Financing Restrictions. (a) During the period beginning on the Closing Date and ending on the date which is six (6) months following the effective date of the registration statement contemplated by Section 2.1 of the Registration Rights Agreement (the "Effective Date") (provided, however, that such period shall be extended to the extent of any Registration Suspension (as defined in the Registration Rights Agreement) that may occur during such period) and during any Registration Suspension (each such period, the "Financing Restriction Period "), the Company shall not, and shall cause each of its direct and indirect subsidiaries not to, issue or agree to issue (except (i) to Purchaser pursuant to this Agreement, (ii) pursuant to any stock option, stock purchase or restricted stock plan of the Company covering employees, consultants and/or non-employee directors (and any amendment thereof or any award thereunder, provided any such amendment does not reduce any exercise price to an amount below $5.00 per share), so long as the issuance of such stock or option (other than to non-employee directors) is approved by a committee of independent directors of the Company, (iii) pursuant to strategic investments from industry participants, the primary purpose of each of which is not to raise equity capital, (iv) in a private placement led by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney or a comparable nationally recognized investment banking firm with net proceeds to the Company exceeding $10 million, (v) in a firm commitment underwritten public offering, where the net proceeds to the Company exceed $25 million, (vi) upon the exercise of options and warrants (x) outstanding as of the date hereof and disclosed on Schedule 3.3 or (y) issued in a transaction contemplated by clauses (iii), (iv) and (v) of this Section 4.5(a), (vii) as consideration in connection with an acquisition by the Company of any business or assets, regarding which the Company has obtained a fairness opinion from a nationally recognized investment banking firm or regarding which an appropriate officer of the Company has certified to Purchaser that the board of directors of the Company has determined in its reasonable business judgment that the Company has received in such transaction the fair value for the shares issued therefor, (viii) as consideration for services provided to the Company, (I) the issuances of which have been committed by the Company prior to the Closing Date and such commitments have been disclosed to Purchaser in the schedules delivered pursuant to the Securities Purchase Agreement, or (II) the issuances of which are committed by the Company after the Closing Date; provided, however, that services provided pursuant to this clause (II) shall not exceed $200,000 in value and services provided under this clause (viii) in the aggregate shall not exceed $500,000 in value, (ix) under the terms of the April 11, 2000 acquisition by the Company of Giza Group, or (x) upon the issuance or exercise of the warrant to be issued to Ladenburg ▇▇▇▇▇▇▇▇ & Co., Inc.) any equity, equity-like or equity-linked securities of the Company or any security convertible into or exercisable or exchangeable, directly or indirectly, for equity, equity-like or equity-linked securities of the Company (any such securities, "Restricted Securities"). (b) During the six (6) month period beginning on the date immediately following the final day of the initial Financing Restriction Period, other than to a seller or sellers of a business being acquired by the Company in such transaction, the Company shall not, and shall cause each of its direct and indirect subsidiaries not to, issue or agree to issue or offer to issue or solicit any offer or inquiry with regard to any Restricted Securities unless the Company has satisfied or has caused its subsidiary to satisfy all of the following requirements with respect to such issuance: (I) The Company or the subsidiary shall have delivered a notice to Purchaser (the "Transfer Notice"), which notice shall include (A) the terms and number of units of the security and the consideration per unit which the Company or the subsidiary desires to receive for the securities (which, in the case where the Company or the subsidiary shall have received an offer to purchase such securities other than from Purchaser (a "Third Party Offer"), shall be the consideration set forth in such offer) and (B) all of the material terms and conditions, including the terms and conditions of payment, upon which the Company or the subsidiary proposes to issue said securities (which, in the case of a Third Party Offer, shall be the terms and conditions set forth in the Third Party Offer). (II) Upon the delivery of the Transfer Notice, Purchaser shall have an option to purchase the securities described therein on the terms and conditions described therein. Such option shall be exercisable by Purchaser by service of written notice upon the Company or the subsidiary within five (5) business days of receipt of the Transfer Notice. (III) If the option created in clause (II) hereof is not exercised by Purchaser within five (5) business days of service of the Transfer Notice, then, within a period of thirty (30) days beginning on the day following the date of expiration of the option period, the Company or the subsidiary may issue the securities sought to be issued at a price which is not less than one hundred percent (100%) of the price specified in the Transfer Notice and on terms and conditions, taken as a whole, that are not materially less favorable to the Company or the subsidiary than those specified in the Transfer Notice. (c) While Purchaser holds any Preferred Stock, the Company shall not, and shall cause each of its direct and indirect subsidiaries not to, issue, agree to issue or authorize for issuance, or otherwise transfer or enter into any commitment to issue or otherwise transfer, or offer to issue or transfer or solicit any issuance or proposal with regard to, any equity, equity-like or equity-linked securities of any of the Company's direct or indirect subsidiaries (including, without limitation, any such subsidiaries as listed in the latest Form 10-Q or Schedule 3.3) or any security convertible into or exercisable or exchangeable, directly or indirectly, for equity, equity-like or equity-linked securities of such subsidiaries, if so doing would have a Material Adverse Effect.
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Financing Restrictions. (a) During the period beginning on the Closing ---------------------- Date and ending on the date which is six three (63) months following the effective date of the registration statement contemplated by Section 2.1 of the Registration Rights Agreement (the "Effective Date") (provided, however, that -------------- such period shall be extended by the number of days equal to the extent number of any days during which there is a Registration Suspension (as defined in the Registration Rights Agreement) that may occur during such period) and during any Registration Suspension (each such period, the "Financing Restriction Period Period"), the ---------------------------- Company shall not, and shall cause each of its direct and indirect subsidiaries not to, issue or agree to issue (except (i) to Purchaser pursuant to this Agreement, (ii) pursuant to any stock option, stock purchase or restricted stock plan of the Company covering employees, consultants and/or non-employee directors (and any amendment thereof or any award thereunder, provided any such amendment does not reduce any exercise price to an amount below $5.00 per share), so long as the issuance of such stock or option (other than to non-employee directors) is approved by a committee of independent directors of the Company, (iii) pursuant to strategic investments from industry participants, the primary purpose of each of which is not to raise equity capital, (iv) in a private placement led by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney or a comparable nationally recognized investment banking firm with net proceeds to the Company exceeding $10 million, (v) in a firm commitment underwritten public offering, where the net proceeds to the Company exceed $25 million, (vi) upon the exercise of options and warrants (x) outstanding as of the date hereof and disclosed on Schedule 3.3 or (y) issued in a transaction contemplated by clauses (iii), (iv) and (v) of this Section 4.5(a), (vii) as consideration in connection with an acquisition by the Company of any business or assets, regarding which the Company has obtained a fairness opinion from a nationally recognized investment banking firm or regarding which an appropriate officer of the Company has certified to Purchaser that the board of directors of the Company has determined in its reasonable business judgment that the Company has received in such transaction the fair value for the shares issued therefor, (viii) as consideration for services provided to the Company, (I) the issuances of which have been committed by the Company prior to the Closing Date and such commitments have been disclosed to Purchaser in the schedules delivered pursuant to the Securities Purchase Agreement, or (II) the issuances of which are committed by the Company after the Closing Date; provided, however, that services provided pursuant to this clause (II) shall not exceed $200,000 in value and services provided under this clause (viii) in the aggregate shall not exceed $500,000 in value, (ix) under the terms of the April 11, 2000 acquisition by the Company of Giza Group, or (x) upon the issuance or exercise of the warrant to be issued to Ladenburg ▇▇▇▇▇▇▇▇ & Co., Inc.) any equity, equity-like or equity-linked securities of the Company or any security convertible into or exercisable or exchangeable, directly or indirectly, for equity, equity-like or equity-linked securities of the Company Company, other than Excluded Securities (any such securities, "Restricted ---------- Securities").
. The term "Excluded Securities" means capital stock issued and ----------- ------------------- sold by the Company: (bi) During to the six Purchaser pursuant to this Agreement and the Common Stock Warrant, including the Warrant Shares and the Conversion Shares, (6ii) month period beginning on the date immediately following the final day pursuant to any employee stock option, stock purchase or restricted stock plan of the initial Company, so long as the issuance of such stock or option is approved by a committee of independent directors of the Company, (iii) pursuant to strategic investments, the primary purpose of each of which is not to raise equity capital and provided that such strategic investors shall be prohibited from reselling their shares of the Company's capital stock during such Financing Restriction Period, other than to a seller or sellers of a business being acquired by Period and further provided that if the Company requests a waiver of the reselling prohibition set forth in such transaction, this subclause (iii) and demonstrates to the Purchaser that a potential strategic investor is unable to make a strategic investment in the Company shall notas a consequence of such reselling prohibition, and shall cause each of Purchaser will not unreasonably withhold its direct and indirect subsidiaries not to, issue or agree consent to issue or offer to issue or solicit any offer or inquiry with regard to any Restricted Securities unless the Company has satisfied or has caused its subsidiary to satisfy all waiver of the following requirements reselling prohibition set forth in this subclause (iii) with respect to such issuance:
strategic investment, (Iiv) The in a firm commitment underwritten public offering, where the net proceeds to the Company or the subsidiary shall have delivered a notice exceed $15 million, (v) pursuant to Purchaser warrants dated as of April 4, 2000 (the "Transfer NoticeInroad Warrants") to purchase an --------------- aggregate of 325,000 shares of Common Stock issued in connection with the Company's acquisition of Inroad, Inc. in April 2000 (the "Inroad Acquisition"), which notice shall include ------------------ (Avi) 650,000 shares of Common Stock issued to Inroad, Inc. in connection with the terms and number Inroad Acquisition, (vii) warrants dated as of units of April 4, 2000 (the security and the consideration per unit which the Company or the subsidiary desires to receive for the securities (which, in the case where the Company or the subsidiary shall have received an offer "Stratos ------- Warrants") to purchase such securities other than from Purchaser an aggregate of 50,000 shares of Common Stock issued to -------- Stratos Product Development LLC (a "Third Party OfferStratos"), shall be ) in connection with the consideration set forth in such offer) Inroad ------- Acquisition and (Bviii) all of the material terms and conditions, including the terms and conditions of payment, upon which the Company or the subsidiary proposes to issue said securities (which, in the case of a Third Party Offer, shall be the terms and conditions set forth in the Third Party Offer).
(II) Upon the delivery of the Transfer Notice, Purchaser shall have an option warrants to purchase the securities described therein on the terms and conditions described therein. Such option shall be exercisable by Purchaser by service an aggregate of written notice upon the Company or the subsidiary within five (5) business days 50,000 shares of receipt of the Transfer Notice.
(III) If the option created in clause (II) hereof is not exercised by Purchaser within five (5) business days of service of the Transfer Notice, then, within a period of thirty (30) days beginning on the day following the date of expiration of the option period, the Company or the subsidiary may issue the securities sought Common Stock to be issued at a price which is not less than one hundred percent (100%) of to Institutional Finance Group, Inc. in connection with the price specified in the Transfer Notice and on terms and conditions, taken as a whole, that are not materially less favorable to the Company or the subsidiary than those specified in the Transfer Noticetransactions contemplated hereby.
(c) While Purchaser holds any Preferred Stock, the Company shall not, and shall cause each of its direct and indirect subsidiaries not to, issue, agree to issue or authorize for issuance, or otherwise transfer or enter into any commitment to issue or otherwise transfer, or offer to issue or transfer or solicit any issuance or proposal with regard to, any equity, equity-like or equity-linked securities of any of the Company's direct or indirect subsidiaries (including, without limitation, any such subsidiaries as listed in the latest Form 10-Q or Schedule 3.3) or any security convertible into or exercisable or exchangeable, directly or indirectly, for equity, equity-like or equity-linked securities of such subsidiaries, if so doing would have a Material Adverse Effect.
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