Common use of Adjustment for Certain Events Clause in Contracts

Adjustment for Certain Events. (a) In case Network-1 shall at any time after the date hereof (i) declare a dividend on its shares of Common Stock payable in shares of Network-1's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its outstanding shares of Common Stock, (iii) reverse split its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1's capital stock in a reclassification of shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 is the continuing corporation), then, in each case, the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option on such date, shall be proportionately adjusted so that the holder of the Option exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option had been exercised immediately prior to such date, such Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (b) In case Network-1 shall fix a record date for the making of a distribution to all holders Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 shall have one or more subsidiaries, or earned surplus, or dividends payable in Common Stock) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one share of Common Stock. In the event that Network-1 and the Holder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 and the Holder, and the reasonable costs of such appraiser shall be borne by Network-1. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. (c) No adjustment in the Exercise Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the Option. (d) In the event that at any time, as a result of an adjustment made pursuant to Section 7 hereof, the Holder of the Option thereafter exercised shall become entitled to receive any shares of capital stock, options, warrants or other securities of Network-1 other than the shares of Common Stock, thereafter the number of such other shares of capital stock, options, warrants or other securities so receivable upon exercise of this Option shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in this Section 7, and the provisions of this Option Agreement with respect to the shares of Common Stock shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options or warrants or other securities. (e) Upon each adjustment of the Exercise Price as a result of calculations made in this Section 7, the Option outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option immediately prior to such adjustment of the Exercise Price by the Exercise Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. (f) In case of any capital reorganization of Network-1 or of any reclassification of shares of Common Stock (other than as a result of subdivision or combination) or in case of the consolidation of Network-1 with, or the merger of Network-1 into, any other corporation (other than a consolidation or merger in which Network-1 is the continuing corporation) or of the sale of the properties and assets of Network-1 as, or substantially as, an entirety, the Option shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options or warrants or other securities or property to which a Holder (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f) with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon the exercise of the Option. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f). (g) In any case in which this Section 7 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, Network-1 may elect to defer until the occurrence of such event issuing to the Holder, if such Holder exercised any portion of this Option after such record date, shares of capital stock or other securities of Network-1, if any, issuable upon such exercise over and above the shares of Common Stock or other securities issuable, on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that Network-1 shall deliver to the holder a due xxxx or other appropriate instrument evidencing such Holder's right to receive such shares of Common Stock or other securities upon the occurrence of the event requiring such adjustment.

Adjustment for Certain Events. (a) In case Network-1 the Company shall at any time after the date hereof the Warrants are first issued (i) declare a dividend on its shares of the Common Stock payable in shares of Network-1the Company's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its the outstanding shares of Common Stock, (iii) reverse split its the outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1the Company's capital stock in a reclassification of shares of the Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation), then, in each case, the Exercise Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option Warrants on such date, shall be proportionately adjusted so that the holder of the Option any Warrant exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option Warrant had been exercised immediately prior to such date, such Holder holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such Any such adjustment shall be become effective immediately after the record date of such dividend or the effective date of such subdivision, reverse split or reclassification made successively whenever any event listed above shall occur. (b) In case Network-1 the Company shall fix a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 the Company shall have one or more subsidiaries, or earned surplus, or dividends payable in Common StockStock for which adjustment is made under Section 10(a) above) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Purchase Price per Share to be in effect after such record date shall be determined by multiplying the Exercise Purchase Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one a share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one a share of Common Stock. In the event that Network-1 the Company and the Holder Warrantholder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 the Company and the HolderWarrantholder, and the reasonable costs of such appraiser shall be borne by Network-1the Company. Such Any such adjustment shall become effective immediately after the record date for such distribution and shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Purchase Price shall again be adjusted to be the Exercise Purchase Price which would then be in effect if such record date had not been fixed. (c) No adjustment in the Exercise Purchase Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c10(c) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 10 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 the Company be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the OptionWarrants. (d) In the event that at any time, as a result of an adjustment made pursuant to Section 7 10 hereof, the Holder holder of the Option any Warrant thereafter exercised shall become entitled to receive any shares of capital stock, options, stock or warrants or other securities of Network-1 the Company other than the shares of Common StockShares, thereafter the number of such other shares of capital stock, options, stock or warrants or other securities so receivable upon exercise of this Option Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock Shares contained in this Section 710, and the provisions of this Option Agreement warrant certificate with respect to the shares of Common Stock Shares shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options stock or warrants or other securities. (e) Upon each adjustment of the Exercise Purchase Price as a result of calculations made in this Section 710, the Option each Warrant outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Purchase Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option a Warrant immediately prior to such adjustment of the Exercise Purchase Price by the Exercise Purchase Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Purchase Price in effect immediately after such adjustment of the Exercise Purchase Price. (f) In case of any capital reorganization of Network-1 the Company or of any reclassification of shares of the Common Stock (other than a change in par value or from a specified par value to no par value or from no par value to a specified par value or as a result of subdivision or combination) or in case of the consolidation of Network-1 the Company with, or the merger of Network-1 the Company into, any other corporation (other than a consolidation or merger in which Network-1 the Company is the continuing corporation) or of the sale of the properties and assets of Network-1 the Company as, or substantially as, an entirety, the Option each Warrant shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options stock or warrants or other securities or property to which a Holder holder of the number of shares of Common Stock purchasable (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option Warrant would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f10(f) with respect to the rights and interests thereafter of the Holder registered holders of all Warrants shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon on the exercise of the OptionWarrants. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f10(f). (g) In any case in which this Section 7 10 shall require that an adjustment in the Exercise Purchase Price be made effective as of a record date for a specified event, Network-1 the Company may elect to defer until the occurrence of such event issuing to the HolderWarrantholder, if such Holder Warrantholder exercised any portion of this Option Warrant after such record date, shares of capital stock or warrant or other securities of Network-1the Company, if any, issuable upon such exercise over and above the shares of Common Stock or other securities Shares issuable, on the basis of the Exercise Purchase Price in effect prior to such adjustment; provided, however, that Network-1 the Company shall deliver to the holder a due xxxx bill or other appropriate instrument evidencing such Holderholder's right to receive xx xeceive such shares of Common Stock capital stock or warrants or other securities upon the occurrence of the event requiring such adjustment. (h) The Shares and any other shares of capital stock or warrants or other securities now or hereafter receivable upon exercise of this Warrant shall be entitled to registration under the Securities Act of 1933 pursuant to the terms of the Registration Rights Agreement attached to the Purchase Agreement as Exhibit C thereto.

Adjustment for Certain Events. (a) In case Network-1 shall at any time after the date hereof (i) declare a dividend on its shares of Common Stock payable in shares of Network-1's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its outstanding shares of Common Stock, (iii) reverse split its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1's capital stock in a reclassification of shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 is the continuing corporation), then, in each case, the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option on such date, shall be proportionately adjusted so that the holder of the Option exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option had been exercised immediately prior to such date, such Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (b) In case Network-1 shall fix a record date for the making of a distribution to all holders Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 shall have one or more subsidiaries, or earned surplus, or dividends payable in Common Stock) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one share of Common Stock. In the event that Network-1 and the Holder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 and the Holder, and the reasonable costs of such appraiser shall be borne by Network-1. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. (c) No adjustment in the Exercise Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the Option. (d) In the event that at any time, as a result of an adjustment made pursuant to Section 7 hereof, the Holder of the Option thereafter exercised shall become entitled to receive any shares of capital stock, options, warrants or other securities of Network-1 other than the shares of Common Stock, thereafter the number of such other shares of capital stock, options, warrants or other securities so receivable upon exercise of this Option shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in this Section 7, and the provisions of this Option Agreement with respect to the shares of Common Stock shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options or warrants or other securities. (e) Upon each adjustment of the Exercise Price as a result of calculations made in this Section 7, the Option outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option immediately prior to such adjustment of the Exercise Price by the Exercise Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. (f) In case of any capital reorganization of Network-1 or of any reclassification of shares of Common Stock (other than as a result of subdivision or combination) or in case of the consolidation of Network-1 with, or the merger of Network-1 into, any other corporation (other than a consolidation or merger in which Network-1 is the continuing corporation) or of the sale of the properties and assets of Network-1 as, or substantially as, an entirety, the Option shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options or warrants or other securities or property to which a Holder (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f) with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon the exercise of the Option. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f). (g) In any case in which this Section 7 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, Network-1 may elect to defer until the occurrence of such event issuing to the Holder, if such Holder exercised any portion of this Option after such record date, shares of capital stock or other securities of Network-1, if any, issuable upon such exercise over and above the shares of Common Stock or other securities issuable, on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that Network-1 shall deliver to the holder a due xxxx bill or other appropriate instrument evidencing such Holder's right to receive xx xeceive such shares of Common Stock or other securities upon the occurrence of the event requiring such adjustment.

Adjustment for Certain Events. (a) In case Network-1 shall at any time after the date hereof (i) declare a dividend on its shares of Common Stock payable in shares of Network-1's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its outstanding shares of Common Stock, (iii) reverse split its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1's capital stock in a reclassification of shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 is the continuing corporation), then, in each case, the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option on such date, shall be proportionately adjusted so that the holder of the Option exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option had been exercised immediately prior to such date, such Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (b) In case Network-1 shall fix a record date for the making of a distribution to all holders Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 shall have one or more subsidiaries, or earned surplus, or dividends payable in Common Stock) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one share of Common Stock. In the event that Network-1 and the Holder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 and the Holder, and the reasonable costs of such appraiser shall be borne by Network-1. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. (c) No adjustment in the Exercise Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the Option. (d) In the event that at any time, as a result of an adjustment made pursuant to Section 7 hereof, the Holder of the Option thereafter exercised shall become entitled to receive any shares of capital stock, options, warrants or other securities of Network-1 other than the shares of Common Stock, thereafter the number of such other shares of capital stock, options, warrants or other securities so receivable upon exercise of this Option shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in this Section 7, and the provisions of this Option Agreement with respect to the shares of Common Stock shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options or warrants or other securities. (e) Upon each adjustment of the Exercise Price as a result of calculations made in this Section 7, the Option outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option immediately prior to such adjustment of the Exercise Price by the Exercise Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. (f) In case of any capital reorganization of Network-1 or of any reclassification of shares of Common Stock (other than as a result of subdivision or combination) or in case of the consolidation of Network-1 with, or the merger of Network-1 into, any other corporation (other than a consolidation or merger in which Network-1 is the continuing corporation) or of the sale of the properties and assets of Network-1 as, or substantially as, an entirety, the Option shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options or warrants or other securities or property to which a Holder (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f) with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon the exercise of the Option. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f). (g) In any case in which this Section 7 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, Network-1 may elect to defer until the occurrence of such event issuing to the Holder, if such Holder exercised any portion of this Option after such record date, shares of capital stock or other securities of Network-1, if any, issuable upon such exercise over and above the shares of Common Stock or other securities issuable, on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that Network-1 shall deliver to the holder a due xxxx bill or other appropriate instrument evidencing such Holder's right to receive xxxeive such shares of Common Stock or other securities upon the occurrence of the event requiring such adjustment.

Adjustment for Certain Events. (a) In case Network-1 the Company shall at any time after the date hereof the Warrants are first issued (i) declare a dividend on its shares of the Common Stock payable in shares of Network-1the Company's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its the outstanding shares of Common Stock, (iii) reverse split its the outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1the Company's capital stock in a reclassification of shares of the Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation), then, in each case, the Exercise Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option Warrants on such date, shall be proportionately adjusted so that the holder of the Option any Warrant exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option Warrant had been exercised immediately prior to such date, such Holder holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (b) In case Network-1 the Company shall fix a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 the Company shall have one or more subsidiaries, or earned surplus, or dividends payable in Common Stock) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Purchase Price per Share to be in effect after such record date shall be determined by multiplying the Exercise Purchase Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one a share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one a share of Common Stock. In the event that Network-1 the Company and the Holder Warrantholder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 the Company and the HolderWarrantholder, and the reasonable costs of such appraiser shall be borne by Network-1the Company. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Purchase Price shall again be adjusted to be the Exercise Purchase Price which would then be in effect if such record date had not been fixed. (c) The Purchase Price shall be subject to adjustment based on revenues from product licenses, royalties and related maintenance exclusive of revenues from professional services or consulting ("Product Revenue") achieved by the Company during the three month period ended March 31, 2000, as follows: PRODUCT REVENUE PURCHASE PRICE --------------- -------------- $4,000,000 or more $4.00 $3,750,000 - 3,999,999 $3.75 $3,500,000 - 3,749,999 $3.50 $3,250,000 - 3,499,999 $3.25 $2,250,000 - 3,249,999 $3.00 $2,000,000 - 2,249,999 $2.75 $1,750,000 - 1,999,999 $2.50 $1,500,000 - 1,749,999 $2.25 $1,250,000 - 1,499,999 $2.00 $1,000,000 - 1,249,999 $1.75 $ 750,000 - 999,999 $1.50 $ 500,000 - 749,999 $1.25 $ 499,999 or less $1.00 The Purchase Prices set forth above shall be subject to adjustment as provided herein. (d) No adjustment in the Exercise Purchase Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c10(d) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 10 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 the Company be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the OptionWarrants. (de) In the event that at any time, as a result of an adjustment made pursuant to Section 7 10 hereof, the Holder holder of the Option any Warrant thereafter exercised shall become entitled to receive any shares of capital stock, options, stock or warrants or other securities of Network-1 the Company other than the shares of Common StockShares, thereafter the number of such other shares of capital stock, options, stock or warrants or other securities so receivable upon exercise of this Option Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock Shares contained in this Section 710, and the provisions of this Option Agreement warrant certificate with respect to the shares of Common Stock Shares shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options stock or warrants or other securities. (ef) Upon each adjustment of the Exercise Purchase Price as a result of calculations made in this Section 710, the Option each Warrant outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Purchase Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option a Warrant immediately prior to such adjustment of the Exercise Purchase Price by the Exercise Purchase Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Purchase Price in effect immediately after such adjustment of the Exercise Purchase Price. (fg) In case of any capital reorganization of Network-1 the Company or of any reclassification of shares of the Common Stock (other than a change in par value or from a specified par value to no par value or from no par value to a specified par value or as a result of subdivision or combination) or in case of the consolidation of Network-1 the Company with, or the merger of Network-1 the Company into, any other corporation (other than a consolidation or merger in which Network-1 the Company is the continuing corporation) or of the sale of the properties and assets of Network-1 the Company as, or substantially as, an entirety, the Option each Warrant shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options stock or warrants or other securities or property to which a Holder holder of the number of shares of Common Stock purchasable (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option Warrant would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f10(g) with respect to the rights and interests thereafter of the Holder registered holders of all Warrants shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon on the exercise of the OptionWarrants. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f10(g). (gh) If the Company shall, prior to the Expiration Date, issue shares of Common Stock (whether in a single transaction or a series of transactions, whether or not related) (except for any shares of Common Stock issued or to be issued (1) upon conversion of the Series D Preferred Stock or Notes, or exercise of the Warrants issued in accordance with the Securities Purchase Agreement, dated December ___, 1999, between the Company and certain investors (2) as a dividend or distribution on the Series D Preferred Stock, (3) to strategic partners, lenders, vendors and financial institutions up to an aggregate of 457,812, (4) upon exercise of outstanding options and warrants to purchase an aggregate of 800,886 shares of Common Stock as of the date hereof and (5) to employees, officers, directors or consultants of the Corporation pursuant to the Corporation's Stock Option Plan or any other benefit plan) for a purchase price or prices which are, in any instance, less than the Purchase Price then in effect, then the Purchase Price shall be reduced to a price (calculated to the nearest full cent) determined by dividing (A) an amount equal to the sum of (x) the total number of shares of Common Stock outstanding immediately prior to such issuance plus (y) the aggregate of the amount of all consideration, if any, received by the Company upon such issuance by (B) the total number of shares of Common Stock outstanding immediately after such issuance; provided, however, that in no event shall the Purchase Price be adjusted pursuant to this computation to an amount in excess of the Purchase Price in effect immediately prior to such computation. The issuance of any other shares of Common Stock or options or warrants for the purchase thereof may be excluded from the operation of this Section 10(h), provided, the written consent of a majority-in-interest of the Warrant holders has been obtained prior to such issuance. (i) In any case in which this Section 7 10 shall require that an adjustment in the Exercise Purchase Price be made effective as of a record date for a specified event, Network-1 the Company may elect to defer until the occurrence of such event issuing to the HolderWarrantholder, if such Holder Warrantholder exercised any portion of this Option Warrant after such record date, shares of capital stock or warrant or other securities of Network-1the Company, if any, issuable upon such exercise over and above the shares of Common Stock or other securities Shares issuable, on the basis of the Exercise Purchase Price in effect prior to such adjustment; provided, however, that Network-1 the Company shall deliver to the holder a due xxxx or other appropriate instrument evidencing such Holderholder's right to receive such shares of Common Stock capital stock or warrants or other securities upon the occurrence of the event requiring such adjustment. (j) In all events an adjustment, consistent with the anti-dilutive provisions set forth in Section 10(h), shall be made in the Purchase Price and the number of Shares issuable upon the exercise of the Warrants if the Company issues, in exchange for cash, property or services, any securities convertible into or exchangeable for shares of Common Stock, or securities carrying the right to purchase shares of Common Stock or such convertible or exchangeable securities, with a conversion, exchange or exercise price less than the Purchase Price then in effect, with said adjustment being based upon the conversion, exchange or exercise price of such convertible or exchangeable securities.

Adjustment for Certain Events. (a) In case Network-1 the Company shall at any time after the date hereof the Option is first issued (i) declare a dividend on its shares of the Common Stock payable in shares of Network-1the Company's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its the outstanding shares of Common Stock, (iii) reverse split its the outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1the Company's capital stock in a reclassification of shares of the Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation), then, in each case, the Exercise Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option on such date, shall be proportionately adjusted so that the holder of the any Option exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option had been exercised immediately prior to such date, such Holder holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (b) In case Network-1 shall fix a record date for the making of a distribution to all holders Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 shall have one or more subsidiaries, or earned surplus, or dividends payable in Common Stock) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one share of Common Stock. In the event that Network-1 and the Holder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 and the Holder, and the reasonable costs of such appraiser shall be borne by Network-1. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. (c) No adjustment in the Exercise Purchase Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c12(b) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 12 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 the Company be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the Option. (dc) In the event that at any time, as a result of an adjustment made pursuant to Section 7 10 hereof, the Holder holder of the any Option thereafter exercised shall become entitled to receive any shares of capital stock, options, warrants stock or options or other securities of Network-1 the Company other than the shares of Common StockShares, thereafter the number of such other shares of capital stock, options, warrants stock or options or other securities so receivable upon exercise of this Option shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock Shares contained in this Section 712, and the provisions of this Option Agreement with respect to the shares of Common Stock Shares shall apply, to the extent applicable, on like terms to any such other shares of capital stock, stock or options or warrants or other securities. (ed) Upon each adjustment of the Exercise Purchase Price as a result of calculations made in this Section 712, the Option outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Purchase Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the this Option immediately prior to such adjustment of the Exercise Purchase Price by the Exercise Purchase Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Purchase Price in effect immediately after such adjustment of the Exercise Purchase Price. (fe) In case of any capital reorganization of Network-1 the Company or of any reclassification of shares of the Common Stock (other than a change in par value or from a specified par value to no par value or from no par value to a specified par value or as a result of subdivision or combination) or in case of the consolidation of Network-1 the Company with, or the merger of Network-1 the Company into, any other corporation (other than a consolidation or merger in which Network-1 the Company is the continuing corporation) or of the sale of the properties and assets of Network-1 the Company as, or substantially as, an entirety, the Option shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisablevest, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options stock or warrants or other securities or property to which a Holder holder of the number of shares of Common Stock purchasable (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f12(e) with respect to the rights and interests thereafter of the Holder Optionholder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants options or other securities or property thereafter deliverable upon on the exercise of the Option. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f12(e). (gf) In any case in which this Section 7 12 shall require that an adjustment in the Exercise Purchase Price be made effective as of a record date for a specified event, Network-1 the Company may elect to defer until the occurrence of such event issuing to the HolderOptionholder, if such Holder Optionholder exercised any portion of this Option after such record date, shares of capital stock or options or other securities of Network-1the Company, if any, issuable upon such exercise over and above the shares of Common Stock or other securities Shares issuable, on the basis of the Exercise Purchase Price in effect prior to such adjustment; provided, however, that Network-1 the Company shall deliver to the holder a due xxxx bill or other appropriate instrument evidencing such Holderholder's right to receive tx xxceive such shares of Common Stock capital stock or options or other securities upon the occurrence of the event requiring such adjustment.

Adjustment for Certain Events. (a) In case Network-1 shall at any time after the date hereof (i) declare a dividend on its shares of Common Stock payable in shares of Network-1's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its outstanding shares of Common Stock, (iii) reverse split its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1's capital stock in a reclassification of shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 is the continuing corporation), then, in each case, the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option on such date, shall be proportionately adjusted so that the holder of the Option exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option had been exercised immediately prior to such date, such Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (b) . In case Network-1 shall fix a record date for the making of a distribution to all holders Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 shall have one or more subsidiaries, or earned surplus, or dividends payable in Common Stock) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one share of Common Stock. In the event that Network-1 and the Holder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 and the Holder, and the reasonable costs of such appraiser shall be borne by Network-1. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. (c) . No adjustment in the Exercise Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the Option. (d) . In the event that at any time, as a result of an adjustment made pursuant to Section 7 hereof, the Holder of the Option thereafter exercised shall become entitled to receive any shares of capital stock, options, warrants or other securities of Network-1 other than the shares of Common Stock, thereafter the number of such other shares of capital stock, options, warrants or other securities so receivable upon exercise of this Option shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in this Section 7, and the provisions of this Option Agreement with respect to the shares of Common Stock shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options or warrants or other securities. (e) . Upon each adjustment of the Exercise Price as a result of calculations made in this Section 7, the Option outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option immediately prior to such adjustment of the Exercise Price by the Exercise Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. (f) . In case of any capital reorganization of Network-1 or of any reclassification of shares of Common Stock (other than as a result of subdivision or combination) or in case of the consolidation of Network-1 with, or the merger of Network-1 into, any other corporation (other than a consolidation or merger in which Network-1 is the continuing corporation) or of the sale of the properties and assets of Network-1 as, or substantially as, an entirety, the Option shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options or warrants or other securities or property to which a Holder (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f) with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon the exercise of the Option. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f). (g) . In any case in which this Section 7 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, Network-1 may elect to defer until the occurrence of such event issuing to the Holder, if such Holder exercised any portion of this Option after such record date, shares of capital stock or other securities of Network-1, if any, issuable upon such exercise over and above the shares of Common Stock or other securities issuable, on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that Network-1 shall deliver to the holder a due xxxx or other appropriate instrument evidencing such Holder's right to receive such shares of Common Stock or other securities upon the occurrence of the event requiring such adjustment. The Company may, at any time during the term of this Option, unilaterally extend the Expiration Date or reduce the Exercise Price to the then fair market value of the Common Stock.

Adjustment for Certain Events. (a) In case Network-1 the Company shall at any time after the date hereof the Warrants are first issued (i) declare a dividend on its shares of the Common Stock payable in shares of Network-1the Company's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its the outstanding shares of Common Stock, (iii) reverse split its the outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1the Company's capital stock in a reclassification of shares of the Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation), then, in each case, the Exercise Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option Warrants on such date, shall be proportionately adjusted so that the holder of the Option any Warrant exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option Warrant had been exercised immediately prior to such date, such Holder holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such Any such adjustment shall be become effective immediately after the record date of such dividend or the effective date of such subdivision, reverse split or reclassification made successively whenever any event listed above shall occur. (b) In case Network-1 the Company shall fix a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 the Company shall have one or more subsidiaries, or earned surplus, or dividends payable in Common StockStock for which adjustment is made under Section 10(a) above) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Purchase Price per Share to be in effect after such record date shall be determined by multiplying the Exercise Purchase Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one a share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one a share of Common Stock. In the event that Network-1 the Company and the Holder Warrantholder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 the Company and the HolderWarrantholder, and the reasonable costs of such appraiser shall be borne by Network-1the Company. Such Any such adjustment shall become effective immediately after the record date for such distribution and shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Purchase Price shall again be adjusted to be the Exercise Purchase Price which would then be in effect if such record date had not been fixed. (c) No adjustment in the Exercise Purchase Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c10(c) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 10 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 the Company be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the OptionWarrants. (d) In the event that at any time, as a result of an adjustment made pursuant to Section 7 10 hereof, the Holder holder of the Option any Warrant thereafter exercised shall become entitled to receive any shares of capital stock, options, stock or warrants or other securities of Network-1 the Company other than the shares of Common StockShares, thereafter the number of such other shares of capital stock, options, stock or warrants or other securities so receivable upon exercise of this Option Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock Shares contained in this Section 710, and the provisions of this Option Agreement warrant certificate with respect to the shares of Common Stock Shares shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options stock or warrants or other securities. (e) Upon each adjustment of the Exercise Purchase Price as a result of calculations made in this Section 710, the Option each Warrant outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Purchase Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option a Warrant immediately prior to such adjustment of the Exercise Purchase Price by the Exercise Purchase Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Purchase Price in effect immediately after such adjustment of the Exercise Purchase Price. (f) In case of any capital reorganization of Network-1 the Company or of any reclassification of shares of the Common Stock (other than a change in par value or from a specified par value to no par value or from no par value to a specified par value or as a result of subdivision or combination) or in case of the consolidation of Network-1 the Company with, or the merger of Network-1 the Company into, any other corporation (other than a consolidation or merger in which Network-1 the Company is the continuing corporation) or of the sale of the properties and assets of Network-1 the Company as, or substantially as, an entirety, the Option each Warrant shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options stock or warrants or other securities or property to which a Holder holder of the number of shares of Common Stock purchasable (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option Warrant would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f10(f) with respect to the rights and interests thereafter of the Holder registered holders of all Warrants shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon on the exercise of the OptionWarrants. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f10(f). (g) If the Company shall, prior to the Expiration Date, issue shares of Common Stock (whether in a single transaction or a series of transactions, whether or not related) (except for any shares of Common Stock issued or to be issued (1) upon conversion of the Series E Preferred Stock or exercise of the Warrants issued in accordance with the Securities Purchase Agreement, dated October 2, 2001, between the Company and certain investors (the "Purchase Agreement") (2) as a dividend or distribution on the Series E Preferred Stock, (3) to strategic partners, lenders, vendors and financial institutions up to an aggregate of 1,250,000 shares of Common Stock, (4) upon exercise of outstanding options, warrants and convertible securities to purchase an aggregate of 2,605,452 shares of Common Stock as of the date hereof and (5) to employees, officers, directors or consultants of the Corporation pursuant to the Corporation's Stock Option Plan for a purchase price or prices which are, in any instance, less than the Purchase Price then in effect, then the Purchase Price shall be reduced to a price (calculated to the nearest full cent) determined by dividing (A) an amount equal to the sum of (x) the total number of shares of Common Stock outstanding immediately prior to such issuance plus (y) the aggregate of the amount of all consideration, if any, received by the Company upon such issuance by (B) the total number of shares of Common Stock outstanding immediately after such issuance; provided, however, that in no event shall the Purchase Price be adjusted pursuant to this computation to an amount in excess of the Purchase Price in effect immediately prior to such computation. Such adjustment shall be made successively whenever such sale or issuance is made. The issuance of any other shares of Common Stock or options or warrants for the purchase thereof may be excluded from the operation of this Section 10(g), provided, the written consent of a majority-in-interest of the Warrantholders has been obtained prior to such issuance. (h) In any case in which this Section 7 10 shall require that an adjustment in the Exercise Purchase Price be made effective as of a record date for a specified event, Network-1 the Company may elect to defer until the occurrence of such event issuing to the HolderWarrantholder, if such Holder Warrantholder exercised any portion of this Option Warrant after such record date, shares of capital stock or warrant or other securities of Network-1the Company, if any, issuable upon such exercise over and above the shares of Common Stock or other securities Shares issuable, on the basis of the Exercise Purchase Price in effect prior to such adjustment; provided, however, that Network-1 the Company shall deliver to the holder a due xxxx bill or other appropriate instrument evidencing such Holderholder's right to xx receive such shares of Common Stock capital stock or warrants or other securities upon the occurrence of the event requiring such adjustment. (i) In all events an adjustment, consistent with the anti-dilutive provisions set forth in Section 10(g), shall be made in the Purchase Price and the number of Shares issuable upon the exercise of the Warrants if the Company issues, in exchange for cash, property or services, any securities convertible into or exchangeable for shares of Common Stock, or securities carrying the right to purchase shares of Common Stock or such convertible or exchangeable securities, with a conversion, exchange or exercise price less than the Purchase Price then in effect, with said adjustment being based upon the conversion, exchange or exercise price of such convertible or exchangeable securities. (j) The Shares and any other shares of capital stock or warrants or other securities now or hereafter receivable upon exercise of this Warrant shall be entitled to registration under the Securities Act of 1933 pursuant to the terms of the Registration Rights Agreement attached to the Purchase Agreement as Exhibit C thereto.

Adjustment for Certain Events. (a) In case Network-1 the Company shall at any time after the date hereof the Warrants are first issued (i) declare a dividend on its shares of the Common Stock payable in shares of Network-1the Company's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its the outstanding shares of Common Stock, (iii) reverse split its the outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1the Company's capital stock in a reclassification of shares of the Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation), then, in each case, the Exercise Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option Warrants on such date, shall be proportionately adjusted so that the holder of the Option any Warrant exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option Warrant had been exercised immediately prior to such date, such Holder holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such Any such adjustment shall become effective immediately after the record date of such dividend or the effective date of such subdivision, reverse split or reclassification and shall be made successively whenever any event listed above shall occur. (b) In case Network-1 the Company shall fix a record date for the making of a distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 the Company shall have one or more subsidiaries, or earned surplus, or dividends payable in Common StockStock for which adjustment is made under Section 10(a) above) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Purchase Price per Share to be in effect after such record date shall be determined by multiplying the Exercise Purchase Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one a share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one a share of Common Stock. In the event that Network-1 the Company and the Holder Warrantholder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 the Company and the HolderWarrantholder, and the reasonable costs of such appraiser shall be borne by Network-1the Company. Such Any such adjustment shall become effective immediately after the record date for such distribution and shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Purchase Price shall again be adjusted to be the Exercise Purchase Price which would then be in effect if such record date had not been fixed. (c) No adjustment in the Exercise Purchase Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c10(c) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 10 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 the Company be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the OptionWarrants. (d) In the event that at any time, as a result of an adjustment made pursuant to Section 7 10 hereof, the Holder holder of the Option any Warrant thereafter exercised shall become entitled to receive any shares of capital stock, options, stock or warrants or other securities of Network-1 the Company other than the shares of Common StockShares, thereafter the number of such other shares of capital stock, options, stock or warrants or other securities so receivable upon exercise of this Option Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock Shares contained in this Section 710, and the provisions of this Option Agreement warrant certificate with respect to the shares of Common Stock Shares shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options stock or warrants or other securities. (e) Upon each adjustment of the Exercise Purchase Price as a result of calculations made in this Section 710, the Option each Warrant outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Purchase Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option a Warrant immediately prior to such adjustment of the Exercise Purchase Price by the Exercise Purchase Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Purchase Price in effect immediately after such adjustment of the Exercise Purchase Price. (f) In case of any capital reorganization of Network-1 the Company or of any reclassification of shares of the Common Stock (other than a change in par value or from a specified par value to no par value or from no par value to a specified par value or as a result of subdivision or combination) or in case of the consolidation of Network-1 the Company with, or the merger of Network-1 the Company into, any other corporation (other than a consolidation or merger in which Network-1 the Company is the continuing corporation) or of the sale of the properties and assets of Network-1 the Company as, or substantially as, an entirety, the Option each Warrant shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options stock or warrants or other securities or property to which a Holder holder of the number of shares of Common Stock purchasable (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option Warrant would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f10(f) with respect to the rights and interests thereafter of the Holder registered holders of all Warrants shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon on the exercise of the OptionWarrants. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f10(f). (g) In any case in which this Section 7 10 shall require that an adjustment in the Exercise Purchase Price be made effective as of a record date for a specified event, Network-1 the Company may elect to defer until the occurrence of such event issuing to the HolderWarrantholder, if such Holder Warrantholder exercised any portion of this Option Warrant after such record date, shares of capital stock or warrant or other securities of Network-1the Company, if any, issuable upon such exercise over and above the shares of Common Stock or other securities Shares issuable, on the basis of the Exercise Purchase Price in effect prior to such adjustment; provided, however, that Network-1 the Company shall deliver to the holder a due xxxx bxxx or other appropriate instrument evidencing such Holderholder's right to receive such shares of Common Stock capital stock or warrants or other securities upon the occurrence of the event requiring such adjustment. (h) The Shares and any other shares of capital stock or warrants or other securities now or hereafter receivable upon exercise of this Warrant shall be entitled to registration under the Securities Act of 1933 pursuant to the terms of the Registration Rights Agreement attached to the Purchase Agreement as Exhibit 5 thereto.

Adjustment for Certain Events. (a) In case Network-1 shall at any time after the date hereof (i) declare a dividend on its shares of Common Stock payable in shares of Network-1's capital stock (whether in shares of Common Stock or of capital stock of any other class), (ii) subdivide its outstanding shares of Common Stock, (iii) reverse split its outstanding shares of Common Stock into a smaller number of shares, or (iv) issue any shares of Network-1's capital stock in a reclassification of shares of Common Stock (including any such reclassification in connection with a consolidation or merger in which Network-1 is the continuing corporation), then, in each case, the Exercise Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, reverse split or reclassification, and/or the number and kind of shares of capital stock issuable upon exercise of the Option on such date, shall be proportionately adjusted so that the holder of the Option exercised after such time shall be entitled to receive the aggregate number and kind of securities which, if such Option had been exercised immediately prior to such date, such Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, reverse split or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (b) In case Network-1 shall fix a record date for the making of a distribution to all holders Common Stock (including any such distribution made in connection with a consolidation or merger in which Network-1 is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of earnings, consolidated earnings, if Network-1 shall have one or more subsidiaries, or earned surplus, or dividends payable in Common Stock) or rights, options or warrants to subscribe for or purchase Common Stock, then, in each case, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, of which the numerator shall be the current Market Price for one share of Common Stock on such record date less the fair market value of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one share of Common Stock, and of which the denominator shall be the current Market Price for one share of Common Stock. In the event that Network-1 and the Holder cannot agree as to such fair market value, such determination of fair market value shall be made by an appraiser who shall be mutually selected by Network-1 and the Holder, and the reasonable costs of such appraiser shall be borne by Network-1. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Exercise Price shall again be adjusted to be the Exercise Price which would then be in effect if such record date had not been fixed. (c) No adjustment in the Exercise Price shall be required unless such adjustment would require a decrease of at least one cent ($0.01) in such price; provided, however, that any adjustment which by reason of this Section 7(c) is not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be, but in no event shall Network-1 be obligated to issue fractional shares of Common Stock or fractional portions of any securities issuable upon the exercise of the Option. (d) In the event that at any time, as a result of an adjustment made pursuant to Section 7 hereof, the Holder of the Option thereafter exercised shall become entitled to receive any shares of capital stock, options, warrants or other securities of Network-1 other than the shares of Common Stock, thereafter the number of such other shares of capital stock, options, warrants or other securities so receivable upon exercise of this Option shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in this Section 7, and the provisions of this Option Agreement with respect to the shares of Common Stock shall apply, to the extent applicable, on like terms to any such other shares of capital stock, options or warrants or other securities. (e) Upon each adjustment of the Exercise Price as a result of calculations made in this Section 7, the Option outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Option Shares (calculated to the nearest hundredth), obtained by (i) multiplying the number of Option Shares purchasable upon exercise of the Option immediately prior to such adjustment of the Exercise Price by the Exercise Price in effect immediately prior to such adjustment and (ii) dividing the product so obtained by the Exercise Price in effect immediately after such adjustment of the Exercise Price. (f) In case of any capital reorganization of Network-1 or of any reclassification of shares of Common Stock (other than as a result of subdivision or combination) or in case of the consolidation of Network-1 with, or the merger of Network-1 into, any other corporation (other than a consolidation or merger in which Network-1 is the continuing corporation) or of the sale of the properties and assets of Network-1 as, or substantially as, an entirety, the Option shall, after such reorganization, reclassification, consolidation, merger or sale, be exercisable, upon the terms and conditions specified herein, for the number of shares of Common Stock or other capital stock, options or warrants or other securities or property to which a Holder (at the time of such reorganization, reclassification, consolidation, merger or sale) upon exercise of such Option would have been entitled upon such reorganization, reclassification, consolidation, merger or sale; and in any such case, if necessary, the provisions set forth in this Section 7(f) with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of Common Stock or other capital stock or options, warrants or other securities or property thereafter deliverable upon the exercise of the Option. The subdivision, reverse split or combination of shares of Common Stock at any time outstanding into a greater or lesser number of shares shall not be deemed to be a reclassification of the Common Stock for the purposes of this Section 7(f). (g) In any case in which this Section 7 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, Network-1 may elect to defer until the occurrence of such event issuing to the Holder, if such Holder exercised any portion of this Option after such record date, shares of capital stock or other securities of Network-1, if any, issuable upon such exercise over and above the shares of Common Stock or other securities issuable, on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that Network-1 shall deliver to the holder a due xxxx or other appropriate instrument evidencing such Holder's right to receive such shares of Common Stock or other securities upon the occurrence of the event requiring such adjustment. (h) The Company may, at any time during the term of the Option, reduce the Exercise Price to the then fair market value of the Common Stock.