Common use of Required Adjustments Clause in Contracts

Required Adjustments. Subject to the exclusions contained in Section 11(c)(iv) below, if the Company issues or sells any Common Stock in a capital raising transaction for a Per Share Selling Price (as defined below) less than the applicable Exercise Price in effect immediately prior to the time of such issue or sale (a "Dilutive Issuance"), then forthwith upon such Dilutive Issuance, the Exercise Price shall be reduced to the Weighted Average Exercise Price (as defined below). The "Weighted Average Exercise Price" shall be determined by the following formula: EP1 = EP * N + C N + AS where: EP1 = the Weighted Average Exercise Price; EP = the former Exercise Price; N = the number of shares of Common Stock outstanding immediately prior to such issuance (or deemed issuance) assuming exercise or conversion of all outstanding securities exercisable for or convertible into Common Stock; C = the number of shares of Common Stock that the aggregate consideration received or deemed to be received by the Company for the total number of additional securities so issued or deemed to be issued in the Dilutive Issuance would purchase if the Per Share Selling Price were equal to the Exercise Price; AS = the number of shares of Common Stock so issued or deemed to be issued in the Dilutive Issuance. Notwithstanding the foregoing, the exercise of Stock Purchase Rights (as defined below) or conversion of Convertible Securities (as defined below) shall not be deemed a Dilutive Issuance. The Company shall give to the Investors written notice of any such Dilutive Issuance within twenty four (24) hours of the closing thereof.

Required Adjustments. Subject to If during the exclusions contained in Section 11(c)(ivperiod ending on the later of (i) belowthirty (30) months following the Closing Date or (ii) twenty-seven (27) months following the effective date of the Registration Statement contemplated by the Registration Rights Agreement (the "MFN Period"), if the Company issues or sells any shares of its Common Stock in at a capital raising transaction for a per share selling price ("Per Share Selling Price (as defined belowPrice") less lower than the applicable Exercise Conversion Price per share set forth in the definition hereof, then (1) the Conversion Price per share under the Debentures shall be adjusted downward to equal such lower Per Share Selling Price, and (2) the then exercise price under the Warrants shall be adjusted downward to equal such lower Per Share Selling Price, as set forth in the Debentures and Warrants, respectively; provided, however, that this provision shall not apply to (w) any issuances or sales of securities pursuant to employee or director option plans of the Company approved by shareholders or pursuant to contracts currently in effect immediately prior and disclosed to Investors, (x) any issuances of securities in connection with any acquisition, merger or licensing arrangement for products or intellectual property, (y) any issuances to consultants as reasonable consideration for services rendered, or (z) any issuances of securities to liquidate royalty interests, so long as all such issuances under this clause (z) in the aggregate do not cause a dilution of greater than 5% of the Investors' equity ownership in the Company during the one year period following the Closing Date (for clarification purposes, such 5% dilution provision shall apply only to this clause (z) and shall not affect any other provisions of this Section 7.1(a)). If such dilution is greater than 5% at any time or from time to time during the one year period following the Closing Date, then (1) the Conversion Price per share under the Debentures shall be adjusted downward, and (2) the then exercise price under the Warrants shall be adjusted downward, to the time of extent necessary such issue or sale (a "Dilutive Issuance"), then forthwith upon such Dilutive Issuance, that the Exercise Price Investors shall be reduced entitled to receive in the Weighted Average Exercise Price (as defined below). The "Weighted Average Exercise Price" shall be determined by the following formula: EP1 = EP * N + C N + AS where: EP1 = the Weighted Average Exercise Price; EP = the former Exercise Price; N = the aggregate, upon conversion and exercise thereof in full, such additional number of shares of Common Stock outstanding immediately prior as is necessary to eliminate such issuance dilution over 5% without any additional consideration therefor. For purposes of the preceding sentence and clause (or deemed issuancez) assuming exercise or conversion of all outstanding securities exercisable for or convertible into Common Stock; C = the number of shares above, any issuances of Common Stock that the aggregate consideration received or to third parties shall be deemed to have occurred upon the issuance of "derivative securities" as set forth in Section 7.1(b)(i) below, and dilution calculations shall be received by computed as if all the Company for Debenture and Warrants issued on the total number of additional securities so issued or deemed to be issued date hereof were already converted and exercised in the Dilutive Issuance would purchase if the Per Share Selling Price full and any "derivative securities" were equal to the Exercise Price; AS = the number of shares of Common Stock so issued or deemed to be issued already converted, exchanged and exercised in the Dilutive Issuance. Notwithstanding the foregoing, the exercise of Stock Purchase Rights (as defined below) or conversion of Convertible Securities (as defined below) shall not be deemed a Dilutive Issuance. The Company shall give to the Investors written notice of any such Dilutive Issuance within twenty four (24) hours of the closing thereoffull.

Required Adjustments. Subject to the exclusions contained in Section 11(c)(iv) below, if the Company issues or sells any Common Stock in a capital raising transaction for a Per Share Selling Price (as defined below) less than the applicable Exercise Price in effect immediately prior to the time of such issue or sale (a "Dilutive Issuance"), then forthwith upon such Dilutive Issuance, the Exercise Price shall be reduced to the Weighted Average Exercise Price (as defined below). The "Weighted Average Exercise Price" shall be determined by the following formula: EP1 = EP EP* N + C ------- N + AS where: EP1 = the Weighted Average Exercise Price; EP = the former Exercise Price; N = the number of shares of Common Stock outstanding immediately prior to such issuance (or deemed issuance) assuming exercise or conversion of all outstanding securities exercisable for or convertible into Common Stock; C = the number of shares of Common Stock that the aggregate consideration received or deemed to be received by the Company for the total number of additional securities so issued or deemed to be issued in the Dilutive Issuance would purchase if the Per Share Selling Price were equal to the Exercise Price; AS = the number of shares of Common Stock so issued or deemed to be issued in the Dilutive Issuance. Notwithstanding the foregoing, the exercise of Stock Purchase Rights (as defined below) or conversion of Convertible Securities (as defined below) shall not be deemed a Dilutive Issuance. The Company shall give to the Investors written notice of any such Dilutive Issuance within twenty four (24) hours of the closing thereof.

Required Adjustments. Subject to the exclusions contained in Section 11(c)(iv) below, if the Company issues or sells any Common Stock in a capital raising transaction for a Per Share Selling Price (as defined below) less than the applicable Exercise Price in effect immediately prior to the time of such issue or sale (a "Dilutive IssuanceDILUTIVE ISSUANCE"), then forthwith upon such Dilutive Issuance, the Exercise Price shall be reduced to the Weighted Average Exercise Price (as defined below). The "Weighted Average Exercise PriceWEIGHTED AVERAGE EXERCISE PRICE" shall be determined by the following formula: N + C EP1 = EP * N + C ----- N + AS where: EP1 = the Weighted Average Exercise Price; EP = the former Exercise Price; N = the number of shares of Common Stock outstanding immediately prior to such issuance (or deemed issuance) assuming exercise or conversion of all outstanding securities exercisable for or convertible into Common Stock; C = the number of shares of Common Stock that the aggregate consideration received or deemed to be received by the Company for the total number of additional securities so issued or deemed to be issued in the Dilutive Issuance would purchase if the Per Share Selling Price were equal to the Exercise Price; AS = the number of shares of Common Stock so issued or deemed to be issued in the Dilutive Issuance. Notwithstanding the foregoing, the exercise of Stock Purchase Rights (as defined below) or conversion of Convertible Securities (as defined below) shall not be deemed a Dilutive Issuance. The Company shall give to the Investors written notice of any such Dilutive Issuance within twenty four (24) hours of the closing thereof.