): 2009: (i) 18,183,374 36,717,995 shares of Company Common Stock were issued and outstanding; outstanding (ii) 100,000which number includes 32,543,337 shares of Company Voting Stock, 333,224, 1,300,000, 350,000, 150,000, 4,174,658 shares of non-voting Company Common Stock and 427,420 0 shares of Company Common Stock were reserved for issuance pursuant to held by the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectivelyin its treasury; (ii) 3,813,563 Company Options were issued and outstanding, 289,000 Company SARs were issued and outstanding, and 133,906 Company RSUs were issued and outstanding; and (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held owned by Subsidiaries of the Company in its treasury or by its wholly owned Subsidiaries; (vii) Company. At the close of business on October 16, 2009, no shares of Company Preferred Stock were issued and outstanding; . Each outstanding share of Company Common Stock is duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights or similar rights and issued in compliance with applicable state and federal securities Laws. (viiib) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viiiSection 4.3(b) of the Company Disclosure Schedule sets forth a true, complete and correct list, as of the date of this Agreement, of the record owners of the shares of the (i) Company Common Stock, (ii) Company Options, (iii) Company SARs and (iv) Company RSUs, in each case, indicating the "number of such shares or units held of record by each such Person and, as applicable, the exercise price, conversion rate or price and vesting details of such shares or units. After the Effective Time, no Company Convertible Notes")Options or Company SARs will be outstanding and all payments (if any) payable pursuant to (x) Section 3.5 in respect of the Company Options and the Company SARs and (y) Section 3.6 in respect of the Company RSUs will, which is in each case, have been accrued on the Company Closing Balance Sheet. (c) Except for the Company Warrants, there are not issued, reserved for issuance or outstanding (i) any securities of the Company convertible into an aggregate of 410,831 or exchangeable or exercisable for shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) or other voting securities or equity interests of the Company Disclosure Scheduleor (ii) any warrants, restricted stock units, calls, options or other rights to acquire from the Company, and no Voting Debt (as defined below) was issued and outstandingobligation of the Company to issue, any capital stock, voting securities, equity interests or securities convertible into or exchangeable or exercisable for Company Common Stock or voting securities of the Company. Except for the Company Warrants, there are not any outstanding obligations of the Company to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities. The term "Voting Debt" means Company is not a party to any voting Contract with respect to the voting of any such securities. (d) There are no bonds, debentures, notes or other indebtedness Indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders Company Stockholders may vote. (e) Each of the Former Warrant Holders is also a Company Stockholder. The Warrant Termination Agreement provides that no Former Warrant Holder may transfer, sell or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any otherwise dispose of its Subsidiariesrights thereunder.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 200,000,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stock, par value $.01 1.00 per share, of share (the Company ("“Company Preferred Stock"”). At the close of business on October 22February 24, 1999 (except as otherwise indicated): 2011, (i) 18,183,374 126,462,665 shares of Company Common Stock were issued and outstanding; , (ii) 100,000no shares of Company Preferred Stock were issued and outstanding, 333,224, 1,300,000, 350,000, 150,000, and 427,420 (iii) 1,458,248 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director terms of outstanding awards granted pursuant to the Company Plans, (iv) 3,815,976 shares of Company Common Stock Option Planare available for grant under the Company Plans, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iiiv) as of September 30, 1999, 2,166,451 2,673,641 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants upon redemption of Class A Partnership Units of NHP/PMB (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; “Class A Units”), (vi) no 345,639 shares of Company Common Stock were held by reserved for issuance under the Company in its treasury or by its wholly owned Subsidiaries; Company’s Dividend Reinvestment and Stock Purchase Plan, and (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 1,322,200 shares of Company Common Stock upon were reserved for issuance under the terms Company’s at-the-market equity offering program. All issued and conditions set forth on Schedule 3.1(b)(viii) outstanding shares of the capital stock of the Company Disclosure Scheduleare duly authorized, validly issued, fully paid and non-assessable, and no Voting Debt (as defined below) was issued and outstandingclass of capital stock is entitled to preemptive rights. The term "Voting Debt" means There are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters matter on which stockholders holders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock may vote. Section 4.3(a) of the Company Disclosure Letter sets forth a complete and correct list, as of the date of this Agreement, of the total number of outstanding (A) Company Options, (B) Company Restricted Stock Units, (C) Company Restricted Stock, (D) Company Performance Shares, and (E) Company DER and (F) the number of shares of Company Common Stock subject to each outstanding Company Option, the name of the holder, the exercise price, the grant date, and the general terms and conditions including vesting provisions and exercise period of Company Options and the Company Benefit Plan under which such Company Options were granted; the number of shares of Company Common Stock subject to each outstanding award of Company Restricted Stock Units and Company Restricted Stock, the name of the holder, the grant date, and the general terms and conditions including the vesting schedule and the other material terms of each award of Company Restricted Stock Units and Company Restricted Stock, as applicable, and the Company Benefit Plan under which Company Restricted Stock Units and Company Restricted Stock, as applicable, were granted; the number of shares of Company Common Stock subject to each Company Performance Shares award, the name of the holder, the grant date, and the general terms and conditions including the vesting schedule and other material terms of such Company Performance Shares award and the Company Benefit Plan under Company Performance Shares award were granted; and any other rights to purchase or receive Company Common Stock granted under the Company Benefit Plans or otherwise and the names and positions of the holders, the grant date and the terms thereof and the Company Benefit Plan under which such rights were granted. There are no other rights to purchase or receive the Company Common Stock granted under the Company Benefit Plans or otherwise other than the Company Options, Company Restricted Stock Units, Company Restricted Stock, Company Performance Shares, and Company DERs disclosed on Section 4.3(a) of the Company Disclosure Letter. Immediately prior to the Closing, the Company will provide to Parent a complete and correct list that contains the information required to be provided in Section 4.3(a) of the Company Disclosure Schedule that is correct and complete as of the Closing Date. (b) All of the outstanding shares of capital stock of each of the Company Subsidiaries that is a corporation are duly authorized, validly issued, fully paid and nonassessable nonassessable. All equity interests in each of the Company Subsidiaries that is a partnership or limited liability company are duly authorized and validly issued. All shares of capital stock of (or other ownership interests in) each of the Company Subsidiaries which may be issued upon exercise of outstanding options or exchange rights are not subject to preemptive rightsduly authorized and, upon issuance will be validly issued, fully paid and nonassessable. Except as set forth on Schedule 3.1(b)(ixin Section 4.1(c) of the Company Disclosure ScheduleLetter, the Company owns, directly or indirectly, all of the issued and outstanding shares of capital stock and other ownership interests of the Subsidiaries each of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the CompanySubsidiaries, free and clear of all liensencumbrances other than statutory or other liens for Taxes or assessments which are not yet due or delinquent or the validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves are being maintained, chargesand there are no existing options, encumbranceswarrants, claims and options calls, subscriptions, convertible securities or other securities, agreements, commitments or obligations of any nature. character relating to the outstanding capital stock or other securities of any Company Subsidiary or which would require any Company Subsidiary to issue or sell any shares of its capital stock, ownership interests or securities convertible into or exchangeable for shares of its capital stock or ownership interests. (c) Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) 4.3, as of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise date of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stocksecurities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights, commitments, agreements, rights (including preemptive rights)of first refusal, commitments arrangements or agreements undertakings of any kind to 8 18 which the Company or any Company Subsidiary of the Company is a party or by which it any of them is bound in any case bound, obligating the Company or any Company Subsidiary of the Company to issue, deliver, sell, purchase, redeem deliver or acquiresell or create, or cause to be issued, delivered, sold, purchased, redeemed delivered or acquiredsold or created, additional shares of capital Company Common Stock, shares of Company Preferred Stock or other equity securities or phantom stock or other contractual rights the value of which is determined in whole or in part by the value of any Voting Debt or other voting securities equity security of the Company or of any Subsidiary of the Company, Company Subsidiaries or obligating the Company or any Company Subsidiary of the Company to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment commitment, agreement, right of first refusal, arrangement or agreementundertaking. Except As of the date of this Agreement, except as contemplated by this expressly provided in the NHP/PMB Partnership Agreement, there are not as no outstanding contractual obligations of the date hereof and there will not be at the Effective Time Company or any stockholder agreementsCompany Subsidiary to repurchase, voting trusts redeem or otherwise acquire any shares of Company Common Stock, shares of Company Preferred Stock, Class A Units or other equity securities of the Company or any Company Subsidiary (other than in satisfaction of withholding Tax obligations pursuant to certain awards outstanding under the Company Plans in the event the grantees fail to satisfy withholding Tax obligations). Neither the Company nor any Company Subsidiary is a party to or, to the knowledge of the Company, bound by any agreements or understandings to which the Company is a party or by which it is bound relating to concerning the voting (including voting trusts and proxies) of any shares of the capital stock of the Company that will limit in or any way the solicitation of proxies by or on behalf of the Company fromSubsidiaries. (d) All dividends or distributions on the shares of Company Common Stock, Company Preferred Stock and Class A Units and any material dividends or the casting distributions on any securities of votes by, the stockholders of the any Company with respect Subsidiary which have been authorized or declared prior to the Merger. There date hereof have been paid in full (except to the extent such dividends have been publicly announced and are no restrictions on the Company to vote the stock of any of its Subsidiariesnot yet due and payable).

Capital Structure. As of the date hereof, the (i) The authorized capital stock of the Company consists of 30,000,000 100,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 0.001 per share, of the Company share ("Company Preferred Stock"). , of which 1,000,000 shares of Company Preferred Stock were designated by the Board of Directors of the Company as Series A Junior Participating Preferred Stock and are issuable upon exercise of the rights (the "Company Rights") under the Rights Agreement dated as of October 5, 2001, between the Company and Mellon Investor Services LLC, as rights agent (the "Rights Agreement"). (ii) At the close of business on October 22May 27, 1999 2008, (except as otherwise indicated): (iA) 18,183,374 42,656,290 shares of Company Common Stock were issued and outstanding; , (iiB) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 118,916 shares of Company Common Stock were held by the Company in its treasury treasury, (C) 8,433,753 shares of Company Common Stock were reserved and available for issuance pursuant to the 2006 Equity Incentive Plan of the Company, the 1996 Stock Option Plan of the Company and the 2000 Non-Employee Director Stock Option Plan of the Company (such plans, together with the 2000 Employee Stock Purchase Plan of the Company (the "Purchase Plan"), the "Company Stock Plans"), of which 3,888,806 shares of Company Common Stock were subject to outstanding options (other than rights under the Purchase Plan) to acquire shares of Company Common Stock from the Company (such options, together with any other options to acquire shares of Company Common Stock from the Company granted after May 27, 2008 under the Company Stock Plans or otherwise, the "Company Stock Options") and 469,505 shares of Company Common Stock were subject to outstanding restricted stock units with respect to Company Common Stock (such restricted stock units, together with any other restricted stock units with respect to Company Common Stock granted after May 27, 2008 under the Company Stock Plans or otherwise, the "Company RSUs"), (D) 178,638 shares of Company Common Stock were reserved and available for issuance pursuant to the Purchase Plan, (E) 6,109,517 shares of Company Common Stock (such shares, the "CEFF Shares") were reserved and available for issuance pursuant to the terms of that certain Common Stock Purchase Agreement, dated as of July 19, 2006, by its wholly owned Subsidiaries; and between the Company and Kingsbridge Capital Limited (vii"Kingsbridge"), (F) 285,000 shares of Company Common Stock were subject to an outstanding warrant issued to Kingsbridge with an exercise price of $4.94 per share (the "Company Warrant") and (G) no shares of Company Preferred Stock were issued and outstanding; and or outstanding or were held by the Company as treasury shares. (viiiiii) except for Since the $13,801,853 aggregate principal amount close of business on May 27, 2008, (A) there have been no issuances by the Company of shares of capital stock or other voting securities or equity interests of the Company's , other than issuances of shares of Company Common Stock pursuant to the exercise of Company Stock Options, the Company Warrant and rights under the Purchase Plan and the settlement of Company RSUs, in each case outstanding as of the close of business on May 27, 2008, and only if and to the extent required by their terms as in effect on such date, and (B) there have been no issuances by the Company of securities convertible subordinated notes identified into, or exchangeable or exercisable for, or options, warrants or other rights to acquire, or shares of deferred stock, restricted stock units, stock-based performance units, stock appreciation rights or "phantom" stock awards with respect to, any such stock, interests or securities, or other rights that are linked to the value of Company Common Stock or the value of the Company or any part thereof, other than rights under the Purchase Plan. (iv) There are no outstanding shares of Company Common Stock or Company Preferred Stock subject to vesting or restrictions on Schedule 3.1(b)(viiitransfer imposed by the Company. All outstanding Company Stock Options and Company RSUs have been granted under the Company Stock Plans. Other than the Company Stock Plans, there is no plan, contract, agreement or arrangement providing for the grant of options to acquire shares of Company Common Stock by the Company or any of its Subsidiaries. Section 4.01(c)(iv) of the Company Disclosure Schedule sets forth a complete and accurate list, as of May 27, 2008, of (A) all outstanding Company Stock Options, the "Company Convertible Notes"), which is convertible into an aggregate number of 410,831 shares of Company Common Stock upon subject to each such Company Stock Option, the grant date, expiration date, exercise price per share and vesting schedule thereof and the name of the holder thereof and an indication of whether or not such holder is a current employee of the Company or any of its Subsidiaries and whether or not such Company Stock Option is intended to qualify as an incentive stock option under Section 422 of the Code and (B) all shares of Company Common Stock that are subject to outstanding Company RSUs, the grant date and vesting schedule of each Company RSU and name of the holder thereof and an indication of whether or not such holder is a current employee of the Company or any of its Subsidiaries. All Company Stock Options and Company RSUs are evidenced by stock option agreements, restricted stock unit agreements or other award agreements, in each case substantially in the forms made available to Parent or as filed as exhibits to the Filed Company SEC Documents, except that the forms of such agreements differ with respect to the number of Company Stock Options, Company RSUs or shares covered thereby, the exercise price (if applicable), vesting schedule and expiration date applicable thereto and other similar terms, provided that no stock option agreement, restricted stock unit agreement or other award agreement contains terms that are inconsistent in any material respect with, or material terms in addition to, such forms. (v) With respect to the Company Stock Options, (A) each Company Stock Option intended to qualify as an "incentive stock option" under Section 422 of the Code so qualifies, (B) each grant of a Company Stock Option was duly authorized no later than the date on which the grant of such Company Stock Option was by its terms to be effective (the "Grant Date") by all necessary corporate action, including, as applicable, approval by the Board of Directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto, (C) each such grant was made in accordance with the terms of the applicable Company Stock Plan, the Exchange Act and conditions set forth all other applicable Laws, including the rules of The NASDAQ Stock Market LLC ("NASDAQ"), (D) the per share exercise price of each Company Stock Option was equal to the fair market value (as defined in the Company Stock Plans) of a share of Company Common Stock on Schedule 3.1(b)(viiithe applicable Grant Date and (E) each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstandingdisclosed in the Company SEC Documents in accordance with the Exchange Act and all other applicable Laws. The term Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, Company Stock Options prior to, or otherwise knowingly coordinate the grant of Company Stock Options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects. (vi) As of the close of business on May 27, 2008, there were outstanding Company Stock Options to purchase 1,343,561 shares of Company Common Stock with exercise prices on a per share basis lower than the Merger Consideration, and the weighted average exercise price of such Company Stock Options was equal to $3.76 per share. As of the close of business on May 27, 2008, (A) 102,203 shares of Company Common Stock were subject to outstanding rights under the Purchase Plan based on payroll information for the period ended May 15, 2008 (assuming the fair market value per share of Company Common Stock determined in accordance with the terms of the Purchase Plan on the last day of the offering period in effect under the Purchase Plan on the date hereof will be equal to the Merger Consideration and that payroll deductions continue at the current rate through September 30, 2008) (the "Voting Debt" means Current ESPP Shares") and (B) up to a maximum of 76,435 shares of Company Common Stock in addition to the Current ESPP Shares (the "Additional ESPP Shares") could be subject to outstanding rights under the Purchase Plan based on payroll information for the period ended May 15, 2008 (assuming the fair market value per share of Company Common Stock determined in accordance with the terms of the Purchase Plan on the last day of the offering period in effect under the Purchase Plan on the date hereof will be equal to the Merger Consideration and that payroll deductions increase as permitted by the terms of the Purchase Plan through September 30, 2008), resulting in a potential increase in the aggregate Merger Consideration payable for the Additional ESPP Shares of up to approximately $320,000 after giving effect to the purchase price per share of the Additional ESPP Shares. Each Company Stock Option and each Company RSU may, by its terms, be treated at the Effective Time as set forth in Section 6.04(a)(i) or 6.04(a)(ii), as applicable, and all rights to purchase shares of Company Common Stock under the Purchase Plan may, by their terms, be treated in accordance with Section 6.04(a)(iii). No holder of a Company Stock Option or Company RSU or right to purchase shares of Company Common Stock under the Purchase Plan is entitled to any treatment of such Company Stock Option or Company RSU or right to purchase shares of Company Common Stock under the Purchase Plan other than as provided in Section 6.04(a), and after the Closing no holder of a Company Stock Option or Company RSU (or former such holder) shall have the right to acquire any capital stock of the Company or any other equity interest therein. (vii) All outstanding shares of capital stock of the Company are, and all shares which may be issued pursuant to the Company Warrant, Company Stock Options or the Company RSUs or rights under the Purchase Plan will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may are entitled to vote. All outstanding Except as set forth above in this Section 4.01(c) and for shares of Company Common Stock are validly issued or to be issued upon the exercise or settlement of Company Stock Options, Company RSUs and the Company Warrant and included in clauses (C) and (F), as applicable, of Section 4.01(c)(ii), as of May 27, 2008, (A) there were not issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ixreserved for issuance or outstanding (1) of the Company Disclosure Schedule, all outstanding any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities or equity interests of the Company; Company or any of its Subsidiaries, (ii2) no any securities of the Company or any Subsidiary of the Company its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests of the Company or any of its Subsidiaries, (3) any warrants, calls, options or other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, Voting Debt voting securities, equity interests or other securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company or any Subsidiary of the Company; and its Subsidiaries or (iii4) no optionsany shares of deferred stock, warrantsrestricted stock units, callsstock-based performance units, stock appreciation rights (including preemptive rights), commitments or agreements "phantom" stock awards with respect to 8 18 which any capital stock of the Company or any Subsidiary of its Subsidiaries, or other rights that are linked to the value of the Company is a party Common Stock or by which it is bound in any case obligating the value of the Company or any Subsidiary part thereof and (B) there were not any outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of such securities. Neither the Company or nor any of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company its Subsidiaries is a party to any voting or by which it is bound relating other agreement with respect to the voting of any shares such securities and, to the knowledge of the capital stock Company, as of the Company that will limit in any way date hereof, there are no irrevocable proxies and no voting agreements, other than those contemplated by the solicitation of proxies by or on behalf of the Company fromTransaction Agreements, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiariessuch securities.

Capital Structure. (i) As of the date hereofOctober 31, 2000, the authorized capital stock of the Company consists consisted of 30,000,000 (A) 400,000,000 shares of Company Common Stock of which 131,303,401 shares were outstanding and 36,675,391 shares were held in the treasury of the Company, (B) 1,000,000 preference shares, no par value, of which no shares are outstanding and (C) 10,000,000 shares of preferred stockPreferred Stock, no par value $.01 per sharevalue, of which 4,000,000 shares have been designated Series C Junior Participating Preferred Stock and reserved for issuance upon exercise of the rights (the "Company Rights") distributed to the holders of Company Common Stock pursuant to the Rights Agreement, dated as of May 8, 1996 between the Company and ▇▇▇▇▇▇ Trust and Savings Bank (the "Company Rights Agreement") and of which 1,750,000 shares have been designated Series B ESOP Convertible Preferred Stock of which as of October 31, 2000, 854,182 shares were outstanding. Since December 31, 1999 to the date of this Agreement, there have been no issuances of shares of the capital stock of the Company or any other securities of the Company other than issuances of shares pursuant to options or rights outstanding as of November 16, 2000 under the Benefit Plans ("Company Preferred Stock"as defined in Section 8.11(b)) of the Company. At the close There were outstanding as of business on October 22November 16, 1999 2000 (except for the Deferred Compensation Plan for Executives, which are shown as otherwise indicated): of October 31, 2000), no options, warrants or other rights to acquire capital stock from the Company other than (ix) 18,183,374 the Company Rights and (y) options, stock units and other rights to acquire capital stock from the Company representing in the aggregate the right to purchase or receive approximately 10,552,331 shares of Company Common Stock were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Options") under The Company Long-Term Incentive Plan of 1999, The Company Long-Term Incentive Plan of 1990, as amended, The 1984 Long-Term Incentive Plan of the Company, as amended, Deferred Compensation Plan for Executives of the Company, Deferred Compensation Plan for Directors of the Company, the Company Stock Compensation Plan for Outside Directors and the Company Stock Option Plan for Outside Directors (collectively, the "Company Stock Option Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii. Section 3.2(b) of the Company Disclosure Schedule (sets forth a complete and correct list, as of November 16, 2000, of the "Company Convertible Notes"), which is convertible into an aggregate number of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of subject to Company Stock Options or other rights to purchase or receive Company Common Stock granted under the Company Disclosure ScheduleBenefit Plans or otherwise, the dates of grant and the exercise prices thereof. Except for Company Stock Options, no Voting Debt options or warrants or other rights to acquire capital stock from the Company have been issued or granted since December 31, 1999 to the date of this Agreement. (as defined belowii) was issued and outstanding. The term "Voting Debt" means No bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares holders of capital stock of the Subsidiaries of the Company may vote ("Company Voting Debt") are owned by the Company, issued or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. outstanding. (iii) Except as otherwise set forth in this Section 3.1(b3.2(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by Section 1.7 and Section 1.8, as of the date of this Agreement, there are outstanding: (i) no shares securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of any kind to which the Company or any Subsidiary of its Subsidiaries is a party or by which any of them is bound obligating the Company convertible into or exchangeable for any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock, Voting Debt stock or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, its Significant Subsidiaries or obligating the Company or any Subsidiary of the Company its Significant Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment commitment, agreement, arrangement or agreementundertaking. Except as contemplated by As of the date of this Agreement, there are not as no outstanding obligations of the date hereof and there will not be at the Effective Time Company or any stockholder agreementsof its Subsidiaries to repurchase, voting trusts redeem or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Significant Subsidiaries.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 1,500,000,000 shares of Company Common Stock and 10,000,000 50,000,000 shares of preferred stock, par value $.01 0.01 per share, of share (the Company ("“Company Preferred Stock"” and together with the Company Common Stock, the “Company Capital Stock”). At the close of business on October 22April 25, 1999 (except as otherwise indicated): 2011, (i) 18,183,374 57,512,633 shares of Company Common Stock were issued and outstanding; , of which 22,814 were Company Restricted Shares, (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; , (iii) 6,568,656 shares of Company Common Stock were reserved and available for issuance pursuant to the Company Stock Plans, of which (A) 2,575,038 shares were issuable upon exercise of outstanding Company Stock Options and (viiiB) except 2,588,185 shares were potentially issuable under outstanding Company RSUs, including performance-based Company RSUs and Annual Incentive Company RSUs, (iv) 73,271 shares of Company Common Stock were reserved for issuance under the Company Amended and Restated Employee Stock Purchase Plan (the “Company ESPP”), and (v) (x) 44,132 shares of Company Common Stock were reserved for issuance upon conversion of the Company’s 3.0% Convertible Senior Notes due May 15, 2012 (the “Company Convertible Notes”) and (y) the Conversion Rate (as defined in the indenture governing the terms of the Company Convertible Notes) was 14.2086 shares of Company Common Stock per $13,801,853 aggregate 1,000 principal amount of Company Convertible Notes and no adjustments had been made to the table or any amount therein set forth in section 10.13(c) of such indenture since the execution of such indenture. Except as set forth in this Section 4.03(a), at the close of business on April 25, 2011, no shares of capital stock or voting securities of, or other equity interests in, the Company were issued, reserved for issuance or outstanding. From the close of business on April 25, 2011 to the date of this Agreement, there have been no issuances by the Company of shares of capital stock or voting securities of, or other equity interests in, the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of , other than the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares issuance of Company Common Stock upon the exercise of Company Stock Options outstanding at the close of business on April 25, 2011 and in accordance with their terms in effect at such time. (b) All outstanding shares of Company Common Stock (including Company Restricted Shares) are, and, at the time of issuance, all such shares that may be issued upon the exercise of Company Stock Options or pursuant to the Company Stock Plans or the Company ESPP will be, duly authorized, validly issued, fully paid and conditions nonassessable and not subject to, or issued in violation of, any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company Charter, the Company By-laws or any Contract to which the Company is a party or otherwise bound. Except as set forth above in this Section 4.03, there are not issued, reserved for issuance or outstanding, and there are not any outstanding obligations of the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, (x) any capital stock of the Company or any Company Subsidiary or any securities of the Company or any Company Subsidiary convertible into or exchangeable or exercisable for shares of capital stock or voting securities of, or other equity interests in, the Company or any Company Subsidiary, (y) any warrants, calls, options or other rights to acquire from the Company or any Company Subsidiary, or any other obligation of the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, any capital stock or voting securities of, or other equity interests in, the Company or any Company Subsidiary or (z) any rights issued by or other obligations of the Company or any Company Subsidiary that are linked in any way to the price of any class of Company Capital Stock or any shares of capital stock of any Company Subsidiary, the value of the Company, any Company Subsidiary or any part of the Company or any Company Subsidiary or any dividends or other distributions declared or paid on Schedule 3.1(b)(viiiany shares of capital stock of the Company or any Company Subsidiary. Except for acquisitions, or deemed acquisitions, of Company Common Stock or other equity securities of the Company in connection with (i) the payment of the exercise price of Company Stock Options with Company Common Stock (including but not limited to in connection with “net exercises”), (ii) required tax withholding in connection with the exercise of Company Stock Options, the vesting of Company Restricted Shares and the vesting or delivery of other awards pursuant to the Company Stock Plans, and (iii) forfeitures of Company Stock Options and Company Restricted Shares, there are not any outstanding obligations of the Company or any of the Company Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock or voting securities or other equity interests of the Company or any Company Subsidiary or any securities, interests, warrants, calls, options or other rights referred to in clause (x), (y) or (z) of the immediately preceding sentence. With respect to Company Disclosure ScheduleStock Options, (i) each grant of a Company Stock Option was duly authorized no Voting Debt later than the date on which the grant of such Company Stock Option was by its terms to be effective (the “Grant Date”) for such option by all necessary corporate action, including, as defined belowapplicable, approval by the Company Board (or a duly constituted and authorized committee or subcommittee thereof), and (ii) the per share exercise price of each Company Stock Option was issued and outstandingat least equal to the fair market value of a share of Company Common Stock on the applicable Grant Date. The term "Voting Debt" means There are no debentures, bonds, debentures, notes or other indebtedness Indebtedness of the Company having the right to vote (or, other than the Company Convertible Notes, convertible into, or convertible into exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote (“Company Voting Debt”). Neither the Company nor any of the Company Subsidiaries is a party to any voting agreement with respect to the voting of any capital stock or Parentvoting securities of, or other equity interests in, the Company. Neither the Company nor any of the Company Subsidiaries is a party to any agreement pursuant to which any Person is entitled to elect, designate or nominate any director of the Company or any of the Company Subsidiaries. (c) If any holder of the Company Convertible Notes exercises its conversion rights thereunder, the Company has the right to pay cash in lieu of all shares that would otherwise be issuable upon such conversion. The Company Convertible Notes are not, as of the case may bedate hereof, may vote. All outstanding convertible by the holders thereof and the Company has not issued any shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) upon conversion of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesNotes.

Capital Structure. As of the date hereof, the authorized capital stock of the Company consists of 30,000,000 36,000,000 Company Shares and 150,000 shares of Company Common Stock and 10,000,000 shares of cumulative preferred stock, $50 par value $.01 per share, of share (the Company ("Company Preferred StockA Shares") and 200,000 shares of cumulative preferred stock, $100 par value per share (the "Company Preferred B Shares"). At the close of business on October 22December 12, 1999 (except as otherwise indicated): 1997 (i) 18,183,374 shares of 13,514,094 Company Common Stock Shares were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 44,399 shares of Company Common Stock Preferred A Shares were issued and outstanding; and (iii) 26,989 shares of Company Preferred B Shares were issued and outstanding. The Company has no Company Shares, Company Preferred A Shares or Company Preferred B Shares reserved for issuance, except that, as of December 12, 1997, there were 1,602,752 Company Shares reserved for issuance pursuant to the Company's 1996 Non-Key Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Profit Sharing Plan and the Company's 1997 Non-Qualified Stock Option Performance Sharing Plan (collectively, the "Company Stock Plans"), respectively; (iii) and the Company's Dividend Reinvestment Plan and 13,514,094 Company Shares reserved for issuance under the Shareholder Rights Agreement dated as of September 30November 15, 19991989 between the Company and The First National Bank of Boston as rights agent (the "Shareholder Rights Agreement"). In addition, 2,166,451 shares of the Company Common Stock were subject to issuance has reacquired and holds 1,620 Company Shares in treasury for reissuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 Accumulation Plan for Outside Directors. All outstanding shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) capital stock of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant duly authorized, validly issued, fully paid and nonassessable and not subject to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstandingpreemptive rights. The term "Voting Debt" means No bonds, debentures, notes or other indebtedness having of the Company conferring the right to vote (or convertible into into, or exchangeable for, securities having conferring the right to vote) on any matters on which stockholders the shareholders of the Company may vote are issued or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. (a) As of the date hereofof this Agreement, the authorized capital stock of the Company consists of 30,000,000 (i) 120,000,000 shares of Class A common stock, par value $0.01 per share (“Company Class A Common Stock”), (ii) 60,000,000 shares of Class B common stock, par value $0.01 per share (“Company Class B Common Stock” and together with the Company Class A Common Stock, the “Company Common Stock Stock”) and 10,000,000 (iii) 20,000,000 shares of preferred stock, par value $.01 0.01 per shareshare (together with the Company Common Stock, the “Company Capital Stock”), of which 4,000,000 have been designated as 8.75% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Stock of the Company ("the “Company Series A Preferred Stock"”). At the close of business on October 22December 28, 1999 2023: (except as otherwise indicated): (iA) 18,183,374 3,232,701 shares of Company Class A Common Stock were issued and outstanding; (iiB) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 4,000,000 shares of Company Class B Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan issued and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectivelyoutstanding; (iiiC) as of September 30, 1999, 2,166,451 3,567,543 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Series A Preferred Stock were issued and outstanding; (D) 850,000 shares of Company Class A Common Stock were reserved for issuance under outstanding awards or otherwise available for issuance pursuant to the Company Incentive Plan; (E) 4,000,000 units in Holdco (“Holdco Units”) and 4,000,000 shares of Company Class B Common Stock were together exchangeable for 4,000,000 shares of Company Class A Common Stock pursuant to the Holdco LLC Agreement and the Company Charter; and (viiiF) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) no Voting Debt of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable non-assessable and are not subject to preemptive rights. Except as All outstanding shares of Company Capital Stock have been issued and granted in compliance in all material respects with (1) applicable securities Laws and other applicable Law and (2) all requirements set forth in applicable contracts. As of the close of business on Schedule 3.1(b)(ix) December 28, 2023, other than the exchange of Holdco Units and shares of Company Class B Common Stock for shares of Company Class A Common Stock pursuant to the Holdco LLC Agreement and the Company Charter and the rights of the holders of the Company Disclosure ScheduleSeries A Preferred Stock upon a Change of Control (as defined in the Company Charter), all or the issued and outstanding shares Company RSUs, the cancellation and payment for which are addressed in Section 3.2, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Company or any of its Subsidiaries any capital stock of the Subsidiaries Company or securities convertible into or exchangeable or exercisable for capital stock of the Company are owned by (and the Companyexercise, conversion, purchase, exchange or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. other similar price thereof). (b) Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule 4.2(a), and except for changes since October 22September 30, 1999 2023 resulting from the exercise of stock options grants or other awards granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants in accordance with Section 6.1(b)(ii) or the issuance of Company Convertible Notes or Class A Common Stock upon the expiration of any restrictions on Company RSUs, as contemplated by this Agreementof the date hereof, there are outstanding: (i1) no shares of capital stockCompany Capital Stock, (2) no Voting Debt or other voting securities of the Company; Debt, (ii3) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for shares of capital stockCompany Capital Stock or Voting Debt, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii4) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock Company Capital Stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there Debt. (c) There are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the Company Capital Stock. (d) All outstanding shares of capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf Subsidiaries of the Company fromthat are owned by the Company, or the casting of votes by, the stockholders a direct or indirect wholly-owned Subsidiary of the Company with respect to the Merger. There Company, are no restrictions on the Company to vote the stock free and clear of any of its Subsidiariesall Encumbrances, other than Permitted Encumbrances.

Capital Structure. (a) As of the date hereofof this Agreement, the authorized capital stock of the Company consists of 30,000,000 500,000,000 shares of Company Common Stock and 10,000,000 50,000,000 shares of preferred stock, par value $.01 0.01 per share, of share (the Company ("“Company Preferred Stock"”). At the close of business on October 22April 14, 1999 2024 (except as otherwise indicated): such date and time, the “Measurement Date”), (i) 18,183,374 76,535,644 shares of Company Common Stock were issued and outstanding; outstanding (61,779 of which were Company Restricted Shares), (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 no shares of Company Common Preferred Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Planissued and outstanding, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 0 shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; treasury, (viiiv) no shares of Company Preferred Stock were issued and outstanding; and (viiiA) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 3,641,509 shares of Company Common Stock upon were subject to outstanding Company Stock Options, (B) 3,563,287 shares of Company Common Stock were subject to outstanding Company RSUs, and (C) 1,542,760 shares of Company Common Stock were subject to outstanding Company PSUs (assuming achievement of any applicable performance criteria at actual performance levels for Company PSUs (or portions thereof) for which the terms performance period has been completed prior to the date hereof and conditions at target levels for all other Company PSUs (or portions thereof)), (v) 23,447 Phantom RSUs issued and outstanding, (vi) 69,800 Phantom Options issued and outstanding, (vi) an additional 2,218,345 shares of Company Common Stock were reserved and available for issuance pursuant to the Company Stock Plan (for the avoidance of doubt, not including the shares of Company Common Stock subject to the Company Equity Awards set forth on Schedule 3.1(b)(viiiabove), and (vii) 803,716 shares of Company Common Stock were reserved and available for issuance pursuant to the Company ESPP and 164,294 shares of Company Common Stock were subscribed and/or currently estimated to be subscribed for under the Company ESPP during the current offering period immediately prior to the date hereof. As of the Measurement Date, no (A) shares of capital stock or other voting securities of, (B) other equity or voting interests in, (C) securities convertible into or exchangeable for capital stock, voting securities or other equity interests in, (D) stock appreciation rights, performance shares, “phantom” stock rights, or other rights that give the holder thereof any economic or voting interest of a nature that would accrue to the holders of capital stock in, or (E) options, warrants, subscriptions or other rights to acquire or receive capital stock, voting securities or other equity interests or rights referred to in clause (A), (B), (C) and (D) (clauses (A), (B), (C), (D), or (E) collectively, “Equity Interests”) of the Company Disclosure Schedulewere issued, no Voting Debt reserved for issuance or outstanding except as set forth in this Section 3.02(a). (as defined belowb) was All issued and outstanding. The term "Voting Debt" means outstanding Equity Interests in the Company are, and at the time of issuance all Equity Interests in the Company that may be issued prior to the Effective Time in accordance with the terms of this Agreement, including all shares that may be issued pursuant to the Company Stock Plan, will be, duly authorized, validly issued, fully paid and nonassessable (to the extent applicable as a legal concept), have been or will be issued in compliance with all applicable securities laws, and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company Charter, the Company Bylaws or any Contract to which the Company is, or, to the knowledge of the Company, a stockholder of the Company is, a party or otherwise bound. (c) There are no bonds, debentures, notes or other indebtedness having Indebtedness of the Company that may have at any time (whether actual or contingent) the right to vote (vote, or that are convertible into or exchangeable for securities having the right to vote) , on any matters on which stockholders holders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock may vote (“Voting Company Debt”) or any securities that are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Companyconvertible into or exchangeable for, or a direct options, warrants or indirect wholly owned Subsidiary of the Companyother rights to acquire or receive any, free and clear of all liens, charges, encumbrances, claims and options of any nature. Voting Company Debt. (d) Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock PlansOptions, Company RSUs, Company PSUs, Phantom RSUs or Phantom Options, in each case in accordance with their respective terms as in effect as of the Company Warrants or the Company Convertible Notes or as contemplated by this Agreementdate hereof, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities outstanding obligations of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company thereof to issue, delivergrant, deliver or sell, purchase, redeem or acquire, or cause to be issued, deliveredgranted, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of Equity Interests in the Company or such Subsidiary. There are no outstanding obligations of any Subsidiary of the Company, or obligating the Company or any Subsidiary thereof to directly or indirectly amend, redeem, repurchase or otherwise acquire any Equity Interests in the Company or such Subsidiary, except in the case of the Company, for (A) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay the exercise price of such Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to Company Stock Options, Company RSUs or Company PSUs or (C) the acquisition by the Company of Company Stock Options, Company RSUs, Company PSUs, Phantom RSUs or Phantom Options in connection with the forfeiture of such awards, in each case, in accordance with their respective terms. Neither the Company nor any Subsidiary thereof, is party to any agreement with respect to the voting, transfer or registration of any capital stock or voting securities of, or other Equity Interests in, the Company or such Subsidiary, except in the case of the Company, for the Stockholders Agreement, dated as of July 27, 2021, by and among the Company and the other parties named therein (the “Stockholders Agreement”). (e) Section 3.02(e) of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not Disclosure Letter sets forth a correct and complete list of each holder of an outstanding Company Equity Award as of the date hereof, which schedule shows for each Company Equity Award, as applicable, the date such Company Equity Award was granted, the number of shares of Company Common Stock subject to such Company Equity Award (assuming achievement of any applicable performance criteria at actual performance levels for Company PSUs (or portions thereof) for which the performance period has been completed prior to the date hereof and there will not be at target levels for all other Company PSUs (or portions thereof) and the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the applicable exercise price of each Company Equity Award that is a party Company Stock Option. With respect to each Company Equity Award, each Company Stock Option has an exercise price that is equal or by which it is bound relating to greater than the voting of any shares fair market value of the capital stock underlying Company Common Stock on the applicable grant date, and each such grant was properly accounted for in all material respects in accordance with GAAP in the financial statements of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesCompany.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of the Company consists of 30,000,000 10,000,000 shares of Company Common Stock and 10,000,000 1,000,000 shares of preferred stockPreferred Stock of the Company, par value $.01 1.00 per share, of share (the Company ("Company Preferred Stock"), which shares have been designated Series A Preferred Stock (the "Series A Preferred Stock") and Series B Preferred Stock (the "Series B Preferred Stock"). At the close of business on October 22February 26, 1999 2001, (except as otherwise indicated): (iA) 18,183,374 4,943,633 shares of Company Common Stock were issued and outstanding; , (iiB) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 18,047 shares of Company Common Stock were reserved for issuance upon the exercise of outstanding Preferred Stock, (C) 26,000 Company Stock Options were outstanding pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; , each such option entitling the holder thereof to purchase one share of Company Common Stock, (ivD) 365,527 26,000 shares of Company Common Stock are authorized and reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(ivexercise of outstanding Company Stock Options, (E) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 655,091 shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; , (viiF) no 16,423 shares of Company Series A Preferred Stock Stock, were issued and outstanding; , and (viiiG) except 70,000 shares of Series B Preferred Stock have been reserved for the $13,801,853 aggregate principal amount issuance upon exercise of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule rights (the "Company Convertible NotesRights"), which is convertible into an aggregate of 410,831 shares ) distributed to the holders of Company Common Stock upon pursuant to the terms Rights Agreement dated as of March 31, 1993 between the Company and conditions set The Bank of New York, as Rights Agent (the "Rights Agreement"). The Company Disclosure Letter sets forth on Schedule 3.1(b)(viii) a true and complete list of the outstanding Company Disclosure ScheduleStock Options, no Voting Debt including the exercise prices and vesting schedules therefor. (as defined belowii) was issued and outstanding. The term "Voting Debt" means No bonds, debentures, notes or other indebtedness having the right to vote (or convertible into or exercisable for securities having the right to vote) on any matters on which stockholders may vote ("Voting Debt") of the Company are issued or Parent, as the case may be, may vote. outstanding. (iii) All outstanding shares of Company Common Stock the Company's capital stock are validly issued, fully paid and nonassessable and are not free of preemptive rights and were issued in compliance with applicable securities laws and regulations. All shares of Company Common Stock subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from issuance upon the exercise of stock options granted Company Stock Options, upon issuance on the terms and conditions specified in the instruments pursuant toto which they are issuable, or from issuances or purchases underwill be duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights and will be issued in compliance with applicable securities laws and regulations. (iv) Except for this Agreement, the Rights Agreement, the Company Rights, and the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), convertible securities, subscriptions, stock appreciation rights, phantom stock plans or stock equivalents, or other rights, commitments or agreements of any character to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, Company or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there There are not as no outstanding contractual obligations of the date hereof and there will not be at the Effective Time Company or any stockholder agreementsof its Subsidiaries to repurchase, voting trusts redeem or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists entirely of 30,000,000 (i) 100,000,000 shares of Company Common Stock Stock, and (ii) 10,000,000 shares of preferred stock, par value $.01 0.01 per share, of the Company ("Company Preferred Stock"). At the close of business on October 22July 14, 1999 (except as otherwise indicated): 2008: (i) 18,183,374 70,494,861 shares of Company Common Stock were issued and outstandingoutstanding (including 962,214 shares of unvested restricted stock); (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiariestreasury; (viiiii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 6,086,130 shares of Company Common Stock upon were issuable under the terms Alpha Coal Management LLC Amended and conditions set forth on Schedule 3.1(b)(viiiRestated 2004 Long-Term Incentive Plan (the “ACM 2004 LTIP”) and the Alpha Natural Resources, Inc. 2005 Long-Term Incentive Plan as Amended and Restated as of May 14, 2008 (the “2005 LTIP” and, together with the ACM 2004 LTIP, the “Company Stock Plans” and such stock options collectively, the “Company Stock Options”); and (iv) up to 977,320 shares of the Company Disclosure Schedule, no Voting Debt (as defined below) was Common Stock were subject to issued and outstandingoutstanding performance share grants under the Company Stock Plans. The term "Voting Debt" means bondsCompany has made available to Parent a list, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders as of the close of business on July 11, 2008, of the holders of outstanding Company Stock Options, restricted shares, and performance shares or Parentunits, and the number of shares outstanding, the number of shares exercisable (with respect to the Company Stock Options), the vesting schedule and other forfeiture provision (with respect to restricted shares and performance shares or units) and the exercise price, as applicable, subject to each such equity award. As of the case may beclose of business on July 14, may vote2008, the total number of votes entitled to be cast at the Company Stockholders Meeting with respect to the transactions contemplated hereby is 70,494,861. All outstanding shares of capital stock of the Company Common Stock are are, and all shares that may be issued will be, when issued, duly authorized, validly issued, fully paid and nonassessable and are not subject to or issued in violation of preemptive rights. Except as set forth on Schedule 3.1(b)(ixotherwise provided in this Section 3.1(c), there are not issued, reserved for issuance or outstanding (i) of the Company Disclosure Schedule, all outstanding any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; , (ii) no any securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of the Company or any Subsidiary of the Company; and Company Subsidiary, or (iii) no options, any warrants, calls, options or other rights (including preemptive rights), commitments or agreements to 8 18 which acquire from the Company or any Company Subsidiary any capital stock, voting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary Company Subsidiary. Except as otherwise provided in this Section 3.1(c), there are no outstanding obligations of the Company or any Company Subsidiary to (i) issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedany capital stock, redeemed voting securities or acquired, additional shares of securities convertible into or exchangeable or exercisable for capital stock or any Voting Debt or other voting securities of the Company or of any Company Subsidiary of the Companyor (ii) repurchase, redeem or obligating otherwise acquire any such securities. Neither the Company or nor any Company Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to any voting agreement with respect to the voting of any shares such securities. Except as otherwise provided in this Section 3.1(c), there are no agreements, arrangements or commitments of any character (contingent or otherwise) pursuant to which any person is or may be entitled to receive from the capital stock Company or a Company Subsidiary any payment based on the revenues, earnings or financial performance of the Company that will limit or any Company Subsidiary or assets or calculated in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiariesaccordance therewith.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 50,000,000 shares of Company Common Stock Stock, par value $0.01 per share, and 10,000,000 1,000,000 shares of preferred stock, par value $.01 0.01 per share, of share (the Company ("“Company Preferred Stock",” and together with the Company Common Stock, the “Company Capital Stock”). At the close of business on October 22March 12, 1999 (except as otherwise indicated): 2010, (i) 18,183,374 38,252 unvested Company Restricted Shares were issued and outstanding, (ii) 19,116 vested Company Restricted Shares were issued and outstanding, (iii) 12,485,101 other shares of Company Common Stock (excluding shares of Company Common Stock held by the Company in its treasury and vested and unvested Company Restricted Shares) were issued and outstanding, (iv) no shares of Company Preferred Stock were issued and outstanding, (v) 103,626 shares of Company Common Stock were issued and outstanding; held by the Company in its treasury, (iivi) 100,0002,109,821 shares of Company Common Stock were subject to outstanding Company Options, 333,224, 1,300,000, 350,000, 150,000, and 427,420 (vii) 3,103,244 additional shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; Plans (iii) as of September 30, 1999, 2,166,451 including both 2,109,821 shares of Company Common Stock were subject to that are reserved for issuance pursuant to in connection with outstanding options under the Company Stock Plans; (iv) 365,527 Options and 993,423 shares of Company Common Stock that are reserved for issuance but are not subject to any outstanding options or other awards), in each case, subject to adjustments required to be made on the terms set forth in the Company Stock Plans, the Rollover Agreements and the other agreements set forth in Section 3.10(a) of the Company Disclosure Letter governing the Company Restricted Shares and Company Options, as applicable, and (viii) the only type of equity-based awards granted pursuant to warrants (the "Company Warrants") Stock Plans are Company Restricted Shares and Company Options, and Company Restricted Shares and Company Options are the only currently outstanding awards under such plans. Except as set forth above, at the close of business on March 12, 2010, subject to purchase the exercise of Company Options into shares of Company Common Stock upon in accordance with the terms of such Company Option and conditions set forth on Schedule 3.1(b)(iv) of except as contemplated by the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) Rollover Agreements or as permitted by Section 5.01(b), no shares of Company Common Capital Stock were held by or other voting securities of the Company in its treasury or by its wholly owned Subsidiaries; (vii) were, and, immediately prior to the Effective Time no shares of Company Preferred Capital Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) or other voting securities of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may will be, may vote. issued, reserved for issuance or outstanding. (b) All outstanding shares of Company Common Capital Stock are are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and are not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive rights. Except as set forth on Schedule 3.1(b)(ix) right, subscription right or any similar right under any provision of the Company Disclosure ScheduleDGCL, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by Charter, the Company, Company Bylaws or any Contract to which the Company is a direct party or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any natureis otherwise bound. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x3.03(b) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this AgreementLetter, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, callsrights, rights (including preemptive convertible or exchangeable securities, “phantom” stock rights), commitments stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or agreements undertakings of any kind to 8 18 which the Company or any Company Subsidiary of the Company is a party or by which it any of them is bound in any case (x) obligating the Company or any Company Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or other equity interests in, or any Voting Debt security convertible or exercisable for or exchangeable into any capital stock of or other voting securities of equity interest in, the Company or of any Company Subsidiary of the Companyor any Voting Company Debt, or (y) obligating the Company or any Company Subsidiary of the Company to issue, grant, extend or enter into any such option, warrant, call, right, commitment security, commitment, Contract, arrangement or agreementundertaking or (z) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of Company Capital Stock. Except as contemplated by this AgreementThere are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, there are not redeem or otherwise acquire any shares of capital stock of the Company or any Company Subsidiary. (c) Section 3.03(c) of the Company Disclosure Letter sets forth a true and complete list as of the date hereof of all holders of outstanding Company Restricted Shares and there will Company Options, including, with respect to each holder thereof, (i) the exercise price per underlying share, if applicable, (ii) the term of each such Company Option, and (iii) whether such Company Option is a nonqualified stock option or incentive stock option. Prior to the date hereof, the Company has provided to Parent a copy of each form of award agreement that evidences the grant of Company Options and Company Restricted Shares, and, to the extent that any award has been granted that is evidenced by an award agreement that materially deviates from such form, the Company has provided to Parent a copy of such award agreement. With respect to each Company Option, (w) each grant of a Company Option was duly authorized no later than the date on which the grant of such Company Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the Company Board (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, (x) (1) the award agreement governing such grant was duly executed and delivered by the Company and, to the Knowledge of the Company, each other party thereto, and (2) each such grant was made in accordance with the terms of the applicable Company Stock Plan, the Exchange Act and all other applicable Laws, including the rules of the NASDAQ National Market, and (y) the per share exercise price of each Company Option was not be at less than the Effective Time any stockholder agreementsfair market value (within the meaning of Section 422 of the Code, voting trusts in the case of each Company Option intended to qualify as an “incentive stock option,” and within the meaning of Section 409A of the Code, in the case of each other Company Option) of a share of Company Common Stock on the applicable Grant Date. Each Company Option intended to qualify as an “incentive stock option” under Section 422(b) of the Code, if any, so qualifies. (d) There are no outstanding bonds, debentures, notes or other agreements or understandings to which Indebtedness of the Company having the right to vote on any matters on which holders of Company Common Stock may vote (“Voting Company Debt”). (e) The Company does not have in place, and is not subject to, a party stockholder rights plan, “poison pill” or by which it is bound relating to similar plan or instrument. (f) Except as set forth in Section 3.03(f) of the Company Disclosure Letter, there are no outstanding contractual obligations of the Company or any Company Subsidiary (i) restricting the transfer of, (ii) affecting the voting rights of, (iii) requiring the repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (iv) requiring the registration for sale of, or (v) granting any preemptive or anti-dilution right with respect to, any shares of the capital stock of Company Capital Stock, or other equity interests in, the Company that will limit in or any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the MergerSubsidiary. There are no restrictions on outstanding contractual obligations of the Company or any Company Subsidiary to vote make any investment (in the stock form of a loan, capital contribution or otherwise) in any Company Subsidiary (other than in the ordinary course of its Subsidiariesbusiness) or any other Person.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists entirely of 30,000,000 (i) 50,500,000 shares of Company Common Stock Stock, and 10,000,000 (ii) 500,000 shares of preferred stock, no par value $.01 per share, of the Company ("Company Preferred Stock"). At the close of business on October 22November 27, 1999 (except as otherwise indicated): 2009: (i) 18,183,374 27,704,950 shares of Company Common Stock were issued and outstandingoutstanding (including 538,486 shares of Restricted Stock); (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 578,081 shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstandingtreasury; and (viiiiii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 221,268 shares of Company Common Stock upon were subject to issued and outstanding options to purchase Company Common Stock granted under the terms Company First Amended and conditions set forth on Schedule 3.1(b)(viii) Restated 1996 Stock Option Plan, 662,513 shares of Company Common Stock were subject to issued and outstanding options to purchase Company Common Stock granted under the Third Amended and Restated Company 2007 Equity Incentive Plan, and 80,000 shares of Company Common Stock were subject to issued and outstanding options to purchase Company Common Stock granted under the First Amended and Restated 2008 Equity Incentive Plan for Non-Employee Directors of the Company Disclosure Schedule(collectively, no Voting Debt (as defined below) was issued the “Company Stock Plans” and outstandingsuch stock options collectively, the “Company Stock Options”). The term "Voting Debt" means bondsCompany has made available to Parent a list, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders as of the close of business on November 27, 2009, of the holders of outstanding Company or ParentStock Options, as restricted stock, and other stock awards and the case may benumber, may voteexercise prices, vesting schedules, performance targets, expiration dates and other forfeiture provisions of each grant to such holders. All outstanding shares of capital stock of the Company Common Stock are are, and all shares that may be issued will be, when issued, duly authorized, validly issued, fully paid and nonassessable and are not subject to or issued in violation of preemptive rights. Except as set forth on Schedule 3.1(b)(ixotherwise provided in this Section 3.1(c), there are not issued, reserved for issuance or outstanding (i) of the Company Disclosure Schedule, all outstanding any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; , (ii) no any securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of the Company or any Subsidiary of the Company; and Company Subsidiary, or (iii) no options, any warrants, calls, options or other rights (including preemptive rights), commitments or agreements to 8 18 which acquire from the Company or any Company Subsidiary any capital stock, voting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary Company Subsidiary. Except as otherwise provided in this Section 3.1(c), there are no outstanding obligations of the Company or any Company Subsidiary to (i) issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedany capital stock, redeemed voting securities or acquired, additional shares of securities convertible into or exchangeable or exercisable for capital stock or any Voting Debt or other voting securities of the Company or of any Company Subsidiary of the Companyor (ii) repurchase, redeem or obligating otherwise acquire any such securities. Neither the Company or nor any Company Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to any voting agreement with respect to the voting of any shares such securities. Except as otherwise provided in this Section 3.1(c) and for payments under Company Benefit Plans, there are no agreements, arrangements or commitments of any character (contingent or otherwise) pursuant to which any person is or may be entitled to receive from the capital stock Company or a Company Subsidiary any payment based on the revenues, earnings or financial performance of the Company that will limit or any Company Subsidiary or assets or calculated in any way accordance therewith. Except for the solicitation of proxies by or Credit Agreement dated October 27, 2006, as amended, among the Company, Bayshore Industrial L.P., ICO Polymers North America, Inc., ▇▇▇▇▇ Fargo Bank, National Association, KeyBank, National Association, and the other lending institutions named therein (the “Company Credit Agreement”), and except for the other agreements set forth on behalf Section 3.1(c) of the Company fromDisclosure Letter, or the casting of votes by, the stockholders no indebtedness for borrowed money of the Company with respect or any Company Subsidiary contains any restrictions (other than customary notice provisions) upon (i) the prepayment of any indebtedness of the Company or any Company Subsidiary, (ii) the incurrence by the Company or any Company Subsidiary of any indebtedness for borrowed money, or (iii) the ability of the Company or any Company Subsidiary to the Merger. There are no restrictions grant any Lien on the properties or assets of the Company to vote the stock of or any of its SubsidiariesCompany Subsidiary.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 shares of Company Common Stock and 10,000,000 2,500,000 shares of preferred stock, par value $.01 0.01 per share, of the Company ("“Company Preferred Stock"”). At the close As of business on October 22December 1, 1999 (except as otherwise indicated): 2003: (i) 18,183,374 9,206,774 shares of Company Common Stock were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 2,539,538 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan held by Company in its treasury and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned SubsidiariesSubsidiaries of Company; (viiiii) no shares of Company Preferred Stock were issued and outstanding; (iv) no shares of Company Preferred Stock were held by Company in its treasury or were held by any Subsidiary of Company; and (viiiv) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 2,117,367 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of were reserved for issuance pursuant to all plans, including the Company Disclosure ScheduleOption Plans, no Voting Debt agreements or arrangements providing for equity-based compensation to any director, Employee (as defined below) was issued and outstanding. The term "Voting Debt" means bondsin Section 3.1(f)), debentures, notes consultant or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders independent contractor of the Company or Parentany of its Subsidiaries (collectively, as the case may be“Company Stock Plans”), may voteof which 1,119,865 shares are subject to outstanding stock options to acquire Company Common Stock. All outstanding shares of capital stock of Company Common Stock are are, and all shares thereof which may be issued prior to the Closing will be, when issued, duly authorized, validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except Company has delivered to Newco a true and complete list, as set forth of the close of business on Schedule 3.1(b)(ixDecember 1, 2003, of all outstanding stock options to purchase or receive Company Common Stock and all other rights to purchase or receive Company Common Stock granted under Company Stock Plans (collectively, the “Company Stock Options”), the number of shares subject to each such Company Stock Option, the grant dates, the vesting schedule and the exercise prices (to the extent applicable) of each such Company Stock Option and the Company Disclosure Schedule, all outstanding shares of capital stock names of the Subsidiaries of holders thereof. Company has not awarded or authorized the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options award of any natureCompany Stock Options since December 1, 2003. Except as set forth in this Section 3.1(b3.1(c) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for the Company Rights Agreement and changes since October 22December 1, 1999 2003 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no the issuance of shares of Company Common Stock pursuant to and in accordance with Company Stock Options outstanding prior to December 1, 2003 and (ii) as expressly contemplated hereby (x) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock, Voting Debt stock or voting securities or other voting ownership interests of Company, (B) any securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or voting securities or other voting securities ownership interests of the Company, or (C) any warrants, calls, options or other rights to acquire from Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the any obligation of Company or any Subsidiary of the Company is a party its Subsidiaries to issue, any capital stock, voting securities or by which it is bound in any case obligating the other ownership interests in, or securities convertible into or exchangeable or exercisable for, capital stock or voting securities or other ownership interests of Company, and (y) there are no outstanding obligations of Company or any Subsidiary of the Company its Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedany such securities, redeemed other than pursuant to any “cashless exercise” provision of any Company Stock Options. Except as set forth in Section 3.1(c) of the Company Disclosure Schedule (which schedule shall include the Company Rights Agreement and the Company Stock Plans), there are no outstanding (A) securities of Company or acquired, additional any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt voting securities or other voting securities of the Company or of ownership interests in any Subsidiary of the Company, (B) warrants, calls, options or obligating the other rights to acquire from Company or any of its Subsidiaries, or any obligation of Company or any of its Subsidiaries to issue, any capital stock, voting securities or other ownership interests in, or any securities convertible into or exchangeable or exercisable for, any capital stock, voting securities or other ownership interests in, any Subsidiary of Company or (C) obligations of Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any such outstanding securities of Subsidiaries of Company or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities. Except for the Company Rights Agreement and the Company Stock Plans, neither Company nor any of its Subsidiaries is a party (and, to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not the knowledge of Company as of the date hereof and there will not be at hereof, no other Person having beneficial ownership (within the Effective Time meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of five percent or more of the outstanding Company Common Stock (a “Major Company Stockholder”) is a party) to any stockholder agreementsagreement restricting the transfer of, relating to the voting of, requiring registration of, or granting any preemptive or antidilutive rights with respect to any of the securities of Company or any of its Subsidiaries. There are no voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party or by which it or, to the knowledge of Company as of the date hereof, any Major Company Stockholder is bound relating a party with respect to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 67,500,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stock, par value $.01 0.01 per share, of the Company share ("“Company Preferred Stock"”). At the close of business on October 22May 8, 1999 2012 (except as otherwise indicated): the “Measurement Date”): (i) 18,183,374 22,513,752 shares of Company Common Stock were issued and outstanding; ; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 4,954,942 shares of Company Common Stock were reserved and available for issuance upon or otherwise deliverable in connection with the grant, exercise and/or settlement of equity-based awards pursuant to the Company's ’s 1995 Stock Option Plan, 2004 Stock Plan and 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Planin each case as amended to date (such plans, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "“Company Stock Plans"”), respectively; of which (iiiA) as of September 30, 1999, 2,166,451 4,290,861 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the to purchase Company Common Stock (“Company Stock Plans; Options”) and (ivB) 365,527 75,790 shares of Company Common Stock are reserved for issuance pursuant were subject to warrants (the "Company Warrants") to purchase outstanding deferred stock units denominated in shares of Company Common Stock upon granted to, or held in a deferral account for the terms and conditions set forth on Schedule 3.1(b)(ivbenefit of, any Company Personnel under any Company Stock Plan that were unsettled immediately prior to the Effective Time (“Company DSUs”); (iii) Section 4.01(d)(iii)(1) of the Company Disclosure Schedule; Letter sets forth a true and complete list of all outstanding Company Stock Options, indicating, with respect to each Company Stock Option then outstanding, (vA) 20,000 the name of each holder of such Company Stock Option, (B) the number of shares of Company Common Stock are reserved for issuance pursuant subject to restricted stock awards such Company Stock Option, ("Restricted C) if known, the country in which the holder of such Company Stock Awards"Option resides, if outside of the United States, (D) having the terms name of the plan under which such Company Stock Option was granted and conditions set forth on Schedule 3.1(b)(v(E) the exercise price, date of grant, vesting schedule and expiration date thereof; and Section 4.01(d)(iii)(2) of the Company Disclosure Schedule; Letter sets forth as of the Measurement Date a true and complete list of all outstanding Company DSUs, indicating, with respect to each Company DSU, (vi1) the name of each holder of such Company DSU, (2) the number of shares of Company Common Stock subject to such Company DSU, (3) the country in which the holder of such Company DSU resides, if outside of the United States, (4) the relationship of the holder of such Company DSU to the Company including the name of the employer if the holder is an employee and the country is outside of the United States, (5) the name of the plan under which such Company DSU was granted and (6) the vesting, forfeiture or repurchase conditions to which such share of Company DSU is subject; (iv) no shares of Company Common Stock were held by the Company in its as treasury shares or by its any wholly owned Subsidiaries; Subsidiary of the Company; (viiv) no shares of Company Preferred Stock were issued and outstandingissued, reserved for issuance, outstanding or were held by the Company as treasury shares; and and (viiivi) except as set forth above in this Section 4.01(d) or as permitted by Section 5.01(a), (x) there are not issued, reserved for issuance or outstanding (A) any shares of capital stock or other voting securities or equity interests of the $13,801,853 aggregate principal amount Company or any of its Subsidiaries, (B) any securities of the Company or any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests of the Company or any Subsidiary of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii, (C) any warrants, calls, options or other rights to acquire from the Company or any of its Subsidiaries, or any obligation of the Company Disclosure Schedule (the "Company Convertible Notes")or any of its Subsidiaries to issue, which is any capital stock, voting securities, equity interests or securities convertible into an aggregate or exchangeable or exercisable for capital stock or voting securities of 410,831 the Company or any Subsidiary of the Company or (D) any stock appreciation rights, “phantom” stock rights, performance units, or other rights to receive shares of Company Common Stock upon (or cash or other economic benefit in respect thereof) on a deferred basis or other rights (other than Company Stock Options) that are linked to the terms value of Company Common Stock and conditions set forth on Schedule 3.1(b)(viii(y) there are not any outstanding obligations of the Company Disclosure Scheduleor any of its Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities. All outstanding Company Stock Options and Company DSUs are evidenced by stock option agreements and deferred stock unit award agreements, respectively. All outstanding shares of capital stock of the Company are, and all shares which may be issued pursuant to the Company Stock Options, Company DSUs and other shares capital stock of the Company will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable, free and clear of all Liens and not subject to preemptive rights. There are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders shareholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of Neither the Company Disclosure Schedulenor any of its Subsidiaries is a party to or bound by any voting trusts, all outstanding proxies or similar Contract with respect to the voting of any such securities or restricting the transfer of, or requiring the registration for sale of, any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 (i) 96,250,000 shares of Company Common Stock, par value $.001 per share, and (ii) 3,750,000 shares of Class B Common Stock (the "Class B Common Stock") and (iii) 1,000,000 shares of preferred stock (the "Preferred Stock"). Subject to any Permitted Changes (as defined in Section 4.01(a)(ii)) there are: (i) 47,366,158 shares of Company Common Stock issued and 10,000,000 outstanding (including shares of preferred stock, par value $.01 per share, held in the treasury of the Company and including shares of Company Restricted Stock); ("Company Preferred Stock"). At the close of business on October 22, 1999 (except as otherwise indicated): (iii) 18,183,374 2,645,871 shares of Company Common Stock were issued and outstandingheld in the treasury of the Company; (iiiii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 452,065 shares of Company Common Stock were reserved for issuance upon exercise of authorized but unissued Company Stock Options pursuant to the Stock Plans, and 354,334 shares of Company Common Stock reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan Plans (collectively, the "other than upon exercise of Company Stock Plans"Options), respectively; (iiiiv) as of September 30, 1999, 2,166,451 423,438 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the issuable upon exercise of awarded but unexercised Company Stock Plans; (iv) 365,527 shares of Options, with an exercise price per each awarded but unexercised Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions Option as is set forth on Schedule 3.1(b)(ivin Section 3.01(c) of the Company Disclosure Schedule; (v) 20,000 no shares of Class B Common Stock issued and outstanding or in the treasury of the Company, and, to the knowledge of the Company, no shares of Class B Common Stock issuable upon conversion of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms Stock; and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Preferred Stock were held by issued and outstanding or in the Company in its treasury or by its wholly owned Subsidiaries; (vii) of the Company. Except as set forth above, no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) capital stock or other equity securities of the Company Disclosure Schedule (the "Company Convertible Notes")are issued, which is convertible into an aggregate of 410,831 reserved for issuance or outstanding. All outstanding shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) capital stock of the Company Disclosure Scheduleare, and all shares which may be issued pursuant to the Stock Plans will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means outstanding bonds, debentures, notes or other indebtedness or other securities of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreementabove, there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to 8 18 which the Company or any Subsidiary of the Company its subsidiaries is a party or by which it any of them is bound in any case obligating the Company or any Subsidiary of the Company its subsidiaries to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt other equity or other voting securities of the Company or of any Subsidiary of the Company, its subsidiaries or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.subsidiaries to issue, grant,

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 40,000,000 shares of Company Common Stock and 10,000,000 1,000,000 shares of series preferred stock, par value $.01 per share, of the Company share ("Company Preferred Stock"). At the close of business on October 22November 28, 1999 (except as otherwise indicated): 1997, (i) 18,183,374 14,941,227 shares of Company Common Stock were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, 470,300 shares of Company Series B Preferred Stock were issued and 427,420 outstanding (and 1,410,900 shares of Company Common Stock were reserved for issuance pursuant to upon the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"conversion thereof), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 872,032 shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; treasury, (viiiv) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 1,378,847 shares of Company Common Stock upon were reserved for issuance pursuant to ▇▇▇▇▇▇ Inc. 1985 Stock Option and Appreciation Plan and ▇▇▇▇▇▇ Inc. Stock Option Plan for Non-Employee Directors (collectively, the terms "Stock Plans"), and conditions (v) 200,000 shares of Company Series A Preferred Stock were reserved for issuance in connection with the rights (the "Rights") to purchase shares of Company Series A Preferred Stock issued pursuant to the Renewed Rights Agreement dated September 25, 1996 (as amended from time to time, the "Rights Agreement") between the Company and American Stock Transfer and Trust Company, as rights agent. Except as set forth above, at the close of business on Schedule 3.1(b)(viii) December 14, 1997, no shares of capital stock or other voting securities of the Company Disclosure Schedulewere issued, reserved for issuance or outstanding (except for shares of Company Common Stock issued upon conversion of shares of Company Series B Preferred Stock since November 28, 1997). At the close of business on December 14, 1997, there were no Voting Debt outstanding stock appreciation rights or rights (as defined belowother than outstanding employee stock options to purchase shares of Company Common Stock ("Employee Stock Options")) was to receive shares of Company Common Stock on a deferred basis granted under the Stock Plans or otherwise. All outstanding shares of capital stock of the Company are, and all shares which may be issued will be, when issued, duly authorized, validly issued, fully paid and outstandingnonassessable and not subject to preemptive rights. The term "Voting Debt" means There are no notes, bonds, debentures, notes debentures or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders shareholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth above, at the close of business on Schedule 3.1(b)(ix) of the Company Disclosure ScheduleDecember 14, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement1997, there are outstanding: (i) were no shares of capital stockoutstanding securities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to 8 18 which the Company or any Subsidiary of the Company is its subsidiaries was a party or by which it is any of them was bound in any case obligating the Company or any Subsidiary of the Company its subsidiaries to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, its subsidiaries or obligating the Company or any Subsidiary of the Company its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment commitment, agreement, arrangement or agreementundertaking. Except At the close of business on December 14, 1997, and except as contemplated by this Agreementprovided pursuant to the terms of the Company Series B Preferred Stock there were no outstanding contractual obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries. At the close of business on December 14, 1997, there are not as were no outstanding contractual obligations of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts Company to vote or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting dispose of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiariessubsidiaries. The Company has delivered to Bethlehem a complete and correct copy of the Rights Agreement.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 3,200,000,000 shares of common stock, par value $0.0001, of the Company (the “Company Common Stock Stock”) and 10,000,000 100,000,000 shares of preferred stock, par value $.01 0.01 per shareshare (such preferred stock, together with the Company Common Stock, the “Company Capital Stock”), of which 4,000,000 shares are designated as Series A Junior Participating Preferred Stock (the Company ("Company “Series A Preferred Stock"”) and 1,000,000 shares are designated as Series B Preferred Stock (the “Series B Preferred Stock”). At the close of business on October 22January 12, 1999 (except as otherwise indicated): 2017, (i) 18,183,374 1,425,934,305 shares of Company Common Stock were issued and outstanding; , none of which were held by any Company Subsidiary, (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 7,073,244 shares of Company Common Stock were reserved and available for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans")Plans in respect of outstanding awards, respectively; including (iiiA) as Company RSUs with respect to 137,686 shares of September 30Company Common Stock, 1999, 2,166,451 (B) 390,449 shares of Company Common Stock were subject with respect to issuance pursuant to outstanding options under the Company DSUs that are settled in Company Common Stock Plans; (iv) 365,527 and 246,049 shares of Company Common Stock with respect to Company DSUs that are reserved for issuance pursuant settled in cash, and (C) Company Performance Shares with respect to warrants (the "Company Warrants") to purchase 6,299,060 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) Stock, assuming achievement of the Company Disclosure Schedule; applicable performance goals at maximum level, (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (viiii) no shares of Company Common Series A Preferred Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; outstanding and (viiiv) no 1,000,000 shares of Company Series B Preferred Stock were issued and outstanding; , all of which were held by a Company Subsidiary. Except as set forth above, at the close of business on January 12, 2017, no shares of capital stock of, or other equity, voting or ownership interests in, the Company were issued, reserved for issuance or outstanding. All outstanding shares of Company Capital Stock are, and (viii) except for all such shares that may be issued prior to the $13,801,853 aggregate principal amount Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) NCBCA, the Company Charter, the Company Bylaws or any Contract to which the Company is a party or otherwise bound (other than any Contracts to which Parent or any Parent Subsidiary is a party or otherwise bound). There is no Indebtedness of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares holders of Company Common Capital Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rightsmay vote (“Company Voting Debt”). Except as set forth on Schedule 3.1(b)(ix) above, as of the Company Disclosure Schedule, all outstanding shares date of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, Agreement there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, callsrights, rights (including preemptive convertible or exchangeable securities, other securities, “phantom” stock rights), commitments stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or agreements undertakings of any kind to 8 18 which the Company or any Company Subsidiary of the Company is a party or by which it any of them is bound in (other than any case Contracts, arrangements or undertakings to which Parent or any Parent Subsidiary is a party or by which any of them is bound) (x) other than as may be required by the Governance Agreement, obligating the Company or any Company Subsidiary of the Company to issue, delivergrant, deliver or sell, purchase, redeem or acquire, or cause to be issued, deliveredgranted, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock of or other equity, voting or ownership interests in, or any Voting Debt security convertible or exercisable for or exchangeable into any capital stock of, or other equity, voting securities of or ownership interest in, the Company or of any Company Subsidiary of the Companyor any Company Voting Debt, or (y) obligating the Company or any Company Subsidiary of the Company to issue, grant, sell, extend or enter into any such option, warrant, call, right, commitment security, unit, commitment, Contract, arrangement or agreement. Except as contemplated by this Agreement, there are not as of undertaking or (z) that give any person the date hereof right to receive any economic benefit or right similar to or derived from the economic benefits and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings rights accruing to which the Company is a party or by which it is bound relating to the voting of any shares holders of the capital stock of the Company that will limit in or any way Company Subsidiary. As of the solicitation date of proxies by or on behalf this Agreement, there are not any outstanding contractual obligations of the Company fromor any Company Subsidiary to (i) repurchase, redeem or otherwise acquire any shares of capital stock of, or the casting of votes byother equity, voting or ownership interests in, the stockholders Company or any Company Subsidiary or (ii) vote or dispose of any shares of capital stock of, or other equity, voting or ownership interest in, any Company Subsidiaries. (b) During the period from the close of business on January 12, 2017 to the date of this Agreement, there have been no issuances, distributions or dividends by the Company of any shares of capital stock of, or other equity, voting or ownership interests in, the Company other than issuances of shares of Company Common Stock in connection with the vesting or settlement of Company Stock Awards in accordance with their terms. To the Knowledge of the Company, there are no irrevocable proxies and no voting agreements with respect to any shares of the capital stock or other voting securities of the Company with respect or any Company Subsidiary, other than pursuant to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesGovernance Agreement.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 45,000,000 shares of Company Common Stock Stock, and 10,000,000 6,000,000 shares of preferred stockPreferred Stock (the “Preferred Stock” and, par value $.01 per share, of together with the Company ("Common Stock, the “Company Preferred Capital Stock"”). At the close of business on October 22November 8, 1999 2019 (except as otherwise indicated): the “Capitalization Date”), (i) 18,183,374 35,012,030 shares of Company Common Stock were issued and outstandingoutstanding (of which 67,033 shares were subject to vesting restrictions pursuant to the Company Stock Plans); (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, 2,668,786 shares of Company Common Stock were issued and 427,420 held in treasury; (iii) no shares of Preferred Stock were issued and outstanding; (iv) 1,529,189 shares of Company Common Stock were reserved and available for issuance pursuant to the Company Stock Plans; (v) 669,899 shares of Company Common Stock were issuable upon exercise of outstanding Company Stock Options; (vi) 2,878,197 shares of Company Common Stock were subject to outstanding Company RSUs and 706,065 shares of Company Common Stock were subject to outstanding Performance-Vesting Awards assuming all applicable performance measures were satisfied at maximum levels of performance; (vii) 346,984 shares of Company Common Stock were reserved for future issuance pursuant to under the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan Company ESPP; and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iiiviii) as of September 30, 1999, 2,166,451 7,371,788 shares of Company Common Stock were subject to reserved for future issuance pursuant to outstanding options under upon conversion of the Convertible Notes. Since the Capitalization Date, the Company has not issued any Company Stock Plans; Options, Company RSUs or Performance-Vesting Awards or other equity or equity-based awards. Except as set forth in this Section 5.03(a), there are not issued, reserved for issuance or outstanding, and there are not any outstanding obligations of the Company to issue, deliver or sell, or cause to be issued, delivered or sold, (ivx) 365,527 any capital stock or any securities of the Company convertible into or exchangeable or exercisable for shares of capital stock or voting securities of, or other equity interests in, the Company, (y) any warrants, calls, options, phantom stock, stock appreciation rights or other rights to acquire from the Company, or any other obligation of the Company to issue, deliver or sell, or cause to be issued, delivered or sold, any capital stock or voting securities of, or other equity interests in, the Company or (z) any rights issued by, or other obligations of, the Company that are linked in any way to the price of any class of Company Capital Stock, the value of the Company or any part of the Company or any dividends or other distributions declared or paid on any shares of capital stock of the Company. Section 5.03(a) of the Company Disclosure Letter sets forth an accurate list, as of the Capitalization Date, of each outstanding Company Stock Award, in each case specifying the employee ID of the holder, the type of award, the number of underlying shares of Company Common Stock, the date of grant, and, if applicable, the exercise price per share of Company Common Stock and the expiration date. (b) All outstanding shares of Company Common Stock are reserved for issuance are, and, at the time of issuance, all such shares that may be issued (i) upon the exercise of Company Stock Options, (ii) upon the vesting or settlement of Company RSUs pursuant to warrants the Company Stock Plans and applicable award agreements, (iii) under the "Company Warrants"ESPP or (iv) upon conversion of the Convertible Notes pursuant to the Indenture, will be, duly authorized, validly issued, fully paid and nonassessable and not subject to, or issued in violation of, any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the DGCL, the Company Charter, the Company Bylaws or any Contract to which the Company is a party or bound. All grants of equity awards or other rights with respect to shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) to current or former directors, officers, employees, agents or consultants of the Company Disclosure Schedule; or any Company Subsidiary have been made in accordance with applicable Law, the terms of the applicable Company Stock Plans and award agreements thereunder or the Company ESPP, as applicable, and any policy of the Company or Company Board (vincluding any committee thereof) 20,000 shares relating to the grant of such awards or rights. Except for acquisitions, or deemed acquisitions, of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) or other equity securities of the Company Disclosure Schedule; in connection with (vix) no shares the payment of the exercise price of Company Stock Options with Company Common Stock were held by (including in connection with “net exercises”), (y) required tax withholding in connection with the Company in its treasury exercise of, vesting or by its wholly owned Subsidiaries; (vii) no shares settlement of Company Preferred Stock were issued and outstanding; Awards, and (viiiz) except for the $13,801,853 aggregate principal amount forfeitures of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) Company Stock Awards, there are not any outstanding obligations of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) or any of the Company Disclosure ScheduleSubsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock or voting securities or other equity interests of the Company or any Company Subsidiary. Except for the Convertible Notes, there are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means debentures, bonds, debentures, notes or other indebtedness Indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature’s stockholders may vote (“Company Voting Debt”). Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities None of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company Subsidiaries is a party to or otherwise bound by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating agreement with respect to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company fromvoting securities of, or the casting of votes byother equity interests in, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesCompany.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 150,000,000 shares of the Company Common Stock Stock, par value $0.001 per share and 10,000,000 shares of preferred stock, par value $.01 0.001 per share, of share (the Company ("“Company Preferred Stock"”). At the close of business on October 22July 15, 1999 2025 (except as otherwise indicatedthe “Measurement Date”): (i) 18,183,374 44,171,194 shares of the Company Common Stock were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 no shares of the Company Common Stock were held by the Company in its treasury; (iii) 9,964,518 shares of the Company Common Stock were subject to outstanding Company Stock Options with a weighted average exercise price of approximately $15.96 per share, 3,005,288 shares of Company Common Stock were subject to outstanding In-the-Money Options with a weighted average exercise price of approximately $6.05 per share; (iv) 1,115,274 shares of the Company Common Stock were subject to outstanding Company Restricted Stock Units; (v) 16,059,599 shares of the Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively9,702,424 of which were available for future issuance; (iiivi) as of September 30, 1999, 2,166,451 667,931 shares of the Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure ScheduleESPP, 506,565 of which were available for future issuance; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and or outstanding; and (viii) except for . Except as set forth above, at the $13,801,853 aggregate principal amount close of business on the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) Measurement Date, no shares of capital stock of the Company Disclosure Schedule (were issued, reserved for issuance or outstanding. From the "Measurement Date to the Agreement Date, there have been no issuances by the Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of capital stock or other voting securities or equity interests of the Company or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock or other voting securities or equity interests of the Company or other rights that give the holder thereof any economic or voting interest of a nature accruing to the holders of the Company Common Stock, other than the issuance of the Company Common Stock upon the terms exercise of Company Stock Options or vesting and conditions set forth on Schedule 3.1(b)(viiisettlement of Company Restricted Stock Units in accordance with their terms. (b) All outstanding shares of the Company Disclosure ScheduleCommon Stock are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. (c) As of the Agreement Date, there are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness of the Company or its subsidiaries having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders holders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. may vote by virtue of their ownership thereof (“Voting Company Debt”). (d) Except as set forth on Schedule 3.1(b)(ixin Section 4.02(a) of this Agreement and in Section 4.02(d) of the Company Disclosure ScheduleLetter, all outstanding shares of capital stock as of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this AgreementMeasurement Date, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, callsconvertible or exchangeable securities, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt stock-based performance units or other voting securities of the Company rights or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings Contracts to which the Company is a party or by which it the Company is bound relating bound: (i) obligating the Company to issue, grant, deliver or sell, or cause to be issued, granted, delivered or sold, additional shares of capital stock of, or other voting securities or equity interests in, or any security convertible or exchangeable for any shares of capital stock of, or other voting securities or equity interests in, the Company or any Voting Company Debt; (ii) obligating the Company to issue, grant or enter into any such option, warrant, security, unit, right or Contract; (iii) that give any Person the right to receive any economic or voting interest of a nature accruing to the voting holders of the Company Common Stock; or (iv) restricting the transfer of, containing any right of first refusal or right of first offer with respect to, or requiring the registration for sale of any shares of, capital stock of the Company. (e) As of the Measurement Date, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of capital stock of the Company that will limit in any way or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire shares of capital stock of the solicitation Company, except for: (i) acquisitions of proxies by or on behalf shares of the Company from, or Common Stock in connection with the casting surrender of votes by, the stockholders shares of the Company Common Stock by holders of Company Stock Options in order to pay the exercise price of Company Stock Options; (ii) the withholding of shares of the Company Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Stock Plans; and (iii) the acquisition by the Company of Company Stock Options and Company Restricted Stock Units in connection with the forfeiture or repurchase of such awards or shares. (f) All Company Stock Options and Company Restricted Stock Units are evidenced by written award agreements, in each case, substantially in the forms that have been made available to Parent, except to the extent that such agreements differ from such forms and from one another with respect to the Merger. There are no restrictions on number of shares of the Company to vote Common Stock covered thereby, the stock type of any award, the exercise price, exercise period, vesting schedule, vesting terms and expiration date applicable thereto. (g) Section 4.02(g) of its Subsidiariesthe Company Disclosure Letter sets forth a true and complete list of all outstanding Company Stock Options and Company Restricted Stock Units, as of the Measurement Date, indicating for each such Company Stock Option or Company Restricted Stock Unit: (i) the name of the holder thereof; (ii) the date of grant; (iii) the number of vested and unvested shares underlying Company Stock Options and Company Restricted Stock Units; and (iv) for each Company Stock Option, the per share exercise price. Each Company Stock Option and Company Restricted Stock Unit was granted or issued in all material respects in accordance with the terms of the applicable Company Stock Plan and all applicable Laws.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 1,000,000,000 shares of Company Common Stock and 10,000,000 50,000,000 shares of preferred stock, without par value $.01 per share, of the Company ("Company Preferred Stock"). 1,500,000 shares of Company Preferred Stock have been designated as Series A Participating Preferred Stock, without par value (the "Company Series A Preferred Stock"). At the close of business on October 22December 14, 1999 (except as otherwise indicated): 2004, (i) 18,183,374 321,485,774 shares of Company Common Stock were issued and outstanding; outstanding (which number includes (A) 535,645 shares of Company Common Stock held by the Company in its treasury, (B) 1,934,116 shares of Company Common Stock held by the trust established under The Guidant Employee Savings and Stock Ownership Plan and (C) 919,276 shares of Company Common Stock subject to vesting and restrictions on transfer ("Company Restricted Stock")), (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 41,590,880 shares of Company Common Stock were reserved and available for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive 1994 Stock Plan, the Company's as amended, 1996 Nonemployee Director Stock Plan, as amended, 1998 Stock Plan, as amended, and 2001 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (the "ESPP") (such plans, collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 which 35,485,818 shares of Company Common Stock were subject to issuance pursuant outstanding Company Stock Options or agreements to issue Company Stock Options, and (iii) no shares of Company Preferred Stock (including Company Series A Preferred Stock) were issued or outstanding options under or were held by the Company Stock Plans; (iv) 365,527 as treasury shares. Except as set forth above in this Section 3.01(c), at the close of business on December 14, 2004, no shares of capital stock or other voting securities or equity interests of the Company were issued, reserved for issuance or outstanding. At the close of business on December 14, 2004, there were no outstanding stock appreciation rights, "phantom" stock rights, restricted stock units, performance units, rights to receive shares of Company Common Stock on a deferred basis or other rights (other than Company Stock Options) that are reserved for issuance pursuant linked to warrants the value of Company Common Stock (the collectively, "Company WarrantsStock-Based Awards") ). All outstanding options to purchase shares of Company Common Stock upon exclusive of rights under the terms ESPP (collectively, "Company Stock Options") and conditions set forth on Schedule 3.1(b)(iv) shares of Company Restricted Stock are evidenced by stock option agreements, restricted stock purchase agreements or other award agreements. All outstanding shares of capital stock of the Company Disclosure Schedule; (v) 20,000 are, and all shares of Company Common Stock are reserved for issuance which may be issued pursuant to restricted stock awards ("Restricted the Company Stock Awards") having Options or Company Stock-Based Awards will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) nonassessable and not subject to preemptive rights. There are no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders shareholders of the Company or Parent, as the case may be, may vote. All outstanding Except as set forth above in this Section 3.01(c) and for issuances of shares of Company Common Stock pursuant to the Company Stock Options set forth above in this Section 3.01(c) and subject to Section 4.01(a), (x) there are validly not issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ixreserved for issuance or outstanding (A) of the Company Disclosure Schedule, all outstanding any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct other voting securities or indirect wholly owned Subsidiary equity interests of the Company, free and clear of all liens, charges, encumbrances, claims and options of (B) any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests of the Company, (C) any warrants, calls, options or other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, Voting Debt voting securities, equity interests or other securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company or (D) any Subsidiary of the Company; Company Stock-Based Awards and (iiiy) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which there are not any outstanding obligations of the Company or any Subsidiary of the Company is a party its Subsidiaries to repurchase, redeem or by which it is bound in otherwise acquire any case obligating the Company such securities or any Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedany such securities. Neither the Company nor any of its Subsidiaries is a party to any voting Contract with respect to the voting of any such securities. Except as set forth above in this Section 3.01(c) and subject to Section 4.01(a), redeemed there are no outstanding (1) securities of the Company or acquired, additional any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities of the Company or equity interests of any Subsidiary of the Company, (2) warrants, calls, options or obligating other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, voting securities, equity interests or securities convertible into or exchangeable or exercisable for capital stock or voting securities of any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock (3) obligations of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesSubsidiaries to repurchase, redeem or otherwise acquire any such outstanding securities or to issue, deliver or sell, or cause to be issued, delivered or sold, any such securities.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 175,000,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stockPreferred Stock, par value $.01 0.001 per share, of share (the Company ("Company “Preferred Stock"”). . (b) At the close of business on October 22November 8, 1999 (except as otherwise indicated): 2013, (i) 18,183,374 65,967,198 shares of Company Common Stock were issued and outstanding; , (ii) 100,00016,042,202 shares of Company Common Stock were held by the Company in its treasury, 333,224(iii) 10,864,323 shares of Company Common Stock were reserved for issuance upon conversion of the Company’s 2.0% Senior Convertible Notes due 2017 (the “Convertible Notes”), 1,300,000(iv) no shares of Preferred Stock were issued or outstanding, 350,000, 150,000, (v) 10,864,323 shares of Company Common Stock were reserved for issuance upon the exercise of the Call-Spread Warrants and 427,420 (vi) 20,350,000 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option ’s Amended and Restated 2005 Equity Incentive Plan, the Company's Service Center Stock Option Plan, the Company's 1996 ’s 2001 Equity Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified ’s Amended and Restated 1995 Stock Option and Restricted Share Plan (collectivelysuch plans, together with the Company’s Amended and Restated 2000 Employee Stock Purchase Plan (the “Purchase Plan”), the "“Company Stock Plans"”), respectively; of which 10,046,890 shares of Company Common Stock were subject to outstanding options (iiiother than purchase rights under the Purchase Plan) as to acquire shares of September 30Company Common Stock from the Company (the “Company Stock Options”), 1999, 2,166,451 35,667 shares of Company Common Stock were subject to issuance pursuant to upon settlement of outstanding options under restricted share units (the “Company Stock Plans; (ivRSUs”) 365,527 and 612,250 shares of Company Common Stock are reserved for were subject to issuance pursuant to warrants upon settlement of outstanding performance share units (the "“Company Warrants") PSUs”), assuming achievement of the target level of performance at the end of the applicable performance period. As of the date of this Agreement, before giving effect to purchase any “make-whole” adjustments set forth therein, the conversion ratio of the Convertible Notes is 52.9998 shares of Company Common Stock per $1,000 aggregate principal amount. As of the close of business on November 8, 2013, the Company held Company Hedge Options entitling the Company to receive up to 10,864,323 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) exercise of the Company Disclosure Schedule; Hedge Options, subject to adjustments, pursuant to the terms thereof. Prior to the date hereof, the Company has provided Parent with a complete and correct list of (vA) 20,000 each outstanding Company Stock Option, including the holder, date of grant, exercise price, vesting schedule and number of shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards subject thereto and ("Restricted Stock Awards"B) having each outstanding Company RSU and Company PSU, including the terms holder, date of grant, vesting schedule and conditions set forth on Schedule 3.1(b)(v) number of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held thereof (for each Company PSU, assuming achievement of the target level of performance). (c) Since the close of business on November 8, 2013 until the date of this Agreement, (i) there have been no issuances by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no of shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount capital stock or other voting securities or equity interests of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) , other than issuances of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon pursuant to the terms exercise of Company Stock Options, Company RSUs, Company PSUs and conditions set forth purchase rights under the Purchase Plan, in each case outstanding as of the close of business on Schedule 3.1(b)(viiiNovember 8, 2013 and (ii) there have been no issuances by the Company of securities convertible into, or exchangeable or exercisable for, or options, warrants or other rights to acquire, or shares of deferred stock, restricted stock units, stock-based performance units, stock appreciation rights or “phantom” stock awards with respect to, any such stock, interests or securities, or derivative securities or other rights that are linked to the value of Company Common Stock or the value of the Company Disclosure Scheduleor any part thereof, other than purchase rights under the Purchase Plan. (d) All outstanding shares of capital stock of the Company are, and all shares which may be issued pursuant to the Convertible Notes, Company Stock Options, Company RSUs, Company PSUs, purchase rights under the Purchase Plan, Call-Spread Warrants or otherwise will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or, except for the Convertible Notes, convertible into, or convertible into exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth above in this Section 4.3 and for changes since the close of business on Schedule 3.1(b)(ixNovember 8, 2013 resulting from the exercise or settlement of Company Stock Options, Company RSUs, Company PSUs and purchase rights under the Purchase Plan outstanding on such date, (i) of the Company Disclosure Schedulethere are no issued, all reserved for issuance or outstanding (A) shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities or equity interests of the Company; Company or any of its Subsidiaries, (iiB) no securities of the Company or any Subsidiary of the Company its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests of the Company or any of its Subsidiaries, (C) warrants, calls, options or other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, Voting Debt voting securities, equity interests or other securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company or any Subsidiary of the Company; and its Subsidiaries or (iiiD) no optionsshares of deferred stock, warrantsrestricted stock units, callsequity-based performance units, stock appreciation rights (including preemptive rights), commitments or agreements “phantom” stock awards with respect to 8 18 which any capital stock of the Company or any Subsidiary of its Subsidiaries, or derivative securities or other rights that are directly or indirectly linked to the value of the Company is a party Common Stock, or by which it is bound in the value of the Company, any case obligating of its Subsidiaries or any assets or securities thereof and (ii) there are not any outstanding obligations of the Company or any Subsidiary of the Company its Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedany such securities (except pursuant to the forfeiture of Company Stock Options, redeemed Company RSUs or acquired, additional Company PSUs or the acquisition by the Company of shares of capital stock Company Common Stock in settlement of the exercise price of a Company Stock Option or any Voting Debt the Tax withholding obligations of holders of Company Stock Options, Company PSUs or other voting securities Company RSUs, in each case in accordance with their terms as in effect on the date of this Agreement). (e) None of the Company or of Common Stock is owned by any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 100,000,000 shares of Company Common Stock, par value $.001 per share, and 10,000,000 shares of Company Preferred Stock, par value $.001 per share. As of the close of business on June 7, 2001, there were: (i) 40,048,880 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 per share, of the Company ("Company Preferred Stock"). At the close of business on October 22, 1999 (except as otherwise indicated): (i) 18,183,374 shares of Company Common Stock were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 9,886 shares of Company Common Stock were held in the treasury of the Company and no shares of Company Common Stock held by Subsidiaries of the Company; (iii) 10,644,566 shares of Company Common Stock reserved for issuance upon exercise of Company Stock Options available for grant pursuant to the Company Stock Plans; (iv) 5,260,447 shares of Company Common Stock issuable upon exercise of awarded but unexercised Company Stock Options, with an exercise price per each awarded but unexercised Company Stock Option as set forth in the Company Disclosure Schedule; (v) 289,532 shares of Company Common Stock reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, Plan (the Company's 1997 Non-Qualified "Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock PlansPlan"), respectively; (iiivi) as of September 30, 1999, 2,166,451 1,899,234 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares issuable upon exercise of Company Common Stock are reserved Warrants then outstanding and with an exercise price for issuance pursuant to warrants (the "each such Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions Warrant as is set forth on Schedule 3.1(b)(iv) of in the Company Disclosure Schedule; (vvii) 20,000 3,682,720 shares of Company Common Stock are issuable upon conversion of the Convertible Notes (for which Convertible Notes the conversion price under the Convertible Notes Indenture is $7.06); (viii) no shares of Preferred Stock issued and outstanding; (ix) 500,000 shares of Series A Junior Participating Preferred Stock reserved for issuance pursuant to restricted stock awards the Rights Agreement; and ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (viix) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for in the $13,801,853 aggregate principal amount treasury of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) . Except as set forth above, as of June 7, 2001, there were no shares of capital stock or other equity securities of the Company Disclosure Schedule issued, reserved for issuance or outstanding. (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 b) All outstanding shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) capital stock of the Company Disclosure Scheduleare, no Voting Debt (as defined below) was and all shares which may be issued pursuant to the Company Stock Plans and the Company Warrants will be, when issued and outstandingpaid for in accordance with the terms of the Company Warrants and the Company Stock Plans, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. The term "Voting Debt" means bondsAll securities issued by the Company were issued in compliance in all material respects with all applicable federal and state securities laws and all applicable rules and regulations promulgated thereunder. No shares of capital stock of the Company are owned by any Subsidiary of the Company. (c) Except as set forth in Section 2.03(a), debentures, notes or other indebtedness there is no outstanding Indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company may vote (collectively, "Voting Debt"). As used herein, "Indebtedness" means, with respect to any Person, without duplication, (i) all obligations of such Person for borrowed money, or Parentwith respect to deposits or advances of any kind to such Person, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, (iv) all obligations of such Person issued or assumed as the case may bedeferred purchase price of property or services (excluding obligations of such Person to creditors for raw materials, may vote. All outstanding shares inventory, services and supplies incurred in the ordinary course of Company Common Stock are validly issuedsuch Person's business), fully paid (v) all capitalized lease obligations of such Person, (vi) all obligations of others secured by any Lien on property or assets (excluding encumbrances in the form of restrictions on use of Intellectual Property contained in license agreements or scientific collaboration agreements) owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (vii) all obligations of such Person under interest rate or currency hedging transactions (valued at the termination value thereof), (viii) all letters of credit issued for the account of such Person and nonassessable (ix) all guarantees and are not subject to preemptive rightsarrangements having the economic effect of a guarantee of such Person of any Indebtedness of any other Person. Except as set forth in Section 2.03(a), there are no options, warrants or other rights, agreements, arrangements or commitments of any character binding on Schedule 3.1(b)(ix) the Company or any of its Subsidiaries relating to the issued or unissued Equity Interests of the Company Disclosure Scheduleor any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue, all outstanding sell, repurchase, redeem or otherwise acquire or make any payment with respect to any Equity Interests of the Company or any of its Subsidiaries or any Minority Interests held by the Company or any of its Subsidiaries. To the Knowledge of the Company as of the date hereof, there are no irrevocable proxies with respect to shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) its Subsidiaries. There are no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings arrangements pursuant to which the Company is a party or by which it is bound relating could be required to the voting of any register shares of Company Common Stock or other securities under the capital stock Securities Act of 1933, as amended (the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries"Securities Act").

Capital Structure. As of the date hereof, the (i) The authorized capital stock shares of the Company consists of 30,000,000 shares of 50,000,000 Company Common Stock Shares and 10,000,000 shares of 500,000 preferred stockshares, par value $.01 1.00 per shareshare (together, of the “Company ("Company Preferred Stock"Capital Shares”). At the close of business on October 22August 31, 1999 2007, (except as otherwise indicated): (iA) 18,183,374 shares of 21,276,214 Company Common Stock Shares were issued and outstanding; outstanding (iiother than shares held in treasury), inclusive of 1,011,727 restricted shares and the shares referred to in clause (F) 100,000below, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of (B) 124,939 Company Common Shares were held by the Company in its treasury, (C) 889,723 Company Common Shares were subject to outstanding Company Stock Options (as defined below), (D) 243,775 Share Settled Appreciation Rights (the “SSARs”) were outstanding, (E) 15,500 Company Common Shares were reserved for issuance pursuant to outstanding Restricted Share and Retention Incentive Award Agreements, (F) 1,505,241 allocated Company Common Shares and 1,731,746 unallocated Company Common Shares were held under the Company's 1996 Employees Stock Ownership Trust, (G) 1,145,212 additional Company Common Shares are available for issuance pursuant to (1) the 2002 Long Term Incentive Plan, (2) the 2006 Long Term Incentive Plan, (3) the 2002 Non-Employee Director Stock Option Plan, and (4) the Company's Service Center 2004 Non-Employee Director Stock Option Plan (such plans, collectively with the 1996 Long-Term Incentive Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "“Company Stock Share Plans"”), respectively; (iiiH) as of September 30, 1999, 2,166,451 shares of 5,886,422 Company Common Stock Shares were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants upon conversion of the Company’s 4.0% Convertible Subordinated Notes due 2025 (the "Company Warrants"“Convertible Notes”) to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (viI) no shares of Company Common Stock Preferred Shares were issued and outstanding or were held by the Company in its treasury treasury. (ii) During the period from August 31, 2007 to the date of this Agreement, (A) there have been no issuances by the Company of capital shares of, or by its wholly owned Subsidiaries; (vii) no shares other equity or voting interests in, the Company other than issuances of Company Preferred Common Shares pursuant to the exercise of Company Stock were issued Options outstanding on August 31, 2007 as required by their terms as in effect on the date of this Agreement and outstanding; issuances of Company Common Shares pursuant to Restricted Share and Retention Incentive Award Agreements outstanding on August 31, 2007 as required by their terms as in effect on the date of this Agreement or pursuant to the Company Share Plans, and (viiiB) except for there have been no issuances by the $13,801,853 aggregate principal amount Company of options, warrants or other rights to acquire capital shares or other equity or voting interests from the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii. (iii) Section 3.1(c) of the Company Disclosure Schedule Letter contains a true and complete list, as of the close of business on August 31, 2007, of (A) all outstanding options to purchase Company Common Shares granted under the "Company Share Plans (collectively, the “Company Stock Options”) and any other options to purchase Company Common Shares, (B) the exercise prices, grant dates and the number of shares subject to such Company Stock Options and other options to purchase Company Common Shares and (C) the grant dates, exercise prices and the number of shares issuable upon conversion of the Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions . (iv) Except as set forth above, at the close of business on Schedule 3.1(b)(viii) August 31, 2007, no capital shares or other securities of the Company Disclosure Schedulewere issued, no Voting Debt reserved for issuance or outstanding. All outstanding Company Capital Shares are, and all such shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the NYBCL, the Company Charter, the Company By-laws or any Contract (as defined belowin Section 3.1(d)) was issued and outstandingto which the Company is a party or otherwise bound. The term "Voting Debt" means Other than the Convertible Notes, there are not any bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares holders of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Capital Shares may vote (“Voting Company Debt”). (v) Except as set forth on Schedule 3.1(b)(ix) above, as of the Company Disclosure Schedule, all outstanding shares date of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: not any options, warrants, rights, convertible or exchangeable securities, “phantom” stock rights, share appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which the Company or any of its Subsidiaries is a party or by which any of them is bound (i) no obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional capital shares or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of equity interest in, the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and Voting Company Debt, (iiiii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company its Subsidiaries to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment security, commitment, Contract, arrangement or agreementundertaking or (iii) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights inuring to holders of Company Capital Shares. Except Section 3.1(c) of the Company Disclosure Letter sets forth a true and complete list, as contemplated by of the close of business on September 14, 2007, of all such items and matters and the economic terms and conditions thereof. As of the date of this Agreement, there are not as no outstanding contractual obligations of the date hereof and there will not be at the Effective Time Company or any stockholder agreementsof its Subsidiaries to repurchase, voting trusts redeem or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any capital shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 100,000,000 shares of Company Common Stock, 50,000 shares of Company Series A Preferred Stock, 650,000 shares of Company Series B Preferred Stock, 24,500 shares of Company Series C Preferred Stock, and 5,000,000 shares of undesignated preferred stock, $.01 par value ("COMPANY UNDESIGNATED PREFERRED STOCK"). As of the date hereof: (a) (i) 71,010,323 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 per share, of the Company ("Company Preferred Stock"). At the close of business on October 22, 1999 (except as otherwise indicated): (i) 18,183,374 shares of Company Common Stock were are issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, no shares of Company Common Stock are held by the Company in its treasury and 427,420 no shares of Company Common Stock are held by subsidiaries of the Company; (iii) 10,669,553 shares of Company Common Stock were reserved for issuance pursuant to any plans, agreements and arrangements providing for equity-based compensation to any director, employee, consultant or independent contractor of the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan Company or any of its subsidiaries (collectively, the "Company Stock PlansCOMPANY STOCK PLANS"), respectively; (iii) as of September 30, 1999, 2,166,451 which 7,657,829 shares of Company Common Stock were are subject to issuance pursuant to outstanding options under the Company Stock Plans; Options and/or have been granted in the form of restricted stock or issued upon exercise of options and (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to 656,257 warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms are issued and conditions set forth on Schedule 3.1(b)(ivoutstanding; (b) of the Company Disclosure Schedule; (vi) 20,000 50,000 shares of Company Common Series A Preferred Stock are reserved for issuance pursuant to restricted stock awards issued and outstanding, ("Restricted Stock Awards"ii) having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 650,000 shares of Company Common Series B Preferred Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; are issued and outstanding, (viiiii) no 22,109 shares of Company Series C Preferred Stock were are issued and outstanding; , and (viiiiv) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 warrants to purchase 342 shares of Company Common Series C Preferred Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was are issued and outstanding. ; (c) The term "Voting Debt" means bondsCompany has delivered to Parent a true and complete list, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders as of the close of business on the date hereof, of all outstanding Company or ParentStock Options, as the case may be, may vote. All outstanding number of shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. each such Company Stock Option, the grant date, exercise price, term and vesting schedule of each such Company Stock Option and the names of the holders thereof. (d) Except as set forth on Schedule 3.1(b)(ix) Section 3.3 of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries Company have been duly authorized and validly issued and are fully paid and nonassessable and are not subject to preemptive rights created by statute, the Company's Certificate of Incorporation (the "COMPANY CERTIFICATE OF INCORPORATION") or any agreement to which the Company are owned is a party or by which the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any natureCompany may be bound. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 the date of this Agreement resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this AgreementOptions outstanding on such date, there are outstanding: outstanding (i) no shares of capital stock, Voting Debt stock or other voting securities of the Company; , (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt stock or other voting securities of the Company or any Subsidiary of the Company; , and (iii) no optionsoptions or other rights to acquire from the Company, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary and no obligation of the Company to issue, deliverany capital stock, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, securities convertible into or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the exchangeable for capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesCompany.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 120,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 per share, of the Company ("Company Preferred Stock"). At the close of business on October 22February 25, 1999 (except as otherwise indicated): 2010, (i) 18,183,374 56,070,028 shares of Company Common Stock were issued and outstanding; outstanding (which number includes no shares of Company Common Stock subject to vesting or other forfeiture conditions or repurchase by the Company), (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 7,660,238 shares of Company Common Stock were reserved and available for issuance pursuant to the Company's 1996 Non-Employee Director ’s 2008 Stock Option Plan, Incentive Plan (the Company's Service Center Stock Option Plan, the Company's 1996 Incentive “Company Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"”), respectively; of which (iiiA) as of September 30, 1999, 2,166,451 2,750,730 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 to acquire shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of from the Company Disclosure Schedule; with a weighted-average exercise price of $59.39 (vsuch options, together with any similar options granted after February 25, 2010, the “Company Stock Options”), (B) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 203,209 shares of Company Common Stock were held by subject to restricted stock unit awards that were subject to performance-based vesting or delivery requirements, assuming settlement of such awards based on the attainment of performance goals at maximum levels (such restricted stock unit awards, together with any similar restricted stock unit awards granted after February 25, 2010, the “Company in its treasury or by its wholly owned Subsidiaries; (viiPerformance RSU Awards”) no shares of Company Preferred Stock were issued and outstanding; and (viiiC) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 754,230 shares of Company Common Stock upon were subject to a restricted stock unit awards granted by the terms Company that were subject to service-based vesting or delivery requirements (such restricted stock unit awards, together with any similar restricted stock unit awards granted after February 25, 2010, the “Company RSU Awards” and, together with the Company Stock Options and conditions Company Performance RSU Awards, the “Company Equity Awards”), (iii) 30,394 stock equivalents with respect to a share of Company Common Stock were outstanding under the Company’s Supplemental Savings and Retirement Plan for Key Salaried Employees (“Supplemental Plan”) and agreements between the Company and its directors to defer certain director fees (“Director Deferral Agreements”) (such plans, collectively, the “Specified Deferred Compensation Plans”, and such stock equivalents, together with similar stock equivalents issued after February 25, 2010, the “Company Stock Equivalents”) and (iv) $565,000,000 aggregate principal amount of 3.75% convertible senior notes due 2026, issued pursuant to the Indenture between the Company and Wilmington Trust Company dated as of June 13, 2006 (the “Convertible Notes”), were outstanding. Except as set forth above, at the close of business on Schedule 3.1(b)(viii) February 25, 2010, no shares of capital stock or other voting securities of the Company Disclosure Schedulewere issued, no Voting Debt (as defined below) was issued and reserved for issuance or outstanding. The term "Voting Debt" means Since February 25, 2010 to the date of this Agreement, (x) there have been no issuances by the Company of shares of capital stock or other voting securities of the Company, other than issuances of shares of Company Common Stock pursuant to the Company Stock Plan and (y) there have been no issuances by the Company of options, warrants, other rights to acquire shares of capital stock of the Company or other rights that give the holder thereof any economic interest of a nature accruing to the holders of Company Common Stock, except for rights under the Company Stock Plan, the Specified Deferred Compensation Plans, the Company Employees’ Participation and Savings Plan (the “Company 401(k) Plan”) and the Irish Share Scheme; notwithstanding anything to the contrary in this Section 3.01(c), between February 25, 2010 and the date of this Agreement, (i) the Company has not purchased, redeemed or otherwise acquired, directly or indirectly, any Company Common Stock or any rights, warrants or options with respect to the Company Common Stock (in particular Company Equity Awards and Company Stock Equivalents) other than as would be permitted without consent of Parent after the date of this Agreement pursuant to Section 4.01(a)(iii) or (ii) issued, delivered, transferred or sold any shares of Company Common Stock, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such Company Common stock, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units (in particular Company Equity Awards and Company Stock Equivalents) other than as would be permitted without consent of Parent after the date of this Agreement pursuant to Section 4.01(a)(iv). All outstanding shares of Company Common Stock are, and all such shares that may be issued prior to the Effective Time will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders holders of Company Common Stock may vote (“Voting Company Debt”), except for the Convertible Notes. Except for any obligations pursuant to this Agreement, the Company Stock Plan, the Specified Deferred Compensation Plans, the Company 401(k) Plan, the Irish Share Scheme or Parentas otherwise set forth above, as the case may beof February 25, may vote. All outstanding 2010, there are no shares of Company Common Stock are validly issuedStock, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no other shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stocksecurities, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, callsrights, convertible or exchangeable securities, “phantom” stock, “phantom” stock rights, stock appreciation rights (including preemptive rights)or stock-based performance units with respect to the Company, commitments Contracts or agreements undertakings of any kind to 8 18 which the Company or any Subsidiary of the Company its Subsidiaries is a party or by which it any of them is bound in any case (1) obligating the Company or any such Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or other equity interests in, or any Voting Debt security convertible or exchangeable for any capital stock of or other voting securities of equity interest in, the Company or of any Subsidiary of the Companyits Subsidiaries or any Voting Company Debt, or (2) obligating the Company or any such Subsidiary of the Company to grantissue, extend grant or enter into any such option, warrant, call, right, commitment security, unit, Contract or agreementundertaking or (3) that give any person the right to receive any economic interest of a nature accruing to the holders of Company Common Stock. Except as contemplated by As of the date of this Agreement, there are not as no outstanding contractual obligations of the date hereof and there will not be at the Effective Time Company or any stockholder agreementsof its Subsidiaries to repurchase, voting trusts redeem or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock or options, warrants or other rights to acquire shares of capital stock of the Company that will limit in or any way such Subsidiary, other than pursuant to the solicitation of proxies by or on behalf Company Stock Plan, the Company 401(k) Plan, the Irish Share Scheme and the Specified Deferred Compensation Plans. Section 3.01(c) of the Company fromDisclosure Letter sets forth a true and complete list, or as of the casting date of votes bythis Agreement, the stockholders of all Indebtedness for borrowed money of the Company with respect and its Subsidiaries (other than any such Indebtedness owed to the Merger. There are no restrictions on the Company to vote the stock of or any of its Subsidiaries., letters of credit issued in the ordinary course of business and any other such Indebtedness with an aggregate principal amount not in excess of $10.0 million individually outstanding on the date of this Agreement. From and after the Effective Time, neither Parent nor the Company will be required to deliver Company Common Stock or other capital stock of the Company to any person pursuant to or in settlement of any Company Equity Awards, the Convertible Notes, the Irish Share Scheme or otherwise. Table of Contents

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 150,000,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stock, par value $.01 0.01 per share, of the Company share ("“Company Preferred Stock"”). At the close of business on October 2213, 1999 (except as otherwise indicated): 2006, (i) 18,183,374 45,449,433 shares of Company Common Stock were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 approximately 4,300,000 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Company 1994 Stock Option Plan, the Company's Service Center Company 1995 Stock Option Plan, the Company's 1996 Incentive Company 1997 Stock Option Plan, the Company's 1996 Employee Company Amended and Restated 1999 Stock Purchase Option Plan, the Company's 1997 Non-Qualified Company 2000 Stock Purchase Option Plan and the Company's 1997 Non-Qualified Company 2002 Stock Option Plan (collectively, the "“Company Stock Plans"”), respectively; (iii) as of September 30, 1999, 2,166,451 which 2,925,854 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms (collectively, and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 including any options to purchase shares of Company Common Stock are reserved for issuance granted after October 13, 2006, pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the this Agreement, “Company Disclosure Schedule; Stock Options”), (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (viiiii) no shares of Company Preferred Stock were issued and outstanding; or outstanding or were held by the Company as treasury shares and (viiiiv) except 5,000,000 shares of Company Preferred Stock designated as Series A Junior Participating Preferred Stock were reserved for issuance in connection with the $13,801,853 aggregate principal amount rights (the “Rights”) to be issued pursuant to the Rights Agreement, dated as of August 11, 2000, between the Company and ▇▇▇▇▇ Fargo Bank, N.A. (as amended, the “Rights Agreement”). Except as set forth above in this Section 3.01(c), at the close of business on October 13, 2006, no shares of capital stock or other voting securities or equity interests of the Company were issued, reserved for issuance or outstanding. There are no outstanding shares of Company Common Stock or Company Preferred Stock subject to vesting or restrictions on transfer or rights of repurchase by the Company's convertible subordinated notes identified , stock appreciation rights, “phantom” stock rights, performance units, rights to receive shares of Company Common Stock on Schedule 3.1(b)(viiia deferred basis or other rights (other than Company Stock Options) that are linked to the value of Company Common Stock. Section 3.01(c) of the Company Disclosure Schedule (sets forth a complete and accurate list, as of October 13, 2006, of all outstanding Company Stock Options under the "Company Convertible Notes")Stock Plans, which is convertible into an aggregate the number of 410,831 unpurchased shares of Company Common Stock upon subject thereto, the terms grant dates, expiration dates, exercise prices and conditions vesting schedules thereof and the names of the holders thereof. Section 3.01(c) of the Company Disclosure Schedule also sets forth the aggregate number of unpurchased shares of Company Common Stock subject to outstanding Company Stock Options with exercise prices on a per share basis lower than $5.00 and the weighted average exercise price of such Company Stock Options. All Company Stock Options are evidenced by stock option agreements in the forms set forth on Schedule 3.1(b)(viiiin Section 3.01(c) of the Company Disclosure Schedule, and no Voting Debt stock option agreement contains terms that are inconsistent with such forms. With respect to the Company Stock Options, (A) each grant of a Company Stock Option was duly authorized no later than the date on which the grant of such Company Stock Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as defined belowapplicable, approval by the Board of Directors of the Company (or a duly constituted and authorized committee thereof) and any required shareholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was issued duly executed and outstandingdelivered by each party thereto, (B) each such grant was made in accordance with the terms of the applicable Company Stock Plan, the Exchange Act and all other applicable statutes, laws, ordinances, rules, regulations, orders, writs, injunctions, decrees, judgments or stipulations (“Legal Provisions”), including the rules and regulations of The NASDAQ Global Market and its predecessor markets (“Nasdaq”) or any other exchange on which Company securities are traded, (C) the per share exercise price of each Company Stock Option was equal to the fair market value of a share of Company Common Stock on the applicable Grant Date and (D) each such grant was properly accounted for in accordance with GAAP in the audited financial statements included in the Filed Company SEC Documents and disclosed in the Filed Company SEC Documents in accordance with the Exchange Act and all other applicable Legal Provisions. The term "Voting Debt" means Company has terminated the Company 2000 Employee Stock Purchase Plan (the “Company ESPP”), and no employee of the Company has any rights to purchase shares of Company Common Stock pursuant to the Company ESPP. All outstanding shares of capital stock of the Company are, and all shares which may be issued pursuant to the Company Stock Options will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders shareholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ixabove in this Section 3.01(c), (x) of the Company Disclosure Schedulethere are not issued, all reserved for issuance or outstanding (A) any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct other voting securities or indirect wholly owned Subsidiary equity interests of the Company, free and clear of all liens, charges, encumbrances, claims and options of (B) any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or other voting securities or equity interests of the Company or (C) any warrants, calls, options or other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, Voting Debt voting securities, equity interests or other securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company or any Subsidiary of the Company; and (iiiy) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which there are not any outstanding obligations of the Company or any Subsidiary of the Company is a party its Subsidiaries to repurchase, redeem or by which it is bound in otherwise acquire any case obligating the Company such securities or any Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedany such securities. Neither the Company nor any of its Subsidiaries is a party to any voting agreement with respect to the voting of any such securities. Except as set forth above in this Section 3.01(c), redeemed there are no outstanding (1) securities of the Company or acquired, additional any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities of the Company or equity interests of any Subsidiary of the Company, (2) warrants, calls, options or obligating other rights to acquire from the Company or any of its Subsidiaries, and no obligation of the Company or any of its Subsidiaries to issue, any capital stock, voting securities, equity interests or securities convertible into or exchangeable or exercisable for capital stock or voting securities of any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock (3) obligations of the Company that will limit in or any way the solicitation of proxies by its Subsidiaries to repurchase, redeem or on behalf otherwise acquire any such outstanding securities of any Subsidiary of the Company fromor to issue, deliver or sell, or the casting cause to be issued, delivered or sold, any such securities of votes by, the stockholders any Subsidiary of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesCompany.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 35,000,000 shares of Company Common Stock and 10,000,000 2,000,000 shares of preferred stock, par value $.01 per share, of the Company share ("“Company Preferred Stock"”). At the close of business on October 22March 2, 1999 (except as otherwise indicated): 2005, (i) 18,183,374 14,445,563 shares of Company Common Stock were issued and outstanding; , (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; treasury, (viiiii) 7,269,604 shares of Company Common Stock were reserved for issuance pursuant to the Amended and Restated 1996 Equity Compensation Plan of the Company and the 1999 Employee Stock Purchase Plan of the Company (the “ESPP”, and such plans collectively, the “Company Stock Plans”), of which 4,873,628 shares of Company Common Stock were subject to outstanding Company Stock Options, (iv) other than as set forth in clause (v), no shares of Company Preferred Stock were issued and outstanding; or outstanding or were held by the Company in its treasury and (viiiv) except 50,000 shares of Company Preferred Stock designated as Series A Junior Participating Preferred Shares were reserved for issuance in connection with the $13,801,853 aggregate principal amount rights (the “Rights”) to be issued pursuant to the Rights Agreement dated as of July 31, 2001, between the Company and American Stock Transfer & Trust Company, as rights agent (the “Rights Agreement”). Except as set forth above in this Section 3.01(c), at the close of business on March 2, 2005, no shares of capital stock or other voting securities or equity interests of the Company's convertible subordinated notes identified Company were issued, reserved for issuance or outstanding. There are no outstanding shares of Company Common Stock or Company Preferred Stock subject to vesting or restrictions on Schedule 3.1(b)(viiitransfer, stock appreciation rights (“SARs”), “phantom” stock rights, performance units, rights to receive shares of Company Common Stock on a deferred basis or other rights (other than Company Stock Options) that are linked to the value of Company Common Stock (collectively, but exclusive of rights under the ESPP, “Company Stock-Based Awards”). Section 3.01(c) of the Company Disclosure Schedule (the "Company Convertible Notes")sets forth a complete and accurate list, which is convertible into an aggregate as of 410,831 March 2, 2005, of all outstanding options to purchase shares of Company Common Stock upon (collectively, but exclusive of rights under the terms ESPP, “Company Stock Options”) under the Company Stock Plans or otherwise, the number of shares of Company Common Stock (or other stock) subject thereto, the grant dates, expiration dates, exercise or base prices (if applicable) and conditions vesting schedules thereof and the names of the holders thereof. All (i) outstanding shares of Company Common Stock in respect of which the Company has a right under specified circumstances to repurchase such shares by the Company at a fixed purchase price and (ii) Company Stock Options are evidenced by stock option agreements, restricted stock purchase agreements or other award agreements, in each case in the forms set forth on Schedule 3.1(b)(viiiin Section 3.01(c) of the Company Disclosure Schedule, and no Voting Debt (stock option agreement, restricted stock purchase agreement or other award agreement contains terms that are inconsistent with such forms. There are no Company Stock Options intended to qualify as defined below) an “incentive stock option” under Section 422 of the Code, and the exercise price of each Company Stock Option is no less than the fair market value of a share of Company Common Stock as determined on the date of grant of such Company Stock Option. As of the close of business on March 2, 2005, there were outstanding Company Stock Options to purchase 3,962,148 shares of Company Common Stock with exercise prices on a per share basis lower than the Merger Consideration, and the weighted average exercise price of such Company Stock Options was issued and outstandingequal to $19.21. The term "Voting Debt" means maximum number of shares of Company Common Stock that could be purchased with accumulated payroll deductions under the ESPP at the close of business of July 29, 2005 is 25,000, which number was calculated assuming (A) the fair market value of a share of Company Common Stock on such date is equal to the Merger Consideration and payroll deductions continue at the current rate, (B) not giving effect to any limitation contained in the ESPP as to the number of shares that a participant may purchase in any given period and (C) excluding any individuals that are on leave from their employment with the Company as of the date of this Agreement. Each Company Stock Option may, by its terms, be canceled in connection with the transactions contemplated hereby for a lump sum cash payment in accordance with and to the extent required by Section 5.04(a). All outstanding shares of capital stock of the Company are, and all shares which may be issued pursuant to the Company Stock Options or rights under the ESPP will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ixabove in this Section 3.01(c), (x) of the Company Disclosure Schedulethere are not issued, all reserved for issuance or outstanding (A) any shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct other voting securities or indirect wholly owned Subsidiary equity interests of the Company, free and clear of all liens, charges, encumbrances, claims and options of (B) any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities or equity interests of the Company or (C) any Subsidiary of the Company; and (iii) no options, warrants, calls, options or other rights (including preemptive rights)to acquire from the Company, commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary and no obligation of the Company to issue, deliverany capital stock, sellvoting securities, purchaseequity interests or securities convertible into or exchangeable or exercisable for capital stock or voting securities of the Company and (y) there are not any outstanding obligations of the Company to repurchase, redeem or acquireotherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreementsecurities. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the The Company is not a party or by which it is bound relating to any voting agreement with respect to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiariessuch securities.

Capital Structure. (a) As of the date hereofof this Agreement, the authorized capital stock of the Company consists of 30,000,000 50,000,000 shares of Company Common Stock and 10,000,000 1,000,000 shares of preferred stock, par value $.01 0.01 per share, share (the “Preferred Shares”). All of the outstanding shares of Company ("Company Preferred Stock")Common Stock have been duly authorized and are validly issued, fully paid and nonassessable. At the close of business on October 22April 5, 1999 (2005, 18,500,527 shares of Company Common Stock and no Preferred Shares were issued and outstanding. The Company has no shares of Company Common Stock or Preferred Shares reserved for issuance, except as otherwise indicated): that, at the close of business on April 5, 2005: (i) 18,183,374 9,560,777 shares of Company Common Stock were issued and outstanding; reserved for issuance by the Company pursuant to options to purchase shares of Company Common Stock (a “Company Stock Option”) granted under the following plans: 2000 Non-Executive Employee Equity Incentive Plan 2,000,000 1997 Stock Plan 3,250,000 1997 Non-Employee Director Stock Option Plan 330,000 1995 Stock Option Plan 2,695,236 2001 Non-Executive Employee Stock Purchase Plan 500,000 2004 Non-Executive Employee Stock Purchase Plan 500,000 FS 97 Stock Plan 280,990 FS 96 Stock Plan 4,551 (collectively, the “Company Stock Plans”), (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 1,815,807 shares of Company Common Stock were reserved for issuance pursuant to Company Stock Options not yet granted under the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 3,209,776 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; Company’s 3.0% Convertible Senior Notes due 2023 (the “Convertible Senior Notes”) and (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viiitreasury. Section 5.2(a) of the Company Disclosure Schedule sets forth a complete and accurate list, as of the date specified therein, of: (i) all Company Stock Plans, indicating for each Company Stock Plan, as of such date, the "Company Convertible Notes"), which is convertible into an aggregate number of 410,831 shares of Company Common Stock upon issued under such Company Stock Plan, the terms and conditions set forth on Schedule 3.1(b)(viii) number of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are subject to outstanding options under such Company Stock Plan and the number of shares of Company Common Stock reserved for future issuance under such Company Stock Plan; and (ii) all outstanding Company Stock Options, indicating with respect to each such Company Stock Option the name of the holder thereof, the Company Stock Plan under which it was granted, the number of shares of Company Common Stock subject to such Company Stock Option, the exercise price, the date of grant, and the vesting schedule, including whether (and to what extent) the vesting will be accelerated in any way by the execution of this Agreement, the adoption of the Company Voting Proposal, by the consummation of the Merger or by termination of employment or change in position following consummation of the Merger. The Company has made available to Parent complete and accurate copies of all Company Stock Plans and the forms of all stock option agreements evidencing Company Stock Options. The Company is listed on the Nasdaq National Market. Except for the issuance of shares of Company Common Stock pursuant to Company Stock Options outstanding on April 5, 2005, from and after the close of business on April 5, 2005 through and including the date of this Agreement, the Company has not (i) issued any shares of Company Common Stock, Company Stock Options, other stock awards or other capital stock or equity securities of the Company or (ii) changed the authorized share capital of the Company. 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 are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, Company or by a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any natureLiens. Except as set forth above in this Section 3.1(b5.2 or as contemplated by the indenture dated as of December 8, 2003 by and between the Company and Wilmington Trust Company, as Trustee, there are no preemptive or other outstanding rights, options, warrants, conversion rights, phantom stock units or stock appreciation rights or similar rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that obligate the Company or any of its Subsidiaries to issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or any securities or obligations convertible or exchangeable into or exercisable for, or giving any Person a right to subscribe for or acquire, any securities of the Company or any of its Subsidiaries, and no securities or obligations evidencing such rights are authorized, issued or outstanding. The Company does not have outstanding any bonds, debentures, notes or other obligations (i) the terms of which provide the holders the right to vote with the stockholders of the Company on any matter or Schedule 3.1(b)(x(ii) that are convertible into or exercisable for securities having the right to vote with the stockholders of the Company on any matter (any such bonds, debentures, notes or obligations, “Voting Debt”), except, solely in the case of clause (ii), for the Convertible Senior Notes. (b) Section 5.2(b) of the Company Disclosure Schedule sets forth a complete and except for changes since October 22accurate list of the Company’s or its Subsidiaries’ capital stock, 1999 resulting from equity interest or other direct or indirect ownership interest in any Person other than a Subsidiary of the exercise Company. The Company does not own, directly or indirectly, any voting interest in any Person that requires an additional filing by Parent under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvement Act of stock options granted pursuant to1976, or from issuances or purchases underas amended (the “HSR Act”). (c) Other than the registration rights agreement entered into in connection with the Convertible Senior Notes, there are no registration rights, and, as of the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by date of this Agreement, there are outstanding: (i) is no shares of capital stockrights agreement, Voting Debt “poison pill” anti-takeover plan or other voting securities of the Company; (ii) no securities of the Company similar plan, device or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements arrangement to 8 18 which the Company or any Subsidiary of the Company its Subsidiaries is a party or by which it or they are bound with respect to any equity security of any class of the Company. Neither the Company nor any of its Affiliates is a party to or is bound in by any case obligating agreements or understandings with respect to the Company voting (including voting trusts and proxies) or sale or transfer (including agreements imposing transfer restrictions) of any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt other equity interests of the Company. There are no obligations, contingent or other voting securities otherwise, of the Company or any of any Subsidiary of the Companyits Subsidiaries to repurchase, redeem or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any shares of Company Common Stock or the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 250,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 0.001 per share, 44,248 shares of the Company ("Company which are designated as shares of Series A-1 Preferred Stock"), 44,248 shares of which are designated as shares of Series A-2 Preferred Stock, 4,868 shares of which are designated as shares of Series B-1 Preferred Stock, and 4,868 shares of which are designated as shares of Series B-2 Preferred Stock. At As of the close of business on October 22December 8, 1999 (except as otherwise indicated): (i) 18,183,374 2006: 62,212,369 shares of Company Common Stock were issued and outstanding; (ii) 100,000, 333,22423,441 shares of Series A-1 Preferred Stock were issued and outstanding, 1,300,00044,242 shares of Series A-2 Preferred Stock were issued and outstanding, 350,000, 150,0004,835 shares of Series B-1 Preferred Stock were issued and outstanding, and 427,420 4,862 shares of Company Common Series B-2 Preferred Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan issued and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock outstanding. There are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock capital stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) and no shares of Company Preferred Stock were issued and outstanding; and (viii) except for the $13,801,853 aggregate principal amount capital stock are owned or held by any Subsidiary of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) . All of the outstanding shares of capital stock of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms are duly authorized and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to any preemptive rights. Except as set forth on Schedule 3.1(b)(ix. (b) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x3.2(b) of the Company Disclosure Schedule sets forth a complete and except for changes since October 22accurate list, 1999 resulting from as of the exercise close of stock options granted pursuant tobusiness on December 8, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding2006 of: (i) no the number of shares of capital stock, Voting Debt or other voting securities Company Common Stock subject to outstanding options under each Company Stock Plan and the number of the Companyshares of Company Common Stock available for grant under each Company Stock Plan; and (ii) no securities all outstanding options to acquire shares of Company Common Stock (“Company Stock Options”), indicating with respect to each such Company Stock Option the name of the holder thereof and whether such holder is an employee of the Company or any Subsidiary of its Subsidiaries, the Company Stock Plan under which it was granted and whether such Company Stock Option is an “incentive stock option” (as defined in Section 422 of the Code) or a non-qualified stock option, the number of shares of Company Common Stock subject to such Company Stock Option, the exercise price and the date of grant thereof, the applicable vesting schedule of such Company Stock Option and the extent to which such Company Stock Option was vested and exercisable as of December 8, 2006, whether such Company Stock Option was granted with a per share exercise price lower than the fair market value of one share of Company Common Stock on the date of grant as determined in good faith by the Administrator of the Company convertible into or exchangeable for Stock Plan (as defined in each such plan), and the expiration date of such Company Stock Option. As of the close of business on December 8, 2006, approximately 63,000 shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of Common Stock were issuable pursuant to the Company; and ’s 2000 Employee Stock Purchase Plan (iii) no options, warrants, calls, rights (including preemptive rightsthe “Employee Stock Purchase Plan”), commitments or agreements to 8 18 which the Company or any Subsidiary . For purposes of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of “Company Stock Plans” means the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes byCompany’s 1996 Stock Option Plan, the stockholders of Company’s 2000 Stock Option Plan, the Company with respect to Company’s 2005 Stock Option Plan and the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesCompany’s 2000 Directors’ Stock Option Plan, and all sub-plans relating thereto, taken together.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 200,000,000 shares of Company Common Stock Stock, par value $0.10 per share, and 10,000,000 5,000,000 shares of preferred stock, par value $.01 0.01 per share, of share (the Company ("“Company Preferred Stock"”). At the close of business on October 22March 20, 1999 (except as otherwise indicated): 2007, (i) 18,183,374 41,554,469 shares of Company Common Stock were issued and outstanding; outstanding (which number includes 0 shares of Company Common Stock held by the Company in its treasury), (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 6,765,345 shares of Company Common Stock were reserved and available for issuance pursuant to the Company's 1996 Non-’s 1990 Employee Director Stock Option Plan, the Company's Service Center 1997 Incentive Stock Option Plan, the Company's 1996 2000 Long-Term Performance and Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan ESPP (the foregoing plans, collectively, the "“Company Stock Plans"”), respectively; of which 3,130,791 shares of Company Common Stock were subject to outstanding options to acquire shares of Company Common Stock from the Company (iiisuch options, together with any similar options granted after March 20, 2007, but excluding options outstanding under the ESPP, the “Company Stock Options”), 122,857 shares of Company Common Stock were issued or awarded in the form of restricted Company Common Stock (the “Company Restricted Stock”) as of September 30, 1999, 2,166,451 and 436,207 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms vesting of outstanding Company Equity Awards and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (viiiii) no shares of Company Preferred Stock were issued and or outstanding or held by the Company in its treasury. Except as set forth above, at the close of business on March 20, 2007, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding; and . From March 20, 2007, until the date of this Agreement, (viiiA) except for there have been no issuances by the $13,801,853 aggregate principal amount Company of shares of capital stock or other voting securities of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii, other than issuances of shares of Company Common Stock (1) pursuant to the exercise of the Company Stock Options outstanding as of March 20, 2007, (2) pursuant to the ESPP or (3) as set forth in Section 3.01(c) of the Company Disclosure Schedule Letter, and (B) there have been no issuances by the "Company Convertible Notes")of options, warrants, other rights to acquire shares of capital stock of the Company or other rights pursuant to which any Person is convertible into an aggregate or may be entitled to receive any voting interest with respect to matters on which holders of 410,831 Company Common Stock may vote or any payment or other value based on the revenues, earnings or financial performance, stock price performance or other attribute of the Company or any of its assets. All outstanding shares of Company Common Stock upon are, and all such shares that may be issued prior to the terms Effective Time will be when issued, duly authorized, validly issued, fully paid and conditions set forth on Schedule 3.1(b)(viii) of the Company Disclosure Schedule, nonassessable and not subject to preemptive rights. There are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares holders of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rightsmay vote (“Voting Company Debt”). Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of for any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted obligations pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by to this Agreement, any Company Stock Plan or as otherwise set forth above, as of March 20, 2007, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, callsrights, rights (including preemptive rights)convertible or exchangeable securities, commitments stock-based performance units, Contracts or agreements undertakings of any kind to 8 18 which the Company or any Subsidiary of the Company its Subsidiaries is a party or by which it any of them is bound in any case (I) obligating the Company or any such Subsidiary of the Company to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed delivered or acquiredsold to any person other than the Company or its Subsidiaries, additional shares of capital stock or other equity or voting interests in, or any Voting Debt security convertible or exchangeable for any capital stock of or other equity or voting securities of interest in, the Company or of any Subsidiary of the Companyits Subsidiaries or any Voting Company Debt, or (II) obligating the Company or any such Subsidiary of the Company to grantissue, extend grant or enter into any such option, warrant, call, right, commitment security, unit, Contract or agreementundertaking of the type set forth in the immediately preceding clause or (III) that give any person the right pursuant to which such person is or may be entitled to receive any voting interest with respect to matters on which holders of Company Common Stock may vote or any payment or other value based on the revenues, earnings or financial performance, stock price performance or other attribute of the Company or any of its assets. Except as contemplated by As of the date of this Agreement, there are not as no outstanding contractual obligations of the date hereof and there will not be at the Effective Time Company or any stockholder agreementsof its Subsidiaries to repurchase, voting trusts redeem or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of the Company, other than pursuant to the Company that will limit in any way the solicitation of proxies by or on behalf Stock Plans. Section 3.01(c) of the Company from, or the casting Disclosure Letter sets forth a true and complete list of votes by, the stockholders all Indebtedness for borrowed money of the Company with respect and its Subsidiaries (other than any such Indebtedness owed to the Merger. There are no restrictions on the Company to vote the stock of or any of its Subsidiaries) outstanding on the date of this Agreement.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of the Company consists of 30,000,000 180,000,000 shares of Company Common Stock and 10,000,000 5,000,000 shares of preferred stock, par value $.01 1.00 per share, of the Company ("the “Company Preferred Stock"”). At the close of business on October 22September 8, 1999 2017 (except as otherwise indicated): such date and time, the “Measurement Time”), (iA) 18,183,374 57,621,261 shares of Company Common Stock were issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 excluding treasury shares but including 302,247 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options granted under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant Plans and subject to warrants forfeiture conditions (the "“Company Warrants"Restricted Shares”)) to purchase shares of Company Common Stock upon the terms were issued and conditions set forth on Schedule 3.1(b)(ivoutstanding, (B) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 11,313,763 shares of Company Common Stock were held by the Company as treasury shares, (C) 2,086,845 shares of Company Common Stock were reserved and available for issuance in its treasury the aggregate pursuant to the Company Stock Plans, options to purchase shares of Company Common Stock pursuant to the Company Stock Plans (the “Company Stock Options”) were outstanding, entitling the holders thereof to receive an aggregate of 270,126 shares of Company Common Stock, performance-based restricted stock units granted under the Company Stock Plans (the “Company Performance Shares”) were outstanding, entitling the holders thereof to receive an aggregate of 52,204, 208,815 and 417,630 shares of Company Common Stock based on “threshold”, “target” and “maximum” performance levels, respectively, deferred stock units granted under the Benefit Plans (the “Company Deferred Stock Units”) were outstanding, entitling the holders thereof to receive an aggregate of 94,524 shares of Company Common Stock and phantom stock units granted under the Benefit Plans (the “Company Phantom Stock Units”) were outstanding, entitling the holders thereof to receive cash payments equal to the value of an aggregate of 12,986 shares of Company Common Stock (the Company Restricted Shares, the Company Stock Options, the Company Performance Shares, the Company Deferred Stock Units and the Company Phantom Stock Units collectively, the “Company Equity-Based Awards”) and (D) 1,820,525 shares of Company Common Stock were reserved and available for issuance pursuant to the Company ESPP. As of the date of this Agreement, none of the issued and outstanding shares of Company Common Stock (other than the Company Restricted Shares) are subject to vesting or forfeiture conditions or a right of repurchase by its wholly owned Subsidiaries; (vii) the Company. All outstanding Company Equity-Based Awards have been granted under the Company Stock Plans. Other than the Company Stock Plans and the award agreements thereunder, there is no plan, Contract or arrangement providing for the grant of Company Equity-Based Awards. No shares of Company Preferred Stock were are issued and or outstanding; and (viii) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the Company Disclosure Schedule (the "Company Convertible Notes"), which is convertible into an aggregate of 410,831 . No shares of Company Common Stock upon are owned by any Subsidiary of the Company. As of the date of this Agreement, other than the outstanding Company Equity-Based Awards or pursuant to the Company ESPP, there are no outstanding rights of any person to receive Company Common Stock under the Company Stock Plans or Company ESPP or otherwise from the Company, on a deferred basis or otherwise. (ii) Except for outstanding shares of Company Common Stock and Company Equity-Based Awards, as of the Measurement Time, no shares of capital stock of, or other equity or voting interests in, the Company, or securities convertible into, or exchangeable or exercisable for, any such capital stock of, or other equity or voting interests in, the Company were issued, reserved for issuance or outstanding. From the Measurement Time to the date of this Agreement, (A) there have been no issuances by the Company of shares of capital stock of, or other equity or voting interests in, the Company, other than issuances of shares of Company Common Stock pursuant to the exercise or settlement of Company Equity-Based Awards outstanding as of the Measurement Time pursuant to the existing terms thereof and conditions set forth on Schedule 3.1(b)(viii(B) there have been no issuances by the Company of securities convertible into, or exchangeable or exercisable for, or options, warrants, shares of deferred stock, restricted stock awards, stock appreciation rights, restricted stock units, performance units, phantom stock awards, or other rights to acquire or receive shares of capital stock of, or other equity or voting interests in, the Company, or other securities that are linked to the value of Company Common Stock or the value of the Company Disclosure Scheduleor any part thereof. (iii) All outstanding shares of capital stock of the Company are, and all shares that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right. Except as set forth in this Section 3.01(c), there are no Voting Debt (as defined belowA) was issued and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having of the Company or any of its Subsidiaries that may have at any time (whether actual or contingent) the right to vote (or which are convertible into into, or exchangeable for, securities having the right to vote) on any matter on which stockholders of the Company or its Subsidiaries may vote or (B) securities or other instruments or rights (including stock appreciation rights, phantom stock awards or other similar rights) issued by, or other obligations of, the Company or any of its Subsidiaries, in each case, that are linked to, or the value of which is in any way based upon or derived from, the value of any class of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries, the value of the Company, any of its Subsidiaries or any part thereof, or any dividends or other distributions declared or paid on any shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries, or which have or which by their terms may have at any time (whether actual or contingent) the right to vote (or which are convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company or Parentany of its Subsidiaries may vote (the items referred to in clauses (A) and (B) collectively, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature“Equity Equivalents”). Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement3.01(c), there are outstanding: (i) no shares of capital stocksecurities, Voting Debt or other voting securities of the Company; (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of the Company or any Subsidiary of the Company; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements Contracts of any kind to 8 18 which the Company or any Subsidiary of the Company its Subsidiaries is a party party, or by which it the Company or any of its Subsidiaries is bound in any case bound, (x) obligating the Company or any Subsidiary of the Company its Subsidiaries to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchased, redeemed or acquired, additional shares of capital stock or any Voting Debt of, or other equity or voting interests in, or securities convertible into, or exchangeable or exercisable for, shares of capital stock of, or other equity or voting interests in, the Company or any of any Subsidiary of the Companyits Subsidiaries, or (y) obligating the Company or any Subsidiary of the Company its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment right or agreementContract or (z) that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of capital stock of the Company or any of its Subsidiaries. Except pursuant to the forfeiture conditions of the Company Equity-Based Awards outstanding as contemplated by of the date of this Agreement and except pursuant to any cashless exercise or Tax withholding provisions of or authorizations related to such Company Equity-Based Awards as in effect on the date of this Agreement, there are not no outstanding contractual or other obligations of the Company or any of its Subsidiaries to (I) repurchase, redeem or otherwise acquire any shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries or (II) vote or dispose of any shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is a party to any voting agreement with respect to any shares of capital stock of, or other equity or voting interests in, the Company or any of its Subsidiaries and, to the knowledge of the Company, as of the date hereof of this Agreement there are no irrevocable proxies and there will not be at the Effective Time any stockholder agreements, no voting trusts or other agreements or understandings with respect to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of of, or other equity or voting interests in, the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its Subsidiaries.

Capital Structure. As of the date hereof, the The authorized capital stock of the Company consists of 30,000,000 100,000,000 shares of Company Common Stock, 200,000 shares of Company Series A Preferred Stock, 200,000 shares of Company Series B Preferred Stock, 2,500,000 shares of Company Series C Preferred Stock, 2,200,000 Company Series D-1 shares of Preferred Stock and 4,600,000 shares of Company Series D-2 Preferred Stock. As of the date hereof: (A) (i) 23,943,307 shares of Company Common Stock and 10,000,000 shares of preferred stock, par value $.01 per share, of the Company ("Company Preferred Stock"). At the close of business on October 22, 1999 (except as otherwise indicated): (i) 18,183,374 shares of Company Common Stock were are issued and outstanding; (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, no (0) shares of Company Common Stock are held by the Company in its treasury and 427,420 no (0) shares of Company Common Stock are held by subsidiaries of the Company; (iii) 5,000,000 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non1997 incentive stock option plan, agreements and arrangements providing for equity-Employee Director Stock Option Planbased compensation to any director, employee, consultant or independent contractor of the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan Company or any of its subsidiaries (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 which 4,062,000 shares of Company Common Stock were are subject to issuance pursuant outstanding Company Stock Options (iv) an additional 1,377,360 shares are subject to outstanding options under Company Stock Options issued outside the Company Stock Plans; Plans and (ivv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to 1,218,046 warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms are issued and conditions set forth on Schedule 3.1(b)(ivoutstanding; (B) (i) 120,150 shares of the Company Disclosure Schedule; Series A Preferred Stock are issued and outstanding, (ii) 120,150 shares of Company Series B Preferred Stock are issued and outstanding, (iii) 1,000,000 shares of Company Series C Preferred Stock are issued and outstanding, (iv) 795,715 shares of Company Series D-1 Preferred Stock are issued and outstanding and (v) 20,000 2,453,333 shares of Company Common Series D-2 Preferred Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Company Preferred Stock were issued and outstanding; and ; (viiiC) except for the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) Section 3.3 of the Company Disclosure Schedule (the "Company Convertible Notes")lists, which is convertible into an aggregate of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) as of the close of business on the date hereof, all outstanding Company Disclosure ScheduleStock Options, no Voting Debt (as defined below) was issued the number of shares subject to each such Company Stock Option, the grant date, exercise price, term and outstanding. The term "Voting Debt" means bonds, debentures, notes or other indebtedness having vesting schedule of each such Company Stock Option and the right to vote (or convertible into securities having the right to vote) on any matters on which stockholders names of the Company or Parent, as the case may be, may vote. holders thereof. (D) All outstanding shares of capital stock of the Company Common Stock have been duly authorized and validly issued and are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except rights created by statute, the Company's Articles of Incorporation as set forth on Schedule 3.1(b)(ixamended by the Articles of Amendment (the "Company's Articles of Incorporation") of or any agreement to which the Company Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of is a party or by which the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any naturemay be bound. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 the date of this Agreement resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this AgreementOptions outstanding on such date, there are outstanding: outstanding (i) no shares of capital stock, Voting Debt stock or other voting securities of the Company; , (ii) no securities of the Company or any Subsidiary of the Company convertible into or exchangeable for shares of capital stock, Voting Debt stock or other voting securities of the Company, other than the Company or any Subsidiary of the Company; Preferred Stock and Company Convertible Promissory Notes, and (iii) no optionsoptions or other rights to acquire from the Company, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary of the Company is a party or by which it is bound in any case obligating the Company or any Subsidiary and no obligation of the Company to issue, deliverany capital stock, sell, purchase, redeem voting securities or acquire, securities convertible into or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of exchangeable for capital stock or any Voting Debt or other voting securities of the Company or of any Subsidiary of the Company, or obligating other than the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesWarrants.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of the Company consists of 30,000,000 45,000,000 shares of Company Common Stock and 10,000,000 shares of preferred stock1,000,000 Preferred Shares, par value $.01 .001 per share, of share (the Company ("Company Preferred Stock") of which 75,000 shares have been designated as Series A Junior Participating Preferred Stock (the "Company Series A Preferred Shares"). At the close of business on October 22May 3, 1999 (except as otherwise indicated): 2001, (i) 18,183,374 33,461,004 shares of Company Common Stock were issued and outstanding; , all of which were validly issued, fully paid and nonassessable and free of preemptive rights, (ii) 100,000, 333,224, 1,300,000, 350,000, 150,000, and 427,420 shares of Company Common Stock were reserved for issuance pursuant to the Company's 1996 Non-Employee Director Stock Option Plan, the Company's Service Center Stock Option Plan, the Company's 1996 Incentive Stock Plan, the Company's 1996 Employee Stock Purchase Plan, the Company's 1997 Non-Qualified Stock Purchase Plan and the Company's 1997 Non-Qualified Stock Option Plan (collectively, the "Company Stock Plans"), respectively; (iii) as of September 30, 1999, 2,166,451 shares of Company Common Stock were subject to issuance pursuant to outstanding options under the Company Stock Plans; (iv) 365,527 shares of Company Common Stock are reserved for issuance pursuant to warrants (the "Company Warrants") to purchase shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(iv) of the Company Disclosure Schedule; (v) 20,000 shares of Company Common Stock are reserved for issuance pursuant to restricted stock awards ("Restricted Stock Awards") having the terms and conditions set forth on Schedule 3.1(b)(v) of the Company Disclosure Schedule; (vi) no 4,999 shares of Company Common Stock were held by the Company in its treasury or by its wholly owned Subsidiaries; treasury, (viiiii) 2,302,073 shares of Company Common Stock were reserved for issuance pursuant to outstanding options to purchase Company Common Stock (the "Company Stock Options") granted under the Company's 2000 Stock Option Plan, 1999 Stock Option Plan, 1997 Stock Option Plan, 1994 Stock Option Plan, Plains Petroleum Company 1992 Stock Option Plan, 1990 Barr▇▇▇ ▇▇▇ources Corporation Nondiscretionary Stock Option Plan, Plains Petroleum Company 1989 Stock Option Plan and Plains Petroleum Company 1985 Stock Option Plan for Non-Employee Directors (together, and each as amended, the "Company Stock Plans") and (iv) no shares of Company Preferred Stock were issued and outstanding; and (viii) . As of the date of this Agreement, except for (i) the $13,801,853 aggregate principal amount of the Company's convertible subordinated notes identified on Schedule 3.1(b)(viii) of the rights to purchase Company Disclosure Schedule Series A Preferred Shares (the "Company Convertible NotesRights")) issued pursuant to the Rights Agreement dated as of August 5, 1997, as amended pursuant to the Amendment to Rights Agreement dated as of February 25, 1999 and May 7, 2001 (as amended, the "Company Rights Agreement") between the Company and BankBoston, N.A., as Rights Agent (the "Company Rights Agent") or (ii) as set forth above, no Shares were issued, reserved for issuance or outstanding and there are not any phantom stock or other contractual rights the value of which is convertible into an aggregate determined in whole or in part by the value of 410,831 shares of Company Common Stock upon the terms and conditions set forth on Schedule 3.1(b)(viii) any capital stock of the Company Disclosure Schedule("Stock Equivalents"). There are no outstanding stock appreciation rights with respect to the capital stock of the Company. Each outstanding Share is, and each Share which may be issued pursuant to the Company Stock Plans will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no Voting Debt (as defined below) was issued and outstanding. The term "Voting Debt" means outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into into, or exchangeable for, securities having the right to vote) on any matters matter on which the Company's stockholders of the Company or Parent, as the case may be, may vote. All outstanding shares of Company Common Stock are validly issued, fully paid and nonassessable and are not subject to preemptive rights. Except as set forth on Schedule 3.1(b)(ix) above or in Item 4.3 of the Company Disclosure ScheduleLetter, all outstanding shares of capital stock as of the Subsidiaries date of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary of the Company, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.1(b) or Schedule 3.1(b)(x) of the Company Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of stock options granted pursuant to, or from issuances or purchases under, the Company Stock Plans, the Company Warrants or the Company Convertible Notes or as contemplated by this Agreement, there are outstanding: (i) no securities, options, warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind to which the Company or any of its Significant Subsidiaries is a party or by which any of them is bound obligating the Company or any of its Significant Subsidiaries to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional shares of capital stock, Voting Debt stock or other voting securities of the Company; (ii) no securities or Stock Equivalents of the Company or of any Subsidiary of its Significant Subsidiaries or obligating the Company convertible or any of its Significant Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or exchangeable for undertaking. There are no outstanding rights, commitments, agreements, or undertakings of any kind obligating the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock, Voting Debt stock or other voting securities of the Company or any Subsidiary of its Subsidiaries or any securities of the Company; type described in the two immediately preceding sentences. (b) The Company has delivered or made available to Parent complete and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to 8 18 which the Company or any Subsidiary correct copies of the Company is a party or by which it is bound in any case obligating the Stock Plans and all forms of Company or any Subsidiary Stock Options. Item 4.3 of the Company to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares Letter sets forth a complete and accurate list of capital stock or any Voting Debt or other voting securities of the all Company or of any Subsidiary of the Company, or obligating the Company or any Subsidiary of the Company to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not Stock Options outstanding as of the date hereof of this Agreement and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which the exercise price of each outstanding Company is a party or by which it is bound relating to the voting of any shares of the capital stock of the Company that will limit in any way the solicitation of proxies by or on behalf of the Company from, or the casting of votes by, the stockholders of the Company with respect to the Merger. There are no restrictions on the Company to vote the stock of any of its SubsidiariesStock Option.