Common use of Capitalization and Stock Ownership Clause in Contracts

Capitalization and Stock Ownership. The total authorized capital ---------------------------------- stock of the Buyer consists of (a) 50,000,000 Buyer Common Shares, of which 18,499,288 shares are issued and outstanding on the date hereof, and (b) 2,000,000 shares of Preferred Stock, par value $0.01 per share, of which 999,554 shares have been designated Series A Convertible Preferred Stock (the "Buyer Convertible Preferred Shares"). Of such authorized Preferred Stock, 749,665 Buyer Convertible Preferred Shares are issued and outstanding on the date hereof. Except as described in the Buyer Disclosure Documents, there are no existing options, warrants, calls, commitments or other rights of any character (including conversion or preemptive rights) relating to the acquisition of any issued or unissued capital stock or other securities of the Buyer. All of the Buyer Common Shares issuable in connection with the Merger will be, when issued in accordance with the terms thereof, duly and validly authorized and issued, fully paid and non-assessable.