Common use of Shares; Capitalization Clause in Contracts

Shares; Capitalization. The authorized capital stock of ADLT consists of (i) 80,000,000 shares of ADLT Common Stock, of which 16,471,036 were issued and outstanding as of November 10, 1997, and (ii) 1,000,000 shares of Preferred Stock, $.001 par value, none of which is issued and outstanding. On the Effective Date under the Merger Agreement, the ADLT Shares will be duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights created by statute, ADLT's Articles of Incorporation or Regulations or any agreement to which ADLT is a party or is bound. The authorized capital stock of Acquisition consists of 850 shares of common stock, of which 100 shares are issued and outstanding.