Common use of Capital Raising Limitations Clause in Contracts

Capital Raising Limitations. During the period that any Debenture remains outstanding (the “LIMITATION PERIOD”), the Company shall not issue or sell, or agree to issue or sell Variable Equity Securities (as defined below), or any securities of the Company pursuant to an Equity Line (as defined below) structure or format or any securities of the Company in exchange for goods or services, without obtaining the prior written approval of each of the Buyers, with the exception of any such agreements, transactions or Equity Lines existing as of the date hereof. For purposes hereof, an “EQUITY LINE” shall mean a transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula. For purposes hereof, the following shall be collectively referred to herein as, the “VARIABLE EQUITY SECURITIES”: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s Common Stock since date of initial issuance, or (B) any debenture or preferred stock that is accompanied by a number of warrants greater than the original principal amount, divided by the Market Price at the time of closing of such debenture or preferred stock, or (C) any common stock that is sold at a discount to the Market Price at the time of closing that is greater than 10%, (D) any adjustable warrant where the number of shares issuable thereunder is subject to increase, (E) any Common Stock that is accompanied by a number of warrants greater than the number of shares of Common Stock sold by the Company in such transaction, (F) any warrant, convertible security or other Common Stock Equivalent with a conversion, exercise or exchange price that is set a price that represents a discount to the Market Price at the time of closing of such warrant, convertible security or other Common Stock Equivalent that is greater than 10%, (G) any note, debenture or other debt obligation that is accompanied by shares of Common Stock for which the additional consideration (in excess of the face value of the debt obligation) per share is less than 90% of the Market Price at the time of closing. For purposes of the above, the “MARKET PRICE” at time of closing shall mean the Market Price, as defined in the Debenture.

Capital Raising Limitations. During the period that any Debenture remains outstanding (the “LIMITATION PERIOD”)Debentures remain outstanding, notwithstanding whether or not an issuance of securities is an Exempt Issuance, the Company shall not issue or sell, or agree to issue or sell Variable Equity Securities (as defined belowbelow)(the "Variable Equity Securities Lock-Up"), or any securities of the Company pursuant to an Equity Line (as defined below) structure or format or any securities of the Company in exchange for goods or services, without obtaining the prior written approval of each of the Buyers, with the exception of any such agreements, agreements or transactions or Equity Lines existing that (x) exist as of the date hereof and (y) are not amended or modified after the date hereof. For purposes hereof, an “EQUITY LINE” shall mean a transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula. For purposes hereof, the following shall be collectively referred to herein as, the “VARIABLE EQUITY SECURITIES”"Variable Equity Securities": (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s 's Common Stock since date of initial issuance, or (B) any debenture amortizing convertible security which amortizes prior to its maturity date, where the Company is required to or preferred has the option to (or the investor in such transaction has the option to require the Company to) make such amortization payments in shares of Common Stock (whether or not such payments in stock that is accompanied by a number of warrants greater than the original principal amount, divided by the Market Price at the time of closing of such debenture or preferred stockare subject to certain equity conditions), or (C) any common stock that is sold at transaction involving a discount written agreement between the Company and an investor or underwriter whereby the Company has the right to "put" its securities to the Market Price investor or underwriter over an agreed period of time and at the time of closing that is greater than 10%an agreed price or price formula (each, (D) any adjustable warrant where the number of shares issuable thereunder is subject to increase, (E) any Common Stock that is accompanied by a number of warrants greater than the number of shares of Common Stock sold by the Company in such an "Equity Line" transaction, (F) any warrant, convertible security or other Common Stock Equivalent with a conversion, exercise or exchange price that is set a price that represents a discount to the Market Price at the time of closing of such warrant, convertible security or other Common Stock Equivalent that is greater than 10%, (G) any note, debenture or other debt obligation that is accompanied by shares of Common Stock for which the additional consideration (in excess of the face value of the debt obligation) per share is less than 90% of the Market Price at the time of closing). For purposes of the above, the “MARKET PRICE” "Market Price" at time of closing shall mean the Market Price, as defined in the DebentureDebentures. It is expressly agreed and understood that the Variable Equity Securities Lock-Up shall apply in respect of an Exempt Issuance and that no issuance of Variable Equity Securities shall be an Exempt Issuance.

Capital Raising Limitations. During the period that any Debenture remains outstanding (the “LIMITATION PERIOD”)Term of this Agreement, the Company shall not issue or sell, or agree to issue or sell Variable Equity Securities sell, for cash in private capital raising transactions (as defined below), or any securities of the Company pursuant to an Equity Line (as defined below) structure or format or any securities of the Company in exchange for goods or services, without obtaining the prior written approval of each of the Buyers, with the exception of any such agreements, transactions or Equity Lines existing as of the date hereof. For purposes hereof, an “EQUITY LINE” shall mean a transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula. For purposes hereof, the following shall to be collectively referred to herein as, the “VARIABLE EQUITY SECURITIES”: "Variable Deals"), (Aa) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1i) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2ii) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due or upon the occurrence of specified contingent events directly or indirectly related to a change in the business of the Company of the market price of for the Company’s Common Stock since date of initial issuanceStock, or (Bb) any debenture securities of the Company pursuant to an equity line structure or preferred stock that is accompanied by a number format similar in nature to this Offering without obtaining the prior written approval of warrants greater than the original principal amountSubscribers of the Offering (the limitations referred to in this sentence are collectively referred to as the "Capital Raising Limitations"). For any private capital raising transactions not subject to the Capital Raising Limitations, divided by the Market Price Company agrees to deliver to Subscriber at least ten (10) days prior to the time of closing of such debenture transaction, written notice describing the proposed transaction, including the terms and conditions thereof, and providing the Subscriber and its affiliates an option during the ten (10) day period following delivery of such notice to purchase securities being offered in such transaction on the same terms as contemplated by such transaction. The maximum amount of securities which a Subscriber is entitled to purchase (the "Participation Amount") in such transaction shall be a number obtained by multiplying the aggregate amount of securities being offered in such transaction by twenty percent (20%); provided, however, that the lead investor or preferred stockthe placement agent of such transaction may elect to purchase the Subscriber's right to participant in such transaction by paying Subscriber a dollar amount equal to the greater of (i) one percent (1%) of the purchase amount of the Participation Amount, or (Cii) any common stock that is sold at a discount to the Market Price at the time of closing that is greater than 10%, Fifty Thousand Dollars (D) any adjustable warrant where the number of shares issuable thereunder is subject to increase, (E) any Common Stock that is accompanied by a number of warrants greater than the number of shares of Common Stock sold by the Company in such transaction, (F) any warrant, convertible security or other Common Stock Equivalent with a conversion, exercise or exchange price that is set a price that represents a discount to the Market Price at the time of closing of such warrant, convertible security or other Common Stock Equivalent that is greater than 10%, (G) any note, debenture or other debt obligation that is accompanied by shares of Common Stock for which the additional consideration (in excess of the face value of the debt obligation) per share is less than 90% of the Market Price at the time of closing. For purposes of the above, the “MARKET PRICE” at time of closing shall mean the Market Price, as defined in the Debenture$50,000).

Capital Raising Limitations. During the period that any Debenture or Warrant remains outstanding (the “LIMITATION PERIOD”)outstanding, notwithstanding whether or not an issuance of securities is an Exempt Issuance, the Company shall not issue or sell, or agree to issue or sell Variable Highly Dilutive Equity Securities (as defined below), or any securities of the Company pursuant to an Equity Line (as defined below) structure or format or any securities of the Company in exchange for goods or services, without obtaining the prior written approval of each of the Buyers, with the exception of any such agreements, agreements or transactions or Equity Lines existing that (x) exist as of the date hereof and (ii) are not amended or modified after the date hereof. For purposes hereof, an “EQUITY LINE” shall mean a transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula. For purposes hereof, the following shall be collectively referred to herein as, the “VARIABLE HIGHLY DILUTIVE EQUITY SECURITIES”: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s Common Stock since date of initial issuance, or (B) any amortizing convertible security which amortizes prior to its maturity date, where the Company is required to or has the option to (or the investor in such transaction has the option to require the Company to) make such amortization payments in shares of Common Stock (whether or not such payments in stock are subject to certain equity conditions), or (C) any debenture or preferred stock that is accompanied by a number of warrants greater than the original principal amount, divided by the Market Price at the time of closing of such debenture or preferred stock, or (CD) any common stock Common Stock that is sold at a discount to the Market Price at the time of closing that is greater than 1020%, or (DE) any adjustable warrant where the number of shares issuable thereunder is subject to increase, or (EF) any Common Stock common stock that is accompanied by a number of warrants greater than the number of shares of Common Stock common stock sold by the Company in such transaction, or (FG) any warrant, convertible security or other Common Stock Equivalent with a conversion, exercise or exchange price that is set at a price that represents a discount to is less than 75% of the Market Initial Conversion Price at of the time of closing of such warrantDebenture, convertible security or other Common Stock Equivalent that is greater than 10%, (GH) any note, debenture or other debt obligation that is accompanied by shares of Common Stock for which the additional consideration (in excess of the face value of the debt obligation) paid per share of Common Stock is less than 90% of the Market Price at the time of closing, or (I) any securities of the Company in exchange for goods or services, or (J) any transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula (each, an “EQUITY LINE” transaction). For purposes of the above, the “MARKET PRICE” at time of closing shall mean the Market Price, as defined in the DebentureDebentures.

Capital Raising Limitations. During the period that any Debenture remains outstanding (the “LIMITATION PERIOD”)Debentures remain outstanding, notwithstanding whether or not an issuance of securities is an Exempt Issuance, the Company shall not issue or sell, or agree to issue or sell Variable Equity Securities (as defined belowbelow)(the “Variable Equity Securities Lock-Up”), or any securities of the Company pursuant to an Equity Line (as defined below) structure or format or any securities of the Company in exchange for goods or services, without obtaining the prior written approval of each of the Buyers, with the exception of any such agreements, agreements or transactions or Equity Lines existing that (x) exist as of the date hereof and (y) are not amended or modified after the date hereof. For purposes hereof, an “EQUITY LINE” shall mean a transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula. For purposes hereof, the following shall be collectively referred to herein as, the “VARIABLE EQUITY SECURITIESVariable Equity Securities”: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s Common Stock since date of initial issuance, or (B) any debenture amortizing convertible security which amortizes prior to its maturity date, where the Company is required to or preferred has the option to (or the investor in such transaction has the option to require the Company to) make such amortization payments in shares of Common Stock (whether or not such payments in stock that is accompanied by a number of warrants greater than the original principal amount, divided by the Market Price at the time of closing of such debenture or preferred stockare subject to certain equity conditions), or (C) any common stock that is sold at transaction involving a discount written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the Market Price investor or underwriter over an agreed period of time and at the time of closing that is greater than 10%an agreed price or price formula (each, (D) any adjustable warrant where the number of shares issuable thereunder is subject to increase, (E) any Common Stock that is accompanied by a number of warrants greater than the number of shares of Common Stock sold by the Company in such an “Equity Line” transaction, (F) any warrant, convertible security or other Common Stock Equivalent with a conversion, exercise or exchange price that is set a price that represents a discount to the Market Price at the time of closing of such warrant, convertible security or other Common Stock Equivalent that is greater than 10%, (G) any note, debenture or other debt obligation that is accompanied by shares of Common Stock for which the additional consideration (in excess of the face value of the debt obligation) per share is less than 90% of the Market Price at the time of closing). For purposes of the above, the “MARKET PRICEMarket Price” at time of closing shall mean the Market Price, as defined in the DebentureDebentures. It is expressly agreed and understood that the Variable Equity Securities Lock-Up shall apply in respect of an Exempt Issuance and that no issuance of Variable Equity Securities shall be an Exempt Issuance. (iii) Omitted.

Capital Raising Limitations. During the period from the date hereof until the date that is two (2) years following the Effective Date, so long as any Debenture or Warrant remains outstanding (the “LIMITATION PERIOD”)outstanding, notwithstanding whether or not an issuance of securities is an Exempt Issuance, the Company shall not issue or sell, or agree to issue or sell Variable Equity Securities (as defined belowbelow)(the “Variable Equity Securities Lock-Up”), or any securities of the Company pursuant to an Equity Line (as defined below) structure or format or any securities of the Company in exchange for goods or services, without obtaining the prior written approval of each of the Buyers, with the exception of any such agreements, agreements or transactions or Equity Lines existing that (x) exist as of the date hereof and (y) are not amended or modified after the date hereof. For purposes hereof, an “EQUITY LINE” shall mean a transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula. For purposes hereof, the following shall be collectively referred to herein as, the “VARIABLE EQUITY SECURITIESVariable Equity Securities”: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s Common Stock since date of initial issuance, or (B) any debenture amortizing convertible security which amortizes prior to its maturity date, where the Company is required to or preferred has the option to (or the investor in such transaction has the option to require the Company to) make such amortization payments in shares of Common Stock (whether or not such payments in stock that is accompanied by a number of warrants greater than the original principal amount, divided by the Market Price at the time of closing of such debenture or preferred stockare subject to certain equity conditions), or (C) any common stock that is sold at transaction involving a discount written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the Market Price investor or underwriter over an agreed period of time and at the time of closing that is greater than 10%an agreed price or price formula (each, an “Equity Line” transaction) or (D) any adjustable warrant where the number of shares issuable thereunder is subject to increase, (E) any Common Stock common stock that is accompanied by a number of warrants greater than the number of warrants greater than the number of shares of Common Stock common stock sold by the Company in such transaction, or (F) any warrant, convertible security or other Common Stock Equivalent with a conversion, exercise or exchange price that is set a price that represents a discount to the Market Price at the time of closing of such warrant, convertible security or other Common Stock Equivalent that is greater than 10%, (GE) any note, debenture or other debt obligation that is accompanied by shares of Common Stock for which the additional consideration (in excess of the face value of the debt obligation) paid per share of Common Stock is less than 90% of the Market Price at the time of closing. For purposes of the above, the “MARKET PRICEMarket Price” at time of closing shall mean the Market Price, as defined in the DebentureDebentures. It is expressly agreed and understood that the Variable Equity Securities Lock-Up shall apply in respect of an Exempt Issuance and that no issuance of Variable Equity Securities shall be an Exempt Issuance.

Capital Raising Limitations. During the period that from the date hereof and for so long as any Debenture Grid Note remains outstanding (outstanding, the “LIMITATION PERIOD”)Company shall not issue, or agree to issue, Common Stock of the Company or options to purchase Common Stock of the Company to any officers, directors, management or affiliates of the Company, unless such issuance is an Exempt Issuance. In addition, during the period from the date hereof and for so long as any Grid Note remains outstanding, notwithstanding whether or not an issuance of securities is an Exempt Issuance, the Company shall not issue or sell, or agree to issue or sell Variable Equity Securities (as defined belowbelow)(the “Variable Equity Securities Lock-Up”), or any securities of the Company pursuant to an Equity Line (as defined below) structure or format or any securities of the Company in exchange for goods or services, without obtaining the prior written approval of each of the Buyers, with the exception of any such agreements, agreements or transactions or Equity Lines existing that (x) exist as of the date hereof and (y) are not amended or modified after the date hereof. For purposes hereof, an “EQUITY LINE” shall mean a transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula. For purposes hereof, the following shall be collectively referred to herein as, the “VARIABLE EQUITY SECURITIESVariable Equity Securities”: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s Common Stock since date of initial issuance, or (B) any debenture amortizing convertible security which amortizes prior to its maturity date, where the Company is required to or preferred has the option to (or the investor in such transaction has the option to require the Company to) make such amortization payments in shares of Common Stock (whether or not such payments in stock that is accompanied by a number of warrants greater than the original principal amount, divided by the Market Price at the time of closing of such debenture or preferred stockare subject to certain equity conditions), or (C) any common stock that is sold at transaction involving a discount written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the Market Price investor or underwriter over an agreed period of time and at the time of closing that is greater than 10%an agreed price or price formula (each, an “Equity Line” transaction) or (D) any adjustable warrant where the number of shares issuable thereunder is subject to increase, (E) any Common Stock common stock that is accompanied by a number of warrants greater than the number of warrants greater than the number of shares of Common Stock common stock sold by the Company in such transaction, or (F) any warrant, convertible security or other Common Stock Equivalent with a conversion, exercise or exchange price that is set a price that represents a discount to the Market Price at the time of closing of such warrant, convertible security or other Common Stock Equivalent that is greater than 10%, (GE) any note, debenture or other debt obligation that is accompanied by shares of Common Stock for which the additional consideration (in excess of the face value of the debt obligation) paid per share of Common Stock is less than 90% of the Market Price at the time of closing. For purposes of the above, the “MARKET PRICEMarket Price” at time of closing shall mean the Market Price, as defined in the DebentureGrid Notes. It is expressly agreed and understood that the Variable Equity Securities Lock-Up shall apply in respect of an Exempt Issuance and that no issuance of Variable Equity Securities shall be an Exempt Issuance.

Capital Raising Limitations. During the period that Preferred Stock with an aggregate Stated Value of at least one million dollars ($1,000,000) remains outstanding, or so long as any Debenture remains outstanding (of the “LIMITATION PERIOD”)Warrants to purchase at least 100,000 shares of Common Stock remain outstanding, notwithstanding whether or not an issuance of securities is an Exempt Issuance, the Company shall not issue or sell, or agree to issue or sell Variable Equity Securities (as defined below), or any securities of the Company pursuant to an Equity Line (as defined below) structure or format or any securities of the Company in exchange for goods or services, without obtaining the prior written approval of each of the BuyersRequired Holders , with the exception of any such agreements, transactions or Equity Lines existing as of the date hereof. For purposes hereof, an “EQUITY LINE” shall mean a transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at an agreed price or price formula. For purposes hereof, the following shall be collectively referred to herein as, the “VARIABLE EQUITY SECURITIES”: (A) any debt or equity securities or other Common Stock Equivalents which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s Common Stock since date of initial issuance, or (B) any debenture amortizing convertible security which amortizes prior to its maturity date, where the Company has the option to make such amortization payments in shares of Common Stock (whether or not such payments in stock are subject to certain equity conditions), or (C) any debenture, preferred stock or other Common Stock Equivalent that is accompanied by a number of warrants greater than 50% (100%, in the case of preferred stock issued under the Preferred Stock Lock-Up Exceptions) of the original principal amount, divided by the Market Price at the time of closing of such debenture or preferred stock, or (CD) any common stock Common Stock that is sold at a discount to the Market Price at the time of closing that is greater than 1025%, (DE) any adjustable warrant (other than warrants accompanying preferred stock issued under the Preferred Stock Lock-Up Exceptions) where the number of shares issuable thereunder is subject to increase, (EF) any Common Stock that is accompanied by a number of warrants greater than the number of shares of Common Stock sold by the Company in such transaction, (FG) any warrant, convertible security or other Common Stock Equivalent with a conversion, exercise or exchange price that is set at a price that represents a discount to the Market Price at the time of closing of such warrant, convertible security or other Common Stock Equivalent that is greater than 1025%, (GH) any note, debenture or other debt obligation that is accompanied by shares of Common Stock for which the additional consideration (in excess of the face value of the debt obligation) paid per share of Common Stock is less than 90% of the Market Price at the time of closing. For purposes of the above, the “MARKET PRICE” at time of closing shall mean the Market Price, as defined in the DebentureCertificate of Designation.