Common use of Capital Structure of MatrixOne and Subtwo Clause in Contracts

Capital Structure of MatrixOne and Subtwo. (a) The authorized capital stock of MatrixOne consists of (i) 100,000,000 shares of MatrixOne Common Stock, and (ii) 5,000,000 shares of Preferred Stock, $0.01 par value per share (“MatrixOne Preferred Stock”). As of May 7, 2004: (i) 48,633,152 shares of MatrixOne Common Stock were issued and outstanding, all of which are validly issued, fully paid and nonassessable; (ii) no shares of MatrixOne Common Stock were held in the treasury of MatrixOne or by Subsidiaries of MatrixOne; and (iii) 10,686,860 shares of MatrixOne Common Stock were reserved for future issuance pursuant to stock options granted and outstanding under MatrixOne’s stock options plans. All shares of MatrixOne Common Stock subject to issuance as specified above, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, shall be duly authorized, validly issued, fully paid and nonassessable. As of May 7, 2004, no shares of MatrixOne Preferred Stock were issued and outstanding. (b) All of the shares of MatrixOne Common Stock to be issued in the Merger have been duly authorized by all necessary corporate action and, will be, when issued in accordance with this Agreement, duly authorized, validly issued, fully paid and nonassessable. (c) The authorized capital stock of Subone consists of 100 shares of common stock, par value $.01 per share, all of which are issued and outstanding and validly issued, fully paid and nonassessable. (d) The authorized capital stock of Subtwo consists of 1,000 shares of Subtwo Common Stock, of which 10 shares are issued and outstanding, all of which are validly issued, fully paid and nonassessable.