Common use of Adjustment for Spin Off Clause in Contracts

Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a material part of its business or operations or disposes all or of a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then the Company shall cause (i) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder had all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the amount and number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the Trading Day immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares, multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants. -------- 4 Example: Assume 10,000 shares remain under Warrant at an assumed original stated Exercise Price of US$1.50. Total exercise price (clause (y) in text) is (i) 10,000 x (ii) US$1.50, or US$15,000. Company effects 2:1 stock split. Exercise Price is adjusted to US$0.75. Number of shares covered by Warrant is adjusted to 20,000, because (applying clause (x) in text) (i) 20,000 x (ii) US$0.75 = US$15,000.

Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a material part of its business or operations or disposes all or of a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then the Company shall cause (i) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder had all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the amount and number of Spin Off Securities to be --------------------------------- 5 Example: Assume 10,000 shares remain under Warrant at original stated Exercise Price of US$[Class A - 0.20; Class B - 0.05]. Total exercise price (clause (y) in text) is (i) 10,000 x (ii) US$[Class A - 0.20; Class B - 0.05], or US$[Class A - 2,000; Class B - 500]. Company effects 2:1 stock split. Exercise Price is adjusted to US$[Class A - 0.10; Class B - 0.025]. Number of shares covered by Warrant is adjusted to 20,000, because (applying clause (x) in text) (i) 20,000 x (ii) US$[Class A - 0.10; Class B - 0.025] = US$[Class A - 2,000; Class B - 500]. issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the Trading Day immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares, multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants. -------- 4 Example: Assume 10,000 shares remain under Warrant at an assumed original stated Exercise Price of US$1.50. Total exercise price (clause (y) in text) is (i) 10,000 x (ii) US$1.50, or US$15,000. Company effects 2:1 stock split. Exercise Price is adjusted to US$0.75. Number of shares covered by Warrant is adjusted to 20,000, because (applying clause (x) in text) (i) 20,000 x (ii) US$0.75 = US$15,000.

Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a material part of its business or operations or disposes all or of a part of --------------------- 1 Example: Assume 10,000 shares remain under Warrant at original stated Exercise Price of US$0.07. Total exercise price (clause (y) in text) is (i) 10,000 x (ii) US$0.07, or US$700. Company effects 2:1 stock split. Exercise Price is adjusted to US$0.035. Number of shares covered by Warrant is adjusted to 20,000, because (applying clause (x) in text) (i) 20,000 x (ii) US$0.035 = US$700. its assets in a transaction (the "Spin Off"') in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then the Company shall cause (i) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder had all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the amount and number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the Trading Day immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to be issued to the Holder on the exercise of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares, multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants. -------- 4 Example: Assume 10,000 shares remain under Warrant at an assumed original stated Exercise Price of US$1.50. Total exercise price (clause (y) in text) is (i) 10,000 x (ii) US$1.50, or US$15,000. Company effects 2:1 stock split. Exercise Price is adjusted to US$0.75. Number of shares covered by Warrant is adjusted to 20,000, because (applying clause (x) in text) (i) 20,000 x (ii) US$0.75 = US$15,000.

Adjustment for Spin Off. If, for any reason, prior to the exercise of this Warrant in full, the Company spins off or otherwise divests itself of a material part of its business or operations or disposes all or of a part of its assets in a transaction (the "Spin Off") in which the Company does not receive compensation for such business, operations or assets, but causes securities of another entity (the "Spin Off Securities") to be issued to security holders of the Company, then the Company shall cause (i) to be reserved Spin Off Securities equal to the number thereof which would have been issued to the Holder had all of the Holder's unexercised Warrants outstanding on the record date (the "Record Date") for determining the amount and number of Spin Off Securities to be issued to security holders of the Company (the "Outstanding Warrants") been exercised as of the close of business on the Trading Day immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to be issued to the Holder on the exercise ------------------------------------ 1 Example: Assume 10,000 shares remain under Warrant at original stated Exercise Price of US$1.50. Total exercise price (clause (y) in text) is (i) 10,000 x (ii) US$1.50, or US $15,000. Company effects 2:1 stock split. Exercise Price is adjusted to US$0.75. Number of shares covered by Warrant is adjusted to 20,000, because (applying clause (x) in text) (i) 20,000 x (ii) US$0.75 = US$15,000. of all or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares, multiplied by (y) a fraction, of which (I) the numerator is the amount of the Outstanding Warrants then being exercised, and (II) the denominator is the amount of the Outstanding Warrants. -------- 4 Example: Assume 10,000 shares remain under Warrant at an assumed original stated Exercise Price of US$1.50. Total exercise price (clause (y) in text) is (i) 10,000 x (ii) US$1.50, or US$15,000. Company effects 2:1 stock split. Exercise Price is adjusted to US$0.75. Number of shares covered by Warrant is adjusted to 20,000, because (applying clause (x) in text) (i) 20,000 x (ii) US$0.75 = US$15,000.