Common use of Limitation on Issuance of Shares Clause in Contracts

Limitation on Issuance of Shares. If the Company's Common Stock becomes listed on the Nasdaq SmallCap Market after the issuance of the Debenture, the Company may be limited in the number of shares of Common Stock it may issue by virtue of (A) the number of authorized shares or (B) the applicable rules and regulations of the principal securities market on which the Common Stock is listed or traded, including, but not necessarily limited to, NASDAQ Rule 4310(c)(25)(H)(i) or Rule 4460(i)(1), as may be applicable (collectively, the "Cap Regulations"). Without limiting the other provisions thereof; (i) the Company will take all steps reasonably necessary to be in a position to issue shares of Common Stock on conversion of the Debentures without violating the Cap Regulations and (ii) if, despite taking such steps, the Company still cannot issue such shares of Common Stock without violating the Cap Regulations, the Holder cannot convert as result of the Cap Regulations (each such Debenture, an "Unconverted Debenture") shall have the right to elect either of the following remedies: (x) if permitted by the Cap Regulations, require the Company to issue shares of Common Stock in accordance with the Holder's Notice of Conversion at a conversion purchase price equal to the average of the closing bid price per share of Common Stock for any five (5) consecutive Trading Days (subject to certain equitable adjustments for certain events occurring during such period) during the sixty (60) Trading Days immediately preceding the Conversion Date; or(y) require the Company to redeem each Unconverted Debenture for an amount (the "Redemption Amount"), payable in cash, equal to the sum of (i) one hundred thirty-three percent (133%) of the principal of an Unconverted Debenture, plus (ii) any accrued but unpaid interest and penalties thereon through and including the date on which the Redemption Amount is paid to the holder (the "Redemption Date"). The Holder of an Unconverted Debenture may elect one of the above remedies with respect to a portion of such Unconverted Debenture and the other remedy with respect to other portions of the Unconverted Debenture. The Debenture shall contain provisions substantially consistent with the above terms, with such additional provisions as may be consented to by the Holder. The provisions of this section are not intended to limit the scope of the provisions otherwise included in the Debenture.

Limitation on Issuance of Shares. If the Company's Common Stock becomes listed on the Nasdaq SmallCap Market after the issuance of the Debenture, the The Company may be limited in acknowledges that the number of shares of Common Stock it may issue by virtue could result in the issuance of (A) the number of authorized shares or (B) the applicable rules and regulations more than 20% of the principal securities market on which the Company's outstanding Common Stock is listed or traded, including, but not necessarily limited to, NASDAQ in accordance with Nasdaq Rule 4310(c)(25)(H)(i) or Rule 4460(i)(1), as may be applicable (collectively, the "Cap 4310(c)(25)(H)(i)(d)(2)("Cap Regulations"). Without limiting the other provisions thereof; (i) thereof of the Preferred Stock, the Company will take all steps reasonably necessary to be in a position to issue shares of Common Stock on conversion of the Debentures Preferred Stock and/or exercise of the Warrant without violating the Cap Regulations and (ii) ifRegulations. If, despite taking such steps, the Company still cannot issue such shares of Common Stock without violating the Cap Regulations, the Holder holder of Preferred Stock and the Warrant which cannot convert be converted or exercised as a result of the Cap Regulations (each such Debentureshare, an "Unconverted DebentureShare") shall have the right option, exercisable in such holder's sole and absolute discretion, to elect either of the following remedies: (x) if permitted by the Cap Regulations, require the Company to issue shares of Common Stock in accordance with the Holdersuch holder's Notice notice of Conversion conversion or exercise at a conversion or exercise purchase price equal to the average of the closing best bid price per of a share of Common Stock for any the five (5) consecutive Trading Days trading days (subject to certain equitable adjustments for certain events occurring during such each period) during ending on the sixty (60) Trading Days immediately day preceding the Conversion Datedate of notice of conversion or exercise; or(yor (y) require the Company to redeem each Unconverted Debenture Share for an amount in cash (the "Redemption Amount"), payable in cash, ) equal to the sum of One Hundred Fifteen Percent (i) one hundred thirty-three percent (133115%) of the principal Fixed Strike Price of an Unconverted Debenture, plus (ii) any accrued but unpaid interest and penalties thereon through and including the date on which the Redemption Amount is paid to the holder (the "Redemption Date")Share. The Holder Certificate of an Unconverted Debenture may elect one of the above remedies with respect to a portion of such Unconverted Debenture and the other remedy with respect to other portions of the Unconverted Debenture. The Debenture Designation shall contain provisions substantially consistent with the above terms. If the holder elects option (y) above, with such additional provisions as may the Redemption Amount shall be consented to by the Holder. The provisions of this section are not intended to limit the scope payable within three (3) business days of the provisions otherwise included in the Debenturedate of conversion or exercise.

Limitation on Issuance of Shares. If the Company's Common Stock becomes is then listed for trading on the NASDAQ or the Nasdaq SmallCap Market after and the issuance of Company has not obtained the DebentureShareholder Approval (as defined below), then the Company may not issue in excess of 3,878,000 shares of Common Stock upon conversions of the Debentures or exercise of the Warrants, which number of shares of Common Stock shall be limited in subject to adjustment pursuant to Section 6.2 of the Warrant (such number of shares, the "Issuable Maximum"). The Issuable Maximum equals 19.999% of the number of shares of Common Stock it may issue by virtue outstanding immediately prior to the closing of transactions set forth in the Purchase Agreement. If on any Conversion Date (A) the number shares of authorized shares Common Stock are listed for trading on the NASDAQ or the Nasdaq SmallCap Market, (B) the Conversion Price (as defined herein) then in effect is such that the aggregate number of shares of Common Stock that would then be issuable upon conversion in full of all then outstanding Debentures, together with any shares of Common Stock previously issued upon conversion of the Debentures, would exceed the Issuable Maximum, and (C) the Company shall not have previously obtained the vote of shareholders (the "Shareholder Approval"), if any, as may be required by the applicable rules and regulations of the principal securities market Nasdaq Stock Market (or any successor entity) applicable to approve the issuance of shares of Common Stock in excess of the Issuable Maximum pursuant to the terms hereof, then the Company shall issue to the Holder requesting a conversion, a number of shares of Common Stock equal to the Issuable Maximum and, with respect to the remainder of the aggregate previous amount of Debentures then held by such Holder for which a conversion in accordance with the Conversion Price would result in an issuance of shares of Common Stock in excess of the issuable Maximum (the "Excess Stated Value"), the Company shall use its best efforts to obtain the Shareholder Approval applicable to such issuance as soon as possible, but in any event not later than the 75th day after such request (such 75th day, the "Target Date"), provided, that in the event the Company does not obtain the Shareholder Approval on which or prior to the Target Date, then, as soon as possible 12 after the Target Date but, in any event no later than ten (10) days following the Target Date (such 10th day following the Target Date, the "OTC Date"), the Company shall (i) initiate all steps necessary pursuant to the applicable rules and regulations of the Nasdaq Stock Market (or any successor entity) in order to delist the Common Stock is listed from trading on the NASDAQ or tradedthe Nasdaq SmallCap Market, includingas the case may be, but not necessarily limited to, NASDAQ Rule 4310(c)(25)(H)(iand (ii) or Rule 4460(i)(1quote the Common Stock on the OTC Bulletin Board (the obligations indicate in (i)-(ii), are collectively referred to as may be applicable (collectively, the "Cap RegulationsOTC Obligations"). Without limiting Within three (3) days of the other provisions thereof; (i) Common Stock being quoted on the OTC Bulletin Board, the Company will take all steps reasonably necessary to be in a position to shall issue shares of Common Stock to the converting Holder in an amount equal to the Excess Stated Value divided by the Conversion Price on conversion (x) the Target Date or (y) the date of delivery of the Debentures without violating the Cap Regulations and (ii) if, despite taking such steps, the Company still cannot issue such shares of Common Stock without violating being acquired upon the Cap Regulations, the Holder cannot convert as result conversion of the Cap Regulations (each such DebentureExcess Stated Value by the Company, an "Unconverted Debenture") shall have whichever is lower. It is understood that in connection with the right to elect either issuance of the following remedies: (x) if permitted by the Cap Regulations, require the Company to issue shares of Common Stock in accordance with being acquired upon the Holder's Notice conversion of Conversion at a conversion purchase price equal the Excess Stated Value, the Holder shall be entitled to the average rights and benefits conferred to it pursuant to the Registration Rights Agreement. Mr. Xxxxxx, xxe Holder of approximately 35% of the closing bid price per share of outstanding Common Stock for any five (5) consecutive Trading Days (subject to certain equitable adjustments for certain events occurring during such period) during the sixty (60) Trading Days immediately preceding the Conversion Date; or(y) require the Company to redeem each Unconverted Debenture for an amount (the "Redemption Amount")shall simultaneous with closing, payable in cash, equal to the sum of (i) one hundred thirty-three percent (133%) of the principal of an Unconverted Debenture, plus (ii) any accrued but unpaid interest and penalties thereon through and including the date on which the Redemption Amount is paid to the holder (the "Redemption Date"). The Holder of an Unconverted Debenture may elect one of the above remedies deliver a Irrevocable Proxy with respect to a portion of such Unconverted Debenture and the other remedy with respect to other portions of the Unconverted Debenture. The Debenture shall contain provisions substantially consistent with the above terms, with such additional provisions as may be consented to by the Holder. The provisions of this section are not intended to limit the scope of the provisions otherwise included in the Debenturematters requiring Shareholder Approval.