Common use of Capital Structure Clause in Contracts

Capital Structure. As of the date hereof, the authorized capital stock of Parent consists of 200,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22, 1999 (i) 44,958,240 shares of Parent Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstanding.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists of 200,000,000 1,100,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stock, par value $.01 1.00 per share, of Parent share ("Parent Preferred Stock"). At the close of business on October 22January 31, 1999 1997, (i) 44,958,240 607,377,291 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,5003,600,000 shares of Parent Preferred Stock, 40,000 all denominated as Series C Conversion 45 41 Preferred Stock, were issued and 825,000 outstanding, (iii) 3,152,752 shares of Parent Common Stock were held by Parent in its treasury, (iv) 88,147,350 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 1993 Long Term Incentive Plan, Parent's Nonemployee Director1991 Long Term Incentive Plan, Parent's Compensation and Deferral 1984 Long Term Incentive Plan and Parent's Employee Deferred Compensation and Stock Purchase Plan for Directors and other stock-based plans and agreements (collectively, the "Parent Stock Plans"); , (iiiv) 3,667,653 36,000,000 shares of Parent Common Stock were subject to reserved for issuance pursuant to outstanding awards under upon conversion of the Parent Series C Conversion Preferred Stock Plans; and (ivvi) no 5,000,000 shares of Parent Common Preferred Stock, all denominated as Series A Participating Preferred Stock (subject to increase and adjustment as set forth in the Rights Agreement (as defined below) and the Certificate of Designations attached as an exhibit thereto) were held by Parent reserved for issuance in its treasury or by its wholly owned Subsidiaries; connection with the rights (vthe "Rights") no to purchase shares of Parent Preferred Stock pursuant to the Rights Agreement dated as of December 28, 1995, between Parent and First Chicago Trust Company of New York, as Rights Agent (the "Rights Agreement"). Except as set forth above, at the close of business on January 31, 1997, no shares of capital stock or other voting securities of Parent were issued and outstanding; and (vi) no Voting Debt was issued and issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Parent are, and all shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth At the close of business on Schedule 3.2(b)(i) of the Parent Disclosure ScheduleJanuary 31, all outstanding shares of capital stock of the Subsidiaries 1997, there were no notes, bonds, debentures or other indebtedness of Parent are owned by having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any naturemay vote. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans above or as otherwise contemplated by this Agreement, at the close of business on January 31, 1997, there are outstanding: (i) were no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or undertakings of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 kind to which Parent is a party or by which it is bound relating obligating Parent to the voting of any issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock or other voting securities of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on obligating Parent to vote the stock of issue, grant, extend or enter into any of its Subsidiaries. As of the date hereofsuch security, the authorized capital stock of Merger Sub consists of 1,000 shares of common stockoption, par value $.01 per sharewarrant, 1,000 shares of which are validly issuedcall, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstanding.right, commitment, agreement, arrangement or

Capital Structure. As of the date hereof, the (i) The authorized capital stock of Parent DSW consists of 200,000,000 170,000,000 shares of Parent Common DSW Class A Stock, 100,000,000 shares of DSW Class B Stock and 25,000,000 100,000,000 shares of preferred stock, without par value $.01 per share, of Parent ("Parent the “DSW Preferred Stock"”). At As of the close of business on October 22January 29, 1999 2011, (iA)(1) 44,958,240 16,804,965 shares of Parent Common DSW Class A Stock and 27,382,667 shares of DSW Class B Stock were issued and outstanding; outstanding (ii) 4,603,500, 40,000 and 825,000 including issued shares of Parent Common unvested restricted stock), (2) no shares of DSW Class A Stock and no shares of DSW Class B Stock were held in treasury, and (3) 2,932,580 shares of DSW Class A Stock and no shares of DSW Class B Stock were reserved for issuance pursuant upon the exercise or payment of options or other equity-based incentive awards with respect to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee DSW Common Stock Purchase Plan (collectively, the "Parent “DSW Stock Plans"Awards”); and (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (ivB) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent DSW Preferred Stock were outstanding or reserved for issuance. All issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are DSW Common Stock, and all shares of DSW Common Stock that may be issued or granted pursuant to the exercise or vesting of DSW Stock Awards will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable non-assessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding The shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent DSW Common Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent issued pursuant to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not Agreement will have been duly authorized as of the date hereof and there will not be at the Effective Time any stockholder agreementsand, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to if and when issued in accordance with the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date terms hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stockwill be duly authorized, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable non-assessable and are owned by Parent and the balance of which are not issued or outstandingsubject to preemptive rights.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent CDnow consists of 200,000,000 shares of Parent CDnow Common Stock Stock, without par value, and 25,000,000 50,000,000 shares of preferred stock, without par value $.01 per share(together with the CDnow Common Stock, of Parent (the "Parent Preferred CDnow Capital Stock"). At the close of business on October 22July 9, 1999 1999, (i) 44,958,240 30,211,473 shares of Parent CDnow Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 no shares of Parent CDnow Common Stock were held by CDnow in its treasury and (iii) 1,511,934 additional shares of CDnow Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's the CDnow Stock Plans (as defined in Section 8.04(d)). The CDnow Disclosure Letter sets forth a complete list of all CDnow Employee Stock Purchase Plan Options (collectivelyas defined in Section 8.04) outstanding at the close of business on July 12, 1999, together with the number of shares of CDnow Common Stock subject to each such CDnow Employee Stock Option and the exercise price thereof. The CDnow Disclosure Letter sets forth a complete list of all warrants to acquire shares of CDnow Common Stock (the "Parent Stock PlansCDnow Warrants"); (iii) 3,667,653 outstanding at the close of business on July 12, 1999 together with the number of shares of Parent CDnow Common Stock were subject to issuance pursuant to outstanding awards under each such warrant and the Parent Stock Plans; (iv) exercise price thereof. Except as set forth above or in the CDnow Disclosure Letter, at the close of business on July 12, 1999, no shares of Parent Common Stock capital stock or other voting securities of CDnow were held by Parent in its treasury issued, reserved for issuance or by its wholly owned Subsidiaries; (v) outstanding. There are no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingoutstanding CDnow stock appreciation rights. All outstanding shares of Parent capital stock are CDnow 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 rightsright, subscription right or any similar right under any provision of the PBCL, the CDnow Charter, the CDnow By-laws or any Contract (as defined in Section 3.05) to which CDnow is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of CDnow having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of CDnow Common Stock may vote ("Voting CDnow Debt"). Except as set forth on Schedule 3.2(b)(i) of above or in the Parent CDnow Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this AgreementLetter, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or not any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; 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 which Parent CDnow or any CDnow Subsidiary of Parent is a party or by which it any of them is bound in any case (i) obligating Parent CDnow or any CDnow Subsidiary of Parent 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 security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, CDnow or any CDnow Subsidiary or any Voting Debt or other voting securities of Parent or of any Subsidiary of ParentCDnow Debt, or (ii) obligating Parent CDnow or any CDnow Subsidiary of Parent to issue, 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 accruing to holders of CDnow Capital Stock. Except as contemplated by this Agreement, there There are not as any outstanding contractual obligations of the date hereof and there will not be at the Effective Time CDnow or any stockholder agreementsCDnow Subsidiary to repurchase, voting trusts redeem or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of Parent that will limit in CDnow or any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its SubsidiariesCDnow Subsidiary. As of the date hereofEffective Time, each CDnow Warrant will, by its terms, provide the authorized capital stock holder thereof with the right to receive the amount of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid Consideration such holder would have received in the Merger had such CDnow Warrant been exercised immediately prior to the Effective Time (and nonassessable and are owned by Parent and the balance of which are not issued or outstandingno other consideration) upon exercise thereof.

Capital Structure. As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 (i) 100,000,000,000 shares of Parent Common Stock and 25,000,000 (ii) 2,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). At As of the close of business on October 22April 16, 1999 2007, there were: (i) 44,958,240 3,535,358 shares of Parent Common Stock were issued and outstanding; (ii) 4,603,500no shares of Parent Preferred Stock issued and outstanding, 40,000 and 825,000 (iii) 163 shares of Parent Common Stock were held in the treasury of Parent; (iv) 75,146 shares of Parent Common Stock reserved for issuance upon exercise of options available for grant pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan stock option plans (collectively, the "Parent Stock Plans"); (iiiv) 3,667,653 1,888,704 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plansissuable upon exercise of awarded but unexercised stock options; (ivvi) no warrants representing the right to purchase 4,826,517 shares of Parent Common Stock; (vii) 6,457,544 shares of Parent Common Stock reserved for issuance upon conversion of Parent Voting Debt; and (viii) 31,985 shares of Parent Common Stock reserved for capitalized interest on Parent Voting Debt. Except as set forth above, as of the close of business on April 16, 2007 there were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of capital stock or other equity securities of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Parent are, and all shares which may be issued as described above shall be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. The shares of Parent Common Stock to be issued in connection with the Merger (x) shall, when issued, be duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights, and (y) shall be issued in compliance in all material respects with all applicable federal and state securities laws and applicable rules and regulations promulgated thereunder. As of the Effective Time of the Merger, the Board of Directors of Parent shall have reserved for issuance a number of shares of Parent Common Stock as is required by the Company Warrants to be assumed by Parent pursuant to Section 2.03. Except as set forth on Schedule 3.2(b)(iin Section 3.02(b) of the Parent Disclosure Schedule, all there is no outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary Voting Debt of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth above and in this Section 3.2(b) or Schedule 3.2(b)(ii) the Rights Agreement, dated as of October 31, 2001, between Parent and the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent American Stock Plans or as contemplated by this AgreementTransfer & Trust Company, there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or undertakings of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 kind to which Parent is a party or by which it is bound relating obligating Parent to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of Parent or obligating Parent to issue, grant, extend, accelerate the voting vesting of or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of Parent to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its SubsidiariesParent. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 0.01 per share, 1,000 shares 100 of which are have been validly issued, are fully paid and nonassessable and are owned by Parent, free and clear of any Lien, and as of the Closing Date, all the issued and outstanding shares of the common stock of Merger Sub shall be owned by Parent free and the balance clear of which are not issued or outstandingany Lien.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists of 200,000,000 250,000,000 shares of Parent Common Stock and 25,000,000 10,000,000 shares of preferred stock, par value $.01 1.00 per share, of Parent share ("Parent Preferred Stock" and, together with the Parent Common Stock, the "Parent Capital Stock"). At the close of business on October 22July 31, 1999 2005, (i) 44,958,240 66,797,864 shares of Parent Common Stock (each together with a Parent Right) and no shares of Parent Preferred Stock were issued and outstanding, (ii) 23,729,728 shares of Parent Common Stock were issued and outstanding; held by Parent in its treasury, (iiiii) 4,603,500, 40,000 and 825,000 5,878,756 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation outstanding options and Deferral Plan and Parent's Employee Stock Purchase Plan other stock-based awards (collectively, other than shares of restricted stock or other equity based awards included in the "Parent Stock Plans"); (iii) 3,667,653 number of shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; set forth above) and (iv) shares of Parent Preferred Stock reserved for issuance in connection with the rights (the "Parent Rights") issued pursuant to the Rights Agreement dated as of April 21, 1998 (as amended from time to time, the "Parent Rights Agreement"), between Parent and First Chicago Trust Company of New York, as Rights Agent. Except as set forth above, at the close of business on July 31, 2005, no shares of capital stock or other voting securities of Parent were issued, reserved for issuance or outstanding. During the period from July 31, 2005 to the date of this Agreement, (x) there have been no issuances by Parent of shares of capital stock or other voting securities of Parent other than issuances of shares of Parent Common Stock were held pursuant to the exercise of options and other stock-based awards outstanding on such date as required by their terms as in effect on the date of such issuance and (y) there have been no issuances by Parent in its treasury of options, warrants or by its wholly owned Subsidiaries; (v) no other rights to acquire shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingcapital stock or other voting securities of Parent. All outstanding shares of Parent capital stock are 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 rightsright, subscription right or any similar right under any provision of the DGCL, the Restated Certificate of Incorporation of Parent (the "Parent Charter") and the Amended and Restated By-laws of Parent (the "Parent By-laws") or any Contract to which Parent is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Parent Capital Stock may vote ("Voting Parent Debt"). Except as set forth on Schedule 3.2(b)(i) above, as of the Parent Disclosure Schedule, all outstanding shares date of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or not any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; 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 which Parent or any Subsidiary of Parent's subsidiaries (each, a "Parent Subsidiary") is a party or by which it any of them is bound in any case (i) obligating Parent or any Parent Subsidiary of Parent 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 security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Parent or any Parent Subsidiary or any Voting Debt or other voting securities of Parent or of any Subsidiary of ParentDebt, or (ii) obligating Parent or any Parent Subsidiary of Parent to issue, grant, extend or enter into any such option, warrant, call, right, commitment security, unit, 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 occurring to holders of Parent Capital Stock. Except as contemplated by As of the date of this Agreement, there are not as any outstanding contractual obligations of the date hereof and there will not be at the Effective Time Parent or any stockholder agreementsParent Subsidiary to repurchase, voting trusts redeem or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of Parent that will limit in or any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Subsidiary. Parent with respect has made available to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As Company a complete and correct copy of the Parent Rights Agreement, as amended to the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingthis Agreement.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 an unlimited number of common shares and an unlimited number of preferred shares (the “Parent Preferred Shares” and, together with the Parent Common Stock and 25,000,000 shares of preferred stockShares, par value $.01 per share, of the “Parent ("Parent Preferred Stock"”). At the close of business on October 22August 28, 1999 2015, (i) 44,958,240 shares of 64,183,191 Parent Common Stock Shares were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock Shares were issued and outstanding; , and (viiii) no Voting Debt was 9,650,493 Parent Common Shares were reserved for future issuance in respect of awards outstanding under the Parent Benefit Plans, consisting of 11,570 Parent Common Shares reserved for issuance upon exercise of outstanding options and 9,638,923 Parent Common Shares reserved for issuance upon conversion or settlement of outstanding performance and restricted share units under the Parent Benefit Plans. All issued and outstanding. All outstanding shares of Parent capital stock Common Shares are duly authorized, validly issued, fully paid and nonassessable non-assessable, and not subject all Parent Common Shares to be issued as the Merger Consideration or as Stock Award Payments, when so issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable. Other than the Parent Preferred Shares, no class of Parent shares is entitled to preemptive rights. Except as set forth on Schedule 3.2(b)(idisclosed in Section 5.3(a) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this AgreementLetter, there are outstanding: no outstanding bonds, debentures, notes or other indebtedness of Parent having the right to vote (ior convertible into, or exchangeable for, securities having the right to vote) no on any matter on which holders of shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingCommon Shares may vote.

Capital Structure. As The authorized capital stock of Acquiror consists of 100,000,000 shares of Acquiror Common Stock and 20,000,000 shares of Acquiror Preferred Stock, of which 1,000,000 shares have been classified as 8 1/2% Series A Cumulative Redeemable Preferred Stock and the remaining 19,000,000 shares remain unclassified. On the date hereof, the authorized capital stock of Parent consists of 200,000,000 (i) 22,124,410 shares of Parent Acquiror Common Stock and 25,000,000 1,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Acquiror Preferred Stock"). At the close of business on October 22, 1999 (i) 44,958,240 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 no shares of Parent Acquiror Stock or Acquiror Preferred Stock were held by Acquiror in its treasury, (iii) 98,248 shares of Acquiror Common Stock were reserved for issuance pursuant to Parentoptions and shares of restricted stock not yet granted under Acquiror's 1998 Incentive employee benefit or incentive plans ("Acquiror Employee Stock Plans"), (iv) 1,030,440 shares of Acquiror Common Stock were issuable upon exercise of outstanding options under the Acquiror Employee Stock Plans (the "Acquiror Options") to purchase shares of Acquiror Common Stock; (v) 145,972 shares were reserved for issuance pursuant to Acquiror's Dividend Reinvestment and Stock Purchase Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent(vi) 26,308 shares were reserved for issuance pursuant to Acquiror's Employee Stock Purchase Plan and (collectivelyvii) 27,260,770 shares were reserved for issuance upon the exchange of outstanding limited partnership interests ("Units") in the Operating Partnership. On the date of this Agreement, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) except as set forth in this SECTION 3.2.3, no shares of Parent Common Stock capital stock or other voting securities of Acquiror were held by Parent in its treasury issued, reserved for issuance or by its wholly owned Subsidiaries; (v) outstanding. There are no shares outstanding stock appreciation rights relating to the capital stock of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingAcquiror. All outstanding shares of Parent capital stock are of Acquiror are, and all shares which may be issued pursuant to this Agreement will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(iSCHEDULE 3.2.3 to the Acquiror Disclosure Letter, there are no bonds, debentures, notes or other indebtedness of Acquiror having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any natureAcquiror may vote. Except (A) as set above in this SECTION 3.2.3, (B) as set forth in this Section 3.2(bSCHEDULE 3.2.3 to the Acquiror Disclosure Letter or (C) or Schedule 3.2(b)(ii) as otherwise permitted under SECTION 4.2, as of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise date of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, Agreement there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to which Parent Acquiror or any Acquiror Subsidiary of Parent is a party or by which it such entity is bound in any case bound, obligating Parent Acquiror or any Acquiror Subsidiary of Parent 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 stock, voting securities or other voting securities ownership interests of Parent Acquiror or of any Acquiror Subsidiary of Parent, or obligating Parent Acquiror or any Acquiror Subsidiary of Parent to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment commitment, agreement, arrangement or agreementundertaking (other than to Acquiror or an Acquiror Subsidiary). Except as contemplated by this Agreementset forth on SCHEDULE 3.2.3 to the Acquiror Disclosure Letter, there are not as no outstanding contractual obligations of the date hereof and there will not be at the Effective Time Acquiror or any stockholder agreementsAcquiror Subsidiary to repurchase, voting trusts redeem or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of Parent that will limit or other ownership interests in any way Acquiror Subsidiary or make any investment (in the solicitation form of proxies by a loan, capital contribution or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Mergerotherwise) in any Person (other than an Acquiror Subsidiary). There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstanding.3.2.4

Capital Structure. As of the date hereof, the The authorized capital stock of Parent CSLC consists of 200,000,000 65,000,000 shares of Parent CSLC Common Stock Stock, $.01 par value, and 25,000,000 15,000,000 shares of preferred stock, $.01 par value $.01 per share, of Parent (the "Parent CSLC Preferred Stock"). At the close of business on October 22the date hereof, 1999 (i) 44,958,240 19,717,347 shares of Parent CSLC Common Stock and no shares of CSLC Preferred Stock, respectively, were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth provided in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, pursuant to the 1997 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation (the "CSLC Stock Option Plan") and the Exhibits hereto, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent CSLC or any Subsidiary of Parent its Subsidiaries is a party or by which it is bound in any case obligating Parent CSLC or any Subsidiary of Parent 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 debt securities of Parent CSLC or of any Subsidiary of ParentCSLC, or obligating Parent CSLC or any Subsidiary of Parent CSLC to grant, extend or enter into any such option, warrant, call, right, commitment right or agreement. Except All outstanding shares of CSLC Common Stock are, and the Convertible Securities to be issued pursuant to or as specifically contemplated by this AgreementAgreement and the Merger, there are not as will be, duly authorized, validly issued, fully paid and nonassessable. All of the date hereof limited liability member interests of Sub have been duly authorized and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent CSLC. The aggregate authorized beneficial interests of the Trust consists of 100 shares of common equity securities, each having a stated liquidation amount of $25, all of which have been duly authorized and are validly issued, fully paid and non-assessable and owned by CSLC, and 2,380,000 shares of Convertible Securities, all of which have been duly authorized for issuance and, when issued in the Merger and the balance of which are not issued or outstanding"ILM Merger" (as hereinafter defined), shall be validly issued, fully paid and non-assessable.

Capital Structure. As of the date hereofof this Agreement, the ----------------- authorized capital stock of Parent consists of 200,000,000 (i) 2,000,000 shares of Parent Common Stock and 25,000,000 Stock, (ii) 200,000 shares of preferred class A common stock, par value $.01 per share, of Parent ("Parent Class A Common Stock") and (iii) 500,000 shares of --------------------------- preferred stock, par value $.01 per share, of Parent (the "Parent Preferred ---------------- Stock"). At the close of business on October 22November 15, 1999 1999, (i) 44,958,240 929,950 shares of ----- Parent Common Stock were issued and outstanding, all of which were validly issued, fully paid and nonassessable and free of preemptive rights; (ii) 4,603,500174,560 shares of Parent Class A Common Stock were issued and outstanding, 40,000 all of which were validly issued, fully paid and 825,000 nonassessable and free of preemptive rights, and 290 of which are held in the treasury of the Parent; (iii) 618,750 shares of Parent Common Stock were reserved for future issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral 1997 Executive Stock Option Plan and Parent's 1997 Employee Stock Purchase Option Plan (collectively, the "Parent Stock Plans"); (iiiiv) 3,667,653 6,000 shares of Parent Common ------------------ Stock were subject to reserved for future issuance pursuant to outstanding awards under Parent's 1997 Employee Stock Purchase Plan (the "Parent Stock Purchase Plan" and, together with the -------------------------- Parent Stock Plans, the "Parent Incentive Plans"); (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; and (v) no shares of Parent ---------------------- Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and or outstanding. All outstanding of the shares of Parent capital stock are Common Stock and all of the Algos Warrants issuable in exchange for Company Common Stock at the Effective Time in accordance with this Agreement will be, when so issued, duly authorized, validly issued, free of preemptive rights and, in the case of the shares of the Parent Common Stock, fully paid and nonassessable and not subject to preemptive rightsnonassessable. Except as set forth on Schedule 3.2(b)(i) Each share of Parent Common Stock issuable upon exercise of the Parent Disclosure ScheduleAlgos Warrants will be fully paid and nonassessable at the time of exercise. As of the date of this Agreement, all outstanding except for (a) this Agreement, (b) stock options covering not in excess of 618,750 shares of capital stock of Parent Common Stock (collectively, the Subsidiaries of "Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free Stock ------------ Options") and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b(c) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this AgreementPurchase Plan, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, ------- warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or any of any Subsidiary of Parentits Subsidiaries, or securities convertible into or exchangeable for such capital stock, or obligating Parent or any Subsidiary of Parent its Subsidiaries to grant, extend or enter into any such option, warrant, call, right, commitment right or agreement. Since November 15, 1999, Parent has not issued any shares of its capital stock, or securities convertible into or exchangeable for such capital stock, other than shares issued in the ordinary course pursuant to the Parent Stock Plans. Except as contemplated set forth in Schedule 2.2 of that separate disclosure letter delivered by Parent to the Company at or prior to the execution and delivery by Parent of this AgreementAgreement (the "Parent Disclosure ----------------- Schedule"), there are not as no outstanding contractual obligations of Parent or any of -------- Parent's Subsidiaries (i) restricting the date hereof and there will not be at the Effective Time any stockholder agreementstransfer of, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to (ii) affecting the voting of rights of, (iii) requiring the repurchase, redemption or disposition of, (iv) requiring the registration for sale of, or (v) granting any preemptive or antidilutive right with respect to, any shares of the Parent Common Stock, Parent Class A Common Stock, Parent Preferred Stock or any capital stock of Parent that any Subsidiary of Parent. The execution and delivery of the Transaction Agreements do not, and the consummation of the transactions contemplated hereby and thereby and the compliance with the provisions hereof and thereof will limit not, except as set forth in such Transaction Agreements, give rise to any way the solicitation preemptive right or antidilutive right of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent any Person with respect to the Merger. There are no restrictions on any shares of Parent to vote the Common Stock, Parent Class A Common Stock, Parent Preferred Stock or any capital stock of any Subsidiary of its SubsidiariesParent. As Each outstanding share of the date hereof, the authorized capital stock or other equity interests of Merger Sub consists each Subsidiary of 1,000 shares of common stockParent is duly authorized, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and paid, nonassessable and are free of preemptive rights, and each such share is owned by Parent or another Subsidiary of Parent, free and the balance clear of which are not issued or outstandingall security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever.

Capital Structure. As of the date hereof, the authorized capital stock of Parent IGL consists of 200,000,000 of: 250,000,000 shares of Parent IGL Common Stock and 25,000,000 12,000,000 shares of preferred stockSeries Preferred Stock, $1.00 par value $.01 per share(the "IGL Preferred Stock"), of Parent which 3,000,000 shares have been designated as "Junior Participating Preferred Stock, Series C" (the "Parent IGL Series C Preferred Stock"). At the close of business on October 22June 30, 1999 (i) 44,958,240 1997, approximately 93,600,000 shares of Parent IGL Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 all of which were validly issued, are fully paid and 825,000 nonassessable and are free of preemptive rights. No shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent IGL Preferred Stock were have been issued, and there has been no increase of more than 1% in the number of issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are IGL Common Stock between June 30 and the date hereof. All of the shares of IGL Common Stock issuable in exchange for FTX Common Shares at the Effective Time in accordance with this Agreement will be, when so issued, duly authorized, validly issued, fully paid and nonassessable and not subject to free of preemptive rights. Except as set forth on Schedule 3.2(b)(i) If and when the Warrants are exercised for IGL Common Stock in accordance with the terms of the Parent Disclosure ScheduleIGL Warrants, all such shares of IGL Common Stock issued upon such exercise will be duly authorized, validly issued, fully paid and non-assessable, and the holders of outstanding shares of capital stock of IGL are not entitled to any preemptive or other rights with respect to the Subsidiaries of Parent are owned by Parent IGL Warrants or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any naturethe IGL Common Stock issuable upon such exercise. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) As of the Parent Disclosure Schedule and date of this Agreement, except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, except for the rights ("IGL Rights") to purchase shares of IGL Series C Preferred Stock pursuant to the Rights Agreement (the "IGL Rights Agreement") dated June 21, 1989 between IGL and the First National Bank of Chicago, as Rights Agent, as amended, and except for stock options covering not in excess of 4,637,788 shares of IGL Common Stock (collectively, the "IGL Stock Options"), there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent IGL or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent IGL or any Subsidiary of Parent 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 of IGL or any Voting Debt or other voting securities of Parent or of any such Subsidiary of Parent, or obligating Parent IGL or any such Subsidiary of Parent to grant, extend or enter into any such option, warrant, call, right, commitment right or agreement. Except as contemplated by this Agreement, there are not as Each outstanding share 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation each Subsidiary of proxies by or on behalf of Parent fromIGL is duly authorized, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and, except as disclosed in the IGL SEC Documents or the IGL Letter, each such share, and are all of the equity interests in the IMC-Agrico Entities described in the IGL SEC Documents as being owned by Parent IGL, are beneficially owned by IGL or another Subsidiary of IGL, free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever. As of the balance date of which its filing, Exhibit 21.1 to IGL's Annual Report on Form 10-K for the year ended June 30, 1996, as filed with the United States Securities and Exchange Commission (the "SEC") (the "IGL Annual Report"), is a true, accurate and correct statement in all material respects of all of the information required to be set forth therein by the regulations of the SEC. Pursuant to the IGL Rights Agreement, all shares of IGL Common Stock are not issued or outstandingwith Rights attached thereto.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 1,250,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stock, without par value $.01 per share(together with the Parent Common Stock, of Parent (the "Parent Preferred Capital Stock"). At the close of business on October 22November 18, 1999 1998, (i) 44,958,240 254,359,353 shares of Parent Common Stock and 803,346.643 shares of Series B ESOP Convertible Preferred Stock of Parent were issued and outstanding, (ii) 15,900 shares of Parent Common Stock were issued and outstanding; held by Parent in its treasury, (iiiii) 4,603,500as of October 30, 40,000 and 825,000 1998, 7,431,499 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Planoutstanding options to purchase Parent Common Stock granted under Parent Stock Plans (as defined in Section 6.04), Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee (iv) 1,600,000 shares of Series A Junior Participating Preferred Stock Purchase Plan of Parent were reserved for issuance in connection with the rights (collectivelythe "Parent Rights") issued pursuant to the Rights Agreement dated as of February 14, 1990 (as amended from time to time, the "Parent Stock PlansRights Agreement"); , between Parent and ChaseMellon Shareholder Services, L.L.C., as Rights Agent and (iiiv) 3,667,653 72,904 shares of Parent Common Stock were subject to remain reserved for issuance pursuant to outstanding awards under in connection with Parent's previous acquisitions of Xxx'x Incorporated and of Eckerd Corporation. Except as set forth above, at the Parent Stock Plans; (iv) close of business on November 18, 1998, no shares of capital stock or other voting securities of Parent Common Stock were held by issued, reserved for issuance or outstanding, and no securities of Parent in its treasury or by its wholly owned Subsidiaries; (v) no any Parent Subsidiary convertible into or exchangeable for, shares of capital stock, Voting Parent Preferred Debt (as defined below) or other voting securities of the Parent were issued, reserved for issuance or outstanding, reserved for issuance or outstanding. There are no outstanding Parent SARs (as defined in Section 6.04) that were not granted in tandem with a related Parent Employee Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingOption. All outstanding shares of Parent capital stock are Capital Stock are, and all such shares that may be issued prior to the Effective Time or pursuant to this Agreement 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 rightsright, subscription right or any similar right under any provision of the DGCL, the Parent Charter, the Parent Bylaws or any Contract to which Parent is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Parent Common Stock may vote ("Voting Parent Debt"). Except as set forth on Schedule 3.2(b)(i) above, as of the Parent Disclosure Schedule, all outstanding shares date of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or not any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments convertible or agreements exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Parent or any Parent Subsidiary of Parent is a party or by which it any of them is bound in any case (i) obligating Parent or any Parent Subsidiary of Parent to issue, deliver, deliver or sell, purchase, redeem or acquire, acquire or cause to be issued, delivered, delivered or sold, or purchased, redeemed or acquired, acquired additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Parent or any Voting Parent Debt or other voting securities of Parent or of any Subsidiary of Parent, or (ii) obligating Parent or any Parent Subsidiary of Parent to issue, grant, extend or enter into any such option, warrant, call, right, commitment security, commitment, Contract, arrangement or agreementundertaking. Except as contemplated by As of the date of this Agreement, there are not as any outstanding contractual obligations of the date hereof and there will not be at the Effective Time Parent or any stockholder agreementsParent Subsidiary to repur chase, voting trusts redeem or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of Parent. Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect has made available to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As Company a complete and correct copy of the Parent Rights Agreement as amended to the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingthis Agreement.

Capital Structure. (a) As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 280,000,000 shares of capital stock, which have been classified as 250,000,000 shares of Parent Common Stock and 25,000,000 30,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22May 20, 1999 2023, (i) 44,958,240 103,880,021 Parent Common Shares were issued and outstanding, (ii) 6,799,467 shares of Parent Common Series A Preferred Stock were issued and outstanding; , (iiiii) 4,603,5004,695,887 shares of Parent Series B Preferred Stock were issued and outstanding, 40,000 and 825,000 (iv) 359,840 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive awards outstanding under the Parent 2021 Equity Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iiiv) 3,667,653 2,500,000 shares of Parent Common Stock were subject to reserved for issuance upon a conversion of awards of LTIP Units pursuant to outstanding awards under the Parent Stock Plans; 2021 OPP and (ivvi) there are no shares of Parent Common Stock were held by reserved for issuance upon conversion of Parent in its treasury or by its wholly owned Subsidiaries; Partnership Units. One hundred thousand (v100,000) no shares of Parent Preferred Stock were are designated as Parent Series C Preferred Stock, none of which is outstanding, and which are reserved for issuance in accordance with the stockholder rights plan adopted pursuant to the Parent Rights Agreement (the “Parent Rights Plan”). All issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of the beneficial interests of Parent capital stock are are, and all Parent Common Shares reserved for issuance as noted above, shall be, when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable non-assessable and not subject free of preemptive rights, and all Parent Common Shares and Parent Preferred Shares to be issued to Parent Operating Partnership and provided by Parent Operating Partnership as the REIT Common Merger Consideration or the REIT Preferred Merger Consideration, when so issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure ScheduleThere are no outstanding bonds, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parentdebentures, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt notes or other voting securities of Parent; (ii) no securities indebtedness of Parent or any Parent Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which holders of Parent convertible into or exchangeable for shares of capital stock, Voting Debt Common Shares or other voting securities equity holders of such Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingmay vote.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 100,000,000 shares of Parent Common Stock, of which 13,620,292 shares were issued and outstanding as of October 29, 2003, and 4,500,000 shares of Preferred Stock, $.01 par value, none of which is issued or outstanding. The authorized capital stock of Merger Sub consists of 3,000 shares of Common Stock, $.01 par value, 100 shares of which, as of the date hereof, are issued and outstanding and are held by Parent. All such shares have been duly authorized, and all such issued and outstanding shares have been validly issued, are fully paid and nonassessable, and are free of any liens or encumbrances other than any liens or encumbrances created by or imposed upon the holders thereof. As of October 29, 2003, Parent had reserved 1,464,525 shares of Parent Common Stock and 25,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22, 1999 (i) 44,958,240 shares of Parent Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive 1986 Stock Plan, Parent's Nonemployee Director's Compensation 1987 Stock Plan, 1996 Stock Plan, 1997 Stock Plan, 1999 Stock Plan, 2001 Nonqualified Stock Option Plan, and Deferral Plan and Parent's Employee 2002 Stock Purchase Incentive Plan (collectively, the "Parent Stock PlansOption Plan"); (iii) 3,667,653 , under which options were outstanding for 832,445 shares, and 395,715 shares of Parent Common Stock were subject to for issuance pursuant to upon the exercise of outstanding awards under the warrants (which as of October 29, 2003 are outstanding for an aggregate of 395,715 shares of Parent Stock Plans; (iv) no Common Stock). All shares of Parent Common Stock were held by subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid, and nonassessable. Since August 1, 2003, there have been no amendments of any Parent stock options or warrants and no changes in its treasury or by its wholly owned Subsidiaries; (v) no shares the capital structure of Parent Preferred other than issuances of Parent Common Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingupon the exercise of options granted under the Parent Stock Option Plan or the exercise of outstanding warrants. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject Common Stock that were issued pursuant to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, under the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound Option Plan were validly issued in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 transactions either exempt from the registration requirements of the date hereof Securities Act or pursuant to registration statements filed under the Securities Act and there will not be at the Effective Time in accordance with any stockholder agreements, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingapplicable state securities laws.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of Parent JSB consists of 200,000,000 65,000,000 shares of Parent JSB Common Stock and 25,000,000 15,000,000 shares of preferred stock, par value $.01 per share, of Parent share ("Parent JSB Preferred Stock"). At As of the close date of business on October 22, 1999 this Agreement: (iA) 44,958,240 9,286,897 shares of Parent JSB Common Stock were issued and outstanding; , (iiB) 4,603,500, 40,000 and 825,000 no shares of Parent JSB Preferred Stock were issued and outstanding, (C) no shares of JSB Common Stock were reserved for issuance, except that 952,676 shares of JSB Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Planthe JSB Option Plans, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectivelywhich includes 810,676 shares reserved for issuance upon the exercise of options that have already been granted under the JSB Option Plans, plus 142,000 shares reserved for issuance upon the "Parent Stock Plans"); (iii) 3,667,653 shares exercise of Parent Common Stock were subject to issuance options that will be automatically granted pursuant to outstanding awards under the Parent Stock Plans; terms of the JSB 1996 Option Plan as a result of the execution of this Agreement, (ivD) no shares of Parent JSB Preferred Stock were reserved for issuance and (E) 6,713,103 shares of JSB Common Stock were held by Parent JSB in its treasury or by its wholly owned Subsidiaries; (v) . The authorized capital stock of JSB Bank consists of 40,000,000 shares of common stock, par value $1.00 per share, and 20,000,000 shares of preferred stock, par value $1.00 per share. As of the date of this Agreement, 1,000 shares of such common stock were outstanding, no shares of Parent Preferred Stock such preferred stock were issued outstanding and outstanding; all outstanding shares of such common stock were, and (vi) no Voting Debt was issued and outstandingas of the Effective Time will be, owned by JSB. All outstanding shares of Parent capital stock of JSB and JSB Bank are duly authorized and validly issued, fully paid and nonassessable and not subject to any preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedulerights and, all outstanding with respect to shares of capital stock of the Subsidiaries of Parent held by JSB in its treasury or by its Subsidiaries, are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all claims, liens, charges, encumbrances, claims encumbrances or restrictions (other than those imposed by applicable federal or state securities laws) and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock voting or disposition of any such shares. JSB's Disclosure Letter sets forth a complete and accurate list of its Subsidiaries. As all outstanding options to purchase JSB Common Stock that have been granted pursuant to the JSB Option Plans, including the dates of grant, exercise prices, dates of vesting, dates of termination and shares subject to each grant, and all options to purchase JSB Common Stock that will be automatically granted as a result of the date hereof, the authorized capital stock execution of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingthis Agreement.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent CSLC consists of 200,000,000 65,000,000 shares of Parent CSLC Common Stock Stock, $.01 par value, and 25,000,000 15,000,000 shares of preferred stock, $.01 par value $.01 per share, of Parent (the "Parent CSLC Preferred Stock"). At the close of business on October 22the date hereof, 1999 (i) 44,958,240 19,717,347 shares of Parent CSLC Common Stock and no shares of CSLC Preferred Stock, respectively, were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth provided in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, pursuant to the 1997 Omnibus Stock and Incentive Plan for Capital Senior Living Corporation (the "CSLC Stock Option Plan") and the Exhibits hereto, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent CSLC or any Subsidiary of Parent its Subsidiaries is a party or by which it is bound in any case obligating Parent CSLC or any Subsidiary of Parent 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 debt securities of Parent CSLC or of any Subsidiary of ParentCSLC, or obligating Parent CSLC or any Subsidiary of Parent CSLC to grant, extend or enter into any such option, warrant, call, right, commitment right or agreement. Except All outstanding shares of CSLC Common Stock are, and the Convertible Securities to be issued pursuant to or as specifically contemplated by this AgreementAgreement and the Merger, there are not as will be, duly authorized, validly issued, fully paid and nonassessable. All of the date hereof limited liability member interests of Sub have been duly authorized and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent CSLC. The aggregate authorized beneficial interests of the Trust consists of 100 shares of common equity securities, each having a stated liquidation amount of $25, all of which have been duly authorized and are validly issued, fully paid and non-assessable and owned by CSLC, and 2,380,000 shares of Convertible Securities, all of which have been duly authorized for issuance and, when issued in the Merger and the balance of which are not issued or outstanding"ILM II Merger" (as hereinafter defined), shall be validly issued, fully paid and non-assessable.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 1,500,000,000 shares of Parent Common Stock and 25,000,000 10,000,000 shares of preferred stock, par value $.01 0.001 per share, of Parent share ("Parent Preferred Stock"). At the close of business on October 22September 30, 1999 2003, (i) 44,958,240 589,645,080 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; treasury, (viii) 137,986,873 shares of Parent Common Stock were reserved for issuance pursuant to the 2002 Stock Incentive Plan, as amended, the 1987 Supplemental Stock Option Plan and the 1993 Qualified Employee Stock Purchase Plan, as amended (collectively, the "Parent Stock Plans") (of which 85,925,216 shares of Parent Common Stock were subject to outstanding options to purchase shares of Parent Common Stock granted under the Parent Stock Plans ) and (iv) no shares of Parent Preferred Stock were issued and or outstanding; and (vi) . Except as set forth above in this Section 4.02(a), at the close of business on September 30, 2003, no Voting Debt was issued and shares of capital stock or other voting securities of the Parent were issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Parent are, and all shares which may be issued (including shares of Parent Common Stock to be issued in accordance with this Agreement) will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth above in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement4.02(a), there are outstanding: (i) no shares of capital stockbonds, Voting Debt debentures, notes or other voting securities of Parent; (ii) no securities indebtedness of Parent having the right to vote (or any Subsidiary of Parent convertible into into, or exchangeable for shares of capital stockfor, Voting Debt or other voting securities of Parent or having the right to vote) on any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to matters on which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingmay vote.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists of 200,000,000 shares of Parent Common Stock and 25,000,000 shares 10,000,000 shares, without par value, of preferred stock, par value $.01 per shareof which 6,745,347 shares have been designated as Convertible Preferred Stock, of Parent Series D ("Parent Series D Preferred Stock"). Parent has issued rights to purchase shares of Parent Common Stock (the "Parent Rights") that were issued pursuant to the Renewed Rights Agreement dated as of September 25, 1997 (as amended from time to time, the "Parent Rights Agreement"), between Parent and First Chicago Trust Company of New York. At the close of business on October 22June 30, 1999 2003: (i) 44,958,240 58,313,553 shares of Parent Common Stock and 4,146,255 shares of Parent Series D Preferred Stock were issued outstanding, all of which were validly issued, fully paid and outstandingnonassessable; (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury treasury; (iii) 3,331,806 shares of Parent Common Stock were issuable upon the conversion or by its wholly owned Subsidiariesredemption of the Parent Series D Preferred Stock; (iv) 5,412,710 shares of Parent Common Stock were issuable upon the exercise of the purchase contracts which form a part of Parent's Adjustable Conversion-Rate Equity Security Units ("Parent Units"); and (v) 8,934,167 shares of Parent Common Stock were issuable upon the exercise of outstanding employee or director stock options (the "Parent Employee Stock Options") that were granted pursuant to any stock plan, program or arrangement of Parent or any Parent Subsidiary (the "Parent Employee Stock Plans"). Except as set forth above, at the close of business on June 30, 2003, no shares of capital stock or other voting securities of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and issued, reserved for issuance or outstanding. Other than the Parent Units, there are no bonds, debentures, notes or other indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of Parent must vote. Except as set forth above, as of the date of this Agreement there are not any Options to which Parent or any Parent Subsidiary is a party or by which any of them is bound relating to the issued or unissued capital stock of Parent or any Parent Subsidiary, or obligating Parent or any Parent Subsidiary to issue, transfer, grant or sell any shares of capital stock or other equity interests in, or securities convertible or exchangeable for any capital stock or other equity interests in, Parent or any Parent Subsidiary or obligating Parent or any Parent Subsidiary to issue, grant, extend or enter into any such Options. All outstanding shares of Parent capital stock Common Stock that are subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. All shares of Parent Common Stock that are subject to issuance pursuant to the Merger, upon issuance pursuant to this Agreement, will be duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) As of the Parent Disclosure Schedule, all outstanding shares date of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 any outstanding contractual obligations of the date hereof and there will not be at the Effective Time Parent or any stockholder agreementsParent Subsidiary to repurchase, voting trusts redeem or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of Parent that will limit or any Parent Subsidiary, or make any material investment (in the form of a loan, capital contribution or otherwise) in any way the solicitation of proxies by or on behalf of person other than a Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its SubsidiariesSubsidiary. As of the date hereofof this Agreement, the authorized capital stock shares of Merger Sub consists consist of 1,000 shares of common stockshares, without par value $.01 per sharevalue, 1,000 shares all of which are have been validly issued, are fully paid and nonassessable and are owned by Parent free and the balance clear of which are not issued or outstandingany Lien.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 350,000,000 shares of Parent Common Stock and 25,000,000 20,000,000 shares of preferred stock, par value $.01 0.01 per share, of Parent share ("“Parent Preferred Stock"”). At the close of business on October 22December 28, 1999 2018, (i) 44,958,240 202,345,501 shares of Parent Common Stock were issued and outstanding; outstanding (including the restricted shares of Parent Common Stock set forth in Section 4.3(a) of the Parent Disclosure Letter (the “Parent Restricted Shares”)), (ii) 4,603,500no shares of Parent Preferred Stock were issued and outstanding, 40,000 and 825,000 (iii) no shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation outstanding Parent Options and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iiiiv) 3,667,653 8,155,298 shares of Parent Common Stock were subject to reserved for issuance pursuant to outstanding awards under the terms of the Parent Stock Equity Incentive Plans; (iv) no , including 3,229,000 shares of Parent Common Stock issuable pursuant to outstanding restricted stock unit awards and performance restricted stock unit awards granted pursuant to the Parent Equity Incentive Plans. Equity-based awards with an aggregate value of $16,606,000 were held by granted effective as of January 1, 2019, to be converted into a number of restricted stock unit awards under the Parent Equity Incentive Plans and a number of LTIP Units (as defined in its treasury or by its wholly owned Subsidiaries; (vthe Parent Operating Partnership Agreement) no shares based in each case on a valuation of Parent Preferred Stock were the units, consistent with the Ordinary Course of Business of Parent. All issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock Common Stock are duly authorized, validly issued, fully paid and nonassessable non-assessable, and not subject no class of capital stock is entitled to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on outstanding bonds, debentures, notes or other Indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the stock right to vote) on any matter on which holders of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingCommon Stock may vote.

Capital Structure. (a) As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 120,000,000 shares of Parent Common Stock (the “Parent Stock”) and 25,000,000 shares 30,000,000 of preferred excess stock, par value $.01 0.001 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22September 3, 1999 2013, (i) 44,958,240 68,571,617 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issuedtreasury, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no 471,034 shares of Parent Common Stock were reserved for issuance under Parent’s Distribution Reinvestment and Stock Purchase Plan, 911,610 shares of Parent Common Stock were reserved for future issuance or grant under the Parent Benefit Plans, 1,850,000 shares of Parent Common Stock were reserved for issuance upon exercise of outstanding options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary and 535,751 shares of Parent is a party Common Stock were reserved for conversion or by which it is bound in any case obligating settlement of outstanding stock units under the Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent to grant, extend or enter into any such option, warrant, call, right, commitment or agreementBenefit Plans. Except as contemplated by this Agreement, there are not as of the date hereof All issued and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of any outstanding shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf are, and all shares of Parent fromCommon Stock reserved for issuance as noted above, or shall be, when issued in accordance with the casting of votes byrespective terms thereof, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereofduly authorized, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable non-assessable and free of preemptive rights, and all shares of Parent Common Stock to be issued as the Merger Consideration or as Stock Award Payments, when so issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid, non-assessable and free of preemptive rights. There are owned by no outstanding bonds, debentures, notes or other indebtedness of Parent and or any Parent Subsidiary having the balance right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which holders of which are not issued shares of Parent Common Stock or outstandingother equity holders of such Parent Subsidiary may vote.

Capital Structure. (a) As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 shares of 50,000,000 Parent Common Stock Shares and 25,000,000 250,000 shares of preferred stock, no par value $.01 per share, of Parent ("the “Parent Preferred Stock"”), of which 50,000 shares have been designated as Series A Junior Participating Preferred Stock. At the close of business on October 22November 9, 1999 2009, (i) 44,958,240 shares of 13,688,740 Parent Common Stock Shares were issued and outstanding, all of which were validly issued, fully paid, nonassessable and free of preemptive rights; (ii) 4,603,500, 40,000 and 825,000 shares no Parent Shares were held in the treasury of Parent Common Stock or by Subsidiaries of Parent; (iii) 246,336 Parent Shares were reserved for issuance pursuant to outstanding options, warrants or other rights to purchase or otherwise acquire Parent Shares under Parent's 1998 Incentive Plan’s plans or other arrangements or pursuant to any plans or arrangements assumed by Parent in connection with any acquisition, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan business combination or similar transaction (collectively, the "“Parent Stock Plans"”); (iii) 3,667,653 shares . Between November 9, 2009 and the date of this Agreement, except as set forth herein and except for the issuance of Parent Common Stock were subject to issuance Shares pursuant to outstanding awards under the Parent Stock Plans; (iv) , no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent were issued, reserved for issuance or any Subsidiary outstanding. Parent has 50,000 shares of Parent Preferred Stock reserved for issuance pursuant to the Rights Agreement, dated as of March 19, 2008, between the Company and National City Bank (the “Parent Rights Agreement”) providing for rights to acquire shares of Parent; ’s Series A Junior Participating Preferred Stock (the “Parent Rights”). All of the Parent Shares issuable upon conversion of Company Common Stock at the Effective Time in accordance with this Agreement will be, when so issued, duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. As of the date of this Agreement, except for (i) this Agreement and (iiiii) as set forth above, there are no options, warrants, calls, rights rights, puts or Contracts (including preemptive rights), commitments or agreements as hereinafter defined) to which Parent or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent or any Subsidiary of Parent its Subsidiaries to issue, deliver, sell, purchase, redeem or otherwise acquire, or cause to be issued, delivered, sold, purchased, redeemed or otherwise acquired, any additional shares of capital stock or any Voting Debt (or other voting securities or equity equivalents) of Parent or any of any Subsidiary of Parent, its Subsidiaries or obligating Parent or any Subsidiary of Parent its Subsidiaries to grant, extend or enter into any such option, warrant, call, right, commitment put 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its SubsidiariesContract. As of the date hereofof this Agreement, Parent does not have any outstanding bonds, debentures, notes or other obligations the authorized holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matter. There are no Contracts to which Parent, its Subsidiaries or any of their respective officers or directors is a party concerning the voting of any capital stock of Merger Sub consists Parent or any of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingits Subsidiaries.

Capital Structure. (a) The authorized share capital of Aphria consists of an unlimited number of Aphria Shares. As of the date hereofDecember 15, the authorized capital stock of Parent consists of 200,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stock2020, par value $.01 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22, 1999 (i) 44,958,240 shares of Parent Common Stock 316,745,571 Aphria Shares were issued and outstanding; outstanding (excluding all Aphria Shares issued pursuant to the Aphria Convertible Senior Notes after the date of this Agreement but including Aphria Shares subsumed within units), (ii) 4,603,500no Aphria Shares are held in Aphria’s treasury or by any of the Aphria Subsidiaries, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock 9,316,809 Aphria Shares were subject to issuance issuable pursuant to outstanding awards granted under the Parent Stock Aphria Benefit Plans; , of which, 3,732,875 shares were issuable in respect of Aphria RSUs, assuming, as applicable, a target level of achievement under performance awards, 5,237,218 shares were issuable in respect of Aphria Options and 346,716 shares were issuable in respect of Aphria DSUs, (iv) no shares 7,022,472 2020 Aphria Warrants (including warrants subsumed within units) exercisable for an aggregate of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; 7,022,472 Aphria Shares at an exercise price of $9.26 per one Aphria Share and (v) no shares 200,000 2016 Aphria Warrants exercisable for an aggregate of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding200,000 Aphria Shares at an exercise price of $3.14 per one Aphria Share. All of the outstanding shares share capital of Parent capital stock Aphria has been duly authorized and validly issued, and are fully paid and nonassessable and are not subject to any preemptive right, and all Aphria Shares which may be issued pursuant to the exercise or vesting of Aphria RSUs will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to any preemptive rightsright. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth described in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement(2)(a), there are outstanding: (i) no shares of capital stock, Voting Debt is not any phantom equity or other voting securities contractual rights the value of Parent; (ii) no securities of Parent which is determined in whole or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or in part by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or the value of any Subsidiary share capital of ParentAphria, or obligating Parent or any Subsidiary of Parent to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, and 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent no outstanding share appreciation rights with respect to the Mergershares of Aphria. There Other than Aphria Shares, there are no restrictions on Parent to vote the stock other authorized classes of any share capital of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingAphria.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of Parent consists of 200,000,000 shares of 1,000,000,000 Parent Common Stock Shares and 25,000,000 30,000,000 shares of preferred stock, par value $.01 per share, of Parent 0.01 ("“Parent Preferred Stock"”). At As of the close of business on October 22April 26, 1999 2018, (iA) 44,958,240 shares of 461,878,776 Parent Common Stock Shares were issued and outstanding (not including Parent Shares held in treasury), (B) 272,926,451 Parent Shares were held in treasury, (C) no Parent Preferred Stock was issued or outstanding; , (iiD) 4,603,5008,677,876 Parent Shares were issuable upon the exercise of outstanding options to purchase Parent Shares, 40,000 and 825,000 shares (E) 294,898 Parent Shares were subject to outstanding restricted stock units in respect of Parent Common Stock Shares, (F) 207,852 Parent Shares were subject to outstanding performance units in respect of Parent Shares based on the closing price of Parent Shares on April 26, 2018 and assuming maximum performance, (G) 40,028,071 Parent Shares were reserved for issuance pursuant to Parent's 1998 under the Amended and Restated Marathon Petroleum Corporation 2012 Incentive Compensation Plan, Parent's Nonemployee Director's Compensation and Deferral 39,151,187 Parent Shares were reserved for issuance under the Marathon Petroleum Thrift Plan and Parent's Employee 5,505,409 Parent Shares were reserved for issuance under the Marathon Petroleum Corporation Dividend Reinvestment and Direct Stock Purchase Plan (collectively, the "“Parent Stock Plans"); ”) and (iiiH) 3,667,653 no other shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under capital stock or other voting securities of the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury issued, reserved for issuance or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are Shares are, and all Parent Shares reserved for issuance in accordance with the Parent Stock Plan, when issued upon exercise thereof or in accordance with the respective terms thereof, will be, duly authorized, validly issued, fully paid and nonassessable non-assessable, free and not subject to preemptive rightsclear of any Lien. Except as set forth on Schedule 3.2(b)(i) Each of the Parent Disclosure Schedule, all outstanding shares of capital stock or other securities of the each of Parent’s Significant Subsidiaries of Parent are (other than MPLX) is duly authorized, validly issued, fully paid and non-assessable and owned by Parent or by a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any natureLiens. Except as set forth above in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule 5.1(b)(i), and except for changes since October 22, 1999 resulting from after the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreementdate hereof in compliance with Section 6.1(b), there are outstanding: no (i1) no shares of capital stock, Voting Debt stock or other voting securities of of, or ownership interests in, Parent; , (ii2) no securities of Parent or any Subsidiary of Parent its Subsidiaries convertible into or exchangeable or exercisable for, or giving any Person a right to subscribe for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered, sold, purchased, redeemed or acquired, additional any shares of capital stock or other securities of or ownership interests in Parent or any Voting Debt Subsidiary, (3) preemptive or other voting outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that (x) give any Person the right to purchase, subscribe for or acquire from Parent or any Parent Subsidiary, or (y) obligate Parent or any of its Subsidiaries to issue or sell, any capital stock, securities of, or ownership interests in, or securities convertible into or exchangeable or exercisable for capital stock or securities of, or ownership interests in, Parent or any Parent Subsidiary, or (4) obligations of Parent or of any Parent Subsidiary of Parentto repurchase, redeem or otherwise acquire any capital stock or securities of, or obligating ownership interests in, or any securities convertible into or exchangeable or exercisable for any capital stock or securities of, or ownership interests in, Parent or any Subsidiary Parent Subsidiary. Neither Parent nor MPLX has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of Parent to grant, extend or enter into the unitholders of MPLX on any such option, warrant, call, right, commitment or agreementmatter. 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 stockholder agreements, no voting trusts or other agreements or understandings to which Parent or any Parent Subsidiary is a party or by which it is bound relating with respect to the voting of any shares or restricting the transfer of the capital stock or other equity interests of Parent that will limit in or any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingSubsidiary.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent JPFI consists of 200,000,000 75,000,000 shares of Parent JPFI Common Stock and 25,000,000 5,000,000 shares of preferred stock, par value $.01 per share, of Parent share ("Parent JPFI Preferred Stock"). At the close of business on October 22June 24, 1999 1997: (i) 44,958,240 22,588,688.61 shares of Parent JPFI Common Stock were is- sued and outstanding (including shares of restricted JPFI Com- mon Stock); (ii) no shares of JPFI Common Stock were held by JPFI in its treasury; (iii) no shares of JPFI Preferred Stock were issued and outstanding; (iiiv) 4,603,500, 40,000 and 825,000 4,264,329 shares of Parent Common JPFI Com- mon Stock were reserved for issuance pursuant to Parent's 1998 all stock op- tion, restricted stock or other stock-based compensation, ben- efits or savings plans, agreements or arrangements in which current or former employees or directors of JPFI or its subsid- iaries participate as of the date hereof, including, without limitation, the JPFI 1994 Stock Incentive Plan, Parent's Nonemployee Director's Compensation the JPFI Stock Option Plan for Outside Directors and Deferral Plan and Parent's the JPFI 1994 Employee Stock Purchase Plan Plan, complete and correct copies of which, in each case as amended as of the date hereof, have been filed with the JPFI Filed SEC Documents or delivered to RSI (such plans, collectively, the "Parent JPFI Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; and (v) no 350,000 shares of Parent JPFI Preferred Stock were reserved for issuance upon exercise of preferred share purchase rights issued pursuant to the Rights Agreement, dated as of February 19, 1996, between JPFI and outstanding; The Bank of New York, as rights agent (the "JPFI Rights Agreement"). Section 3.2(c) of the JPFI Disclosure Schedule sets forth a complete and correct list, as of June 24, 1997, of the number of shares of JPFI Common Stock subject to employee stock options or other rights to purchase or receive JPFI Common Stock granted under the JPFI Stock Plans (vi) no Voting Debt was issued col- lectively, "JPFI Employee Stock Options"), the dates of grant and outstandingexercise prices thereof. All outstanding shares of Parent capital stock are of JPFI are, and all shares which may be issued pursuant to this Agreement or otherwise will be, when issued, duly au- thorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule Sec- tion 3.2(c), and except for changes since October 22June 24, 1999 resulting 1997 re- sulting from the exercise issuance of employee stock options granted pursuant to, or from issuances or purchases under, shares of JPFI Common Stock pur- suant to the Parent JPFI Employee Stock Plans Options or as contemplated expressly per- mitted by this Agreement, (x) there are outstanding: not issued, reserved for issuance or outstanding (iA) no any shares of capital stock, Voting Debt stock or other voting securities of Parent; JPFI, (iiB) no any securities of Parent JPFI or any Subsidiary of Parent JPFI subsidiary convertible into or exchangeable or exer- cisable for shares of capital stock, Voting Debt stock or other voting securities of Parent or JPFI, (C) any Subsidiary of Parent; and (iii) no options, warrants, calls, options or other rights (including preemptive rights), commitments or agreements to which Parent ac- quire from JPFI or any Subsidiary JPFI subsidiary, and any obligation of Parent is a party or by which it is bound in any case obligating Parent JPFI or any Subsidiary of Parent JPFI subsidiary to issue, deliverany capital stock, sellvoting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of JPFI, purchaseand (y) there are no outstanding obligations of JPFI or any JPFI subsidiary 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 any such securities. There are no outstand- ing (A) securities of JPFI or acquired, additional any JPFI subsidiary convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities or ownership interests in any JPFI subsidiary, (B) warrants, calls, options or other rights to acquire from JPFI or any JPFI subsidiary, and any obligation of Parent JPFI or of any Subsidiary of ParentJPFI subsidiary to issue, any capital stock, voting securities or other ownership interests in, or obligating Parent any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any JPFI subsidiary or (C) obligations of JPFI or any Subsidiary of Parent JPFI subsidiary to grantrepurchase, extend redeem or enter into otherwise acquire any such optionoutstanding securities of JPFI subsidiaries or to issue, warrantdeliver or sell, callor cause to be issued, rightdelivered or sold, commitment or agreementany such securities. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time Neither JPFI nor any stockholder agreements, voting trusts or other agreements or understandings to which Parent JPFI subsidiary is a party to any agree- ment restricting the purchase or by which it is bound transfer of, relating to the voting of of, requiring registration of, or granting any shares preemp- tive or, except as provided by the terms of the capital stock JPFI Employee Stock Options, antidilutive rights with respect to, any securi- ties of Parent that will limit the type referred to in the two preceding sentences. Other than the JPFI subsidiaries, JPFI does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any way other entity except for non- controlling investments made in the solicitation ordinary course of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of business in entities which are not issued individually or outstandingin the aggregate ma- terial to JPFI and its subsidiaries as a whole.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 140,000,000 shares of Parent Common Stock and 25,000,000 10,000,000 shares of preferred stock, par value $.01 0.01 per share, of Parent share ("“Parent Preferred Stock"”). At the close of business on October 22July 15, 1999 2005, (i) 44,958,240 71,901,863 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 1,219,807 shares of Parent Common Stock were reserved for issuance (including shares underlying outstanding stock options and shares available for future grant) pursuant to Parent's 1998 the 1994 Stock Incentive Plan, Parent's 1997 Stock Incentive Plan, as amended, 1993 Nonemployee Director's Director Stock Option Plan, Deferred Compensation Plan for Nonemployee Directors, 1999 Nonemployee Director Stock Option Plan, as amended, Amended and Deferral Plan and Parent's Restated Employee Stock Purchase Plan (collectively, the "“Parent Stock Plans"”); , (iii) 3,667,653 8,269,946 shares of Parent Common Stock were subject to reserved for issuance pursuant to outstanding awards under upon conversion of the Parent Stock Plans; Senior Subordinated Convertible Notes due 2024 and (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and or outstanding; and (vi) . Except as set forth above in this Section 4.02(a), at the close of business on July 15, 2005, no Voting Debt was issued and shares of capital stock or other voting securities of Parent were issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Parent are, and all shares which may be issued (including shares of Parent Common Stock to be issued in accordance with this Agreement) will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of for the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this AgreementSenior Subordinated Convertible Notes due 2024, there are outstanding: (i) no shares of capital stockbonds, Voting Debt debentures, notes or other voting securities of Parent; (ii) no securities indebtedness of Parent having the right to vote (or any Subsidiary of Parent convertible into into, or exchangeable for shares of capital stockfor, Voting Debt or other voting securities of Parent or having the right to vote) on any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to matters on which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingmay vote.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 375,000,000 shares of the common stock of Parent, par value $0.001 per share, of which 217,500,000 shares are designated as “Class A Common Stock” and 157,500,000 shares are designated as “Class B Common Stock,” and 10,042,490 shares of Parent Preferred Stock. As of October 2, 2006, 52,033,287 shares of Parent’s “Class A Common Stock,” 17,173,166 shares of Parent’s “Class B Common Stock” and 10 Merger Sub Units were outstanding. All shares of Parent Capital Stock and all Merger Sub Units have been duly authorized, and all issued and outstanding shares of Parent Capital Stock and Merger Sub Units have been validly issued and are fully paid and nonassessable. As of October 2, 2006, there was an aggregate of 288,801 shares of Parent Common Stock available for issuance to employees and 25,000,000 shares of preferred stockdirectors of, par value $.01 per share, of and consultants to Parent under Parent’s 2005 Stock Incentive Plan ("the “Parent Preferred Stock"Stock Plan”). At the close As of business on October 222, 1999 (i) 44,958,240 2006, 1,983,144 shares of Parent Common Stock were issuable upon the exercise of outstanding, unexercised, vested options, including options issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Plan, options issued under Parent’s 1996 Stock Incentive Plan and non-plan options. Except for the options exercisable for Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth described in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule 3.2(a), and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, those Contracts described in or from issuances or purchases under, filed as exhibits to the Parent Stock Plans or SEC Documents (as contemplated by this Agreementdefined in Section 3.4), as of the date hereof, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements Contracts to which Parent or any Subsidiary of Parent is a party party, or by which it is bound in any case bound, obligating Parent or any Subsidiary of Parent to issue, deliver, sell, purchase, redeem repurchase or acquireredeem, or cause to be issued, delivered, sold, purchasedrepurchased or redeemed, redeemed or acquired, additional any shares of capital stock or any Voting Debt or other voting securities of Parent or of any Subsidiary of Parent, Capital Stock and/or options exercisable for Parent Capital Stock or obligating Parent or any Subsidiary of Parent to grant, extend extend, accelerate the vesting and/or repurchase rights of, change the price of, or otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as All outstanding Parent securities and all outstanding Merger Sub securities were issued in compliance with all applicable federal and state securities laws. Parent directly owns 100% 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit outstanding membership interests in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingSub.

Capital Structure. As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 (a) 475,000,000 shares of Parent Common Stock and 25,000,000 (b) 10,000,000 shares of preferred stock, par value $.01 1.00 per share, of Parent share ("“Parent Preferred Stock"”). At the close of business on October 22May 13, 1999 2016: (i) 44,958,240 169,747,995 shares of Parent Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 which includes undistributed shares of Parent Common Stock were reserved held in the Parent’s Amended and Restated 2004 Deferred Compensation Plan for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation Directors and Deferral Plan Select Employees; and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (vii) no shares of Parent Preferred Stock were issued and outstanding; (iii) an aggregate of 5,135,291 shares of Parent Common Stock were available for future equity award grants pursuant to Parent’s Amended and Restated 2005 Equity-Based Incentive Compensation Plan (the “2005 Parent Plan”); and (viiv) there was no Voting Debt was issued Debt. As of May 13, 2016: (i) unvested equity awards (consisting of, restricted stock units and outstandingperformance share units) in the aggregate amount of 1,479,987 shares of Parent Common Stock were held by the Parent’s directors, officers and other employees pursuant to the 2005 Parent Plan; and (ii) 1,379,173 stock appreciation rights with a weighted average strike price of $64.79 were outstanding (such stock appreciation rights being anti-dilutive as of the date hereof). All outstanding shares of Parent capital stock Common Stock are validly issued, fully paid and non-assessable and are not subject to preemptive rights. The Parent Common Stock to be issued pursuant to this Agreement, when issued, will be validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as All outstanding shares of Parent Common Stock have been, and the Parent Common Stock to be issued pursuant to this Agreement, when issued, will be, issued and granted in compliance in all material respects with (i) applicable securities Laws and other applicable Law and (ii) all requirements set forth on Schedule 3.2(b)(i) in applicable contracts. As of the close of business on May 13, 2016, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from Parent Disclosure Scheduleor any of its Subsidiaries any capital stock of Parent or securities convertible into or exchangeable or exercisable for capital stock of Parent (and the exercise, all conversion, purchase, exchange or other similar price thereof). All outstanding shares of capital stock of the Subsidiaries of Parent that are owned by Parent Parent, or a direct or indirect wholly wholly-owned Subsidiary of Parent, are free and clear of all liensEncumbrances, charges, encumbrances, claims and options of any natureother than Permitted Encumbrances. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule 5.2, and except for changes since October 22, 1999 resulting from the exercise of employee stock options grants or other awards granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreementin accordance with Section 6.2(b)(ii), there are outstanding: (i1) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii2) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; , and (iii3) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Other than the Voting 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its SubsidiariesCompany. As of the date hereofof this Agreement, Parent has no (x) material joint venture or other similar material equity interests in any Person or (y) obligations, whether contingent or otherwise, to consummate any material additional investment in any Person other than its Subsidiaries and its joint ventures listed on Schedule 5.2 of the Parent Disclosure Letter. The authorized capital stock of Merger Sub consists of 1,000 100 shares of common stock, par value $.01 per share, 1,000 shares all of which shares are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingParent.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of Parent Conexant consists of 200,000,000 1,000,000,000 shares of Parent Common Stock Stock, par value $1.00 per share (the "Conexant Common Stock"), and 25,000,000 shares of preferred stock, without par value $.01 per share, of Parent (the "Parent Conexant Preferred Stock"). At the close of business on October 22, 1999 (i) 44,958,240 1,500,000 shares of Parent which are designated as "Series A Junior Participating Preferred Stock" and one share of which is designated as "Series B Voting Preferred Stock". As of November 30, 2001, (A) 254,423,819 shares of Conexant Common Stock and (B) one share of Conexant Preferred Stock designated as "Series B Voting Preferred Stock" were issued and outstanding and no other shares of capital stock of Conexant were issued and outstanding; (ii) 4,603,500. As of November 30, 40,000 and 825,000 2001, 84,082,811 shares of Parent Conexant Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent upon exercise of options outstanding under Conexant Stock Plans"); (iii) 3,667,653 shares . As of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) November 30, 2001, no shares of Parent Conexant Common Stock were held by Parent in its as treasury or by its wholly owned Subsidiaries; (v) shares. Since November 30, 2001 to the date of this Agreement, no shares of Parent Preferred capital stock of Conexant or any other securities of Conexant have been issued other than shares of Conexant Common Stock were (and accompanying Conexant Rights (as defined below)) issued pursuant to (w) the Conexant Systems, Inc. Retirement Savings Plan and the Conexant Systems, Inc. Hourly Employees Savings Plan, (x) options or rights outstanding as of November 30, 2001 under Conexant Stock Plans and (y) the exchange or retraction of Exchangeable Shares of Philsar Semiconductor Inc. All issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock of Conexant are duly authorized, validly issued, fully paid and nonassessable nonassessable, and not subject no class of capital stock of Conexant is entitled to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all There are outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 agreementsno options, voting trusts warrants or other agreements or understandings rights to which Parent is a party or by which it is bound relating acquire capital stock from Conexant other than (w) rights (the "Conexant Rights") distributed to the voting holders of any Conexant Common Stock pursuant to the Rights Agreement dated as of November 30, 1998, as amended as of December 9, 1999, between Conexant and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the "Conexant Rights Agreement"), (x) options and other rights to acquire Conexant Common Stock from Conexant ("Conexant Stock Options") representing in the aggregate the right to purchase 51,394,095 shares of Conexant Common Stock under the capital stock Conexant Stock Plans, (y) $94,849,000 aggregate principal amount of Parent that will limit in any way the solicitation Conexant's 4 1/4% Convertible Subordinated Notes due 2006 and $615,000,000 aggregate principal amount of proxies by or Conexant's 4% Convertible Subordinated Notes due 2007 which are, on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, convertible into Conexant Common Stock at exercise prices of $23.098 and $108, respectively, per share (collectively, the authorized capital stock "Conexant Convertible Notes") and (z) Exchangeable Shares of Merger Sub consists Philsar Semiconductor Inc. which are exchangeable into, or subject to retraction in exchange for, an aggregate of 1,000 357,640 shares of common stock, par value $.01 per share, 1,000 shares Conexant Common Stock. Section 5.2(b) of which are validly issued, fully paid the Conexant Disclosure Schedule sets forth a complete and nonassessable and are owned by Parent correct list as of a recent date of all outstanding Conexant Stock Options and the balance of which are not issued or outstandingexercise prices thereof.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 240,000,000 shares of Parent Common Stock and 25,000,000 Stock, 545,454 shares of preferred stockSeries A Convertible Preferred Stock, par value $.01 0.01 per shareshare (the “Series A Preferred Stock”), and 283,018 shares of Parent Series B Convertible Preferred Stock, par value $0.01 per share ("the “Series B Preferred Stock” and, together with the Series A Preferred Stock, the “Parent Preferred Stock"”). The Parent Common Stock and the Parent Preferred Stock are referred to herein as the “Parent Stock.” At the close of business on October 22December 14, 1999 2012, (i) 44,958,240 11,157,643 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500545,454 shares of Series A Preferred Stock were issued and outstanding, 40,000 (iii) 283,018 shares of Series B Preferred Stock were issued and 825,000 outstanding, (iv) 1,096,400 shares of Parent Common Stock were reserved for issuance pursuant to under Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral ’s Equity Plan and Parent's Employee ’s Non-Executive Director Stock Purchase Plan (collectivelytogether, the "“Parent Stock Plans"”); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; , and (v) no shares of 886,376 Parent Preferred Stock OP Units were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All issued and outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent fromare duly authorized, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable non-assessable, and all shares of Parent Common Stock to be issued as the Merger Consideration, when so issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable. All Parent OP Units to be issued as the Partnership Merger Consideration, when so issued in accordance with the terms of this Agreement, will be duly authorized and validly issued. No class of capital stock is entitled to preemptive rights. Except as disclosed in Section 5.3(a) of the Parent Disclosure Letter, there are owned by no outstanding bonds, debentures, notes or other indebtedness of Parent and having the balance right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which holders of which are not issued or outstandingshares of Parent Common Stock may vote.

Capital Structure. As of the date hereofJune 30, 2005, the authorized share capital stock of Parent consists of 200,000,000 999,575,693 ordinary shares, 424,247 class “A” ordinary shares of Parent Common Stock and 25,000,000 shares of preferred stock, par value $.01 per share60 deferred shares, of which 604,055,917 Parent ("Parent Preferred Stock"). At Ordinary Shares were outstanding as of the close of business on October 22June 30, 1999 (i) 44,958,240 2005. Parent has submitted to its stockholders, at a stockholder meeting scheduled to be held by July 27, 2005, inter alia, a proposal to increase the number of authorized ordinary shares of Parent Common Stock were to a total of 1,499,575,693 ordinary shares. One Parent ADS represents one Parent Ordinary Share. All of the issued and outstanding; (ii) 4,603,500outstanding Parent Ordinary Shares and Parent ADSs have been, 40,000 and 825,000 shares of all Parent Common Stock were reserved for issuance ADSs representing Parent Ordinary Shares which are to be issued pursuant to Parent's 1998 Incentive Planthe Merger have been duly authorized and will be, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectivelywhen issued in accordance with the terms of this Agreement, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and are not subject to any preemptive rightsor similar right. Except as set forth on Schedule 3.2(b)(i) Each of the Parent Disclosure Schedule, all outstanding shares of capital stock stock, ownership interests, or other securities of each of the Subsidiaries of Parent are Parent’s Significant Subsidiaries, Merger Sub and Sister Subsidiary is duly authorized, validly issued, fully paid and nonassessable and is owned by Parent or a direct or indirect wholly wholly-owned Subsidiary of Parent, free and clear of all liensany lien, chargespledge, encumbrancessecurity interest, claims claim or other encumbrance. Except pursuant to Parent’s stock plans (collectively, the “Parent Stock Plans”), as set forth on Section 5.2(b) of the Parent Disclosure Schedules, and options except as otherwise set forth on Section 5.2(b) of the Parent Disclosure Schedules, there are no preemptive or other outstanding rights, options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements or commitments to issue or to sell any natureshares of capital stock, ownership interests or other securities of Parent or any of its Significant 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 Parent or any of its Significant Subsidiaries, and so securities or obligations evidencing such rights are authorized, issued or outstanding. Except as set forth in this on Section 3.2(b) or Schedule 3.2(b)(ii5.2(b) of the Parent Disclosure Schedule and except for changes since October 22Schedules, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 does not have outstanding any Voting Debt or other voting securities of Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingDebt.

Capital Structure. As of the date hereof, the authorized capital stock of Parent FTX consists of 200,000,000 of: 100,000,000 FTX Common Shares and 50,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stockPreferred Stock, $100 par value $.01 per share("FTX Preferred Shares"), of Parent (which 5,000,000 shares have been designated as "Parent $4.375 Convertible Exchangeable Preferred Stock" (the "FTX $4.375 Preferred Shares"). At the close of business on October 22August 21, 1999 1997: (i) 44,958,240 shares of Parent 23,302,866 FTX Common Stock Shares were issued and outstanding, all of which were validly issued, are fully paid and nonassessable and are free of preemptive rights; and (ii) 4,603,5001,001,690 FTX $4.375 Preferred Shares were issued and outstanding, 40,000 all of which were validly issued, are fully paid and 825,000 shares nonassessable and are free of Parent preemptive rights. As of the date of this Agreement, except for FTX $4.375 Preferred Shares and except for stock options covering not in excess of 1,829,677 FTX Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan Shares (collectively, the "Parent FTX Stock PlansOptions"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent FTX or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent FTX or any Subsidiary of Parent 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 of FTX or any Voting Debt or other voting securities of Parent or of any such Subsidiary of Parent, or obligating Parent FTX or any such Subsidiary of Parent to grant, extend or enter into any such option, warrant, call, right, commitment right or agreement. Except as contemplated by this Agreement, there are not as Each outstanding share 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock and all equity interests of Parent that will limit in any way the solicitation each Subsidiary of proxies by or on behalf of Parent fromFTX is duly authorized, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and, except as disclosed in the FTX SEC Documents or the FTX Letter (as such terms are hereinafter defined), each such share and are all equity interests, and all of the equity interests in the IMC-Agrico Entities described in FTX SEC Documents as being owned by Parent FTX, are beneficially owned by FTX or another Subsidiary of FTX, free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever. As of the balance date of which are not issued or outstandingits filing, Exhibit 21.1 to FTX's Annual Report on Form 10-K for the year ended December 31, 1996, as filed with the SEC (the "FTX Annual Report"), is a true, accurate and correct statement in all material respects of all of the information required to be set forth therein by the regulations of the SEC.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent HFS consists of 200,000,000 600,000,000 shares of Parent HFS Common Stock and 25,000,000 10,000,000 shares of preferred stock, par value $.01 1.00 per share, of Parent share ("Parent HFS Preferred Stock"). At the close of business on October 22May 21, 1999 1997: (i) 44,958,240 158,291,401 shares of Parent HFS Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 no shares of Parent HFS Common Stock were held by HFS in its treasury; (iii) no shares of HFS Preferred Stock were issued and outstanding; (iv) 40,013,543 shares of HFS Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive the HFS 1992 Stock Option Plan and the HFS 1993 Stock Option Plan, Parentcomplete and correct copies of which have been delivered to CUC (such plans, collectively, the "HFS Stock Plans"); and (v) 8,080,102 shares of HFS Common Stock were reserved for issuance upon conversion of HFS's Nonemployee Director4-1/2% Convertible Senior Notes due 1999 and 3,598,320 shares of HFS Common Stock were reserved for issuance upon conversion of HFS's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan 4-3/4% Convertible Senior Notes due 2003 (collectively, the "Parent Stock PlansHFS Convertible Securities"); (iii. Section 3.1(c) 3,667,653 of the HFS Disclosure Schedule sets forth a complete and correct list, as of May 21, 1997, of the number of shares of Parent HFS Common Stock were subject to issuance pursuant employee stock options or other rights to outstanding awards purchase or receive HFS Common Stock granted under the Parent HFS Stock Plans; Plans (iv) no shares collectively, "HFS Employee Stock Options"), the dates of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued grant and outstanding; and (vi) no Voting Debt was issued and outstandingexercise prices thereof. All outstanding shares of Parent capital stock are of HFS are, and all shares which may be issued will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b3.1(c) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22May 21, 1999 1997 resulting from the exercise issuance of employee stock options granted shares of HFS Common Stock pursuant to, or from issuances or purchases underto the HFS Employee Stock Options, the Parent Stock Plans HFS Convertible Securities or as contemplated permitted by this AgreementSection 4.1(a)(i)(y) and 4.1(a)(ii), (x) there are outstanding: not issued, reserved for issuance or outstanding (iA) no any shares of capital stock, Voting Debt stock or other voting securities of Parent; HFS, (iiB) no any securities of Parent HFS or any Subsidiary of Parent HFS subsidiary convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of Parent or HFS, (C) any Subsidiary of Parent; and (iii) no options, warrants, calls, options or other rights (including preemptive rights), commitments or agreements to which Parent acquire from HFS or any Subsidiary HFS subsidiary, and any obligation of Parent is a party or by which it is bound in any case obligating Parent HFS or any Subsidiary of Parent HFS subsidiary to issue, deliverany capital stock, sellvoting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of HFS, purchaseand (y) there are no outstanding obligations of HFS or any HFS subsidiary 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 any such securities. There are no outstanding (A) securities of HFS or acquired, additional any HFS subsidiary convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities or ownership interests in any HFS subsidiary, (B) warrants, calls, options or other rights to acquire from HFS or any HFS subsidiary, and any obligation of Parent HFS or of any Subsidiary of ParentHFS subsidiary to issue, any capital stock, voting securities or other ownership interests in, or obligating Parent any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any HFS subsidiary or (C) obligations of HFS or any Subsidiary of Parent HFS subsidiary to grantrepurchase, extend redeem or enter into otherwise acquire any such optionoutstanding securities of HFS subsidiaries or to issue, warrantdeliver or sell, callor cause to be issued, rightdelivered or sold, commitment or agreementany such securities. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time Neither HFS nor any stockholder agreements, voting trusts or other agreements or understandings to which Parent HFS subsidiary is a party or by which it is bound to any agreement restricting the transfer of, relating to the voting of of, requiring registration of, or granting any shares preemptive or, except as provided by the terms of the capital stock HFS Employee Stock Options and the HFS Convertible Securities, antidilutive rights with respect to, any securities of Parent that will limit the type referred to in the two preceding sentences. Other than the HFS subsidiaries, HFS does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any way other entity except for non-controlling investments made in the solicitation ordinary course of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of business in entities which are not issued individually or outstandingin the aggregate material to HFS and its subsidiaries as a whole.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists entirely of 200,000,000 (i) 75,000,000 shares of Parent Common Stock and 25,000,000 Stock, (ii) 10,707 shares of preferred stock, par value $.01 100 per share, of Parent, and (iii) 1,000,000 shares of special stock, without par value, of Parent ("Parent Preferred “Special Stock"”), of which 100,000 shares have been designated as Series A Junior Participating Special Stock (“Series A Special Stock”). At the close of business on October 22November 27, 1999 2009: (i) 44,958,240 26,602,173 shares of Parent Common Stock were issued and outstandingoutstanding (including 752,320 shares of restricted stock); (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no 16,207,011 shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiariestreasury; (viii) no shares of Parent Preferred Special Stock or Series A Special Stock were issued and outstanding; and (viiv) no Voting Debt was 12,000 shares of Parent Common Stock were subject to issued and outstandingoutstanding options to purchase Parent Common Stock granted under Parent’s 1992 Non-Employee Directors’ Stock Option Plan, as amended, 469,955 shares of Parent Common Stock were subject to issued and outstanding options under Parent’s 2002 Equity Incentive Plan (the “Parent Stock Plan” and such stock options, the “Parent Stock Options”). Parent has made available to the Company a list, as of the close of business on November 27, 2009, of the holders of outstanding Parent Stock Options, restricted stock, performance shares or units, deferred shares, stock units and other stock awards and the number, exercise prices, vesting schedules, performance targets, expiration dates and other forfeiture provisions of each grant to such holders. All outstanding shares of Parent capital stock are of Parent are, and all shares that may be issued will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to or issued in violation of preemptive rights. Except as set forth on Schedule 3.2(b)(iotherwise provided in this Section 3.2(c), there are not issued, reserved for issuance or outstanding (i) of the Parent Disclosure Schedule, all outstanding any shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; , (ii) no any securities of Parent or any Subsidiary of Parent convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of Parent or any Subsidiary of Parent; and Parent Subsidiary, or (iii) no options, any warrants, calls, options or other rights (including preemptive rights), commitments or agreements to which acquire from Parent or any Parent Subsidiary any capital stock, voting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary Parent Subsidiary. Except as otherwise provided in this Section 3.2(c), there are no outstanding obligations of Parent or any Parent 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 Parent or of any Parent Subsidiary of Parentor (ii) repurchase, redeem or obligating Parent or any Subsidiary of Parent to grant, extend or enter into otherwise acquire 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 Neither Parent nor any stockholder agreements, voting trusts or other agreements or understandings to which Parent Subsidiary 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 3.2(c) and for payments under Parent 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 Parent or a Parent Subsidiary any payment based on the capital stock revenues, earnings or financial performance of Parent that will limit or any Parent Subsidiary or assets or calculated in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingaccordance therewith.

Capital Structure. As Except as set forth in Item 5.2 of the date hereofParent Letter, the authorized capital stock of Parent consists of 200,000,000 960,000,000 shares of common stock (the "Parent Common Stock Shares") and 25,000,000 30,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22March 23, 1999 2001, (i) 44,958,240 shares of 484,040,320 Parent Common Stock Shares were issued and outstanding; , all of which were validly issued, fully paid and nonassessable and free of preemptive rights and (ii) 4,603,500, 40,000 and 825,000 shares of 6,311,910 Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock Shares were held by Parent in its treasury or by treasury. As of the close of business on April 24, 2001, there were 25,554,954 Parent Shares reserved for issuance pursuant to outstanding options to purchase Parent Shares (the "Parent Stock Options") granted under Parent's 1996 Stock Plan, its wholly owned Subsidiaries; Stock Plan for Non-Officer Employees, its 1996 Stock Plan for Non-Employee Directors, and the Willxxxx Xxxernational Stock Plan (v) no the "Parent Stock Incentive Plans"), and, as of the close of business on February 28, 2001, there were 15,122,521 Parent Shares reserved for the grant of additional awards under Parent Stock Incentive Plans. The numbers of shares of capital stock and options described in the immediately preceding sentences have not materially changed as of the date of this Agreement, except for adjustments made in connection with the April 23, 2001 spin-off of Willxxxx Xxxmunications Group, Inc. from Parent. As of the date of this Agreement, except as set forth above, no Parent Preferred Stock Shares were issued issued, reserved for issuance or outstanding and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares 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 Parent ("Parent Stock Equivalents"). There are no outstanding stock appreciation rights with respect to the capital stock are of Parent. Each outstanding Parent Share is, and each Parent Share which may be issued pursuant to Parent Stock Plans will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure ScheduleThere are no outstanding bonds, all outstanding shares of capital stock of the Subsidiaries debentures, notes or other indebtedness of Parent are owned by Parent having the right to vote (or a direct convertible into, or indirect wholly owned Subsidiary of exchangeable for, securities having the right to vote) on any matter on which Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature's stockholders may vote. Except as set forth above or in this Section 3.2(b) or Schedule 3.2(b)(ii) Item 5.3 of the Parent Disclosure Schedule and except for changes since October 22Letter, 1999 resulting from as of the exercise date of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stocksecurities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to which Parent or any Subsidiary of Parent its Significant Subsidiaries is a party or by which it any of them is bound in any case obligating Parent or any Subsidiary of Parent its Significant Subsidiaries 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 or Parent Stock Equivalents of Parent or of any Subsidiary of Parent, its Significant Subsidiaries or obligating Parent or any Subsidiary of Parent 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 contractual obligations of the date hereof and there will not be at the Effective Time Parent or any stockholder agreementsof its Significant Subsidiaries to repurchase, voting trusts redeem or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Significant Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstanding.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists of 200,000,000 50,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stockStock, par value $.01 0.01 per share (the "Parent Common Stock"), and 3,000,000 shares of Preferred Stock, par value $0.01 per share, of Parent which 100,000 have been designated Series D Convertible Preferred Stock and 100,000 have been designated Series E Preferred Stock (the "Parent Permanent Preferred Stock"). At the close of business on October 22July 12, 1999 2002: (i) 44,958,240 24,911,352 shares of Parent Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 52,600 shares of Parent Common Stock in the aggregate were held by Parent and its subsidiaries in their treasuries; (iii) no shares of Preferred Stock were issued and outstanding; and (iv) 3,631,506 shares of Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan the plans set forth in Section 3.02(c) of the Parent Disclosure Schedule (collectively, the "Parent Stock Plans"); (iii) 3,667,653 , of which 3,357,000 shares of are subject to outstanding employee stock options or other rights to purchase or receive Parent Common Stock were subject to issuance pursuant to outstanding awards granted under the Parent Stock Plans; Plans (iv) no shares of collectively, "Parent Common Employee Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingOptions"). All outstanding shares of Parent capital stock are of Parent are, and all shares which may be issued (including the Bridge Preferred Stock and Parent Common stock to be issued hereunder and the Permanent Preferred Stock and the Conversion Shares issuable upon conversion thereof) will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth , and free of restrictions on Schedule 3.2(b)(i) of transfer other than restrictions on transfer under applicable state and federal securities laws and under the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free Management Rights and clear of all liens, charges, encumbrances, claims and options of any natureStandstill Agreement. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and 3.02(c), except for changes since October 22July 12, 1999 2002 resulting from the exercise issuance of employee stock options granted shares of Parent Common Stock pursuant to, or from issuances or purchases under, to the Parent Employee Stock Plans or as contemplated by this AgreementOptions, (x) there are outstanding: not issued, reserved for issuance or outstanding (iA) no any shares of capital stock, Voting Debt stock or other voting securities of Parent; , (iiB) no any securities of Parent or any Subsidiary of Parent convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of Parent or any Subsidiary of Parent; and (iiiC) no options, any warrants, calls, options or other rights (including preemptive rights), commitments or agreements to which acquire from Parent or any Subsidiary Parent subsidiary, and no obligation of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent subsidiary to issue, deliverany capital stock, sell, purchasevoting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of Parent and (y) there are no outstanding obligations of Parent or any Parent subsidiary 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 any such securities. Neither Parent nor any Parent subsidiary is a party to any voting or acquired, additional registration rights agreement with respect to the voting or registration of any such securities. There are no outstanding (A) securities of Parent or 24. any Parent subsidiary convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities or ownership interests in any Parent subsidiary, (B) warrants, calls, options or other rights to acquire from Parent or any Parent subsidiary, and no obligation of Parent or of any Subsidiary of ParentParent subsidiary to issue, any capital stock, voting securities or other ownership interests in, or obligating any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any Parent subsidiary or (C) obligations of Parent or any Subsidiary Parent subsidiary to repurchase, redeem or otherwise acquire any such outstanding securities of Parent subsidiaries or to grantissue, extend deliver or enter into sell, or cause to be issued, delivered or sold, any such optionsecurities. Other than the Parent subsidiaries, warrantParent does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any other entity. All outstanding shares of Parent Common Stock and all outstanding Parent Employee Stock Options have been issued and granted in compliance with (i) all applicable securities laws and other applicable Legal Requirements, call, right, commitment or agreementand (ii) all material requirements set forth in applicable Parent Material Contracts. Except as contemplated All securities reacquired by this Agreement, there are not as Parent were reacquired in compliance with (i) the applicable provisions of the date hereof DGCL and there will not be at the Effective Time any stockholder agreementsall other applicable Legal Requirements, voting trusts or and (ii) all requirements set forth in applicable restricted stock purchase agreements and other agreements or understandings to which applicable Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingMaterial Contracts.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists of 200,000,000 1,500,000,000 shares of Parent Common Stock and 25,000,000 39,000,000 shares of preferred stockParent Class B Common Stock and 1,000,000 shares of Preferred Stock, par value $.01 .001 per share, of Parent share ("Parent Preferred StockPARENT PREFERRED STOCK"). At the close of business on October 22June 25, 1999 2001, (i) 44,958,240 103,820,962 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 4,762,000 shares of Parent Class B Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Planissued and outstanding, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; treasury, (iv) 16,536,718 shares of Parent Common Stock were issuable pursuant to outstanding Parent Stock Options, (v) no shares of Parent Preferred Stock were issued and or outstanding; , and (vi) no Voting Debt was shares of 10.5% cumulative preferred stock, par value $10.00 per share, were issued and outstanding. All outstanding shares of Parent capital stock are of Parent Common Stock are, and all shares of Parent Common Stock which may be issued pursuant to this Agreement will be, when issued in accordance with the terms hereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. As of the date hereof there are no bonds, debentures, notes or other indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of Parent may vote. Except (i) as set forth on Schedule 3.2(b)(iabove in this Section 3.2(c), and (ii) for shares of Parent Common Stock reserved for issuance under any plan or arrangement providing for the grant of options to purchase shares of Parent Common Stock to current or former officers, directors, employees or consultants of Parent or its Subsidiaries (the "PARENT STOCK PLANS") or resulting from the issuance of shares of Parent Common Stock pursuant to options or other benefits issued or granted pursuant to the Parent Stock Plans outstanding as of the Parent Disclosure Scheduleclose of business on June 25, all 2001, as of the date hereof (x) there are not issued, issuable, reserved for issuance or outstanding (A) any shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary other voting securities of Parent, free (B) any securities of Parent convertible into or exchangeable or exercisable for shares of capital stock or voting securities of Parent, (C) any warrants, calls, options or other rights to acquire from Parent or any Parent Subsidiary, and clear no obligation of all liensParent or any Parent Subsidiary to issue, chargesany capital stock, encumbrancesvoting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of Parent, claims or (D) any stock appreciation rights or rights to receive shares of Parent Common Stock on a deferred basis granted under the Parent Stock Purchase Plans or otherwise; and options (y) there are not any outstanding obligations of Parent or any Parent Subsidiary 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. Neither Parent nor any Significant Subsidiary is a party to any voting agreement with respect to the voting of any naturesuch securities. Except as set forth in this Section 3.2(b3.2(c) or Schedule 3.2(b)(ii) of and in the Parent Disclosure Schedule Joint Venture Agreement among Parent, TMP Worldwide Pty Limited, Xxxxxxx.xxx A&NZ Pty Limited, ninemsn Pty Limited, Turustar Pty Limited and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this AgreementClycal Pty Limited, there are outstanding: no issued, issuable, reserved for issuance or outstanding (iA) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Parent Significant Subsidiary of Parent convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities or ownership interests in any Parent Significant Subsidiary, (B) warrants, calls, options or other rights to acquire from Parent or any Significant Subsidiary of Parent, and no obligation of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Significant Subsidiary of Parent to issue, deliverany capital stock, sellvoting securities or other ownership interests in, purchaseor any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any Significant Subsidiary of Parent or (C) obligations of Parent or any Significant Subsidiary of Parent to repurchase, redeem or acquireotherwise acquire any such outstanding securities of the 24 Significant Subsidiaries of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingsecurities.

Capital Structure. As (a) SCHEDULE 3.2(a) sets forth the authorized capitalization of Parent and the number of shares of each class or series of Parent's capital stock ("Parent Common Stock") that are issued and outstanding as of the date hereofof this Agreement, including the authorized capital number of shares of Parent's common stock that are so issued and outstanding and the number of Parent consists of 200,000,000 shares of Parent Common Stock that (A) have been reserved for conversion of shares of any class of stock that is convertible into Parent Common Stock ("Parent Convertible Shares"), (B) have been reserved for issuance upon exercise of warrants to purchase shares of Parent Common Stock ("Reserved Parent Warrant Shares") and 25,000,000 (C) shares that have been reserved for issuance upon exercise of options to purchase shares of Parent Common Stock ("Reserved Parent Option Shares"). Parent is authorized to issue 20,000,000 shares of $.001 par value common stock and 5,000,000 shares of $.001 preferred stock. As of the date of execution of this Agreement, Parent has 5,532,000 shares of its common stock issued and outstanding. All of the issued and outstanding shares of Parent Common Stock have been duly and validly authorized and issued and are fully paid and nonassessable. All the Parent Common Stock when issued upon the conversion of the Parent Convertible Shares, all the Reserved Parent Warrant Shares, when issued upon the exercise of the underlying warrants, and all the Reserved Parent Option Shares, when issued upon the due exercise of the underlying options, will be duly and validly authorized and issued and fully paid and nonassessable. All the shares of Parent Common Stock have been duly and validly authorized and issued and are fully paid and nonassessable. None of the Parent Common Stock has been issued and none of the Parent Common Stock will be issued in violation of the preemptive rights of any stockholder of Parent. The issued and outstanding Parent Common Stock has been issued, and the Parent Convertible Shares, the Reserved Parent Warrant Shares and the Reserved Parent Option Shares will be issued, in compliance in all material respects with all applicable Federal and state securities laws and regulations. The shares of Parent Common Stock to be issued pursuant to the Merger will be duly and validly authorized and issued, will be fully paid and nonassessable and will be issued in compliance with all applicable Federal and state securities laws and regulations. The authorized capital stock of Acquiring Corp consists of 50,000,000 shares of common stock, $0.001 par value per share, of which 1,000 shares are issued and outstanding and 5,000,000 shares of preferred stock, $0.001 par value $.01 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22, 1999 (i) 44,958,240 shares of Parent Common Stock were which none are issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstanding.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of Parent STI consists of 200,000,000 10,000,000 shares of Parent STI Common Stock and 25,000,000 shares of preferred stock, par value $.01 per shareStock, of Parent ("Parent Preferred Stock"). At which 4,730,700 shares were issued and outstanding and 0 shares were held in treasury as of the close of business on October 22March 31, 1999 (i) 44,958,240 1997. All of the outstanding shares of Parent STI Common Stock have been duly authorized and are validly issued, fully paid and nonassessable. As of March 31, 1997, there were issued and outstanding; not more than (iiA) 4,603,500, 40,000 and 825,000 5,000 shares of Parent STI Common Stock were reserved for issuance upon exercise of outstanding Redeemable Common Stock Purchase Warrants ("STI Redeemable Warrants"), each of which entitles the holder thereof to purchase one share of STI Common Stock for a price of $6.00 until November 3, 1999, subject to earlier redemption by STI, (B) 112,500 shares of STI Common Stock reserved for issuance upon exercise of 36,500 outstanding Underwriters' Warrants, each of which entitles the holder thereof to purchase one Unit, consisting of two shares of STI Common Stock and one Redeemable Warrant, until November 3, 1999, and (C) 365,000 shares of STI Common Stock that STI was obligated to issue pursuant to ParentSTI's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation Amended and Deferral Restated 1994 Stock Option Plan and Parent's Employee Outside Directors' Stock Purchase Option Plan (collectively, the "Parent STI Stock Plans"); (iii) 3,667,653 shares . Each of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are of each of STI's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rightsowned by STI or a direct or indirect wholly-owned subsidiary of STI, free and clear of any lien, pledge, security interest, claim or other encumbrance. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreementabove, there are outstanding: (i) no shares of capital stock, Voting Debt preemptive or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stockoutstanding rights, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, callsconversion rights, rights (including preemptive stock appreciation rights), redemption rights, repurchase rights, agreements, arrangements or commitments to issue or agreements to which Parent or sell any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent STI or any of its Subsidiaries or any Subsidiary of Parentsecurities or obligations convertible or exchangeable into or exercisable for, or obligating Parent giving any Person a right to subscribe for or acquire, any Subsidiary securities of Parent to grant, extend STI 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stockand no securities or obligation evidencing such rights are authorized, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstanding. STI does not have outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of STI on any matter.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 1,250,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stock, without par value $.01 per share(together with the Parent Common Stock, of Parent (the "Parent Preferred Capital Stock"). At the close of business on October 22November 18, 1999 1998, (i) 44,958,240 254,359,353 shares of Parent Common Stock and 803,346.643 shares of Series B ESOP Convertible Preferred Stock of Parent were issued and outstanding, (ii) 15,900 shares of Parent Common Stock were issued and outstanding; held by Parent in its treasury, (iiiii) 4,603,500as of October 30, 40,000 and 825,000 1998, 7,431,499 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Planoutstanding options to purchase Parent Common Stock granted under Parent Stock Plans (as defined in Section 6.04), Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee (iv) 1,600,000 shares of Series A Junior Participating Preferred Stock Purchase Plan of Parent were reserved for issuance in connection with the rights (collectivelythe "Parent Rights") issued pursuant to the Rights Agreement dated as of February 14, 1990 (as amended from time to time, the "Parent Stock PlansRights Agreement"); , between Parent and ChaseMellon Shareholder Services, L.L.C., as Rights Agent and (iiiv) 3,667,653 72,904 shares of Parent Common Stock were subject to remain reserved for issuance pursuant to outstanding awards under in connection with Parent's previous acquisitions of Fay's Incorporated and of Eckerd Corporation. Except as set forth xxxxx, at the Parent Stock Plans; (iv) close of business on November 18, 1998, no shares of capital stock or other voting securities of Parent Common Stock were held by issued, reserved for issuance or outstanding, and no securities of Parent in its treasury or by its wholly owned Subsidiaries; (v) no any Parent Subsidiary convertible into or exchangeable for, shares of capital stock, Voting Parent Preferred Debt (as defined below) or other voting securities of the Parent were issued, reserved for issuance or outstanding, reserved for issuance or outstanding. There are no outstanding Parent SARs (as defined in Section 6.04) that were not granted in tandem with a related Parent Employee Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingOption. All outstanding shares of Parent capital stock are Capital Stock are, and all such shares that may be issued prior to the Effective Time or pursuant to this Agreement 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 rightsright, subscription right or any similar right under any provision of the DGCL, the Parent Charter, the Parent Bylaws or any Contract to which Parent is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which holders of Parent Common Stock may vote ("Voting Parent Debt"). Except as set forth on Schedule 3.2(b)(i) above, as of the Parent Disclosure Schedule, all outstanding shares date of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or not any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments convertible or agreements exchangeable securities, "phantom" stock rights, stock appreciation rights, stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to which Parent or any Parent Subsidiary of Parent is a party or by which it any of them is bound in any case (i) obligating Parent or any Parent Subsidiary of Parent to issue, deliver, deliver or sell, purchase, redeem or acquire, acquire or cause to be issued, delivered, delivered or sold, or purchased, redeemed or acquired, acquired additional shares of capital stock or other equity interests in, or any security convertible or exercisable for or exchangeable into any capital stock of or other equity interest in, Parent or any Voting Parent Debt or other voting securities of Parent or of any Subsidiary of Parent, or (ii) obligating Parent or any Parent Subsidiary of Parent to issue, grant, extend or enter into any such option, warrant, call, right, commitment security, commitment, Contract, arrangement or agreementundertaking. Except as contemplated by As of the date of this Agreement, there are not as any outstanding contractual obligations of the date hereof and there will not be at the Effective Time Parent or any stockholder agreementsParent Subsidiary to repur chase, voting trusts redeem or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of otherwise acquire any shares of the capital stock of Parent. Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect has made available to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As Company a complete and correct copy of the Parent Rights Agreement as amended to the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingthis Agreement.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent Berkshire ----------------- consists of 200,000,000 1,500,000 shares of Parent Berkshire Class A Common Stock Stock, 50,000,000 shares of Berkshire Class B Common Stock, and 25,000,000 1,000,000 shares of preferred stock, no par value $.01 per share, of Parent share ("Parent Berkshire Preferred Stock"). At Subject to such changes as may occur after May 1, 1998, and subject in the close case of business on October 22, 1999 clauses (i) 44,958,240 and (iii) to adjustment as a result of conversions of Berkshire Class A Common Stock into Berkshire Class B Common Stock, there were, as of May 1, 1998: (i) 1,192,905 shares of Parent Berkshire Class A Common Stock, 1,448,918 shares of Berkshire Class B Common Stock, and no shares of Berkshire Preferred Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 163,583 shares of Parent Berkshire Class A Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans")held by Berkshire in its treasury; (iii) 3,667,653 35,787,150 shares of Parent Berkshire Class B Common Stock were subject to reserved for issuance pursuant to outstanding awards under the Parent Stock Plansupon conversion of Berkshire Class A Common Stock; (iv) no shares of Parent Berkshire Class B Common Stock were held by Parent in its treasury or by its wholly owned Subsidiariesreserved for issuance upon exercise of authorized but unissued options under Berkshire's 1996 Stock Option Plan; and (v) 15,669 shares of Berkshire Class B Common Stock issuable upon exercise of outstanding options under Berkshire's 1996 Stock Option Plan. Except as set forth in this Section 4.3(c), no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and capital stock or other equity securities of Berkshire are issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Berkshire are, and all shares of Holding Company Common Stock which may be issued pursuant to this Agreement will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding All shares of capital stock Holding Company Common Stock issued pursuant to this Agreement will, when so issued, be registered under the Securities Act for such issuance and registered under the Exchange Act, be registered or exempt from registration under any applicable state securities laws, and be listed on the NYSE, subject to official notice of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any natureissuance. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement4.3(c), there are outstanding: (i) no shares of capital stockoutstanding bonds, Voting Debt debentures, notes or other voting indebtedness or other securities of Parent; Berkshire having the right to vote (ii) no securities of Parent or any Subsidiary of Parent convertible into into, or exchangeable for shares for, securities having the right to vote) on any matters on which stockholders of capital stockBerkshire may vote. Except as set forth in this Section 4.3(c), Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) except as set forth in the Agreement with respect to Holding Company and the Merger Subsidiaries, there are no outstanding securities, options, warrants, calls, or rights (including preemptive rights), commitments or agreements to which Parent obligating Berkshire or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 equity securities of Parent Berkshire or any of any Subsidiary of Parent, its subsidiaries or obligating Parent Berkshire or any Subsidiary of Parent its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, or 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstanding.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists of 200,000,000 100,000,000 shares of Parent Common Stock and 25,000,000 10,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). At , of which there were issued and outstanding, as of the close of business on October 22September 15, 1999 2005, the following shares of Parent Common Stock: (i) 44,958,240 20,397,210 shares of Class A Common Stock, (ii) 319,388 shares of Class B Common Stock and (iii) 319,388 shares of Class C Common Stock. There are no issued and outstanding shares of Parent Preferred Stock. There are no other outstanding shares of capital stock or voting securities, and there are a sufficient number of authorized shares of Parent Common Stock were issued and outstanding; available to satisfy all outstanding commitments to issue any shares of Parent Capital Stock pursuant to (i) the exercise of options outstanding as of such date under Parent’s 2003 Long Term Incentive Compensation Plan (the “Parent Stock Option Plan”), (ii) 4,603,500the terms of this Agreement, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to all other outstanding capital stock issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingobligations. All outstanding shares of Parent capital stock Common Stock are duly authorized, validly issued, fully paid and nonassessable non-assessable and are free and clear of any Liens other than any Liens created by or imposed upon the holders thereof, and are not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) rights or rights of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned first refusal created by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases understatute, the Parent Stock Plans Articles of Amendment or Restatement or Bylaws, each as contemplated by this Agreementamended, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 agreement to which Parent is a party or by which it is bound relating to bound. Parent has issued or granted 506,175 phantom shares under the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the MergerStock Option Plan. There are no restrictions on contracts, commitments or agreements relating to voting, purchase or sale of Parent’s capital stock between or among Parent to vote the stock of and any of its Subsidiariesstockholders except as contemplated hereby. As True and complete copies of all material agreements and instruments relating to or issued under the date hereofParent Stock Option Plan have been provided or made available to the Company (including through the SEC’s XXXXX Database) and such agreements and instruments have not been amended, modified or supplemented, and there are no agreements to amend, modify or supplement such agreements or instruments in any case from the authorized capital stock of Merger Sub consists of 1,000 form provided or made available to the Company. All outstanding shares of common stock, par value $.01 per share, 1,000 Parent Common Stock and all options to purchase Parent Common Stock were issued in compliance with all applicable federal and state securities laws. The shares of which are Parent Capital Stock to be issued pursuant to this Agreement, when issued in accordance with this Agreement, will be duly authorized, validly issued, fully paid and nonassessable non-assessable, and are owned free and clear of any Liens other than Liens created by Parent and or imposed upon the balance of which are not issued or outstandingholders thereof.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent ACT consists of 200,000,000 ACT Common Shares and 50,000,000 preferred shares of Parent Common Stock and 25,000,000 shares beneficial interest, par value $.01 per share ("ACT Preferred Shares"), of preferred stockwhich 350,000 are designated as Series A Junior Participating Preferred Shares, par value $.01 per share. On the date hereof, of Parent ("Parent Preferred Stock"). At the close of business on October 22, 1999 (i) 44,958,240 shares of Parent 10,015,111 ACT Common Stock Shares and no ACT Preferred Shares were issued and outstanding; , (ii) 4,603,500no ACT Common Shares or ACT Preferred Shares were held by ACT in its treasury, 40,000 and 825,000 shares of Parent (iii) 505,506 ACT Common Stock Shares were reserved for issuance pursuant to Parent's in connection with the AMRESCO Capital Trust 1998 Incentive Plan, Parent's Nonemployee Director's Compensation Share Option and Deferral Plan and Parent's Employee Stock Purchase Award Plan (collectively, the "Parent Stock PlansACT Option Plan"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; , (iv) no shares 1,479,511 ACT Common Shares were issuable upon exercise of Parent outstanding options to purchase ACT Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; Shares ("ACT Options") and (v) 250,002 ACT Common Shares were issuable upon exercise of outstanding warrants to purchase ACT Common Shares ("ACT Warrants"). On the date hereof, except as set forth above in this Section 3.3, no capital shares or other voting securities of ACT were issued, reserved for issuance or outstanding. There are no outstanding share appreciation rights relating to the capital shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingACT. All outstanding capital shares of Parent capital stock ACT are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure ScheduleThe ACT Common Shares to be issued pursuant hereto have been duly authorized by ACT and, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parentwhen issued, free sold and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth delivered in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by accordance with this Agreement, will be validly issued, fully paid and nonassessable and not subject to preemptive rights. There are no bonds, debentures, notes or other indebtedness of ACT having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which shareholders of ACT may vote. Except for the ACT Options, ACT Warrants and the rights issuable under the Rights Agreement, dated as of February 25, 1999, between ACT and The Bank of New York, as rights agent (the "ACT Rights Plan"), and for the transactions contemplated hereby, there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to which Parent ACT or any Subsidiary of Parent its Subsidiaries is a party or by which it such entity is bound in any case bound, obligating Parent ACT or any Subsidiary of Parent its Subsidiaries to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedadditional capital shares, redeemed voting securities or acquired, additional shares other ownership interests of capital stock ACT or any Voting Debt or other voting securities of Parent or of any Subsidiary of Parent, its Subsidiaries or obligating Parent ACT or any Subsidiary of Parent its 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 this Agreementset forth on Schedule 3.3 to the ACT Disclosure Letter, there are not as no outstanding contractual obligations of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts ACT or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereofSubsidiaries to repurchase, the authorized redeem or otherwise acquire any capital stock of Merger Sub consists of 1,000 shares of common stockACT or any capital shares, par value $.01 per sharevoting securities or other ownership interests in any Subsidiary of ACT or make any material investment (in the form of a loan, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued capital contribution or outstandingotherwise) to any Person.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent ----------------- consists of 200,000,000 1,500,000,000 shares of Parent Common Stock and 25,000,000 39,000,000 shares of preferred stockParent Class B Common Stock and 1,000,000 shares of Preferred Stock, par value $.01 .001 per share, of Parent share ("Parent Preferred StockPARENT PREFERRED STOCK"). At the close of ---------------------- business on October 22June 25, 1999 2001, (i) 44,958,240 103,820,962 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 4,762,000 shares of Parent Class B Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Planissued and outstanding, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; treasury, (iv) 16,536,718 shares of Parent Common Stock were issuable pursuant to outstanding Parent Stock Options, (v) no shares of Parent Preferred Stock were issued and or outstanding; , and (vi) no Voting Debt was shares of 10.5% cumulative preferred stock, par value $10.00 per share, were issued and outstanding. All outstanding shares of Parent capital stock are of Parent Common Stock are, and all shares of Parent Common Stock which may be issued pursuant to this Agreement will be, when issued in accordance with the terms hereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. As of the date hereof there are no bonds, debentures, notes or other indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of Parent may vote. Except (i) as set forth on Schedule 3.2(b)(iabove in this Section 3.2(c), and (ii) for shares of Parent Common Stock reserved for issuance under any plan or arrangement providing for the grant of options to purchase shares of Parent Common Stock to current or former officers, directors, employees or consultants of Parent or its Subsidiaries (the "PARENT STOCK PLANS") or resulting from ------------------ the issuance of shares of Parent Common Stock pursuant to options or other benefits issued or granted pursuant to the Parent Stock Plans outstanding as of the Parent Disclosure Scheduleclose of business on June 25, all 2001, as of the date hereof (x) there are not issued, issuable, reserved for issuance or outstanding (A) any shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary other voting securities of Parent, free (B) any securities of Parent convertible into or exchangeable or exercisable for shares of capital stock or voting securities of Parent, (C) any warrants, calls, options or other rights to acquire from Parent or any Parent Subsidiary, and clear no obligation of all liensParent or any Parent Subsidiary to issue, chargesany capital stock, encumbrancesvoting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of Parent, claims or (D) any stock appreciation rights or rights to receive shares of Parent Common Stock on a deferred basis granted under the Parent Stock Purchase Plans or otherwise; and options (y) there are not any outstanding obligations of Parent or any Parent Subsidiary 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. Neither Parent nor any Significant Subsidiary is a party to any voting agreement with respect to the voting of any naturesuch securities. Except as set forth in this Section 3.2(b3.2(c) or Schedule 3.2(b)(ii) of and in the Parent Disclosure Schedule Joint Venture Agreement among Parent, TMP Worldwide Pty Limited, Xxxxxxx.xxx A&NZ Pty Limited, ninemsn Pty Limited, Turustar Pty Limited and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this AgreementClycal Pty Limited, there are outstanding: no issued, issuable, reserved for issuance or outstanding (iA) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Parent Significant Subsidiary of Parent convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities or ownership interests in any Parent Significant Subsidiary, (B) warrants, calls, options or other rights to acquire from Parent or any Significant Subsidiary of Parent, and no obligation of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Significant Subsidiary of Parent to issue, deliverany capital stock, sellvoting securities or other ownership interests in, purchaseor any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any Significant Subsidiary of Parent or (C) obligations of Parent or any Significant Subsidiary of Parent to repurchase, redeem or acquireotherwise acquire any such outstanding securities of the Significant Subsidiaries of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingsecurities.

Capital Structure. As of the date hereofEffective Time, the authorized capital stock of Parent consists will consist of 200,000,000 500,000,000 shares of Parent Common Stock and 25,000,000 50,000,000 shares of preferred stockPreferred Stock, par value $.01 1.00 per share, of Parent share (the "Parent Preferred Stock"). At the close of business on October 2224, 1999 1997, (i) 44,958,240 61,762,302 shares of Parent Common Stock were issued and outstanding, all of which were validly issued, fully paid and nonassessable and free of preemptive rights; (ii) 4,603,500, 40,000 and 825,000 4,811,248 shares of Parent Common Stock were reserved for future issuance pursuant to Parent's 1998 1994 Long-Term Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral the 1987 Stock Option Plan, the 1997 Stock-Based Incentive Plan and Parent's Employee the Parisian Stock Purchase Plan Option Plans (collectively, the "Parent Stock Plans"); (iii) 3,667,653 645,036 shares of Parent Common Stock were subject to reserved for future issuance pursuant to outstanding awards under the Parent Parent's 1994 Employee Stock PlansPurchase Plan; and (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and or outstanding. All outstanding of the shares of Parent capital stock are Common Stock issuable in exchange for Company Common Stock at the Effective Time in accordance with this Agreement will be, when so issued, duly authorized, validly issued, fully paid and nonassessable nonassessable, free of preemptive rights and not subject be entitled to preemptive rights. Except as set forth on Schedule 3.2(b)(i) the benefits of the Parent Disclosure Schedule, all outstanding shares of capital stock Rights Plan under the terms thereof. As of the Subsidiaries date of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, except for (a) this Agreement, (b) stock options covering not in excess of 4,196,248 shares of Parent Common Stock (collectively, the "Parent Stock Options"), (c) the 1994 Employee Stock Purchase Plan, (d) contingent stock grants of 615,000 shares of Parent Common Stock to key executives, and (e) securities issuable pursuant to the stock purchase rights declared as a dividend on March 28, 1995 (the "Parent Rights") and the rights agreement dated as of March 28, 1995 between Parent and Union Planters National Bank (the "Parent Rights Agreement") ( the Parent Rights and the Parent Rights Agreement are collectively the "Parent Rights Plan"), there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or any of any Subsidiary of Parentits Subsidiaries, or securities convertible into or exchangeable for such capital stock, or obligating Parent or any Subsidiary of Parent its Subsidiaries to grant, extend or enter into any such option, warrant, call, right, commitment right or agreement. Except as contemplated by this Agreement, there are not as of disclosed in Parent SEC Documents filed prior to the date hereof and there will (as hereinafter defined), since October 24, 1997, Parent has not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of issued any shares of the its capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent fromstock, or securities convertible into or exchangeable for such capital stock, other than shares issued in the casting of votes by, the stockholders of Parent with respect ordinary course pursuant to the MergerParent Stock Plans and the accompanying rights issued pursuant to the Parent Rights Agreement. There are no restrictions on Except as disclosed in Parent SEC Documents filed prior to vote the stock of any of its Subsidiaries. As of the date hereof, there are no outstanding contractual obligations of Parent or any of Parent's Subsidiaries (i) restricting the authorized transfer of, (ii) affecting the voting rights of, (iii) requiring the repurchase, redemption or disposition of, (iv) requiring the registration for sale of, or (v) granting any preemptive or antidilutive right with respect to, any shares of Parent Common Stock or any capital stock of Merger Sub consists any Subsidiary of 1,000 shares Parent. Each outstanding share of common stockcapital stock of each Subsidiary of Parent is duly authorized, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and paid, nonassessable and are free of preemptive rights and, except as disclosed in the Parent SEC Documents filed prior to the date hereof, each such share is owned by Parent or another Subsidiary of Parent, free and the balance clear of which are not issued or outstandingall security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent the Company consists of 200,000,000 25,000,000 shares of Parent Company Common Stock Stock, par value $.01 per share, and 25,000,000 5,000,000 shares of preferred stock, par value $.01 per share, of Parent share ("Parent Company Preferred Stock"). At As of the close of business on October 22September 30, 1999 1998, there were: (i) 44,958,240 12,396,721 shares of Parent Company Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 918,254 shares of Parent Company Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, held in the "Parent Stock Plans")treasury of the Company or held by Subsidiaries; (iii) 3,667,653 2,370,000 shares of Parent Company Common Stock were subject to reserved for issuance upon exercise of Company Stock Options available for grant pursuant to outstanding awards under the Parent Company Stock Plans; and (iv) 2,450,000 shares of Company Common Stock issuable upon conversion of currently outstanding Debentures. As of the close of business on September 30, 1998, there were 1,993,900 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 is set forth in Section 3.01(c)(iii) of the Company Disclosure Schedule. Except as set forth above, as of the close of business on September 30, 1998, there were no shares of Parent Common Stock were held by Parent in its treasury capital stock or by its wholly owned Subsidiaries; (v) no shares other equity securities of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and the Company issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of the Company are, and all shares which may be issued pursuant to the Company Stock Plans and the Debentures will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) All 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. Other than the Debentures, there are no outstanding bonds, debentures, notes or other indebtedness or debt securities of the Parent Disclosure ScheduleCompany having the right to vote (or convertible into, all outstanding shares of capital stock or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of ParentCompany may vote (collectively, free and clear of all liens, charges, encumbrances, claims and options of any nature"Voting Debt"). Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule above and except for changes since October 22, 1999 resulting from pursuant to the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Option Agreement, there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to which Parent the Company or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent the Company or any Subsidiary of Parent 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 Parent the Company or of any Subsidiary of Parent, its Subsidiaries or obligating Parent the Company or any Subsidiary of Parent its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment commitment, agreement, arrangement or agreementundertaking. Except Other than the Stock Option Agreement and except as contemplated by this Agreementdisclosed in Section 3.01(c) of the Company Disclosure Schedule, (i) there are not as no outstanding contractual obligations, commitments, understandings or arrangements 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 otherwise acquire or understandings to which Parent is a party or by which it is bound relating to the voting make any payment in respect of any shares of the capital stock of Parent that will limit in the Company or any way of its Subsidiaries and (ii) to the solicitation knowledge of the Company, there are no irrevocable proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the shares of capital stock of the Company or any of its Subsidiaries. As Except as set forth in Section 3.01(c) of the date hereofCompany Disclosure Schedule, there are no agreements or arrangements pursuant to which the Company is or could be required to register shares of Company Common Stock or other securities of the Company or any of its Subsidiaries under the Securities Act of 1933, as amended (the "Securities Act"), or other agreements or arrangements with or, to the knowledge of the Company, among any securityholders of the Company or any of its Subsidiaries with respect to securities of the Company or any of its Subsidiaries. Since September 30, 1998, except as disclosed in Section 3.01(c) of the Company Disclosure Schedule, the authorized Company has not (A) issued or permitted to be issued any shares of capital stock, or securities exercisable for or convertible into shares of capital stock, of the Company or any of its Subsidiaries, other than (1) pursuant to the Stock Option Agreement, (2) the grant of any employee stock options prior to the date of this Agreement pursuant to the Company Stock Plans, (3) the issuance of Company Common Stock upon exercise of the options granted pursuant to the Company Stock Plans prior to the date of this Agreement and (4) upon conversion of Debentures outstanding on such date; (B) repurchased, redeemed or otherwise acquired, directly or indirectly through one or more Subsidiaries, any shares of capital stock of Merger Sub consists the Company or any of 1,000 its Subsidiaries; or (C) declared, set aside, made or paid to the stockholders of the Company or any of its Subsidiaries dividends or other distributions on the outstanding shares of common stockcapital stock of the Company or any of its Subsidiaries (excluding dividends declared, par value $.01 per shareset aside, 1,000 shares of which are validly issued, fully made or paid and nonassessable and are by wholly owned by Parent and Subsidiaries to the balance of which are not issued Company or outstandingany wholly owned Subsidiaries).

Capital Structure. As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 90,000,000 shares of Parent Common Stock and 25,000,000 1,000,000 shares of preferred stock, par value $.01 per share, stock of Parent (the "Parent Preferred Stock"). At As of the close of business on October 22July 25, 1999 1997, there were: (i) 44,958,240 45,599,755 shares of Parent Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 1,773,597 shares of Parent Common Stock were held in the treasury of Parent; (iii) 5,233,411 shares of Parent Common Stock reserved for issuance pursuant to Parent's 1998 Incentive Planstock option plans, Parent's Nonemployee Director's Compensation and Deferral Plan employee stock purchase plans and Parent's Employee Director Stock Purchase and Deferred Compensation Plan (collectivelysuch plans, collectively with the 1997 Stock Incentive Plan approved on August 21, 1997 subject to stockholder approval, the "Parent Stock Plans"); (iiiiv) 3,667,653 3,356,441 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plansissuable upon exercise of awarded but unexercised stock options; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; and (v) no shares of Parent Preferred Stock outstanding. Except as set forth above and except for shares of junior participating preferred stock issuable pursuant to the Shareholder Protection Rights Agreement, dated as of April 30, 1989, between Parent and The First National Bank of Boston, as of the close of business on July 25, 1997 there were issued and outstanding; and (vi) no Voting Debt was issued and shares of capital stock or other equity securities of Parent issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Parent are, and all shares which may be issued as described above will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all There is no outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary Voting Debt of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreementabove, there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or undertakings of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 kind to which Parent is a party or by which it is bound relating obligating Parent to the issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of Parent or obligating Parent to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of Parent to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of capital stock of Parent. During the period from July 25, 1997 through the date of this Agreement, except as set forth in Section 3.02(b) of the Parent Disclosure Schedule, Parent did not (A) issue or permit to be issued any shares of capital stock, or securities exercisable for or convertible into shares of capital stock, of Parent, other than pursuant to or as permitted by the terms of the Parent Stock Plans; (B) repurchase, redeem or otherwise acquire, directly or indirectly through one or more subsidiaries, any shares of capital stock of Parent; or (C) declare, set aside, make or pay to the stockholders of Parent dividends or other distributions on the outstanding shares of capital stock of Parent that will limit in any way (other than regular quarterly cash dividends on the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its SubsidiariesCommon Stock). As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares all of which are have been validly issued, are fully paid and nonassessable and are owned by Parent, free and clear of any Lien, and as of the Closing Date, all the issued and outstanding shares of the common stock of Sub will be owned by Parent free and the balance clear of which are not issued or outstandingany Lien.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent Geon consists of 200,000,000 (i) 100,000,000 shares of Parent Geon Common Stock and 25,000,000 (ii) 10,000,000 shares of preferred stock, without par value $.01 per share, of Parent ("Parent Geon Authorized Preferred Stock"). At the close of business on October 22May 5, 1999 2000 (the "Geon Measurement Date"): (i) 44,958,240 24,332,625 shares of Parent Geon Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 3.642,823 shares of Parent Geon Common Stock were held by Geon in its treasury; (iii) no shares of Geon Authorized Preferred Stock were issued or outstanding; and (iv) 4,925,956 shares of Geon Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan the plans as set forth in Section 3.1(c)(iv) of the Geon Disclosure Schedule (collectively, the "Parent Geon Stock Plans"); (iii) 3,667,653 , of which 4,208,856 shares of Parent are subject to outstanding employee stock options or other rights to purchase or receive Geon Common Stock were subject to issuance pursuant to outstanding awards granted under the Parent Geon Stock Plans; Plans (iv) no shares of Parent Common collectively, the "Geon Employee Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingOptions"). All outstanding shares of Parent capital stock are of Geon are, and all shares which may be issued will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b3.1(c), (ii) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 the Geon Measurement Date resulting from the exercise issuance of employee stock options granted shares of Geon Common Stock pursuant toto the Geon Employee Stock Options, or from issuances or purchases under, (iii) for outstanding rights issued pursuant to the Parent Stock Plans or as contemplated by this Geon Rights Agreement, and (iv) as permitted by Section 4.1(a)(ii), (x) there are outstanding: not issued, reserved for issuance or outstanding (iA) no any shares of capital stock, Voting Debt stock or other voting securities of Parent; Geon, (iiB) no any securities of Parent or any Subsidiary of Parent Geon convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of Parent Geon or (C) any Subsidiary of Parent; and (iii) no options, warrants, calls, options or other rights (including preemptive rights), commitments or agreements to which Parent acquire from Geon or any Subsidiary Geon subsidiary, and no obligation of Parent is a party or by which it is bound in any case obligating Parent Geon or any Subsidiary of Parent Geon subsidiary to issue, deliverany capital stock, sell, purchasevoting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of Geon and (y) there are no outstanding obligations of Geon or any Geon subsidiary to repurchase, redeem or acquireotherwise acquire any such securities or, other than agreements entered into with respect to the Geon Stock Plans in effect as of the close of business on the Geon Measurement Date, to issue, deliver or sell, or cause to be issued, delivered, delivered or sold, purchasedany such securities. Section 3.1(c) of the Geon Disclosure Schedule provides a summary of the number of Geon Employee Stock Options and each award (including restricted stock, redeemed deferred stock and performance shares) outstanding under the Geon Stock Plans (each, a "Geon Award") as of the close of business on the Geon Measurement Date. Neither Geon nor any Geon subsidiary is a party to any voting agreement with respect to the voting of any such securities. There are no outstanding (A) securities of Geon or acquired, additional any Geon subsidiary convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities or ownership interests in any Geon subsidiary, (B) warrants, calls, options or other rights to acquire from Geon or any Geon subsidiary, and no obligation of Parent Geon or of any Subsidiary of ParentGeon subsidiary to issue, any capital stock, voting securities or other ownership interests in, or obligating Parent any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any Geon subsidiary or (C) obligations of Geon or any Subsidiary of Parent Geon subsidiary to grantrepurchase, extend redeem or enter into otherwise acquire any such optionoutstanding securities of Geon subsidiaries or to issue, warrant, call, right, commitment deliver 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent fromsell, or the casting of votes by, the stockholders of Parent with respect cause to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly be issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued delivered or outstandingsold, any such securities.

Capital Structure. As of the date hereofEffective Time, the authorized capital stock of Parent consists will consist of 200,000,000 500,000,000 shares of Parent Common Stock and 25,000,000 50,000,000 shares of preferred stockPreferred Stock, par value $.01 1.00 per share, of Parent share (the "Parent Preferred Stock"). At the close of business on October 2224, 1999 1997, (i) 44,958,240 61,762,302 shares of Parent Common Stock were issued and outstanding, all of which were validly issued, fully paid and nonassessable and free of preemptive rights; (ii) 4,603,500, 40,000 and 825,000 4,811,248 shares of Parent Common Stock were reserved for future issuance pursuant to Parent's 1998 1994 Long-Term Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral the 1987 Stock Option Plan, the 1997 Stock-Based Incentive Plan and Parent's Employee the Parisian Stock Purchase Plan Option Plans (collectively, the "Parent Stock Plans"); (iii) 3,667,653 645,036 shares of Parent Common Stock were subject to reserved for future issuance pursuant to outstanding awards under the Parent Parent's 1994 Employee Stock PlansPurchase Plan; and (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and or outstanding. All outstanding of the shares of Parent capital stock are Common Stock issuable in exchange for Company Common Stock at the Effective Time in accordance with this Agreement will be, when so issued, duly authorized, validly issued, fully paid and nonassessable nonassessable, free of preemptive rights and not subject be entitled to preemptive rights. Except as set forth on Schedule 3.2(b)(i) the benefits of the Parent Disclosure Schedule, all outstanding shares of capital stock Rights Plan under the terms thereof. As of the Subsidiaries date of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, except for (a) this Agreement, (b) stock options covering not in excess of 4,196,248 shares of Parent Common Stock (collectively, the "Parent Stock Options"), (c) the 1994 Employee Stock Purchase Plan, (d) contingent stock grants of 615,000 shares of Parent Common Stock to key executives, and (e) securities issuable pursuant to the stock purchase rights declared as a dividend on March 28, 1995 (the "Parent Rights") and the rights agreement dated as of March 28, 1995 between Parent and Union Planters National Bank (the "Parent Rights Agreement") ( the Parent Rights and the Parent Rights Agreement are collectively the "Parent Rights Plan"), there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent or any Subsidiary of Parent 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 -8- capital stock or any Voting Debt or other voting securities of Parent or any of any Subsidiary of Parentits Subsidiaries, or securities convertible into or exchangeable for such capital stock, or obligating Parent or any Subsidiary of Parent its Subsidiaries to grant, extend or enter into any such option, warrant, call, right, commitment right or agreement. Except as contemplated by this Agreement, there are not as of disclosed in Parent SEC Documents filed prior to the date hereof and there will (as hereinafter defined), since October 24, 1997, Parent has not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to the voting of issued any shares of the its capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent fromstock, or securities convertible into or exchangeable for such capital stock, other than shares issued in the casting of votes by, the stockholders of Parent with respect ordinary course pursuant to the MergerParent Stock Plans and the accompanying rights issued pursuant to the Parent Rights Agreement. There are no restrictions on Except as disclosed in Parent SEC Documents filed prior to vote the stock of any of its Subsidiaries. As of the date hereof, there are no outstanding contractual obligations of Parent or any of Parent's Subsidiaries (i) restricting the authorized transfer of, (ii) affecting the voting rights of, (iii) requiring the repurchase, redemption or disposition of, (iv) requiring the registration for sale of, or (v) granting any preemptive or antidilutive right with respect to, any shares of Parent Common Stock or any capital stock of Merger Sub consists any Subsidiary of 1,000 shares Parent. Each outstanding share of common stockcapital stock of each Subsidiary of Parent is duly authorized, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and paid, nonassessable and are free of preemptive rights and, except as disclosed in the Parent SEC Documents filed prior to the date hereof, each such share is owned by Parent or another Subsidiary of Parent, free and the balance clear of which are not issued or outstandingall security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 180,000,000 shares of Common Stock, $.001 par value, as of the date hereof, of which 64,009,818 shares were issued and outstanding as of February 13, 1998 plus any shares issued on such date upon exercise of options outstanding on such date and 10,000,000 shares of Class II Preferred Stock, $.01 par value, 1,000,000 shares of which (subject to adjustment upward or downward by the Parent's Board of Directors) have been designated Series A Junior Participating Preferred Stock and 1,775,000 of which (subject to adjustment upward or downward in accordance with the Parent's Certificate of Incorporation, as amended) have been designated as Class II Series B Preferred Stock. No shares of the Series A Junior Participating Preferred Stock are issued or outstanding as of the date hereof. The shares of Parent Common Stock to be issued pursuant to the Merger and 25,000,000 upon the exercise of Substitute Options will include a corresponding number of rights (such rights being hereinafter referred to collectively as "Parent Rights") to purchase shares of preferred stockSeries A Junior Participating Stock pursuant to the Rights Agreement dated as of December 21, par value 1995 (the "Parent Rights Agreement") between Parent and Xxxxxx Trust and Savings Bank, as Rights Agent. The authorized capital stock of Merger Sub consists of 1,000 shares of Common Stock, $.01 per sharepar value, 1,000 shares of which are issued and outstanding and held by Parent. A total of 1,768,421 shares of Class II Series B Preferred Stock are issued and outstanding as of the date hereof. All of the foregoing shares have been duly authorized, and all such issued and outstanding shares have been validly issued, are fully paid and nonassessable and are free of any liens or encumbrances other than any liens or encumbrances created by or imposed upon the holders thereof. The registered holders of Parent ("Common Stock have Parent Preferred Stock")Rights, pursuant to the Parent Rights Agreement. At The description and terms of the close Parent Rights are set forth in the Parent Rights Agreement. As of business on October 22the date hereof, 1999 Parent has also reserved (i) 44,958,240 864,850 shares of Common Stock for issuance to the Parent's officers, directors, employees or independent contractors or affiliates thereof under the Parent's 1989 Stock Option Plan, (ii) 115,000 shares of Common Stock for issuance to the Chief Executive Officer of the Parent under the Parent's Chief Executive Officer Stock Option Plan, (iii) 2,475,706 shares of Common Stock for issuance to the Parent's officers, directors, employees or independent contractors or affiliates thereof under the Parent's 1991 Stock Option Plan, (iv) 498,000 shares of its Common Stock for issuance to non-employee directors of the Parent under the Parent's Directors' Stock Option Plan, (v) 1,000,000 shares of its Common Stock for issuance to officers, directors, employees, independent contractors or other service providers of the Parent under the 1994 Stock Incentive Plan, (vi) 8,030,251 shares of its Common Stock for issuance to officers, directors, employees, independent contractors or other service providers of the Parent under the Parent's 1995 Employee Incentive Compensation Plan, (vii) 1,768,421 shares (subject to adjustment upward or downward) of its Common Stock for issuance upon conversion of outstanding shares of Class II Series B Preferred Stock, (viii) 8,243,010 shares of Common Stock for issuance upon the election by the holders of 6.75% Convertible Subordinated Notes to convert such notes into shares of Common Stock as provided therein and (ix) 4,160,600 shares of Common Stock for issuance upon the election by the holders of 6.25% Convertible Subordinated Notes to convert such notes into shares of Common Stock as provided therein. As of December 31, 1997, of the 13,474,659 shares of Parent Common Stock reserved for issuance upon exercise of options therefor, 11,861,865 shares remained subject to outstanding options and 1,612,794 shares were issued and outstanding; reserved for future grant. In addition, pursuant to Parent's Employee Stock Purchase Plan, 300,000 shares of Parent's Common Stock will be issuable to the participants therein for the offering period ending February 28, 1998, provided that all participants continue to contribute at current levels (iiassuming the purchase price of such shares to be 85% of the fair market value of Parent's Common Stock on the first day of the current offering period). In addition, as of the date hereof, there are outstanding (A) 4,603,500$115,000,000 (aggregate principal amount) of 6 3/4% Convertible Subordinated Notes Due 2001 (the "Notes"), 40,000 and 825,000 which Notes are (i) convertible at the option of the holder into shares of Parent Common Stock were reserved for issuance pursuant at any time prior to Parent's 1998 Incentive Planmaturity at a conversion price of $13.95 per share (equivalent to a conversion rate of 71.685 shares per $1,000 principal amount of Notes), Parent's Nonemployee Director's Compensation (ii) redeemable at the option of Parent at any time after November 15, 1999 and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; mature on November 15, 2001, and (viB) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock are validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i$150,000,000 (aggregate principal amount) of 6.25% Convertible Subordinated Notes Due 2002, which (i) are redeemable at the Parent Disclosure Schedule, all outstanding shares of capital stock option of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of ParentPurchaser at any time after December 15, free 2000 and clear of all liens(ii) mature on December 15, charges, encumbrances, claims and options of any nature2002. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule Schedules and except for changes since October 22, 1999 resulting from shares of Parent Capital Stock issuable in connection with business combinations or acquisitions of technology pursuant to agreements entered into after the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreementdate hereof, there are outstanding: (i) no shares of capital stockother equity securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 character to which Parent is a party or by which it is bound relating obligating Parent to the voting of issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on obligating Parent to vote the stock of grant, extend or enter into any of its Subsidiaries. As of the date hereofsuch equity security, the authorized capital stock of Merger Sub consists of 1,000 shares of common stockoption, par value $.01 per sharewarrant, 1,000 shares of which are validly issuedcall, fully paid and nonassessable and are owned by Parent and the balance of which are not issued right, commitment or outstandingagreement.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent JPFI consists ----------------- of 200,000,000 75,000,000 shares of Parent JPFI Common Stock and 25,000,000 5,000,000 shares of preferred stock, par value $.01 per share, of Parent share ("Parent JPFI Preferred Stock"). At the close of business on October 22June 24, 1999 1997: (i) 44,958,240 22,588,688.61 shares of Parent JPFI Common Stock were issued and outstanding (including shares of restricted JPFI Common Stock); (ii) no shares of JPFI Common Stock were held by JPFI in its treasury; (iii) no shares of JPFI Preferred Stock were issued and outstanding; (iiiv) 4,603,500, 40,000 and 825,000 4,264,329 shares of Parent JPFI Common Stock were reserved for issuance pursuant to Parent's 1998 all stock option, restricted stock or other stock-based compensation, benefits or savings plans, agreements or arrangements in which current or former employees or directors of JPFI or its subsidiaries participate as of the date hereof, including, without limitation, the JPFI 1994 Stock Incentive Plan, Parent's Nonemployee Director's Compensation the JPFI Stock Option Plan for Outside Directors and Deferral Plan and Parent's the JPFI 1994 Employee Stock Purchase Plan Plan, complete and correct copies of which, in each case as amended as of the date hereof, have been filed with the JPFI Filed SEC Documents or delivered to RSI (such plans, collectively, the "Parent JPFI Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; and (v) no 350,000 shares of Parent JPFI Preferred Stock were reserved for issuance upon exercise of preferred share purchase rights issued pursuant to the Rights Agreement, dated as of February 19, 1996, between JPFI and outstanding; The Bank of New York, as rights agent (the "JPFI Rights Agreement"). Section 3.2(c) of the JPFI Disclosure Schedule sets forth a complete and correct list, as of June 24, 1997, of the number of shares of JPFI Common Stock subject to employee stock options or other rights to purchase or receive JPFI Common Stock granted under the JPFI Stock Plans (vi) no Voting Debt was issued collectively, "JPFI Employee Stock Options"), the dates of grant and outstandingexercise prices thereof. All outstanding shares of Parent capital stock are of JPFI are, and all shares which may be issued pursuant to this Agreement or otherwise will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule 3.2(c), and except for changes since October 22June 24, 1999 1997 resulting from the exercise issuance of employee stock options granted shares of JPFI Common Stock pursuant to, or from issuances or purchases under, to the Parent JPFI Employee Stock Plans Options or as contemplated expressly permitted by this Agreement, (x) there are outstanding: not issued, reserved for issuance or outstanding (iA) no any shares of capital stock, Voting Debt stock or other voting securities of Parent; JPFI, (iiB) no any securities of Parent JPFI or any Subsidiary of Parent JPFI subsidiary convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of Parent or JPFI, (C) any Subsidiary of Parent; and (iii) no options, warrants, calls, options or other rights (including preemptive rights), commitments or agreements to which Parent acquire from JPFI or any Subsidiary JPFI subsidiary, and any obligation of Parent is a party or by which it is bound in any case obligating Parent JPFI or any Subsidiary of Parent JPFI subsidiary to issue, deliverany capital stock, sellvoting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of JPFI, purchaseand (y) there are no outstanding obligations of JPFI or any JPFI subsidiary 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 any such securities. There are no outstanding (A) securities of JPFI or acquired, additional any JPFI subsidiary convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities or ownership interests in any JPFI subsidiary, (B) warrants, calls, options or other rights to acquire from JPFI or any JPFI subsidiary, and any obligation of Parent JPFI or of any Subsidiary of ParentJPFI subsidiary to issue, any capital stock, voting securities or other ownership interests in, or obligating Parent any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any JPFI subsidiary or (C) obligations of JPFI or any Subsidiary of Parent JPFI subsidiary to grantrepurchase, extend redeem or enter into otherwise acquire any such optionoutstanding securities of JPFI subsidiaries or to issue, warrantdeliver or sell, callor cause to be issued, rightdelivered or sold, commitment or agreementany such securities. Except as contemplated by this Agreement, there are not as of the date hereof and there will not be at the Effective Time Neither JPFI nor any stockholder agreements, voting trusts or other agreements or understandings to which Parent JPFI subsidiary is a party to any agreement restricting the purchase or by which it is bound transfer of, relating to the voting of of, requiring registration of, or granting any shares preemptive or, except as provided by the terms of the capital stock JPFI Employee Stock Options, antidilutive rights with respect to, any securities of Parent that will limit the type referred to in the two preceding sentences. Other than the JPFI subsidiaries, JPFI does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any way other entity except for non-controlling investments made in the solicitation ordinary course of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of business in entities which are not issued individually or outstandingin the aggregate material to JPFI and its subsidiaries as a whole.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists of 200,000,000 300,000,000 shares of Parent Common Stock and 25,000,000 10,000,000 shares of preferred stockPreferred Stock, par value $.01 1.00 per share, of Parent share (the "Parent Preferred Stock"). At the close of business on October 22June 30, 1999 1998, (i) 44,958,240 90,751,553 shares of Parent Common Stock were issued and outstanding, all of which were validly issued, fully paid and nonassessable and free of preemptive rights; (ii) 4,603,50037,721,369 shares of Parent Common Stock were held in the treasury of Parent or by the Subsidiaries of Parent, 40,000 and 825,000 (iii) 7,682,674 shares of Parent Common Stock were reserved for future issuance pursuant to Parent's 1998 1994 Long-Term Incentive Plan, Parent's Nonemployee Director's Compensation the 1987 Stock Option Plan, the 1997 Stock-Based Incentive Plan, the Parisian Stock Option Plans and Deferral Plan and Parent's Employee the Carson Pirie Scott & Co. Stock Purchase Options Plan (collectively, the thx "Parent Stock PlansXxxexx Xxxxx Xxans"); (iii) 3,667,653 582,339 shares of Parent Common Stock were subject to reserved for future issuance pursuant to outstanding awards under the Parent Parent's 1994 Employee Stock PlansPurchase Plan; and (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and or outstanding. All outstanding of the shares of Parent capital stock are Common Stock issuable in exchange for Company Common Stock at the Effective Time in accordance with this Agreement will be, when so issued, duly authorized, validly issued, fully paid and nonassessable nonassessable, free of preemptive rights and not subject be entitled to preemptive rights. Except as set forth on Schedule 3.2(b)(i) the benefits of the Parent Disclosure Schedule, all outstanding shares of capital stock Rights Plan (as hereinafter defined) under the terms thereof. As of the Subsidiaries date of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, except for (a) this Agreement, (b) stock options covering not in excess of 6,999,674 shares of Parent Common Stock (collectively, the "Parent Stock Options"), (c) the 1994 Employee Stock Purchase Plan, (d) contingent stock grants of 683,000 shares of Parent Common Stock to key executives, and (e) securities issuable pursuant to the stock purchase rights declared as a dividend on March 28, 1995 (the "Parent Rights") and the rights agreement dated as of March 28, 1995 between Parent and Union Planters National Bank (as amended, the "Parent Rights Agreement", and together with the Parent Rights, the "Parent Rights Plan"), there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or any of any Subsidiary of Parentits Subsidiaries, or securities convertible into or exchangeable for such capital stock, or obligating Parent or any Subsidiary of Parent its Subsidiaries to grant, extend or enter into any such option, warrant, warrant call, right, commitment right or agreement. Except as contemplated by this Agreement, there are not disclosed in Parent SEC Documents (as of the date hereof and there will not be at the Effective Time any stockholder agreements, voting trusts or other agreements or understandings hereinafter defined) filed prior to which Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, since June 30, 1998, Parent has not issued any shares of its capital stock, or securities convertible into or exchangeable for such capital stock, other than shares issued in the authorized ordinary course pursuant to the Parent Stock Plans and the Parent Rights. Except as disclosed in Parent SEC Documents filed prior to the date hereof, there are no outstanding contractual obligations of Parent or any of Parent's Subsidiaries (i) restricting the transfer of, (ii) affecting the voting rights of, (iii) requiring the repurchase, redemption or disposition of, (iv) requiring the registration for sale of, or (v) granting any preemptive or antidilutive right with respect to, any shares of Parent Common Stock or any capital stock of Merger Sub consists any Subsidiary of 1,000 shares Parent. Each outstanding share of common stockcapital stock of each Subsidiary of Parent that is a corporation is duly authorized, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and paid, nonassessable and are free of preemptive rights and, except as disclosed in Parent SEC Documents filed prior to the date hereof, each such share is owned by Parent or another Subsidiary of Parent, free and the balance clear of which are not issued or outstandingall security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of Parent consists of 200,000,000 shares of 800,000,000 common shares, no par value (“Parent Common Stock Shares”), and 25,000,000 shares of 30,000,000 preferred stockshares, no par value $.01 per share, of Parent ("“Parent Preferred Stock"Shares”). At On the close of business on October 22date hereof, 1999 (iA) 44,958,240 shares of 174,665,236 Parent Common Stock Shares were issued and outstanding; , (iiB) 4,603,500no Parent Preferred Shares were issued and outstanding, 40,000 and 825,000 shares of (C) 860,154 Parent Common Stock Shares were reserved for issuance pursuant upon exercise of outstanding stock options to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of purchase Parent Common Stock were subject to issuance pursuant to outstanding awards Shares granted under the Parent Stock Plans; Incentive Plans (ivthe “Parent Stock Options”), and (D) 10,780,154 Parent Common Shares were reserved for issuance under the Parent 2014 Omnibus Incentive Plan. All outstanding Parent Common Shares are, and all Parent Common Shares reserved for issuance will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, duly authorized, validly issued, fully paid and nonassessable. None of the outstanding Parent Common Shares are subject to or were issued in violation of, and none of the Parent Common Shares reserved for issuance will be, upon issuance in accordance with the terms specified in the instruments or agreements pursuant to which they are issuable, subject to or issued in violation of, any preemptive right, purchase option, call option, right of first refusal, subscription or any other similar right. Each outstanding Parent Stock Option was granted in compliance in all material respects with all applicable Laws and all of the terms and conditions of the Parent Stock Incentive Plans pursuant to which it was issued. On the date of this Agreement, except as set forth above in this Section 3.2(c)(i), no shares of Parent Common Stock were held by Parent in its treasury capital stock or by its wholly owned Subsidiaries; (v) no shares other voting securities of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock of Parent are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i(A) of for the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free Common Shares and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or Options, and (B) as contemplated by this Agreementotherwise permitted under Section 4.2, there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stockoptions, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no optionsstock appreciation rights, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements undertakings of any kind to which Parent or any Subsidiary of Parent is a party or by which it such entity is bound in any case bound, obligating Parent or any Subsidiary of Parent 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 stock, voting securities or other voting securities ownership interests of Parent or of any Subsidiary of Parent, Parent or obligating Parent or any Subsidiary of Parent 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 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Mergerundertaking. There are no restrictions on outstanding bonds, debentures, notes or other Indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the stock right to vote) on any matter on which holders of Parent Common Shares may vote. There are no outstanding agreements to which Parent or any Subsidiary of Parent or any of their respective officers or directors is a party concerning the voting, sale, transfer or registration of any capital stock or other equity securities of its SubsidiariesParent or any Subsidiary of Parent. As All dividends or distributions on securities of Parent or any Subsidiary of Parent that have been declared or authorized prior to the date hereof, of this Agreement have been paid in full (except to the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable extent such dividends or distributions have been publicly announced and are owned by Parent not yet due and the balance of which are not issued or outstandingpayable).

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists entirely of 200,000,000 150,000,000 shares of Parent Common Stock and 25,000,000 6,000,000 shares of preferred stock, Serial Preferred Stock without par value $.01 per share, of Parent ("“Parent Preferred Stock"”), of which 1,500,000 shares have been designated as Series A Junior Participating Preferred Shares. At the close of business on October 22March 5, 1999 2004: (i) 44,958,240 50,102,603 shares of Parent Common Stock were issued and outstandingoutstanding (including awards of restricted stock); (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and or outstanding; , and (viiii) no Voting Debt was 2,646,467 shares of Parent Common Stock were subject to outstanding employee or director stock options to purchase Parent Common Stock or other common stock awards granted under Parent stock plans (collectively, the “Parent Stock Options”). Each share of Parent Common Stock carries with it an associated share purchase right (collectively, the “Parent Rights”) issued pursuant to the Amended and outstandingRestated Rights Agreement between Parent and Computershare Investor Services, LLC, as Rights Agent, dated as of August 28, 2000 (the “Parent Rights Agreement”), which entitles the holder thereof to purchase, on the occurrence of certain events, Parent Common Stock. All outstanding shares of Parent capital stock are of Parent are, and all shares that may be issued will be, when issued, duly authorized, validly issued, fully paid and nonassessable nonassessable, and not subject to or issued in violation of preemptive rights. Except as All shares of Parent Common Stock to be issued in the Merger will entitle the holders thereof to one vote on each matter properly submitted to the shareholders of Parent for their vote, consent, waiver, release, or other action, including any vote or consent for the election or removal of directors; provided, however, that such shares will entitle the holders thereof to ten votes per share on each of the matters set forth on Schedule 3.2(b)(iin Division II, Section 2(a) of Parent’s Amended Articles of Incorporation, subject to the Parent Disclosure Schedule, all outstanding limitations set forth therein. The shares of capital stock Parent Common Stock to be issued pursuant to this Agreement, when issued in accordance with the terms of the Subsidiaries of Parent are owned by Parent this Agreement, will be validly issued, fully paid, and nonassessable, and no person will have any preemptive right, subscription right, or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any natureother purchase right in respect thereof. Except (i) as set forth in this Section 3.2(b3.2(c) or Schedule 3.2(b)(iiand (ii) as set forth on Section 3.2(c) of the Parent Disclosure Schedule and except for changes since October 22Letter, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, (A) there are outstanding: not issued, reserved for issuance or outstanding (i1) no any shares of capital stock, Voting Debt stock or other voting securities of Parent; , (ii2) any securities convertible into or exchangeable or exercisable for shares of capital stock or voting securities of Parent, or (3) any warrants, calls, options or other rights to acquire from Parent or any Parent Subsidiary, and no securities obligation of Parent or any Parent Subsidiary of Parent to issue, any capital stock, voting securities or securities convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of Parent or any Subsidiary of Parent; and (iiiB) there are no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which outstanding obligations of Parent or any Parent Subsidiary of Parent is a party to repurchase, redeem or by which it is bound in otherwise acquire any case obligating Parent such securities or any Subsidiary of Parent to issue, deliver, deliver or sell, purchase, redeem or acquire, or cause to be issued, delivered, delivered or sold, purchasedany such securities. Neither Parent nor any Parent Subsidiary is a party to any voting agreement with respect to the voting of any such securities. There are not issued, redeemed reserved for issuance or acquired, additional outstanding (i) securities convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities or ownership interests in any Parent Subsidiary, (ii) warrants, calls, options or other rights to acquire from Parent or any Parent Subsidiary, and no obligation of Parent or of any Parent Subsidiary of Parentto issue, any capital stock, voting securities or other ownership interests in, or obligating any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any Parent Subsidiary, or (iii) obligations of Parent or any Parent Subsidiary to repurchase, redeem or otherwise acquire any such outstanding securities of Parent Subsidiaries or to grantissue, extend deliver or enter into sell, or cause to be issued, delivered or sold, 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Mergersecurities. There are no restrictions on Parent to vote the stock agreements, arrangements or commitments of any character (contingent or otherwise) pursuant to which any person is or may be entitled to receive any payment pursuant to any unpaid earnout or similar agreement contained in any business acquisition agreement based on the revenues, earnings or other performance measurement of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingany Parent Subsidiary.

Capital Structure. As of the date hereof, the (i) The authorized capital stock of Parent Conexant consists of 200,000,000 1,000,000,000 shares of Parent Common Stock Stock, par value $1.00 per share (the "Conexant Common Stock"), and 25,000,000 shares of preferred stock, without par value $.01 per share, of Parent (the "Parent Conexant Preferred Stock"). At the close of business on October 22, 1999 (i) 44,958,240 1,500,000 shares of Parent which are designated as "Series A Junior Participating Preferred Stock" and one share of which is designated as "Series B Voting Preferred Stock". As of November 30, 2001, (A) 254,423,819 shares of Conexant Common Stock and (B) one share of Conexant Preferred Stock designated as "Series B Voting Preferred Stock" were issued and outstanding and no other shares of capital stock of Conexant were issued and outstanding; (ii) 4,603,500. As of November 30, 40,000 and 825,000 2001, 84,082,811 shares of Parent Conexant Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent upon exercise of options outstanding under Conexant Stock Plans"); (iii) 3,667,653 shares . As of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) November 30, 2001, no shares of Parent Conexant Common Stock were held by Parent in its as treasury or by its wholly owned Subsidiaries; (v) shares. Since November 30, 2001 to the date of this Agreement, no shares of Parent Preferred capital stock of Conexant or any other securities of Conexant have been issued other than shares of Conexant Common Stock were (and accompanying Conexant Rights (as defined below)) issued pursuant to (w) the Conexant Systems, Inc. Retirement Savings Plan and the Conexant Systems, Inc. Hourly Employees Savings Plan, (x) options or rights outstanding as of November 30, 2001 under Conexant Stock Plans and (y) the exchange or retraction of Exchangeable Shares of Philsar Semiconductor Inc. All issued and outstanding; and (vi) no Voting Debt was issued and outstanding. All outstanding shares of Parent capital stock of Conexant are duly authorized, validly issued, fully paid and nonassessable nonassessable, and not subject no class of capital stock of Conexant is entitled to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all There are outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 agreementsno options, voting trusts warrants or other agreements or understandings rights to which Parent is a party or by which it is bound relating acquire capital stock from Conexant other than (w) rights (the "Conexant Rights") distributed to the voting holders of any Conexant Common Stock pursuant to the Rights Agreement dated as of November 30, 1998, as amended as of December 9, 1999, between Conexant and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the "Conexant Rights Agreement"), (x) options and other rights to acquire Conexant Common Stock from Conexant ("Conexant Stock Options") representing in the aggregate the right to purchase 51,394,095 shares of Conexant Common Stock under the capital stock Conexant Stock Plans, (y) $94,849,000 aggregate principal amount of Parent that will limit in any way the solicitation Conexant's 4 1/4% Convertible Subordinated Notes due 2006 and $615,000,000 aggregate principal amount of proxies by or Conexant's 4% Convertible Subordinated Notes due 2007 which are, on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, convertible into Conexant Common Stock at exercise prices of $23.098 and $108, respectively, per share (collectively, the authorized capital stock "Conexant Convertible Notes") and (z) Exchangeable Shares of Merger Sub consists Philsar Semiconductor Inc. which are exchangeable into, or subject to retraction in exchange for, an aggregate of 1,000 357,640 shares of common stock, par value $.01 per share, 1,000 shares Conexant Common Stock. Section 5.2(b) of which are validly issued, fully paid the Conexant Disclosure Schedule sets forth a A-20 complete and nonassessable and are owned by Parent correct list as of a recent date of all outstanding Conexant Stock Options and the balance of which are not issued or outstandingexercise prices thereof.

Capital Structure. (i) As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 400,000,000 shares of Parent Common Stock Stock, 10,000,000 shares of Series Common Stock, $.01 per share, of Parent ("Series Stock") and 25,000,000 10,000,000 shares of preferred stock, par value $.01 per share, of Parent (the "Parent Preferred Stock"). At As of the close of business on October 22March 10, 1999 1998, there were: (i) 44,958,240 171,120,069 shares of Parent Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 7,702,009 shares of Parent Common Stock were held in the treasury of Parent; (iii) 12,189,852 shares of Parent Common Stock reserved for issuance pursuant to Parent's 1998 Incentive Planstock option and stock purchase plans (such plans, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iiiiv) 3,667,653 15,002,581 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plansissuable upon exercise of awarded but unexercised stock options; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; and (v) no shares of Series Stock or Parent Preferred Stock outstanding. Except as set forth above and except for shares of junior participating preferred stock issuable pursuant to the Rights Agreement, dated as of October 15, 1996, between Parent and First Chicago Trust Company of New York, as of the close of business on March 10, 1998 there were issued and outstanding; and (vi) no Voting Debt was issued and shares of capital stock or other equity securities of Parent issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Parent are, and all shares which may be issued as described above will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure ScheduleThere are no outstanding bonds, all outstanding shares of capital stock of the Subsidiaries debentures, notes or other indebtedness or debt securities of Parent are owned by having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any naturemay vote. Except as set forth above or in this Section 3.2(b) or Schedule 3.2(b)(ii3.02(b) of the disclosure schedule delivered by Parent and Sub to the Company at the time of the execution of this Agreement (the "Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this AgreementSchedule"), there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or undertakings of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 kind to which Parent is a party or by which it is bound relating obligating Parent to the issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of Parent or obligating Parent to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of Parent to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingParent.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent Sports Authority consists of 200,000,000 100,000,000 shares of Parent Sports Authority Common Stock and 25,000,000 5,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22April 27, 1999 1998: (i) 44,958,240 31,732,167 shares of Parent Sports Authority Common Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 49,231 shares of Parent Sports Authority Common Stock were held by Sports Authority in its treasury; (iii) no shares of Sports Authority Preferred Stock were issued and outstanding; (iv) 4,711,240 shares of Sports Authority Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive the Stock Option Plan, Parent's Nonemployee Director's Compensation the 1996 Stock Option and Deferral Plan and Parent's Restricted Stock Plan, the Director Stock Option Plan, the Employee Stock Purchase Plan and the Management Stock Purchase Plan, complete and correct copies of which have been delivered to Woolworth (such plans, collectively, the "Parent Sports Authority Stock Plans"); and (iiiv) 3,667,653 4,580,964 shares of Parent Sports Authority Common Stock were reserved for issuance upon conversion of Sports Authority's 5.25% Convertible Subordinated Notes due 2001 (the "Sports Authority Convertible Securities"). Section 3.1(c) of the Sports Authority Disclosure Schedule sets forth a complete and correct list, as of April 27, 1998, of the number of shares of Sports Authority Common Stock subject to issuance pursuant employee stock options or other rights to outstanding awards purchase or receive Sports Authority Common Stock granted under the Parent Sports Authority Stock Plans; Plans (iv) no shares collectively, "Sports Authority Employee Stock Options"), the dates of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued grant and outstanding; and (vi) no Voting Debt was issued and outstandingexercise prices thereof. All outstanding shares of Parent capital stock are of Sports Authority are, and all shares which may be issued will be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b3.1(c) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22April 27, 1999 1998 resulting from the exercise issuance of employee stock options granted shares of Sports Authority Common Stock pursuant to, or from issuances or purchases underto the Sports Authority Employee Stock Options, the Parent Stock Plans Sports Authority Convertible Securities or as contemplated permitted by this AgreementSection 4.1(a)(i)(y) and 4.1(a)(ii), (x) there are outstanding: not issued, reserved for issuance or outstanding (iA) no any shares of capital stock, Voting Debt stock or other voting securities of Parent; Sports Authority, (iiB) no any securities of Parent Sports Authority or any Subsidiary of Parent Sports Authority subsidiary convertible into or exchangeable or exercisable for shares of capital stock, Voting Debt stock or other voting securities of Parent or Sports Authority, (C) any Subsidiary of Parent; and (iii) no options, warrants, calls, options or other rights (including preemptive rights), commitments or agreements to which Parent acquire from Sports Authority or any Subsidiary Sports Authority subsidiary, and any obligation of Parent is a party or by which it is bound in any case obligating Parent Sports Authority or any Subsidiary of Parent Sports Authority subsidiary to issue, deliverany capital stock, sellvoting securities or securities convertible into or exchangeable or exercisable for capital stock or voting securities of Sports Authority, purchaseand (y) there are no outstanding obligations of Sports Authority or any Sports Authority subsidiary to repurchase, redeem or acquireotherwise acquire any such securities or to issue, deliver or sell, or cause to be issued, delivered, delivered or sold, purchasedany such securities. Except as set forth in Section 3.1(c) of the Sports Authority Disclosure Schedule, redeemed there are no outstanding (A) securities of Sports Authority or acquired, additional any Sports Authority subsidiary convertible into or exchangeable or exercisable for shares of capital stock or any Voting Debt or other voting securities or ownership interests in any Sports Authority subsidiary, (B) warrants, calls, options or other rights to acquire from Sports Authority or any Sports Authority subsidiary, and any obligation of Parent Sports Authority or of any Subsidiary of ParentSports Authority subsidiary to issue, any capital stock, voting securities or other ownership interests in, or obligating Parent any securities convertible into or exchangeable or exercisable for any capital stock, voting securities or ownership interests in, any Sports Authority subsidiary or (C) obligations of Sports Authority or any Subsidiary of Parent Sports Authority subsidiary to grantrepurchase, extend redeem or enter into otherwise acquire any such optionoutstanding securities of Sports Authority subsidiaries or to issue, warrantdeliver or sell, callor cause to be issued, rightdelivered or sold, commitment or agreementany such securities. Except as contemplated by this Agreement, there are not as set forth in Section 3.1(c) of the date hereof and there will not be at the Effective Time Sports Authority Disclosure Schedule, neither Sports Authority nor any stockholder agreements, voting trusts or other agreements or understandings to which Parent Sports Authority subsidiary is a party or by which it is bound to any agreement restricting the transfer of, relating to the voting of of, requiring registration of, or granting any shares preemptive or, except as provided by the terms of the capital stock Sports Authority Employee Stock Options and the Sports Authority Convertible Securities, antidilutive rights with respect to, any securities of Parent that will limit the type referred to in the two preceding sentences. Other than the Sports Authority subsidiaries, Sports Authority does not directly or indirectly beneficially own any securities or other beneficial ownership interests in any way other entity except for non-controlling investments made in the solicitation ordinary course of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of business in entities which are not issued individually or outstandingin the aggregate material to Sports Authority and its subsidiaries as a whole.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent Berkshire consists of 200,000,000 1,500,000 shares of Parent Berkshire Class A Common Stock Stock, 50,000,000 shares of Berkshire Class B Common Stock, and 25,000,000 1,000,000 shares of preferred stock, no par value $.01 per share, of Parent share ("Parent Berkshire Preferred Stock"). At Subject to such changes as may occur after May 1, 1998, and subject in the close case of business on October 22, 1999 clauses (i) 44,958,240 and (iii) to adjustment as a result of conversions of Berkshire Class A Common Stock into Berkshire Class B Common Stock, there were, as of May 1, 1998: (i) 1,192,905 shares of Parent Berkshire Class A Common Stock, 1,448,918 shares of Berkshire Class B Common Stock, and no shares of Berkshire Preferred Stock were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 163,583 shares of Parent Berkshire Class A Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans")held by Berkshire in its treasury; (iii) 3,667,653 35,787,150 shares of Parent Berkshire Class B Common Stock were subject to reserved for issuance pursuant to outstanding awards under the Parent Stock Plansupon conversion of Berkshire Class A Common Stock; (iv) no shares of Parent Berkshire Class B Common Stock were held by Parent in its treasury or by its wholly owned Subsidiariesreserved for issuance upon exercise of authorized but unissued options under Berkshire's 1996 Stock Option Plan; and (v) 15,669 shares of Berkshire Class B Common Stock issuable upon exercise of outstanding options under Berkshire's 1996 Stock Option Plan. Except as set forth in this Section 4.3(c), no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and capital stock or other equity securities of Berkshire are issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Berkshire are, and all shares of Holding Company Common Stock which may be issued pursuant to this Agreement will be when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding All shares of capital stock Holding Company Common Stock issued pursuant to this Agreement will, when so issued, be registered under the Securities Act for such issuance and registered under the Exchange Act, be registered or exempt from registration under any applicable state securities laws, and be listed on the NYSE, subject to official notice of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any natureissuance. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement4.3(c), there are outstanding: (i) no shares of capital stockoutstanding bonds, Voting Debt debentures, notes or other voting indebtedness or other securities of Parent; Berkshire having the right to vote (ii) no securities of Parent or any Subsidiary of Parent convertible into into, or exchangeable for shares for, securities having the right to vote) on any matters on which stockholders of capital stockBerkshire may vote. Except as set forth in this Section 4.3(c), Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) except as set forth in the Agreement with respect to Holding Company and the Merger Subsidiaries, there are no outstanding securities, options, warrants, calls, or rights (including preemptive rights), commitments or agreements to which Parent obligating Berkshire or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 equity securities of Parent Berkshire or any of any Subsidiary of Parent, its subsidiaries or obligating Parent Berkshire or any Subsidiary of Parent its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, or 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstanding.

Capital Structure. As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 (i) 2,000,000 shares of Parent Common Stock Stock, (ii) 200,000 shares of class A common stock, par value $.01 per share, of Parent ("Parent Class A Common Stock") and 25,000,000 (iii) 500,000 shares of preferred stock, par value $.01 per share, of Parent (the "Parent Preferred Stock"). At the close of business on October 22November 15, 1999 1999, (i) 44,958,240 929,950 shares of Parent Common Stock were issued and outstanding, all of which were validly issued, fully paid and nonassessable and free of preemptive rights; (ii) 4,603,500174,560 shares of Parent Class A Common Stock were issued and outstanding, 40,000 all of which were validly issued, fully paid and 825,000 nonassessable and free of preemptive rights, and 290 of which are held in the treasury of the Parent; (iii) 618,750 shares of Parent Common Stock were reserved for future issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral 1997 Executive Stock Option Plan and Parent's 1997 Employee Stock Purchase Option Plan (collectively, the "Parent Stock Plans"); (iiiiv) 3,667,653 6,000 shares of Parent Common Stock were subject to reserved for future issuance pursuant to outstanding awards under Parent's 1997 Employee Stock Purchase Plan (the "Parent Stock Purchase Plan" and, together with the Parent Stock Plans, the "Parent Incentive Plans"); (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; and (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and or outstanding. All outstanding of the shares of Parent capital stock are Common Stock and all of the Algos Warrants issuable in exchange for Company Common Stock at the Effective Time in accordance with this Agreement will be, when so issued, duly authorized, validly issued, free of preemptive rights and, in the case of the shares of the Parent Common Stock, fully paid and nonassessable and not subject to preemptive rightsnonassessable. Except as set forth on Schedule 3.2(b)(i) Each share of Parent Common Stock issuable upon exercise of the Parent Disclosure ScheduleAlgos Warrants will be fully paid and nonassessable at the time of exercise. As of the date of this Agreement, all outstanding except for (a) this Agreement, (b) stock options covering not in excess of 618,750 shares of capital stock of Parent Common Stock (collectively, the Subsidiaries of "Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free Stock Options") and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b(c) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this AgreementPurchase Plan, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent its Subsidiaries is a party or by which it any of them is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or any of any Subsidiary of Parentits Subsidiaries, or securities convertible into or exchangeable for such capital stock, or obligating Parent or any Subsidiary of Parent its Subsidiaries to grant, extend or enter into any such option, warrant, call, right, commitment right or agreement. Since November 15, 1999, Parent has not issued any shares of its capital stock, or securities convertible into or exchangeable for such capital stock, other than shares issued in the ordinary course pursuant to the Parent Stock Plans. Except as contemplated set forth in Schedule 2.2 of that separate disclosure letter delivered by Parent to the Company at or prior to the execution and delivery by Parent of this AgreementAgreement (the "Parent Disclosure Schedule"), there are not as no outstanding contractual obligations of Parent or any of Parent's Subsidiaries (i) restricting the date hereof and there will not be at the Effective Time any stockholder agreementstransfer of, voting trusts or other agreements or understandings to which Parent is a party or by which it is bound relating to (ii) affecting the voting of rights of, (iii) requiring the repurchase, redemption or disposition of, (iv) requiring the registration for sale of, or (v) granting any preemptive or antidilutive right with respect to, any shares of the Parent Common Stock, Parent Class A Common Stock, Parent Preferred Stock or any capital stock of Parent that any Subsidiary of Parent. The execution and delivery of the Transaction Agreements do not, and the consummation of the transactions contemplated hereby and thereby and the compliance with the provisions hereof and thereof will limit not, except as set forth in such Transaction Agreements, give rise to any way the solicitation preemptive right or antidilutive right of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent any Person with respect to the Merger. There are no restrictions on any shares of Parent to vote the Common Stock, Parent Class A Common Stock, Parent Preferred Stock or any capital stock of any Subsidiary of its SubsidiariesParent. As Each outstanding share of the date hereof, the authorized capital stock or other equity interests of Merger Sub consists each Subsidiary of 1,000 shares of common stockParent is duly authorized, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and paid, nonassessable and are free of preemptive rights, and each such share is owned by Parent or another Subsidiary of Parent, free and the balance clear of which are not issued or outstandingall security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever.

Capital Structure. As of the date hereof, the authorized capital stock of Parent consists of 200,000,000 35,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stockStock, par value $.01 per share, and 5,000,000 shares of Parent ("Parent Preferred Stock")preferred stock, $.01 par value per share. At the close of business on October 22December 14, 1999 1995: (i) 44,958,240 18,546,075 shares of Parent Common Stock are issued and outstanding, and an aggregate of 1,960,957 shares of Parent Common Stock are reserved for issuance pursuant to Parent's Amended and Restated Stock Option Plan for Key Employees and Parent's Stock Option Plan for Nonemployee Directors (collectively, the "Parent Stock Option Plans") and 1,000,000 shares of Parent Common Stock are reserved for issuance pursuant to the Redeemable Series A Convertible Preferred Stock of Parent (ii) 100,000 shares of Redeemable Series A Convertible Preferred Stock of Parent were issued and outstanding; (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstandingtreasury; and (viiii) no 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 Parent stockholders may vote ("Parent Voting Debt was Debt") were issued and or outstanding. All outstanding shares of Parent capital stock Common Stock have been duly authorized, are validly issued, fully paid and nonassessable and are not subject to preemptive rights, and, subject to the approval of the Parent Share Issuance and the Charter Amendment, all shares of Parent Common Stock issuable in the Merger will be duly authorized and will be, when issued, validly issued, fully paid and non-assessable and free of preemptive rights. Except as set forth on Schedule 3.2(b)(i3.2(b) of the Parent Disclosure ScheduleLetter, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent Parent, or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22December 14, 1999 1995 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans Option Plans, or as contemplated by this Agreement, including issuances contemplated by the Subscription Agreement, there are outstanding: (i) no shares of capital stock, Parent Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Parent Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent Voting Debt or other voting securities of Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent to grant, extend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreementset forth on Schedule 3.2(b) of the Parent Letter, there are not as of the date hereof and there will not be at the Effective Time any no stockholder agreements, registration rights, voting trusts or other similar agreements or understandings to which Parent is a party or by which it is bound relating to the voting of any shares bound. Except as set forth on Schedule 3.2(b) of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent fromLetter, or the casting of votes by, the stockholders of Parent with respect to the Merger. There there are no restrictions on Parent Parent's ability to vote the stock of held by Parent or any of its Subsidiaries. As of the date hereofClosing, the authorized capital stock of Merger Sub consists will consist of 1,000 shares of common stockordinary shares, par value $.01 0.01 per share, 1,000 100 shares of which are will be validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are will not be issued or outstanding.

Capital Structure. As of the date hereofof this Agreement, the authorized capital stock of Parent consists of 200,000,000 (i) 100,000,000,000 shares of Parent Common Stock and 25,000,000 (ii) 2,000,000 shares of preferred stock, par value $.01 per share, of Parent ("Parent Preferred Stock"). At As of the close of business on October 22June 30, 1999 2008, there were: (i) 44,958,240 5,648,781 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 11,666,195 shares of Parent Common Stock were issuable upon conversion of 3,227.3617 shares of Parent Preferred Stock, (iii) 163 shares of Parent Common Stock held in the treasury of Parent; (iv) 52,818 shares of Parent Common Stock reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan ’s stock option plans (collectively, the "“Parent Stock Plans"”); (iiiv) 3,667,653 1,293,820 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no shares issuable upon exercise of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstandingawarded but unexercised stock options; and (vi) warrants representing the right to purchase 9,461,725 shares of Parent Common Stock; Except as set forth above, as of the close of business on June 30, 2008 there were no Voting Debt was issued and shares of capital stock or other equity securities of Parent issued, reserved for issuance or outstanding. All outstanding shares of Parent capital stock are of Parent are, and all shares which may be issued as described above shall be, when issued, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(iThe shares of Parent Common Stock to be issued in connection with the Merger (x) shall, when issued, be duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights, and (y) shall be issued in compliance in all material respects with all applicable federal and state securities laws and applicable rules and regulations promulgated thereunder. As of the Effective Time of the Merger, the Board of Directors of Parent Disclosure Schedule, all outstanding shall have reserved for issuance a number of shares of capital stock of Parent Common Stock as is required by the Subsidiaries of Parent are owned Company Warrants to be assumed by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any naturepursuant to Section 2.03. Except as set forth above and in this Section 3.2(b) or Schedule 3.2(b)(ii) the Rights Agreement, dated as of October 31, 2001, between Parent and the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent American Stock Plans or as contemplated by this AgreementTransfer & Trust Company, there are outstanding: (i) no shares of capital stockoutstanding securities, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments commitments, agreements, arrangements or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or undertakings of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 kind to which Parent is a party or by which it is bound relating obligating Parent to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other equity or voting securities of Parent or obligating Parent to issue, grant, extend, accelerate the voting vesting of or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking. There are no outstanding contractual obligations, commitments, understandings or arrangements of Parent to repurchase, redeem or otherwise acquire or make any payment in respect of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its SubsidiariesParent. As of the date hereof, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $.01 0.01 per share, 1,000 shares 100 of which are have been validly issued, are fully paid and nonassessable and are owned by Parent, free and clear of any Lien, and as of the Closing Date, all the issued and outstanding shares of the common stock of Merger Sub shall be owned by Parent free and the balance clear of which are not issued or outstandingany Lien.

Capital Structure. As of the date hereof, the The authorized capital stock of Parent consists of 200,000,000 25,000,000 shares of Parent Common Stock and 25,000,000 shares of preferred stock, Preferred Stock without par value $.01 per share, of Parent ("Parent Preferred Stock")value. At the close of business on October 22November 26, 1999 1996, (i) 44,958,240 8,585,000 shares of Parent Common Stock were issued and outstanding; , (ii) 4,603,500, 40,000 and 825,000 shares of Parent Common Stock were reserved for issuance pursuant to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; (iv) no zero shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; treasury, (viii) not more than 538,000 shares of Parent Common Stock were reserved for issuance upon exercise of outstanding employee and director stock options to purchase shares of Parent Common Stock and (iv) no shares of Parent Preferred Stock were issued outstanding. Except as set forth above and for amounts which in the aggregate are not material, at the close of business on November __, 1996, no shares of capital stock or other voting securities of the Parent were issued, reserved for issuance or outstanding; . Other than the options referred to in clause (iii) above and as disclosed in Parent SEC Documents (vi) as defined in Section 3.2(d)), as of the date of this Agreement, there are no Voting Debt was issued and outstandingmaterial amounts of outstanding securities convertible into Parent Common Stock. All outstanding shares of Parent capital stock are of the Parent are, and all shares which may be issued pursuant to this Agreement will be, when issued in accordance with the terms hereof, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases under, the Parent Stock Plans or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable for shares of capital stock, Voting Debt or other voting securities of Parent or any Subsidiary of Parent; and (iii) no options, warrants, calls, rights (including preemptive rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent 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 Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the stockholders of Parent with respect to the Merger. There are no restrictions on Parent to vote the stock of any of its Subsidiaries. As of the date hereofof this Agreement, the authorized capital stock of Merger each Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 100 shares of which are have been validly issued, are fully paid and nonassessable and are owned by Parent free and the balance clear of which are not issued or outstandingany Liens.

Capital Structure. As of the date hereof, the (a) The authorized capital stock of Parent consists of 200,000,000 30,000,000 shares of common stock, $.0001, par value, and 1,000,000 shares of preferred stock, $.0001 par value, of which, as of the date hereof, there were issued and outstanding, 7,580,000 shares of common stock and no shares of preferred stock. There are no other outstanding shares or voting securities of the Parent and no outstanding commitments to issue any shares of capital stock or voting securities of the Parent after the date hereof, other than (i) pursuant to this Agreement, (ii) 6,000,000 shares of Parent Common Stock and 25,000,000 shares issuable upon the exercise of preferred stockthe Parent’s Redeemable Common Stock Purchase Warrants (“Parent Warrants”) issued in Parent’s initial public offering (“IPO”), par value $.01 per share, of Parent ("Parent Preferred Stock"). At the close of business on October 22, 1999 (iiii) 44,958,240 3,200,000 shares of Parent Common Stock were issuable upon the exercise of warrants issued to initial stockholders of Parent (the “Insider Warrants” and outstanding; together with the Parent Warrants, the “Warrants”) and (iiiv) 4,603,500, 40,000 and 825,000 210,000 shares of Parent Common Stock were reserved for issuance pursuant issuable upon the exercise of the unit purchase option granted by Parent to Parent's 1998 Incentive Plan, Parent's Nonemployee Director's Compensation certain underwriters of its initial public offering and Deferral Plan and Parent's Employee Stock Purchase Plan (collectively, the "Parent Stock Plans"); (iii) 3,667,653 shares of Parent Common Stock were subject to issuance pursuant to outstanding awards under the Parent Stock Plans; Warrants issuable thereunder (iv) no shares of Parent Common Stock were held by Parent in its treasury or by its wholly owned Subsidiaries; (v) no shares of Parent Preferred Stock were issued and outstanding; and (vi) no Voting Debt was issued and outstandingthe “Underwriter Option”). All outstanding shares of Parent capital stock Common Stock are duly authorized, validly issued, fully paid and nonassessable non-assessable and are free of any Liens or encumbrances other than any Liens or encumbrances created by or imposed upon the holders thereof, and are not subject to preemptive rights. Except as set forth on Schedule 3.2(b)(i) rights or rights of the Parent Disclosure Schedule, all outstanding shares of capital stock of the Subsidiaries of Parent are owned first refusal created by Parent or a direct or indirect wholly owned Subsidiary of Parent, free and clear of all liens, charges, encumbrances, claims and options of any nature. Except as set forth in this Section 3.2(b) or Schedule 3.2(b)(ii) of the Parent Disclosure Schedule and except for changes since October 22, 1999 resulting from the exercise of employee stock options granted pursuant to, or from issuances or purchases understatute, the Parent Stock Plans Certificate of Incorporation or as contemplated by this Agreement, there are outstanding: (i) no shares of capital stock, Voting Debt or other voting securities of Parent; (ii) no securities bylaws of Parent or any Subsidiary agreement to which Parent is a party or by which it is bound. Parent has reserved 9,200,000 shares of common stock for issuance upon exercise of Parent convertible into or exchangeable Warrants and the Insider Warrants. Except for shares of capital stock(i) the rights created pursuant to this Agreement, Voting Debt or other voting securities of (ii) the Parent or any Subsidiary of Parent; and Warrants, (iii) the Insider Warrants, and (iv) the Underwriter Option, there are no other options, warrants, calls, rights (including preemptive rights), commitments or agreements of any character to which Parent or any Subsidiary of Parent is a party or by which it is bound in any case obligating Parent or any Subsidiary of Parent to issue, deliver, sell, purchase, redeem repurchase or acquireredeem, or cause to be issued, delivered, sold, purchasedrepurchased or redeemed, redeemed or acquired, additional any shares of capital stock or any Voting Debt or other voting securities of Parent or of any Subsidiary of Parent, or obligating Parent or any Subsidiary of Parent to grant, extend extend, accelerate the vesting and/or repurchase rights of, change the price of, or otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. Except as contemplated by this Agreement, there are not as for the obligation of Parent’s initial stockholders to vote in accordance with the majority 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 Parent is a party or by which it is bound relating to the voting of any shares of the capital stock of Parent that will limit in any way the solicitation of proxies by or on behalf of Parent from, or the casting of votes by, the Parent’s stockholders of Parent with respect to the Merger. There Business Combination, there are no restrictions on contracts, commitments or agreements relating to voting, purchase or sale of Parent’s capital stock (i) between or among Parent to vote the stock of and any of its Subsidiaries. As stockholders and (ii) to the best of the date hereofParent’s knowledge, the authorized capital stock between or among any of Merger Sub consists of 1,000 shares of common stock, par value $.01 per share, 1,000 shares of which are validly issued, fully paid and nonassessable and are owned by Parent and the balance of which are not issued or outstandingParent’s stockholders.