Capitalization of the Company The authorized capital stock of the Company consists of 12,000,000 shares of Company Common Stock and 4,000,000 shares of Series A Preferred Stock, and the Company has no authority to issue any other capital stock. There are 4,651,550 shares of Company Common Stock issued and outstanding and 100,000 shares of Series A Preferred Stock issued and outstanding, and such shares are duly authorized, validly issued, fully paid and nonassessable, and none of such shares have been issued in violation of the preemptive rights of any person. After the (i) amendment of the Company’s Certificate of Incorporation to provide for a 1.719-for-1 forward stock split (the “Company Stock Split”), and (ii) conversion into shares of Company Common Stock of the outstanding shares of Series A Convertible Preferred Stock, par value $.01 per share (the “Series A Preferred Stock”), and the balance owed under the Company’s outstanding Shareholder Notes (the “Shareholder Notes”), immediately prior to the Effective Time, the Company will have 9,500,000 shares of Company Common Stock outstanding. The offer, issuance and sale of such shares of Company Common Stock were (a) exempt from the registration and prospectus delivery requirements of the Securities Act, (b) registered or qualified (or were exempt from registration or qualification) under the registration or qualification requirements of all applicable state securities laws and (c) accomplished in conformity with all other applicable securities laws. None of such shares of Company Stock are subject to a right of withdrawal or a right of rescission under any federal or state securities or blue sky law. Except as disclosed in Schedule 2.5, the Company has no outstanding options, rights or commitments to issue Company Common Stock or other Equity Securities of the Company, and there are no outstanding securities convertible or exercisable into or exchangeable for Company Common Stock or other Equity Securities of the Company. The Company has received written waivers executed by each of the holders of Series A Preferred Stock providing for the waiver of payment of any and all accrued but unpaid dividends under the terms of the Series A Preferred Stock.
Certain Rights of the Depositary The Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs. The Depositary may issue ADSs against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares.
Rights of the Company The Company shall not be required to (i) transfer on its books any Purchased Shares that have been sold or transferred in contravention of this Agreement or (ii) treat as the owner of Purchased Shares, or otherwise to accord voting, dividend or liquidation rights to, any transferee to whom Purchased Shares have been transferred in contravention of this Agreement.
