Common use of Exceptions to Adjustment Clause in Contracts

Exceptions to Adjustment. Notwithstanding the provisions of Section 5(f): (i) No adjustment in the Warrant Price shall be required unless the adjustment would require an increase or decrease of at least 1% in the Warrant Price then in effect; provided, however, that any adjustments that by reason of this subparagraph (g)(i) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this subparagraph shall be made to the nearest cent or nearest 1/100th of a share. (ii) Upon the sale or issuance of any Dilutive Securities as compensation to officers, directors, employees or consultants of the Company other than pursuant to compensation or incentive plans existing as of the date of this Warrant, then the Warrant Price shall be automatically adjusted, for an equivalent number of Shares equal to all such compensatory Dilutive Securities, to be equal to the lowest Dilutive Strike Price of all such compensatory Dilutive Securities. By way of illustration, if compensatory Dilutive Securities to purchase 1,000 shares of Common Stock are issued to various persons at Strike Prices of $0.01, $.02 and $0.025, this Warrant shall be adjusted so as to provide the Holder with the right to purchase 1,000 shares of Common Stock at $0.01 per share. (iii) Upon the sale or issuance of any Dilutive Securities in connection with capital investment into the Company, or debt financings or refinancings, then the Warrant Price shall be automatically adjusted to be equal to the lowest Dilutive Strike Price of all such Dilutive Securities. The parties intend that any Dilutive Securities sold or issued to placement agents, finders, brokers, underwriters and the like as compensation for their assistance with respect to any such transaction are intended to be governed by this provisions of this subparagraph (g)(iii) rather than the provisions of subparagraph 5(g)(ii). (iv) Notwithstanding anything to the contrary set forth in this Section 5(f), no adjustment shall be made to the Warrant Price upon the issuance of Common Stock upon the conversion or exercise of the options, warrants or rights of the Company outstanding as of the date hereof.

Exceptions to Adjustment. Notwithstanding There shall be no adjustment of the provisions Conversion Price in case of the issuance of any shares of capital stock of the Corporation in a reorganization, acquisition or other similar transaction except as specifically set forth in this Section 5(f): (i) No 7. If any action or transaction would require adjustment of the Conversion Price pursuant to more than one paragraph of this Section 7, only one adjustment shall be made, and such adjustment shall be the amount of adjustment that has the highest absolute value. Board Discretion. If the Corporation shall take any action affecting the Common Shares, other than action described in this Section 7, that in the Warrant opinion of the Board of Directors would materially adversely affect the conversion rights of the holders of the Series "A" Preferred Shares, the Conversion Price for the Series "A" Preferred Shares may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors, in its sole discretion, may determine to be equitable in the circumstances. Adjustment to Share Reservation. The Corporation covenants that it will reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued Common Shares, for the purpose of issuance upon conversion of the Series "A" Preferred Shares, that number of Common Shares required by any such increase in the Conversion Price. For purposes of this paragraph (n), such number of Common Shares shall be required unless computed as if at the time of computation all such Series "A" Preferred Shares were held by a single holder. The Corporation further covenants that any Common Shares issued upon conversion of the Series "A" Preferred Shares shall be validly issued, fully paid and non-assessable. Before taking any action that would cause an adjustment would require an increase or decrease reducing the Conversion Price below the then-par value of at least 1% the Common Shares deliverable upon conversion of the Series "A" Preferred Shares, the Corporation shall take any corporate action that, in the Warrant Price then opinion of its counsel, may be necessary in effectorder that the Corporation may validly and legally issue fully paid and non-assessable Common Shares at such adjusted Conversion Price. The Corporation shall use its commercially reasonable best efforts to list the Common Shares required to be delivered upon conversion of the Series "A" Preferred Shares or payable as a dividend on the Series "A" Preferred Shares, prior to such delivery, upon each national securities exchange or automated quotation market, if any, upon which the outstanding Common Shares are listed or quoted at the time of such delivery. Prior to the delivery of any securities that the Corporation shall be obligated to deliver upon conversion of, or the payment of a dividend on, the Series "A" Preferred Shares, the Corporation shall use its commercially reasonable best efforts to comply with all federal and state laws and regulations thereunder requiring the registration of such securities with, or any approval of or consent to the delivery thereof, by any governmental authority. Transfer Taxes. The Corporation shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of Common Shares or other securities or property on conversion of the Series "A" Preferred Shares pursuant hereto; provided, however, that any adjustments that by reason of this subparagraph (g)(i) are the Corporation shall not be required to pay any tax that may be made shall payable in respect of any transfer involved in the issue or delivery of any Common Shares or other securities or property in a name other than that of the holder of the Series "A" Preferred Shares to be carried forward converted, and taken into account in any subsequent adjustment. All calculations under this subparagraph no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the nearest cent or nearest 1/100th of a share. (ii) Upon Corporation the sale or issuance amount of any Dilutive Securities as compensation such tax or established, to officers, directors, employees or consultants the reasonable satisfaction of the Company other than pursuant to compensation or incentive plans existing as of the date of this WarrantCorporation, then the Warrant Price shall be automatically adjusted, for an equivalent number of Shares equal to all that such compensatory Dilutive Securities, to be equal to the lowest Dilutive Strike Price of all such compensatory Dilutive Securities. By way of illustration, if compensatory Dilutive Securities to purchase 1,000 shares of Common Stock are issued to various persons at Strike Prices of $0.01, $.02 and $0.025, this Warrant shall be adjusted so as to provide the Holder with the right to purchase 1,000 shares of Common Stock at $0.01 per sharetax has been paid. (iii) Upon the sale or issuance of any Dilutive Securities in connection with capital investment into the Company, or debt financings or refinancings, then the Warrant Price shall be automatically adjusted to be equal to the lowest Dilutive Strike Price of all such Dilutive Securities. The parties intend that any Dilutive Securities sold or issued to placement agents, finders, brokers, underwriters and the like as compensation for their assistance with respect to any such transaction are intended to be governed by this provisions of this subparagraph (g)(iii) rather than the provisions of subparagraph 5(g)(ii). (iv) Notwithstanding anything to the contrary set forth in this Section 5(f), no adjustment shall be made to the Warrant Price upon the issuance of Common Stock upon the conversion or exercise of the options, warrants or rights of the Company outstanding as of the date hereof.