9. Preferred Stock, Warrants and Stock Purchase Rights

On August 30, 2000, the Company granted rights to an investor group to purchase securities of the Company and securities of the Company’s four new operating subsidiaries. At the closing of the investment, the Company received $87.8 million in cash from the investor group. The Company has issued to the investors Series A and Series B Preferred Stock (the "Preferred Stock"), as well as warrants to purchase Company common stock, and has agreed to issue to the investors additional warrants upon the occurrence of certain events relating to the operating subsidiaries, including the sale of an operating subsidiary or the failure of an operating subsidiary to consummate an IPO. In addition, each of the four operating subsidiaries has issued to the investors rights to purchase shares of its common stock, and each of the four operating subsidiaries have agreed to issue rights to purchase additional shares of its common stock to the investors upon the occurrence of certain events. The initial exercise prices and the number of shares issuable upon exercise of the subsidiary stock purchase rights are dependent upon certain events. The Company may require the investors to exercise a portion of these stock purchase rights at the time of an operating subsidiary’s initial public offering. A summary of the terms of these securities follows.

Company to an amount equal to the liquidation proceeds payable with respect to the common stock into which the Preferred Stock is convertible.

Dividends. Dividends on the Preferred Stock compound quarterly and accrue from the date of issue at a rate equal to the greater of 4.00% per annum (compounded quarterly) on its Liquidation Preference or the aggregate cash dividends payable with respect to the common stock into which the Preferred Stock is convertible. However, cash dividends on the Preferred Stock are not payable without the consent of a majority of holders of the preferred stock.

Conversion Feature. Each share of Series A Preferred Stock is convertible at any time at the option of the holder into that number of shares of common stock of the Company equal to the Liquidation Preference of the share of Series A Preferred Stock at that time divided by $40.00, adjusted for stock dividends, splits, combinations or similar events (the "Series A Conversion Price"). Each share of Series B Preferred Stock is convertible at any time at the option of the holder into that number of shares of common stock of the Company equal to the Liquidation Preference of the share of Series B Preferred Stock at that time divided by $30.00, adjusted for stock dividends, splits, combinations or similar events (the "Series B Conversion Price," together with the Series A Conversion Price, the "Conversion Price"). On the conversion of Preferred Stock, any property placed in escrow with respect to such stock (as described immediately below) will be released to the holder of such stock. If certain restrictions prevent the holders of the Preferred Stock from exercising their redemption rights (as described below under the heading "Shareholder Redemption Rights"), then the Conversion Price will be adjusted to equal 90% of the market price of the Company’s common stock on the date specified for such redemption.

Escrow Accounts. If the Company makes a distribution of property (including shares of Controlled stock) with respect to the Company’s common stock prior to the conversion of a holder’s Preferred Stock, the holder will participate in such distribution as follows. If the distribution is of stock of Controlled or any of the Company’s other Direct Subsidiaries ("Spin Shares"), the holder will participate in such distribution immediately on an as-converted basis; however, such Spin Shares will be placed in escrow on the holder’s behalf (a "Spin Escrow"). The Spin Shares will be legally issued and outstanding and will be shown as issued and outstanding on the respective corporation’s financial statements. The holders of Preferred Stock will have current voting and dividend rights with respect to Spin Shares placed in a Spin Escrow on their behalf. The Spin Shares will be treated as owned by the holder for federal income tax purposes. To the extent the Company makes a distribution of property other than Spin Shares or pays cash dividends at a rate greater than the stated accrual on the Preferred Stock (an "Extraordinary Dividend"), the amount of such Extraordinary Dividend that would be distributed to the holders of the then outstanding Preferred Stock if converted immediately prior to such distribution will also be placed in an escrow (an "Extraordinary Dividend Escrow," together with the Spin Escrow, the "Escrows"). Any Spin Shares or Extraordinary Dividends held in Escrows with respect to a holder of Preferred Stock will be released to the holder when the holder converts the Preferred Stock. If a holder redeems (as opposed to converts) the Preferred Stock, any Spin Shares held in a Spin Escrow with respect to the holder will be contributed to such Direct Subsidiary on behalf of the holder, and any Extraordinary Dividend held in an Extraordinary Dividend Escrow with respect to the holder will revert to the Company.

Shareholder Redemption Rights. At any time on or after February 23, 2003, a holder of Preferred Stock may require the Company to redeem for cash all (but not less than all) of the holder’s Preferred Stock at the Liquidation Preference then in effect. In the event of a 50% change in control of the Company, holders of the Preferred Stock will have the right to require the Company to redeem for cash all or any portion of the Preferred Stock for the greater of (1) 101% of the Liquidation Preference then in effect or (2) the aggregate market value of the shares of common stock into which the Preferred Stock is then convertible (provided that if the change in control is triggered by a transaction in which holders of common stock receive property, any amount payable under clause (2) in excess of the amount payable under clause (1) may be paid in such property).

The Company's Redemption Rights. At any time on or after February 23, 2004, the Company will have the right to redeem for cash all (but not less than all) of the Preferred Stock at the Liquidation Preference then in effect (subject to the rights of the holders of the Preferred Stock to convert to common stock immediately prior to such redemption).

Class A Warrants. The Company issued warrants to certain preferred stockholders to purchase 250,000 shares of common stock at an initial exercise price of $45.00 per share, adjusted for stock dividends, splits, combinations or similar events (the "Class A Warrants"). The Class A Warrants are exercisable until August 2007 and otherwise contain customary terms and conditions (including provisions with respect to "cashless" exercise and customary anti-dilutive provisions).

Class B Warrants. The Company issued warrants to certain preferred stockholders to purchase 200,000 shares of common stock at an initial exercise price of $35.00 per share, adjusted

Subsidiary Stock Purchase Rights. The investors have agreed to purchase 0.75% of the common stock of each subsidiary that consummates an IPO of its common stock at the time of that subsidiaries IPO. In addition, each of the operating subsidiaries has granted to the investors rights to purchase up to 4.25% (inclusive of the 0.75%) of its common stock, which become exercisable upon the occurrence of certain events. The exercise price of these rights will depend upon the number of rights the investors exercise and the timing of the exercises.