Common use of Capitalization; Ownership Clause in Contracts

Capitalization; Ownership. (a) The authorized capital ------------------------- stock of the Company consists of (x) 1,066,667 shares of Preferred Stock, of which 1,033,333 shares are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Company's 1995 Stock Plan (the "Company Stock Plan"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notes. (b) Except for the Company Options, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company is a party or obligating the Company to issue or sell any shares of capital stock of, or other equity interests in, the Company. Except for the Company Options, no other awards have been made pursuant to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding capital stock of the Company and are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares. (d) The stock register of the Company accurately records: (i) the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Company, the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date of cancellation.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock of the Company consists of (xi) 1,066,667 37,000,000 shares of Preferred Stock, Company Common Stock of which 1,033,333 shares 25,000,000 are issued class C-l Common Stock and outstanding and each share of which is convertible into one share of 12,000,000 are Class C-2 Common Stock and (yii) 2,162,667 7,000,000 shares of Common preferred stock, par value $0.0001 per share of the Company the “Company Preferred Stock”. As of the date of this Agreement, of which (i) 400,033 8,937,235 shares are of Class C-l Common Stock and 956,077 shares of Class C-2 Common Stock were issued and outstanding, all of which were validly issued and are fully paid, nonassessable and not subject to, or issued in violation of, any preemptive rights and (ii) 672,572 no shares are reserved for issuance pursuant to of Company Preferred Stock were issued or outstanding Company Options issued pursuant to the Company's 1995 Stock Plan (the "Company Stock Plan"), and (iii) ------------------ 44,228 822,500 shares of Common Stock are reserved for issuance upon held in treasury by the granting Company. A true, complete and accurate list of additional options pursuant to the holders of the capital stock of the Company Stock Plan and the number and classes of shares so held is set forth in Section 3.3(a) of the Company Disclosure Letter and except as listed in Section 3.3(a) of the Company Disclosure Letter, the Company has no other authorized, issued or outstanding shares of capital stock. Except as listed in Section 3.3(a) and (ivd) no shares are reserved for issuance pursuant to the Convertible Notes. (b) Except for of the Company OptionsDisclosure Letter, there are no existing options, warrants or other rights, agreementssubscriptions, arrangements warrants, unsatisfied preemptive rights, calls or commitments of any character relating to (c) the authorized and unissued capital stock or treasury stock of the Company or (d) any securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire from the Company any shares of capital stock of the Company. Except as set forth in Section 3.3(a) of the Company Disclosure Letter, there are no outstanding agreements to which the Company is a party respecting the voting, transferring or obligating holding of shares of the Company’s capital stock. (b) None of the Company or its Subsidiaries owns any equity interest in any Person except that the Persons listed in Section 3.4(b) of the Company Disclosure Letter are the wholly-owned, direct or indirect Subsidiaries of the Company. The authorized and issued shares of capital stock, or other comparable ownership interests, of each of the Subsidiaries is set forth in Section 3.3(b) of the Company Disclosure Letter. Except as listed in Section 3.3(b) of the Company Disclosure Letter, all issued and outstanding capital stock, or other comparable ownership interests, of each of the Company’s Subsidiaries is owned by the Company, free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, preemptive rights, limitations on voting rights, charges and other encumbrances of any nature whatsoever (collectively, “Liens”). Except as listed in Section 3.3(b) of the Company Disclosure Letter, there are no existing options, rights, subscriptions, warrants, unsatisfied preemptive rights, calls or commitments of any character relating to issue (i) the authorized and unissued capital stock or sell treasury stock (or other comparable ownership interests) of the Subsidiaries of the Company or (ii) any securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire from the Subsidiaries of the Company any shares of capital stock of, (or other equity interests in, the Companycomparable ownership interests) of such Subsidiary. Except for as set forth in Section 3.3(b) of the Company OptionsDisclosure Letter, no other awards have been made pursuant to the Company Stock Plan. There there are no outstanding contractual obligations of the Company agreements to repurchase, redeem or otherwise acquire any of the capital stock of which the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company its Subsidiaries is not a party to any agreement granting registration rights to any person with respect to any securities respecting the voting, transferring or holding of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as shares of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company WarrantsSubsidiary’s capital stock or other comparable ownership interests. (c) The Shares constitute all All of the issued outstanding shares of Company Common Stock are owned beneficially and outstanding capital stock of record by the Company Holders, and in the respective amounts, as set forth in Section 3.3(a) of the Company and Disclosure Letter, and, except as set forth in Section 3.3(c) of the Company Disclosure Letter are owned of record and beneficially solely by the Stockholders free and clear of all encumbrances. All of the Shares are fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the SharesLiens. (d) The stock register Section 3.3(d) of the Company accurately records: Disclosure Letter sets forth, as of the date of this Agreement, (iw) the name and address of each person owning Shares and persons to whom Company Stock Options have been granted, (iix) the certificate number date of each certificate evidencing Shares issued by grant for the Company, the number of shares evidenced company Stock Options held by each such certificateperson, (y) the exercise price for the Company Stock Options held by each such person and (z) whether such Company Stock Options (or Company Common Stock issued upon exercise of any Company Stock Options) are subject to vesting and, if subject to vesting, the date dates on which each of issuance thereof andthose Company Stock Options (or Company Common Stock issued upon exercise of any Company Stock Options) vest. Except as set forth in Section 2.2(a), in none of the case Company Stock Options (or Company Common Stock issued upon exercise of cancellation, any Common Stock Options) that are subject to vesting will vest as a result of the date consummation of cancellationthe Merger and the transactions contemplated by this Agreement.

Capitalization; Ownership. (a) The authorized capital ------------------------- stock of the Company consists of (xi) 1,066,667 1,500 shares of Company Stock, of which 900 shares of Company Stock are issued and outstanding (the "Company Shares"), and (ii) 1,500 shares of Company Preferred Stock, of which 1,033,333 1,150 shares of Company Preferred Stock are issued and outstanding and each share of which is convertible into one share of Common Stock and (y) 2,162,667 shares of Common Stock, of which (i) 400,033 shares are issued and outstanding, (ii) 672,572 shares are reserved for issuance pursuant to outstanding Company Options issued pursuant to the Company's 1995 Stock Plan (the "Company Stock PlanPreferred Shares"), (iii) ------------------ 44,228 shares are reserved for issuance upon the granting of additional options pursuant to the Company Stock Plan and (iv) no shares are reserved for issuance pursuant to the Convertible Notes. (b) Except for the Company Options, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which the Company is a party or obligating the Company to issue or sell any shares of capital stock of, or other equity interests in, the Company. Except for the Company Options, no other awards have been made pursuant to the Company Stock Plan. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of the capital stock of the Company or to provide funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in any other entity. The Company is not a party to any agreement granting registration rights to any person with respect to any securities Shares and Company Preferred Shares are all of the Company. All warrants issued pursuant to the Convertible Demand Note and Warrant Purchase Agreement dated as of October 10, 1996 among certain of the Stockholders and the Company (the "Company Warrants") ---------------- have been exercised pursuant to the cashless exercise provisions thereof and 20,833 Common Shares have been issued in satisfaction and cancellation of all such Company Warrants. (c) The Shares constitute all the issued and outstanding shares of capital stock of the Company and have been duly authorized and validly issued and are owned fully paid and nonassessable and free of record and beneficially solely preemptive rights other than such rights as might exist by operation of law. Except as disclosed in Schedule 5.2(a) of the Disclosure Schedule there are not, as of the date hereof, any outstanding or authorized subscriptions, options, warrants, calls, rights, commitments, or any other agreements of any character (any of the foregoing, a "Commitment") obligating the Company to issue any additional shares of capital stock of the Company, or any other securities convertible into or evidencing the right to subscribe for any shares of capital stock of the Company. The West Coast Stockholders own the respective number of shares of Company Stock set forth on Schedule 5.2 (a) of the Disclosure Schedule, free and clear of all encumbrancesLiens. All Each of the West Coast Stockholders has full legal right, power and authority to exchange, assign and transfer or cause to be exchanged, assigned or transferred their respective shares of Company Stock. The delivery to Pentacon of the Company Shares pursuant to the terms of this Agreement will transfer good and valid title thereto, free and clear of all Liens. (b) The authorized capital stock of each of the Subsidiaries consists of the number and type of shares of capital stock set forth on Schedule 5.2(c) of the Disclosure Schedule (collectively, "Subsidiary Stock"). Schedule 5.2(c) of the Disclosure Schedule also sets forth the number and type of shares of Subsidiary Stock which are issued and outstanding (collectively, "Subsidiary Shares"), the securities of any other corporation owned by the Company or any of the Subsidiaries, as well as the names of any joint venture, partnership or other noncorporate entity in which the Company or any of the Subsidiaries is a participant. The Subsidiary Shares are all of the issued and outstanding shares of capital stock of the Subsidiaries and have been duly authorized and validly issued and are fully paid and nonassessablenonassessable and free of preemptive rights other than such rights as might exist by operation of law. Also set forth in Schedule 5.2(c) of the Disclosure Schedule is a listing of all names under which the Company and the Subsidiaries have done business, as well as the names of all predecessors of the Company and the Subsidiaries, including the names of any entities from whom the Company or the Subsidiaries previously acquired significant assets. There are no voting trustsnot, stockholder agreementsas of the date hereof, proxies or other agreements or understandings in effect with respect to the voting or transfer of any Commitments obligating any of the Shares. (d) Subsidiaries to issue any additional shares of capital stock of any such Subsidiaries, or any other securities convertible into or evidencing the right to subscribe for any shares of capital stock of any such Subsidiary. The stock register of Company and the Company accurately records: (i) ASI Sellers, respectively, own the name and address of each person owning Shares and (ii) the certificate number of each certificate evidencing Shares issued by the Company, the respective number of shares evidenced by each such certificateof ASI Stock set forth on Schedule 5.2(b) of the Disclosure Schedule attached hereto, the date free and clear of issuance thereof and, in the case of cancellation, the date of cancellationany Liens.