Common use of Capitalization Representation Clause in Contracts

Capitalization Representation. The authorized capital stock of the Corporation is 35,000,000 shares of Common Stock, of which 2,158,000 shares are issued and outstanding and 18,000,000 shares of Preferred Stock issuable in series, of which (i) 6,700,000 shares are designated Series A Preferred Stock, 6,366,667 shares of which are issued and outstanding; and (ii) 6,000,000 shares are designated Series B Preferred Stock, 4,100,000 shares of which are issued and outstanding. All such issued and outstanding shares have been duly authorized and validly issued, are fully paid and nonassessable, and were issued in compliance with all applicable state and federal laws concerning the issuance of securities. The Corporation has reserved 6,700,000 shares of Common Stock for issuance upon the conversion of Series A Preferred Stock, 6,000,000 shares of Common Stock for issuance upon the conversion of Series B Preferred Stock, 759,386 shares of Common Stock for issuance pursuant to the exercise of outstanding Common Stock purchase warrants, and 5,140,614 shares of Common Stock for issuance to employees, directors, and consultants pursuant to its 1998 Stock Option Plan. Upon their issuance in accordance with this Warrant, the Warrant Shares issuable hereunder shall be duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock.