Common use of Exceptions to Adjustment of Exercise Price Clause in Contracts

Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Price will be made (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of the members of a committee of independent directors established for such purpose; (iii) upon the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Company.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will be made (iunder this Section 3(b) upon in respect of Excluded Securities. “Excluded Securities” means the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (iia) upon shares of Common Stock or options to employees, officers or directors of, or consultants to, the grant or exercise of Company pursuant to any stock or options which may hereafter be granted or exercised under any employee benefit option agreement, stock option plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved duly adopted by a majority of the independent non-employee members of the Board of Directors of the Company or a majority of the members of a committee of independent non-employee directors established for such purpose; purpose (iii) upon for purposes of clarity, the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject upon exercise of options granted pursuant to appropriate arithmetic adjustment in the event of any a stock splitsoption agreement, stock dividends, combinations of shares, recapitalizations option plan or other such events relating to the Common Stock occurring equity incentive plan subsequent to the date hereofhereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or securities rights exercisable or exchangeable for or convertible or exercisable into 1,000,000 or less shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (subject other than on a non-discretionary basis pursuant to appropriate arithmetic adjustment in the event pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any stock splitssuch securities, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)(c) may be securities issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise acquisitions or strategic transactions approved by a majority of the Warrants; (v) so long as disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the shareholders business of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization and in which the Company acquires, receives benefits in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant addition to the Purchase Agreement investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (viid) upon any investment by the Holder (or affiliates thereof) in shares of Common Stock or warrants other securities issued in connection with any stock split, stock dividend or recapitalization of the CompanyCompany (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Warrant Price or the number of Warrant Shares issuable pursuant to this Warrant will be made under Section 2(e) or 2(f) above as a result of the issuance of any securities of the Company issued pursuant to (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee employee, consultant or director benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved by a majority of the independent non-employee members of the Company's Board of Directors of the Company or a majority of the members of a committee of independent non-employee directors established for such purpose, (ii) any options, warrant, preferred stock, convertible securities or rights or agreements to purchase securities of the Company (not including equity lines of credit) outstanding on the date hereof; (iii) upon the issuance any underwritten public offerings of equity securities (other than equity lines of credit and similar transactions); (iv) any equity securities issued for consideration other than cash pursuant to a merger, consolidation, acquisition or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company similar business combination; (so long as (iv) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment issued in the event of connection with any stock splitssplit, stock dividends, combinations of shares, recapitalizations dividend or other such events relating to recapitalization by the Common Stock occurring subsequent to the date hereofCompany; (vi) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock issued upon exercise of the Warrants or any warrants issued in connection with the Securities Purchase Agreements (subject to appropriate arithmetic adjustment in the event of as defined below); (vii) any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be equity securities issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% any equipment leasing arrangement or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation debt financing from a bank or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization similar financial institution whose primary business is lending money and not investing in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entitysecurities; or (viviii) upon any equity securities (other than equity lines of credit) issued in connection with strategic transactions involving the exercise Company and other entities, including (A) joint ventures, manufacturing, marketing or distribution arrangements, (B) technology transfer or development arrangements; provided, that the primary purpose of such transaction is not the other raising of capital; (ix) an agreement to issue securities which does not close; (x) any securities issued or issuable under the Securities Purchase Agreements entered into by and between the Company and certain investors (including the original holder of this Warrant) on the date of original issuance of this Warrant (collectively, the "Securities Purchase Agreements"), pursuant to which such investors agreed to purchase shares of common stock and common stock purchase warrants from the Company, (xi) any common stock purchase warrants issued pursuant or issuable to the placement agent described in the Securities Purchase Agreement Agreements, or any shares of common stock issuable thereunder; and (viixii) upon any investment by shares of common stock issued as payment in kind on the Holder (or affiliates thereof) in Common Stock or warrants shares of the Company's Series A Convertible Preferred Stock outstanding on the date hereof.

Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Price will be made (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of the members of a committee of independent directors established for such purpose; (iii) upon the issuance or deemed issuance exercise of the Warrants; (iv) issuances of securities for less than the Market Price in connection with a strategic relationship, joint venture investment or strategic investment in acquisition (the Company (so long as (i) the main primary purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for capital), so long as, in connection with an acquisition or strategic purposes) (provided investment that during the Exercise Period only has an aggregate acquisition price in excess of 1,000,000 ten million dollars ($10,000,000), the Company has received an opinion from a nationally recognized investment banking firm reasonably acceptable to the holder of this Warrant in connection with such strategic investment or less shares acquisition that such transaction is fair to the Company from a financial point of view; (v) issuance of the Bank Warrants (as defined in the Securities Purchase Agreement); or (vi) issuances of securities (including Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 shares of Common Stock) (AGECC Redemption Securities@) the proceeds of which are used for the purpose of purchasing or less redeeming the 1,766,245 shares of Common Stock of the Company held by General Electric Capital Corporation, which issuance is not primarily for the purpose of raising equity capital (subject a AGECC Transaction@); provided, that such GECC Redemption Securities are not issued at a discount in excess of ten percent (10%) of the Market Price on the date of issuance of such securities (taking into account the value of any warrants or options to appropriate arithmetic adjustment acquire Common Stock issued in connection therewith) and; provided, further, that if such GECC Redemption Securities consist solely of warrants, options or similar rights (AGECC Warrants@) in which the purchaser pays no consideration for such GECC Warrants in connection with a GECC Transaction, then (A) the number of GECC Warrants issued in such transaction may not exceed the consideration paid by such purchasers in the event GECC Transaction divided by the market Price of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause effect immediately preceding such transaction multiplied by twenty-five percent (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)25%), (ivB) upon the exercise price of the Warrants; (v) so long as GECC Warrants must be greater than the shareholders Market Price of the Company prior to Common Stock in effect immediately preceding such GECC Transaction and (C) the transaction have 50% or more of the voting power after consummation term of such transaction, upon GECC Warrants must be less than or equal to four (4) years following the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets date of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the CompanyGECC Transaction.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (ic) upon the issuance of any Excluded Securities. For purposes hereof, "Excluded Securities" means ------------------- (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon exercise of the Additional Investment Rights or the Warrants; (III) shares of Common Stock issuable or issued to (x) employees or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the issuance of such stock Issue Date or options is approved adopted after the Issue Date by a majority of the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, and (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or a majority issued hereafter, provided such issuances are approved by the Board of Directors; (IV) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the members of a committee of independent directors established for such purposeCompany; (iiiV) upon shares of Common Stock issued in connection with the issuance acquisition by the Company of any corporation or deemed issuance other entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of securities for less than national recognition; (VI) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the Market Price date hereof and (VII) shares issued to Persons with whom the Corporation is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a strategic relationship, joint venture or strategic investment in transaction the Company (so long as (i) the main primary purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companycapital.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will be made (iunder this Section 3(b) upon in respect of Excluded Securities. “Excluded Securities” means the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (iia) upon shares of Common Stock or options to employees, officers or directors of, or consultants to, the grant or exercise of Company pursuant to any stock or options which may hereafter be granted or exercised under any employee benefit option agreement, stock option plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved duly adopted by a majority of the independent non-employee members of the Board of Directors of the Company or a majority of the members of a committee of independent non-employee directors established for such purpose; purpose (iii) upon for purposes of clarity, the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject upon exercise of options granted pursuant to appropriate arithmetic adjustment in the event of any a stock splitsoption agreement, stock dividends, combinations of shares, recapitalizations option plan or other such events relating to the Common Stock occurring equity incentive plan subsequent to the date hereofhereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued under the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or securities rights exercisable or exchangeable for or convertible or exercisable into 1,000,000 or less shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (subject other than on a non-discretionary basis pursuant to appropriate arithmetic adjustment in the event pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any stock splitssuch securities, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)(c) may be securities issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise acquisitions or strategic transactions approved by a majority of the Warrants; (v) so long as disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the shareholders business of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization and in which the Company acquiresreceives benefits in addition to the investment of funds, but shall not include a transaction in a single transaction which the Company is issuing securities primarily for the purpose of raising capital or series to an entity whose primary business is investing in securities, (d) shares of related transactionsCommon Stock or other securities issued in connection with any stock split, all stock dividend or substantially all recapitalization of the assets Company (subject to Section 3(a) and Section 4.14 of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or hereof), and (viie) upon any investment by the Holder (or affiliates thereof) in shares of Common Stock or warrants of the Companyother securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (ic) upon the issuance of any Excluded Securities. For purposes hereof, "Excluded Securities" means (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (III) shares of Common Stock issuable or issued to (x) employees or directors from time to time either directly or upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the futurediscretion of the Board of Directors, so long as the issuance of such stock or options is approved by a majority the independent members of the Board, pursuant to one or more stock option plans or restricted stock plans or stock purchase plans in effect as of the Issue Date or subsequently approved by the independent members of the Board of Directors or by the Company's stockholders, or (y) consultants, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the independent members of the Company Board of Directors or a majority of by the members of a committee of independent directors established for such purposeCompany's stockholders; (iiiIV) upon except as required by subparagraph (c)(ii)(E) above, shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the issuance or deemed issuance date hereof; (V) shares of securities for less than the Market Price Common Stock issued to a Person in connection with a joint venture, strategic relationship, joint venture alliance or strategic investment in other commercial relationship with such Person relating to the Company (so long as (i) operation of the main Company's business and not for the purpose of which is not to raise raising equity capital and capital; (iiVI) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment Stock) issued in connection with the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, any corporation or other reorganization entity (including, without limitation, the interests in certain limited partnerships of which the Company acquires, in or a single transaction or series of related transactions, all Subsidiary is a general partner) or substantially all of the assets of such other any corporation or other entity or fifty percent division thereof, as long as a purpose of such transaction is not to raise equity capital; (50%VII) any borrowings by the Company, direct or more indirect, from a commercial lending institution that are approved by the Board of Directors, including any type of loan or payment evidenced by any type of Debt instrument, provided the value of the voting power equity portion of any such borrowings, including warrants, options or other corporation or entity; or (vi) upon the exercise of the rights to purchase capital stock and other interests convertible into capital stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Company, does not exceed ten percent (10%) of such borrowing; and (VIII) up to an aggregate of $5,000,000 of Film Vehicle Interests (as defined in the Securities Purchase Agreement).

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of the members of a committee of independent directors established for such purpose; (iiic) upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon conversion of the Preferred Stock or deemed issuance exercise of securities for less than the Market Price in connection with a strategic relationship, joint venture Warrants or strategic investment the VeriChip Warrant; (III) the 2004 Warrants (as defined in the Company Securities Purchase Agreement) and securities issued or issuable thereunder; (so long as (iIV) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject or the common stock of any Subsidiary) issuable or issued to appropriate arithmetic adjustment (x) employees or directors of the Company or any such Subsidiary from time to time either directly or upon the exercise of options, in such case granted or to be granted in the event discretion of any the Company’s or such Subsidiary’s Board of Directors (or a duly authorized committee thereof) as an inducement to join the Company or such Subsidiary or pursuant to one or more stock splitsoption plans or restricted stock plans in effect as of the Closing Date or adopted after the Closing Date by the Company’s or such Subsidiary’s Board of Directors (or a duly authorized committee thereof) or by the Company’s or such Subsidiary’s shareholders, stock dividendsor (y) vendors, combinations of sharesservice providers or consultants, recapitalizations either directly or other such events relating pursuant to the options or warrants to purchase Common Stock occurring subsequent to that are outstanding on the date hereof) hereof or issued hereafter, provided such issuances are approved by the Company’s or such Subsidiary’s Board of Directors (or securities convertible a duly authorized committee thereof) or exercisable into 1,000,000 by the Company’s or less such Subsidiary’s shareholders; (V) shares of Common Stock (subject to appropriate arithmetic adjustment issued in the event of connection with any stock splitssplit, stock dividends, combinations of shares, recapitalizations dividend or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders recapitalization of the Company prior to or any of its Subsidiaries; (VI) shares of Common Stock issued in connection with the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, any corporation or other reorganization entity occurring after the Effective Date; (VII) shares of Common Stock issued in which connection with any Convertible Securities or Purchase Rights outstanding on the date hereof and disclosed on Schedule 3.5 to the Securities Purchase Agreement; (IX) shares issued to Persons with whom the Company acquiresor any of its Subsidiaries is entering into a joint venture, strategic alliance or other commercial relationship in a single transaction or series of related transactions, all or substantially all of connection with the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants operation of the Company’s or any such Subsidiary’s business and not in connection with a transaction the primary purpose of which is to raise equity capital; (VIII) shares of Common Stock, Convertible Securities or Purchase Rights issued in connection with the settlement of a bona fide litigation approved by the Company’s or such Subsidiary’s Board of Directors and (IX) shares issued to a Subsidiary pursuant to a share exchange.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph 6(c) upon the issuance of any Excluded Securities. For purposes hereof, "Excluded Securities" means (iI) securities purchased under the Securities Purchase Agreement (including all securities issued to any finder or broker for facilitating the purchase of the Debentures and the Warrants); (II) securities issued upon exercise of the Debentures or Warrants; (III) shares of Common Stock issuable or issued to (x) employees or directors from time to time either directly or upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long as the issuance of such stock or options is approved by a majority of the independent members discretion of the Board of Directors (or a duly authorized committee thereof) pursuant to one or more stock option plans or restricted stock plans in effect as of the Company Closing Date or adopted after the Closing Date by the Board of Directors (or a majority duly authorized committee thereof) or by the Company's shareholders, or (y) vendors, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of Directors (or a duly authorized committee thereof) or by the Company's shareholders; (IV) any borrowings, direct or indirect, from financial institutions by the Company that are approved by the Board of Directors, including any type of loan or payment evidenced by any type of Debt instrument, provided the value of the members equity portion of any such borrowings, including warrants, options or other rights to purchase capital stock and other interests convertible into capital stock of the Company, does not exceed ten percent (10%) of such borrowing (or, in the case of a committee borrowing under the existing working capital facility provided by Xxxxxxx Xxxxx and the Related Parties, does not exceed forty percent (40%) of independent directors established for such purposeborrowing); (iiiV) upon shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the issuance Company; (VI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or deemed issuance other entity occurring after the Initial Effective Date; (VII) shares of securities for less than Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the Market Price date hereof; (VIII) shares of Common Stock issued to Persons with whom the Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a strategic relationship, joint venture or strategic investment in transaction the Company (so long as (i) the main primary purpose of which is not to raise equity capital and capital, (iiIX) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment a registered public offering underwritten on a best efforts basis by Xxxxxxx Xxxxx or a nationally-recognized investment bank with net proceeds to the Exercise Price pursuant to Section 4(a)Company of at least fifteen million dollars ($15,000,000), and (ivX) upon the exercise of Additional Registrable Securities (as defined in the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the CompanyRegistration Rights Agreement).

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of the members of a committee of independent directors established for such purpose; (iiic) upon the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splitsExcluded Securities. For purposes hereof, stock dividends, combinations of shares, recapitalizations or other such events relating to "Excluded Securities" means (I) securities ------------------- purchased under the Common Stock occurring subsequent to the date hereofSecurities Purchase Agreement; (II) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (vIII) so long as the shareholders shares of the Company prior Common Stock issuable or issued to the transaction have 50% (x) employees or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant directors from time to an acquisition of another corporation time either directly or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of options, in such case granted or to be granted in the other discretion of the Board of Directors (or a duly authorized committee thereof) pursuant to one or more stock option plans or restricted stock plans or stock purchase warrants issued plans in effect as of the Issue Date or adopted ----------------------- after the Issue Date by the Board of Directors (or a duly authorized committee thereof) or by the Company's shareholders, or (y) vendors, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the Purchase Agreement date hereof or (vii) upon any investment issued hereafter, provided such issuances are approved by the Holder Board of Directors (or affiliates a duly authorized committee thereof) in or by the Company's shareholders; (IV) shares of Common Stock issued in connection with any stock split, stock dividend or warrants recapitalization of the Company; (V) shares of Common Stock issued in connection with the acquisition by the Company or a Subsidiary of any Person --------------- or business not for the purpose or with the effect of raising equity capital; (VI) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof; (VII) shares issued to Persons with whom the Corporation is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the primary purpose of which is to raise equity capital; and (VIII) shares of Common Stock, Convertible Securities or Purchase Rights issued in connection with the settlement of a bona fide litigation approved by the Board of Directors.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the ------------------------------------------- foregoing, no adjustment to the Exercise Price will shall be made pursuant to this Section 6(c) upon the issuance of any Excluded Securities. For purposes hereof, "Excluded Securities" means (iI) securities purchased under the Exchange -------------------- Agreement or the Securities Purchase Agreement; (II) securities issued upon conversion or exercise of shares of Series A Preferred Stock or the related warrants, or of any securities issued under the Exchange Agreement, the Securities Purchase Agreement or the securities purchase agreement relating to the Series A Preferred Stock; (III) shares of Common Stock issuable or issued to employees, consultants or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long as the issuance of such stock or options is approved by a majority of the independent members discretion of the Board of Directors pursuant to one or more stock option plans or agreements or restricted stock plans or agreements in effect as of the Company or a majority of the members of a committee of independent directors established for such purpose; (iii) upon the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not Issue Date and up to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less additional 500,000 shares of Common Stock (subject issuable or issued to appropriate arithmetic adjustment employees, directors, consultants or lenders from time to time as shares or upon the exercise of options or warrants, which may be granted in the event discretion of any stock splitsthe Board of Directors pursuant to one or more agreements, stock dividends, combinations option plans or agreements or restricted stock plans or agreements approved by the Independent Directors of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to Board of Directors after the date hereofIssue Date; (IV) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment issued in the event of connection with any stock splitssplit, stock dividends, combinations dividend or recapitalization of shares, recapitalizations or other such events relating to the Company; and (V) shares of Common Stock occurring subsequent to issued in connection with the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, any corporation or other reorganization in which entity occurring after the Company acquires, in Effective Date and as long as a single transaction or series fairness opinion with respect to such acquisition is rendered by an investment bank of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companynational recognition.

Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Price will be made (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of the members of a committee of independent directors established for such purpose; (iii) upon the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (viv) so long as upon the shareholders issuance, within 180 days of the Company prior to Closing Date (as defined in the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquiresSecurities Purchase Agreement), in a single transaction to a Strategic Investor (as defined below) of (A) up to $10 million of Common Stock (or series securities convertible into Common Stock) for a price per share of related transactionsCommon Stock (or, all or substantially all in the case of convertible securities, having a conversion price per share of Common Stock) of not less than 80% of the assets Market Price in effect on the date of issuance of such other corporation Common Stock (or entity security convertible into Common Stock) and (B) options or fifty percent (50%) or more warrants to purchase up to 19.99% of the voting power outstanding Common Stock of the Company at an exercise price per share of Common Stock of not less than 80% of the Market Price in effect on the date of issuance of such other corporation options or entitywarrants; or (viv) upon the exercise issuance, simultaneous with the closing of the other stock transactions referred to in clause (iv) above, to an executive officer of the Strategic Investor of options to purchase warrants issued pursuant up to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in one million shares of Common Stock or warrants at an exercise price per share of Common Stock of not less than $4.00 in connection with such individual's agreement to serve on the Board of Directors of the Company.Company following the closing of the transactions described in clause (iv) above; PROVIDED, HOWEVER, that in the case of the events described in clauses (iv) and (v) hereof, if the Market Price of the Common Stock in effect on the thirtieth (30th) calendar day following the public announcement of the material terms of such transactions is less than the Market Price of the Common Stock in effect on the Trading Day immediately preceding the public announcement of the material terms of such transactions, then the Conversion Price shall be subject to adjustment effective on the later of (x) the thirtieth (30th) calendar day following the public announcement of the material terms of such

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (ic) upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon conversion or exercise of the Debentures or the Warrants; (III) shares of Common Stock issuable or issued to (x) employees, consultants or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the issuance of such stock Issue Date or options is approved adopted after the Issue Date by a majority of the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Issue Date, and (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of Directors; (IV) any borrowings, direct or indirect, from financial institutions by the Company that are approved by the Board of Directors, including any type of loan or payment evidenced by any type of Debt instrument, provided the equity portion of any such borrowings, including warrants, options or other rights to purchase capital stock and other interests convertible into capital stock of the Company, does not exceed ten percent (10%) of such borrowing; (V) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the Company; (VI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VII) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof and (VIII) shares issued to Persons with whom the Corporation is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company or a majority of the members of a committee of independent directors established for such purpose; (iii) upon the issuance or deemed issuance of securities for less than the Market Price ‘s business and not in connection with a strategic relationship, joint venture or strategic investment in transaction the Company (so long as (i) the main primary purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companycapital.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to paragraph (ic) above upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (III) shares of Common Stock issuable or issued to (x) employees, consultants or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the issuance of such stock Issue Date or options is approved adopted after the Issue Date by a majority of the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, or a majority (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of the members of a committee of independent directors established for such purposeDirectors; (iiiIV) upon the issuance or deemed issuance shares of securities for less than the Market Price Common Stock issued in connection with a strategic relationshipcommercial lending transaction with a federally-insured financial institution that is approved by the independent members of the Board of Directors, joint venture provided that the fair market value of such shares does not exceed ten percent (10%) of the amount borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or strategic investment recapitalization of the Company; (VI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other entity occurring after the Effective Date, provided that a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (so long as VII) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof and disclosed in a schedule to the Securities Purchase Agreement; and (iVIII) shares issued to Persons with whom the main Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company’s business and not in connection with a transaction the purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companycapital.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (ic) upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) the Securities and the Existing Securities (as defined in the Debentures); (II) securities issued upon conversion or exercise of the Existing Securities; (III) shares of Common Stock issuable or issued to (x) employees, consultants or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the issuance of such stock Issue Date or options is approved adopted after the Issue Date by a majority of the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Issue Date, and (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of Directors; (IV) any borrowings, direct or indirect, from financial institutions by the Company that are approved by the Board of Directors, including any type of loan or payment evidenced by any type of Debt instrument, provided the value of the equity portion of any such borrowings, including warrants, options or other rights to purchase capital stock and other interests convertible into capital stock of the Company, does not exceed ten percent (10%) of such borrowing; (V) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the Company; (VI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (VII) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof, including, without limitation, the Existing Securities; and (VIII) shares issued to Persons with whom the Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company or a majority of the members of a committee of independent directors established for such purpose; (iii) upon the issuance or deemed issuance of securities for less than the Market Price ‘s business and not in connection with a strategic relationship, joint venture or strategic investment in transaction the Company (so long as (i) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companycapital.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (ic) upon the issuance of any Excluded Securities. For purposes hereof, “Excluded Securities” means (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon conversion or exercise of the Debentures or the Warrants; (III) shares of Common Stock issuable or issued to (x) employees, consultants or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the issuance of such stock Issue Date or options is approved adopted after the Issue Date by a majority of the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, or a majority (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of the members of a committee of independent directors established for such purposeDirectors; (iiiIV) upon the issuance or deemed issuance shares of securities for less than the Market Price Common Stock issued in connection with a strategic relationshipcommercial lending transaction with a federally-insured financial institution that is approved by the independent members of the Board of Directors, joint venture provided that the fair market value of such shares does not exceed ten percent (10%) of the amount borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or strategic investment recapitalization of the Company; (VI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other entity occurring after the Effective Date, provided that, if in connection with such acquisition, the Company will issue a number of shares equal to or greater than 20% of the number of shares of Common Stock issued and outstanding immediately prior to the consummation of such acquisition, the Company shall obtain a fairness opinion with respect to such acquisition from an investment bank of national recognition; (so long as VII) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof and disclosed in a schedule to the Securities Purchase Agreement; and (iVIII) shares issued to Persons with whom the main Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company’s business and not in connection with a transaction the purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companycapital.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to paragraph (ic) above upon the issuance of any Excluded Securities. For purposes hereof, "Excluded Securities" means (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon exercise of the Warrants; (III) shares of Common Stock issuable or issued to (x) employees, consultants or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the issuance of such stock Issue Date or options is approved adopted after the Issue Date by a majority of the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, or a majority (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of the members of a committee of independent directors established for such purposeDirectors; (iiiIV) upon the issuance or deemed issuance shares of securities for less than the Market Price Common Stock issued in connection with a strategic relationshipcommercial lending transaction with a federally-insured financial institution that is approved by the independent members of the Board of Directors, joint venture provided that the fair market value of such shares does not exceed ten percent (10%) of the amount borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or strategic investment recapitalization of the Company; (VI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other entity occurring after the Effective Date, provided that a fairness opinion with respect to such acquisition is rendered by an investment bank of national recognition; (so long as VII) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof and disclosed in a schedule to the Securities Purchase Agreement; and (iVIII) shares issued to Persons with whom the main Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companycapital.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (ic) upon the issuance of any Excluded Securities. For purposes hereof, "EXCLUDED SECURITIES" means (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon exercise of the Additional Investment Rights or the Warrants; (III) shares of Common Stock issuable or issued to (x) employees or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the issuance of such stock Issue Date or options is approved adopted after the Issue Date by a majority of the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, and (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or a majority issued hereafter, provided such issuances are approved by the Board of Directors; (IV) shares of Common Stock issued in connection with any stock split, stock dividend or recapitalization of the members of a committee of independent directors established for such purposeCompany; (iiiV) upon shares of Common Stock issued in connection with the issuance acquisition by the Company of any corporation or deemed issuance other entity occurring after the Effective Date and as long as a fairness opinion with respect to such acquisition is rendered by an investment bank of securities for less than national recognition; (VI) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the Market Price date hereof and (VII) shares issued to Persons with whom the Corporation is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a strategic relationship, joint venture or strategic investment in transaction the Company (so long as (i) the main primary purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companycapital.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved by a majority of the independent members of the Board of Directors of the Company or a majority of the members of a committee of independent directors established for such purpose; (iiic) upon the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splitsExcluded Securities. For purposes hereof, stock dividends, combinations of shares, recapitalizations or other such events relating to "Excluded Securities" means (I) ------------------- securities purchased under the Common Stock occurring subsequent to the date hereofSecurities Purchase Agreement; (II) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (vIII) so long as the shareholders shares of the Company prior Common Stock issuable or issued to the transaction have 50% (x) employees or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant directors from time to an acquisition of another corporation time either directly or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of options, in such case granted or to be granted in the other discretion of the Board of Directors (or a duly authorized committee thereof) pursuant to one or more stock option plans or restricted stock plans or stock purchase warrants issued plans in effect as of the Issue Date or adopted after the Issue Date by the Board of Directors (or a duly authorized committee thereof) or by the Company's shareholders, or (y) vendors, either directly or pursuant to warrants to purchase Common Stock that are outstanding on the Purchase Agreement date hereof or (vii) upon any investment issued hereafter, provided such issuances are approved by the Holder Board of Directors (or affiliates a duly authorized committee thereof) in or by the Company's shareholders; (IV) shares of Common Stock issued in connection with any stock split, stock dividend or warrants recapitalization of the Company; (V) shares of Common Stock issued in connection with the acquisition by the Company or a Subsidiary of any Person or business not for the purpose or with the effect of raising equity capital; (VI) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof; (VII) shares issued to Persons with whom the Company or a Subsidiary is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the primary purpose of which is to raise equity capital; (VIII) shares of Common Stock, Convertible Securities or Purchase Rights issued in connection with the settlement of a bona fide litigation approved by the Board of Directors; and (IX) shares of Common Stock issued to a Subsidiary under a share exchange agreement.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will be made (iunder this Section 3(b) upon in respect of Excluded Securities. "Excluded Securities" means the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (iia) upon shares of Common Stock or options to employees, officers or directors of, or consultants to, the grant or exercise of Company pursuant to any stock or options which may hereafter be granted or exercised under any employee benefit option agreement, stock option plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock or options is approved duly adopted by a majority of the independent non-employee members of the Board of Directors of the Company or a majority of the members of a committee of independent non-employee directors established for such purpose; purpose (iii) upon for purposes of clarity, the issuance or deemed issuance of securities for less than the Market Price in connection with a strategic relationship, joint venture or strategic investment in the Company (so long as (i) the main purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject upon exercise of options granted pursuant to appropriate arithmetic adjustment in the event of any a stock splitsoption agreement, stock dividends, combinations of shares, recapitalizations option plan or other such events relating to the Common Stock occurring equity incentive plan subsequent to the date hereofhereof shall also be Excluded Securities), (b) securities upon the exercise or exchange of or conversion of (i) any Securities issued in connection with the Purchase Agreement; (ii) securities to a registered broker-dealer in connection with the transactions contemplated by the Purchase Agreement; and/or (iii) other securities or securities rights exercisable or exchangeable for or convertible or exercisable into 1,000,000 or less shares of Common Stock which are issued and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase Agreement (subject other than on a non-discretionary basis pursuant to appropriate arithmetic adjustment in the event pre-existing anti-dilution provisions thereof) to increase the number of such securities or to decrease the exercise, exchange or conversion price of any stock splitssuch securities, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)(c) may be securities issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise acquisitions or strategic transactions approved by a majority of the Warrants; (v) so long as disinterested directors, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the shareholders business of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization and in which the Company acquires, receives benefits in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant addition to the Purchase Agreement investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (viid) upon any investment by the Holder (or affiliates thereof) in shares of Common Stock or warrants other securities issued in connection with any stock split, stock dividend or recapitalization of the CompanyCompany (subject to Section 3(a) hereof), and (e) shares of Common Stock or other securities issued in connection with any registered primary public offering.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will be made under this Section 11(b) in respect of (i1) upon the exercise granting of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise shares of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan Common Stock to employees, officers and directors of the Company now existing pursuant to any stock option plan, share purchase plan or to be implemented in the future, so long as the issuance of such stock or options is approved similar plan duly adopted by a majority of the independent non-employee members of the Supervisory Board of Directors of the Company or a majority of the members of a committee of independent non-employee directors established for such purpose; , (iii2) upon the issuance of up to 150,000 shares of Common Stock or Capital Shares Equivalents, in the aggregate, to consultants or advisors to the Company for services rendered to the Company by such consultants or advisors subsequent to the date hereof, (3) the issuance or deemed issuance of any security by the Company pursuant to the Transaction Documents, or (4) upon the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the Initial Exercise Date, provided that such securities for less than have not been amended since the Market Price in connection date of the Subscription Agreement to increase the type or number of securities issuable with a strategic relationshiprespect thereto or decrease the exercise or conversion price of such securities, (5) acquisitions, business partnerships, joint venture ventures, real property leasing arrangements, or other strategic investment in investments, the Company (so long as (i) the main primary purpose of which is not to raise equity capital and capital, or commercial credit arrangements or debt financings from a bank or similar financial institution, (ii6) leasing arrangements from a bank or similar financial institution approved by the Company’s board of directors approves such issuance solely for strategic purposesSupervisory Board or (7) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be Capital Shares Equivalents issued pursuant to a rights plan adopted by the Company’s Supervisory Board commonly referred to as a “poison pill” plan, but this clause (iiiexception shall not apply to any subsequent exercise of any such Capital Shares Equivalents; and no single event that causes and adjustment under this Section 11(b) without effecting shall cause an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise under more than one of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companyparagraphs above.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will shall be made pursuant to this paragraph (ic) upon the issuance of any Excluded Securities. For purposes hereof, "Excluded Securities" means (I) securities purchased under the Securities Purchase Agreement; (II) securities issued upon conversion or exercise of the Debentures or the Warrants; (III) shares of Common Stock issuable or issued to (x) employees, consultants or directors from time to time upon the exercise of any warrantsoptions, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise of any stock or options which may hereafter be in such case granted or exercised under any employee benefit plan or equity incentive plan of the Company now existing or to be implemented granted in the future, so long discretion of the Board of Directors pursuant to one or more stock option plans or restricted stock plans in effect as of the issuance of such stock Issue Date or options is approved adopted after the Issue Date by a majority of the independent members of the Board of Directors with substantially the same terms as such plans in effect as of the Company Issue Date, or a majority (y) vendors pursuant to warrants to purchase Common Stock that are outstanding on the date hereof or issued hereafter, provided such issuances are approved by the Board of the members of a committee of independent directors established for such purposeDirectors; (iiiIV) upon the issuance or deemed issuance shares of securities for less than the Market Price Common Stock issued in connection with a strategic relationshipcommercial lending transaction with a federally- insured financial institution that is approved by the independent members of the Board of Directors, joint venture provided that the fair market value of such shares does not exceed ten percent (10%) of the amount borrowed; (V) shares of Common Stock issued in connection with any stock split, stock dividend or strategic investment recapitalization of the Company; (VI) shares of Common Stock issued in connection with the acquisition by the Company of any corporation or other entity occurring after the Effective Date, provided that, if in connection with such acquisition, the Company will issue a number of shares equal to or greater than 20% of the number of shares of Common Stock issued and outstanding immediately prior to the consummation of such acquisition, the Company shall obtain a fairness opinion with respect to such acquisition from an investment bank of national recognition; (so long as VII) shares of Common Stock issued in connection with any Convertible Securities or Purchase Rights outstanding on the date hereof and disclosed in a schedule to the Securities Purchase Agreement; and (iVIII) shares issued to Persons with whom the main Company is entering into a joint venture, strategic alliance or other commercial relationship in connection with the operation of the Company's business and not in connection with a transaction the purpose of which is not to raise equity capital and (ii) the Company’s board of directors approves such issuance solely for strategic purposes) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise of the Warrants; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Companycapital.

Exceptions to Adjustment of Exercise Price. No Notwithstanding the foregoing, no adjustment to the Exercise Price will be made under this Section 11(b) in respect of (i1) upon the exercise granting of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date of issuance of this Warrant; (ii) upon the grant or exercise shares of any stock or options which may hereafter be granted or exercised under any employee benefit plan or equity incentive plan Common Stock to employees, officers and directors of the Company now existing pursuant to any stock option plan, share purchase plan or to be implemented in the future, so long as the issuance of such stock or options is approved similar plan duly adopted by a majority of the independent non-employee members of the Supervisory Board of Directors of the Company or a majority of the members of a committee of independent non-employee directors established for such purpose; , (iii2) upon the issuance of up to 150,000 shares of Common Stock or Capital Shares Equivalents, in the aggregate, to consultants or advisors to the Company for services rendered to the Company by such consultants or advisors subsequent to the date hereof, (3) the issuance or deemed issuance of any security by the Company pursuant to the Transaction Documents, or (4) upon the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the Initial Exercise Date, provided that such securities for less than have not been amended since the Market Price in connection date of the Subscription Agreement to increase the type or number of securities issuable with a strategic relationshiprespect thereto or decrease the exercise or conversion price of such securities, (5) acquisitions, business partnerships, joint venture ventures, real property leasing arrangements, or other strategic investment in investments, the Company (so long as (i) the main primary purpose of which is not to raise equity capital and not to a Person whose primary business is investing in securities, or commercial credit arrangements or debt financings from a bank or similar financial institution, (ii6) leasing arrangements from a bank or similar financial institution approved by the Company’s board of directors approves such issuance solely for strategic purposesSupervisory Board or (7) (provided that during the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be Capital Shares Equivalents issued pursuant to a rights plan adopted by the Company’s Supervisory Board commonly referred to as a “poison pill” plan, but this clause (iii) without effecting an adjustment exception shall not apply to the Exercise Price pursuant to Section 4(a)), (iv) upon the any subsequent exercise of the Warrantsany such Capital Shares Equivalents; (v) so long as the shareholders of the Company prior to the transaction have 50% or more of the voting power after consummation of such transaction, upon the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all of the assets, or other reorganization in which the Company acquires, in a and no single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued pursuant to the Purchase Agreement or (vii) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants of the Company.event that causes and adjustment under this

Exceptions to Adjustment of Exercise Price. No adjustment to the Exercise Price will be made (i) upon the exercise of any warrants, options or convertible securities granted, issued and outstanding prior to and on the date hereof in accordance with the terms of issuance such securities as of this Warrantsuch date; (ii) upon the grant or exercise of any stock shares or options which EXHIBIT A may hereafter be granted or exercised under any employee or Director benefit plan or equity incentive plan of the Company now existing or to be implemented in the future, so long as the issuance of such stock shares or options is approved by a majority of the independent non-employee members of the Board of Directors of the Company or a majority of the members of a committee of independent non-employee directors established for such purpose; (iii) upon the issuance or deemed of the Warrants in accordance with terms of the Subscription Agreement and upon the exercise of such Warrants; and (iv) upon the sale and issuance of securities ADSs, Ordinary Shares, Convertible Securities or Variable Rate Convertible Securities for less than the Market Price in connection with to a strategic relationshipinvestor (the "STRATEGIC INVESTOR"), joint venture or strategic investment in PROVIDED, THAT such sale satisfies each of the Company following conditions: (so long as (iA) the main purpose Strategic Investor operates in a line of which is not business similar to raise equity capital and the Company; (iiB) such sale occurs within 90 days of November __, 2000; (C) the Company’s board sale of directors approves such issuance solely for strategic purposes) (provided that during securities was approved by the Exercise Period only an aggregate of 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof) (or securities convertible or exercisable into 1,000,000 or less shares of Common Stock (subject to appropriate arithmetic adjustment in the event of any stock splits, stock dividends, combinations of shares, recapitalizations or other such events relating to the Common Stock occurring subsequent to the date hereof)) may be issued pursuant to this clause (iii) without effecting an adjustment to the Exercise Price pursuant to Section 4(a)), (iv) upon the exercise non-employee members of the Warrants; (v) so long as the shareholders Board of Directors of the Company prior and, in the good faith reasonable business judgment of the non-employee members of the Board of Directors of the Company, such sale of the Company's securities to the transaction have 50% or more Strategic Investor will further the operational business interests of the voting power after consummation Company; (D) the primary purpose of such transaction, upon sale is other than a financing arrangement; (E) the issuance of any stock pursuant to an acquisition of another corporation or entity by the Company by consolidation, merger, purchase of all or substantially all terms and conditions of the assets, or other reorganization in which securities to be issued to such Strategic Investor are not more favorable than the Company acquires, in a single transaction or series of related transactions, all or substantially all of the assets of such other corporation or entity or fifty percent (50%) or more of the voting power of such other corporation or entity; or (vi) upon the exercise of the other stock purchase warrants issued securities purchased pursuant to the Purchase Agreement or Subscription Agreement; and (viiF) upon any investment by the Holder (or affiliates thereof) in Common Stock or warrants aggregate purchase price of the Companysecurities issued to the Strategic Investor is less than $4.0 million.