Common use of Sales to Affiliates Clause in Contracts

Sales to Affiliates. If at any time while this Warrant is outstanding and unexpired the Company shall sell or grant shares of its equity securities or rights, options, warrants or convertible or exchangeable securities of the Company to any Affiliate of the Company, in all instances at below fair market value, then the Warrant Price shall be reduced, from and after the date of such sale, to the lesser of (i) the price to such Affiliate of the Company and (ii) that price determined by multiplying the Warrant Price in effect immediately prior to such date of sale by a fraction (x) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend, and (y) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such sale. The number of shares for which the Warrant is exercisable shall be proportionately increased so that the aggregate Warrant Price shall remain the same. In the event such sale is not so consummated, the Warrant Price shall again be adjusted to the Warrant Price that would then be in effect if the Affiliate of the Company had not so purchased such shares, but such subsequent adjustment shall not affect the number of Warrant Shares issued upon any exercise of the Warrant prior to the date such subsequent adjustment was made. As used herein, "Affiliate of the Company" shall mean (1) any Person (other than Shells Investment Partners, LLC, Banyon Investment, LLC or any Affiliate of either entity) that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Company, (2) any owner, shareholder or director of the Company, and (3) any spouse or any person related by birth or marriage to any Affiliate of the Company described in clauses (1) and (2) above and "Control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. f.

Sales to Affiliates. If at any time while this Warrant is --------------------- outstanding and unexpired the Company shall sell or grant shares of its equity securities or rights, options, warrants or convertible or exchangeable securities of the Company to any Affiliate of the Company, in all instances at below fair market value, then the Warrant Price shall be reduced, from and after the date of such sale, to the lesser of (i) the price to such Affiliate of the Company and (ii) that price determined by multiplying the Warrant Price in effect immediately prior to such date of sale by a fraction (x) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend, and (y) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such sale. The number of shares for which the Warrant is exercisable shall be proportionately increased so that the aggregate Warrant Price shall remain the same. In the event such sale is not so consummated, the Warrant Price shall again be adjusted to the Warrant Price that would then be in effect if the Affiliate of the Company had not so purchased such shares, but such subsequent adjustment shall not affect the number of Warrant Shares issued upon any exercise of the Warrant prior to the date such subsequent adjustment was made. As used herein, "Affiliate of the CompanyAFFILIATE OF THE COMPANY" shall mean (1) any Person (other than Shells Investment Partners, LLC, Banyon Investment, LLC a purchaser of Series A Preferred Stock or any Affiliate of either entitysuch purchaser) that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Company, (2) any owner, shareholder or director of the Company, and (3) any spouse or any person related by birth or marriage to any Affiliate of the Company described in clauses (1) and (2) above and "ControlCONTROL" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. f..