Common use of Capitalization; Title Clause in Contracts

Capitalization; Title. (a) The Acquired Company's authorized capitalization consists of Four Hundred (400) common shares having no par value per share, of which Three Hundred (300) shares are issued and outstanding. (b) Each Shareholder is the true and lawful beneficial and record owner of One Hundred (100) of the Acquired Company Shares and such shares are owned by such shareholder free and clear of all liens, security interests, charges, options, agreements, and encumbrances. (c) Each Shareholder is the true and lawful beneficial and record owner of that number of Series A Preferred Shares indicated on Exhibit A attached hereto. (d) All of the Acquired Company Shares are validly issued, fully paid, and nonassessable and there are, and shall be as of or on the Closing Date, no options, calls, warrants, or any other securities, rights or common share equivalents outstanding, which are convertible into, exercisable for or relate to, any capital shares of the Acquired Company. All Acquired Company Shares were issued in compliance with all applicable federal and state securities laws, rules, and regulations.