Limitations on Transfer Clause Example from Business Contracts

Limitations on Transfer. (a) This Warrant, the Preferred Stock and the securities issuable, directly or indirectly, upon conversion of the Preferred Stock (the "Conversion Shares") shall not be transferable except upon the conditions specified in this Section 2, which conditions are intended to ensure compliance with the provisions of the Securities Act. Each holder of this Warrant, the Preferred Stock issuable hereunder or the Conversion Shares will cause any proposed transferee of the Warrant, Preferred Stock or Conve...rsion Shares to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Section 2. Notwithstanding the foregoing and any other provision of this Section 2, Holder may freely transfer all or part of this Warrant, the Preferred Stock or Conversion Shares at any time to any lender transferee of a portion of the loan commitment of Lender under the Loan Agreement or any affiliate of Holder, provided that such transferee is not an actual or potential competitor of Company (as determined in good faith by the Board), by giving Company notice of the portion of the Warrant, the Preferred Stock or Conversion Shares being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this Warrant, such Preferred Stock or such Conversion Shares to Company for reissuance to the transferees(s) (and Holder, if applicable). 3 (b) Each certificate representing (i) this Warrant, (ii) the Preferred Stock, (iii) the Conversion Shares and (iv) any other securities issued in respect to the Preferred Stock or Conversion Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of this Section 2 or unless such securities have been registered under the Securities Act or sold under Rule 144) be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any legend required under applicable state securities laws): THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE AND DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE TO COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED DUE TO AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS. (c) Holder of this Warrant and each person to whom all or any portion of this Warrant, all or any portion of the Preferred Stock or all or any portion of the Conversion Shares is subsequently transferred represents and warrants to Company (by acceptance of such transfer) that it will not transfer such portion of this Warrant, such Preferred Stock or such Conversion Shares unless a registration statement under the Securities Act was in effect with respect to such securities at the time of issuance thereof) except pursuant to (i) an effective registration statement under the Securities Act, (ii) Rule 144 under the Securities Act (or any other rule under the Securities Act relating to the disposition of securities), or (iii) an opinion of counsel, reasonably satisfactory to counsel for Company, that an exemption from such registration is available. View More