Common use of Subsequent Variable Rate Transactions Clause in Contracts

Subsequent Variable Rate Transactions. From the date hereof until such time as the Buyers no longer hold the Note or thirty (30) days after the Buyers are issued Conversion Shares, the Company shall be prohibited from effecting or entering into an agreement involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is less than $0.3125 per share and is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is less than $0.3125 per share and that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price. Notwithstanding the foregoing, the Company’s sale of Common Stock under its existing equity line of credit shall not constitute a prohibited Variable Rate Transaction. Any Buyer shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

Subsequent Variable Rate Transactions. From the date hereof until such time as the Buyers no longer hold the Note is fully converted or thirty (30) days after the Buyers are issued Conversion Sharesfully repaid, the Company shall be prohibited from effecting or entering into an agreement involving a Variable Rate Transaction; provided, however, that the Company shall be permitted to effect or enter into a Variable Rate Transaction if fifty percent (50%) of the net proceeds from any such Variable Rate Transaction are applied to the then outstanding balance of the Note within three (3) business days of the closing of the respective Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is less than $0.3125 per share and is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is less than $0.3125 per share and that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price. Notwithstanding the foregoing, the Company’s sale of Common Stock under its existing equity line of credit shall not constitute a prohibited Variable Rate Transaction. Any The Buyer shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.