Common use of Cancelled Shares Clause in Contracts

Cancelled Shares. If any of the Cancelled Shares (as defined below) are treated as issued and outstanding or given comparable legal effect (a “Cancelled Share Effectiveness”), then immediately upon such Cancelled Share Effectiveness, the Exercise Price shall be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Exercise Price in effect immediately prior to such Cancelled Share Effectiveness by a fraction, the numerator of which is equal to the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness plus (b) the number of shares of Cancelled Shares treated as issued and outstanding or given comparable legal effect. Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment. To the extent that any Cancelled Share Effectiveness occurs after all or a portion of this Warrant has been exercised for shares of Common Stock, the Corporation shall immediately distribute to the Holder the number of shares of Common Stock that the Holder would have received had such Cancelled Share Effectiveness occurred prior to such exercise. “Cancelled Shares” shall mean the Common Stock issued by the Company in connection with (i) the acquisition of WEBiX Inc., which was subsequently rescinded on March 13, 2003, (ii) the acquisition of the business, operations and prospects of Kolt Oil and Gas, which was subsequently rescinded, (iii) the acquisition of furniture under a note with RHC and (iv) any other issuance of Common Stock prior to the date hereof that would cause the Company to have more than 31,589,501 shares of Common Stock outstanding as of the date hereof if such shares are treated as issued and outstanding or given comparable legal effect.

Cancelled Shares. If any of the Cancelled Shares (as defined below) are treated as issued and outstanding or given comparable legal effect (a “Cancelled Share Effectiveness”), then immediately upon such Cancelled Share Effectiveness, the Exercise Price shall be reduced to a price (calculated to the nearest 1/10th cent) equal to the product obtained by multiplying the Exercise Price in effect immediately prior to such Cancelled Share Effectiveness by a fraction, the numerator of which is equal to the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness, and the denominator of which is equal to the sum of (a) the total number of shares of Common Stock outstanding immediately prior to such Cancelled Share Effectiveness plus (b) the number of shares of Cancelled Shares treated as issued and outstanding or given comparable legal effect. Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment. To the extent that any Cancelled Share Effectiveness occurs after all or a portion of this Warrant has been exercised for shares of Common Stock, the Corporation shall immediately distribute to the Holder the number of shares of Common Stock that the Holder would have received had such Cancelled Share Effectiveness occurred prior to such exercise. “Cancelled Shares” shall mean the Common Stock issued by the Company in connection with (i) the acquisition of WEBiX Inc., which was subsequently rescinded on March 13, 2003, (ii) the acquisition of the business, operations and prospects of Kolt Oil and Gas, which was subsequently rescinded, (iii) the acquisition of furniture under a note with RHC and (iv) any other issuance of Common Stock prior to the date hereof that would cause the Company to have more than 31,589,501 shares of Common Stock outstanding as of the date hereof (other than shares deemed to be issued pursuant to Section 6(d)(ii) hereof) if such shares are treated as issued and outstanding or given comparable legal effect.