Common use of Additional Equity Capital Clause in Contracts

Additional Equity Capital. (i) The Company agrees that during the period beginning on the date hereof and ending on the date which is 180 days following the Closing Date (the "Lock-Up Period"), the Company will not, without the prior written consent of the Purchasers, contract with any party to obtain additional financing in which any equity or equity-linked securities are issued (including any debt financing with an equity component) pursuant to any offering exempt from the registration requirements of the Securities Act which grants any registration rights exercisable within one year of the Closing Date ("Future Offerings"). The limitations referred to in this Section 5(k) are collectively referred to as the "Capital Raising Limitations". The Capital Raising Limitations shall not apply to securities issued pursuant to (1) any transaction involving issuances of securities as consideration in a merger, consolidation or acquisition of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or as consideration for the acquisition of a business, product or license by the Company, (2) the issuance of securities pursuant to a syndicated underwritten public offering, (3) the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities outstanding as of the date hereof, (4) the grant of additional options or warrants, or the issuance of additional securities, under any duly authorized Company stock option, stock purchase or restricted stock plan for the benefit of the Company's employees, consultants or directors, or (5) the issuance of securities to a strategic business partner of the Company, (6) the issuance of securities in connection with a bank or equipment financing transaction, or (7) the issuance of any securities pursuant to a transaction made in reliance on Rule 144A under the Securities Act. (ii) The Company agrees that during the period beginning immediately upon the termination of the Lock-Up Period and ending on the date which is 180 days following such date (the "Participation Period"), each Purchaser shall have a right of first refusal to purchase its Pro Rata Percentage of 20% of the total amount of any issuance of any shares of Common Stock or Preferred Stock of any kind of the Company, whether now or hereafter authorized, and rights, options, or warrants to purchase said Common Stock or Preferred Stock, and securities of any type whatsoever that are, or by their terms may become, convertible into said Common Stock or Preferred Stock that the Company, from time to time, may propose to sell and issue (the "Participation Securities"), provided, however, -------- ------- that the term Participation Securities shall not apply to securities issued pursuant to (1) any transaction involving issuances of securities as consideration in a merger, consolidation or acquisition of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or as consideration for the acquisition of a business, product or license by the Company, (2) the issuance of securities pursuant to a syndicated public offering, (3) the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities outstanding as of the date hereof, (4) the grant of additional options or warrants, or the issuance of additional securities, under any duly authorized Company stock option, stock purchase or restricted stock plan for the benefit of the Company's employees, consultants or directors, or (5) the issuance of securities to a strategic business partner of the Company (6) the issuance of securities in connection with a bank or equipment financing transaction, or (7) the issuance of any securities pursuant to a transaction made in reliance on Rule 144A under the Securities Act (iii) If the Company proposes to issue Participation Securities, it will give each Purchaser written notice (the "Rights Notice") of the Company's intention to do so, describing the Participation Securities, the price, and the general terms upon which the Company proposes to issue them. Each such Purchaser will have 14 days from the date of delivery of the Rights Notice to agree to purchase up to its Pro Rata Percentage of 20% of the total amount of such Participation Securities for the price and upon the general terms specified in the Rights Notice by giving written notice to the Company setting forth the quantity of Participation Securities to be purchased. (iv) The Company will have 120 days after the date of delivery of the Rights Notice to sell the Participation Securities that were not purchased by the Purchasers, at a price and upon general terms no more favorable to the purchasers thereof than the price and general terms specified in the Rights Notice. If the Company does not sell the Participation Securities within said 120-day period as provided in the preceding sentence, the Company will not thereafter issue or sell any of such Participation Securities during the Participation Period without complying with the provisions of Section (iii) above.

Additional Equity Capital. (i) The Company agrees that during Subject to the period beginning on the date hereof and ending on the date which is 180 days following the Closing Date (the "Lock-Up Period")exceptions described below, the Company will not, without the prior written consent of a majority-in-interest of the PurchasersBuyers, negotiate or contract with any party to obtain additional equity financing in which any equity or equity-linked securities are issued (including any debt financing with an equity component), during the period (the "LOCK-UP PERIOD") pursuant to any offering exempt from the registration requirements of the Securities Act which grants any registration rights exercisable within one year of beginning on the Closing Date and ending One Hundred Twenty ("Future Offerings"). The limitations 120) days from the date the Registration Statement (as defined in the Registration Rights Agreement) is first declared effective by the SEC (subject to extension for any days in which sales of all of the Registrable Securities (as defined in the Registration Rights Agreement) cannot be made pursuant to the Registration Statement (as defined in the Registration Rights Agreement) occurring after the date on which such Registration Statement is first declared effective by the SEC) (the limitation referred to in this Section 5(k) are collectively sentence is referred to as the "Capital Raising LimitationsCAPITAL RAISING LIMITATION"). The Capital Raising Limitations Limitation shall not apply to any transaction involving (i) issuances of securities issued in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act), or (1ii) any transaction involving issuances of securities as consideration in for a merger, consolidation or acquisition purchase of assets, or in connection with any strategic partnership alliance, partnership, business relationship or joint venture (in each case, the primary purpose of which is not to raise equity capital), or as consideration for in connection with the disposition or acquisition of a business, product or license by the Company, (2) the issuance of securities pursuant license. The Capital Raising Limitation also shall not apply to a syndicated underwritten public offering, (3) the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities outstanding as of the date hereof, (4) hereof or to the grant or exercise of additional options or warrants, or the issuance of additional securities, under any duly authorized Company stock optionoption plan, stock purchase or restricted stock plan for the or employee benefit plan approved by a majority of the Company's employees, consultants or directors, or (5) the issuance of securities to a strategic business partner independent members of the Company, (6) the issuance Board of securities in connection with a bank or equipment financing transaction, or (7) the issuance of any securities pursuant to a transaction made in reliance on Rule 144A under the Securities Act. (ii) The Company agrees that during the period beginning immediately upon the termination of the Lock-Up Period and ending on the date which is 180 days following such date (the "Participation Period"), each Purchaser shall have a right of first refusal to purchase its Pro Rata Percentage of 20% of the total amount of any issuance of any shares of Common Stock or Preferred Stock of any kind of the Company, whether now or hereafter authorized, and rights, options, or warrants to purchase said Common Stock or Preferred Stock, and securities of any type whatsoever that are, or by their terms may become, convertible into said Common Stock or Preferred Stock that the Company, from time to time, may propose to sell and issue (the "Participation Securities"), provided, however, -------- ------- that the term Participation Securities shall not apply to securities issued pursuant to (1) any transaction involving issuances of securities as consideration in a merger, consolidation or acquisition of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or as consideration for the acquisition of a business, product or license by the Company, (2) the issuance of securities pursuant to a syndicated public offering, (3) the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities outstanding as of the date hereof, (4) the grant of additional options or warrants, or the issuance of additional securities, under any duly authorized Company stock option, stock purchase or restricted stock plan for the benefit of the Company's employees, consultants or directors, or (5) the issuance of securities to a strategic business partner Directors of the Company (6) the issuance of securities in connection with or a bank or equipment financing transaction, or (7) the issuance of any securities pursuant to a transaction made in reliance on Rule 144A under the Securities Act (iii) If the Company proposes to issue Participation Securities, it will give each Purchaser written notice (the "Rights Notice") majority of the Company's intention to do so, describing the Participation Securities, the price, and the general terms upon which the Company proposes to issue them. Each members of a committee of independent directors established for such Purchaser will have 14 days from the date of delivery of the Rights Notice to agree to purchase up to its Pro Rata Percentage of 20% of the total amount of such Participation Securities for the price and upon the general terms specified in the Rights Notice by giving written notice to the Company setting forth the quantity of Participation Securities to be purchasedpurpose. (iv) The Company will have 120 days after the date of delivery of the Rights Notice to sell the Participation Securities that were not purchased by the Purchasers, at a price and upon general terms no more favorable to the purchasers thereof than the price and general terms specified in the Rights Notice. If the Company does not sell the Participation Securities within said 120-day period as provided in the preceding sentence, the Company will not thereafter issue or sell any of such Participation Securities during the Participation Period without complying with the provisions of Section (iii) above.

Additional Equity Capital. (i) The Company agrees that during the period beginning on the date hereof and ending on the date which is 180 days following the Closing Date March 31, 1998 (the "LockLOCK-Up PeriodUP PERIOD"), the Company will not, without the prior written consent of Purchasers (or their designated agents) holding at least two thirds (2/3) of the Purchasersthen outstanding Preferred Shares, contract with any party to obtain additional equity financing in which any equity or equity-linked securities are issued (including any debt financing with an equity component) pursuant to any offering exempt from the registration requirements of the Securities Act which grants any registration rights exercisable within one year of the Closing Date ("Future OfferingsFUTURE OFFERINGS"). The limitations limitation referred to in this Section 5(k) are collectively the immediately preceding sentence is referred to as the "Capital Raising Limitations". CAPITAL RAISING LIMITATION." The Capital Raising Limitations Limitation shall not apply to securities issued pursuant to (1) any transaction involving issuances of securities as consideration in a merger, consolidation or acquisition of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or as consideration for the acquisition of a business, product or license by the CompanyCompany or exercise of options by employees, consultants or directors. The Capital Raising Limitation also shall not apply (2i) to the issuance of securities pursuant to a syndicated firm commitment underwritten public offering, (3ii) so long as the shares of Common Stock underlying such options, warrants or other securities are reserved for issuance as of the date hereof, the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities outstanding as of the date hereof, (4iii) so long as the shares of Common Stock underlying such options, warrants or other securities are reserved for issuance as of the date hereof, the grant of additional options or warrants, or the issuance of additional securities, under any duly authorized Company stock option, stock purchase option or restricted stock plan for the benefit of the Company's employees, consultants or directors, directors in existence as of the date hereof or (5iv) Future Offerings in an aggregate amount less than or equal to three million dollars ($3,000,000.00). In the issuance of securities to a strategic business partner of event the Company, (6) the issuance of securities in connection with a bank or equipment financing transaction, or (7) the issuance of Company conducts any securities pursuant to a transaction made in reliance on Rule 144A under the Securities Act. (ii) The Company agrees that Future Offering during the period beginning immediately upon the termination of the Lock-Up Period and ending on Period, the date Company shall not permit any securities issued in such Future Offering to any person or entity which is 180 days following not a Purchaser (or any securities issuable upon conversion, exercise, exchange or redemption of any such date securities) to be registered for sale under the Securities Act until after January 15, 1998 (subject to extension as provided below) (the "Participation PeriodFUTURE OFFERING REGISTRATION DATE"), each Purchaser shall have a right of first refusal . The restriction contained in the immediately preceding sentence is in addition to purchase its Pro Rata Percentage of 20% of the total amount of any issuance of any shares of Common Stock or Preferred Stock of any kind of the Company, whether now or hereafter authorized, and rights, options, or warrants to purchase said Common Stock or Preferred Stock, and securities of any type whatsoever that are, or by their terms may become, convertible into said Common Stock or Preferred Stock that the Company, from time to time, may propose to sell and issue (the "Participation Securities"), provided, however, -------- ------- that the term Participation Securities Capital Raising Limitation but shall not apply to securities issued a firm committment underwritten public offering. In the event that the registration statement required to be filed pursuant to the Registration Rights Agreement shall not have been (1a) any transaction involving issuances of securities as consideration in a merger, consolidation filed on or acquisition of assets, before the fifteenth (15th) day after the date hereof or in connection with any strategic partnership (b) declared effective on or joint venture before the sixtieth (the primary purpose of which is not to raise equity capital), or as consideration for the acquisition of a business, product or license by the Company, (260th) the issuance of securities pursuant to a syndicated public offering, (3) the issuance of securities upon exercise or conversion of the Company's options, warrants or other convertible securities outstanding as of day after the date hereof, (4) the grant of then, for each additional options or warrants, or the issuance of additional securities, under any duly authorized Company stock option, stock purchase or restricted stock plan for the benefit day required to satisfy either of the Company's employees, consultants or directors, or (5) the issuance of securities to a strategic business partner of the Company (6) the issuance of securities in connection with a bank or equipment financing transaction, or (7) the issuance of any securities pursuant to a transaction made in reliance on Rule 144A under the Securities Act (iii) If the Company proposes to issue Participation Securities, it will give each Purchaser written notice (the "Rights Notice") of the Company's intention to do so, describing the Participation Securitiespreceding deadlines, the price, and the general terms upon which the Company proposes to issue them. Each such Purchaser will have 14 days from the date of delivery of the Rights Notice to agree to purchase up to its Pro Rata Percentage of 20% of the total amount of such Participation Securities for the price and upon the general terms specified in the Rights Notice Future Offering Registration Date shall be extended by giving written notice to the Company setting forth the quantity of Participation Securities to be purchasedone day. (iv) The Company will have 120 days after the date of delivery of the Rights Notice to sell the Participation Securities that were not purchased by the Purchasers, at a price and upon general terms no more favorable to the purchasers thereof than the price and general terms specified in the Rights Notice. If the Company does not sell the Participation Securities within said 120-day period as provided in the preceding sentence, the Company will not thereafter issue or sell any of such Participation Securities during the Participation Period without complying with the provisions of Section (iii) above.