Common use of Dilutive Issuances Clause in Contracts

Dilutive Issuances. (a) If Company shall at any time after the Closing Date and until and including the earlier of (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue or sell any shares of Common Stock or Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuance) for a consideration per share less than $0.90 (subject to adjustment pursuant to this Section 2)(a “Dilutive Issuance”), then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fraction, the numerator of which shall be the Warrant Exercise Price then in effect and the denominator of which shall be the per share consideration received or to be received by Company in such Dilutive Issuance; provided that the Warrant Shares issued upon any prior exercise of this Warrant shall be disregarded (as if the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock for a consideration consisting, in whole or in part, of property other than cash or its equivalent, then in determining the fair market value per share and the consideration received or receivable by or payable to Company for purposes of this Section 2.5, the fair value of such property shall be determined reasonably and in good faith by the Company Board. As used herein, “Company’s Next Financing” means the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000.

Dilutive Issuances. (a) If Company shall the Company, at any time after prior to the Closing Date and until and including the earlier of (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue Uplisting, shall sell, enter into an agreement to sell, or grant any option to purchase, or sell or grant any shares of right to reprice, or otherwise sell or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents in a Subsequent Issuance (other than Stock, at an Exempt Issuance) for a consideration effective price per share less than $0.90 (0.175, subject to adjustment pursuant to this Section 2)(a for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock (the “Conversion Price”) (such lower price, the “Base Share Price,” and such issuances collectively, a “Dilutive Issuance”)) (it being understood and agreed that if the holder of the Common Stock so issued shall at any time, then the Warrant Number shall be adjusted whether by multiplying the Warrant Number immediately prior thereto by a fractionoperation of purchase price adjustments, the numerator of which shall be the Warrant Exercise Price then in effect and the denominator of which shall be the reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share consideration received or which are issued in connection with such issuance, be entitled to be received by Company in such Dilutive Issuance; provided that the Warrant Shares issued upon any prior exercise of this Warrant shall be disregarded (as if the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue receive shares of Common Stock at an effective price per share that is less than the Conversion Price, such issuance shall be deemed to have occurred for a consideration consisting, in whole or in part, less than the Conversion Price on such date of property other than cash or its equivalentthe Dilutive Issuance at such effective price), then in determining within three business days after the fair market value per share and consummation (or, if earlier, the consideration received or receivable by or payable announcement) of each Dilutive Issuance, the Company shall issue to Company for purposes the Holder, without further consideration, an additional number of shares of Common Stock equal to the difference between (i) the number of shares of Common Stock that would have been issued to the Holder pursuant to Section 4 of this Agreement if the Conversion Price had equaled the applicable Base Share Price and (ii) the number of shares of Common Stock originally issued to the Holder pursuant to Section 2.5, the fair value 4 of such property shall be determined reasonably and in good faith by the Company Board. As used herein, “Company’s Next Financing” means the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000this Agreement.

Dilutive Issuances. (aA) If Company shall the Maker, at any time after or from time to time, issues or sells any Additional Shares of Common Stock (as defined below), other than as provided in the Closing Date foregoing subsections of this Section 3(e), for a price per share (which, in the case of options, warrants, convertible securities or other rights, includes the amounts paid therefor plus the exercise price, conversion price or other such amounts payable thereunder) that is less than the Conversion Price then in effect, then and until and including in each such case, the earlier then applicable Conversion Price shall automatically be reduced as of the opening of business on the date of such issue or sale, to a price determined by multiplying the Conversion Price then in effect by a fraction (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue or sell any shares of Common Stock or Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuance) for a consideration per share less than $0.90 (subject to adjustment pursuant to this Section 2)(a “Dilutive Issuance”), then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fraction, the numerator of which shall be (A) the Warrant Exercise Price then in effect number of share of Common Stock deemed outstanding (as determined below) immediately prior to such issue or sale, plus (B) the number of shares of Common Stock which the aggregate consideration received by the Maker for the total number of Additional Shares of Common Stock so issued would purchase at such Conversion Price, and (ii) the denominator of which shall be the per share consideration received or to be received by Company in such Dilutive Issuance; provided that the Warrant Shares issued upon any prior exercise number of this Warrant shall be disregarded (as if the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock for deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of Additional Shares of Common Stock so issued; provided, however, that upon the expiration or other termination of options, warrants or other rights to purchase or acquire Common Stock which triggered any adjustment under this Section 3(e)(vii), and upon the expiration or termination of the right to convert or exchange convertible or exchangeable securities (whether by reason of redemption or otherwise) which triggered any adjustment under this Section 3(e)(vii), if any thereof shall not have been exercised, converted or exchanged, as applicable, the number of shares of Common Stock deemed to be outstanding pursuant to this Section 3(e)(vii) shall be reduced by the number of shares as to which options, warrants and rights to purchase or acquire Common Stock shall have expired or terminated unexercised, and as to which conversion or exchange rights shall have expired or terminated unexercised, and such number of shares shall no longer be deemed to be outstanding; and the Conversion Price then in effect shall forthwith be readjusted and thereafter be the price that it would have been had adjustment been made on the basis of the issuance only of the shares of Common Stock actually issued. For purposes of the preceding sentence, the number of shares of Common Stock deemed to be outstanding as of a consideration consistinggiven date shall be the sum of (x) the number of shares of Common Stock actually outstanding, in whole (y) the number of shares of Common Stock into which this Note could be converted on the day immediately preceding the given date, and (z) the number of shares of Common Stock which could be obtained through the exercise or in partconversion of all other rights, options and convertible securities outstanding on the day immediately preceding the given date. “Additional Shares of property Common Stock” shall mean all shares of Common Stock, and all options, warrants, convertible securities or other rights to purchase or acquire Common Stock, issued by the Maker other than cash (i) shares of Common Stock issued pursuant to the exercise of options, warrants or its equivalentconvertible securities outstanding on the date hereof (including, then without limitation, all of the Warrants issued pursuant to the Original Agreement (as such term is defined in determining the Loan Agreement) and pursuant to the Loan Agreement), or hereafter issued from time to time pursuant to and in accordance with stock purchase or stock option plans as in effect on the date hereof, and (ii) shares of Common Stock and/or options, warrants or other Common Stock purchase rights for up to an aggregate of 1,000,000 shares of Common Stock (such number to be subject to adjustment in accordance with Sections 3(e)(i) and 3(e)(ii) above), where such options, warrants or other rights are issued both (x) with exercise prices per share of Common Stock at the then-current fair market value per of a share and the consideration received or receivable by or payable to Company for purposes of this Section 2.5Common Stock, the fair value of such property shall be as determined reasonably and in good faith by the Company Board. As used hereinBoard of Directors of the Maker or the Compensation Committee thereof, “Companyand (B) to employees, officers or directors of, or consultants to, the Maker or any Subsidiary pursuant to stock purchase or stock option plans or other arrangements that are approved by the Maker’s Next Financing” means Board of Directors or the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000Compensation Committee thereof, and by the Maker’s stockholders.

Dilutive Issuances. (a) If Company shall at any time after the Closing Date and until and including the earlier of (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue or sell any shares of Common Stock or Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuance) for a consideration per share less than $0.90 (subject to adjustment pursuant to this Section 2)(a Article IV) (a “Dilutive Issuance”), then the Warrant Number Conversion Amount shall be adjusted by multiplying the Warrant Number Conversion Amount immediately prior thereto by a fraction, the numerator of which shall be the Warrant Exercise Conversion Price then in effect and the denominator of which shall be the per share consideration received or to be received by Company in such Dilutive Issuance; provided that the Warrant Conversion Shares issued upon any prior exercise conversion of this Warrant Note shall be disregarded (as if the exercise conversion of this Warrant Note and the issuance of such Warrant Conversion Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant Note under this Section 2.5(a4.5(a) as if there had been no prior exercise conversion of this WarrantNote. If Company shall sell or issue shares of Common Stock Conversion Shares for a consideration consisting, in whole or in part, of property other than cash or its equivalent, then in determining the fair market value per share and the consideration received or receivable by or payable to Company for purposes of this Section 2.54.5, the fair value of such property shall be determined reasonably and in good faith by the Company Board. As used herein, “Company’s Next Financing” means the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000.

Dilutive Issuances. (aA) If Company shall the Maker, at any time after or from time to time, issues or sells any Additional Shares of Common Stock (as defined below), other than as provided in the Closing Date foregoing subsections of this Section 3(e), for a price per share (which, in the case of options, warrants, convertible securities or other rights, includes the amounts paid therefor plus the exercise price, conversion price or other such amounts payable thereunder) that is less than the Conversion Price then in effect, then and until and including in each such case, the earlier then applicable Conversion Price shall automatically be reduced as of the opening of business on the date of such issue or sale, to a price determined by multiplying the Conversion Price then in effect by a fraction (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue or sell any shares of Common Stock or Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuance) for a consideration per share less than $0.90 (subject to adjustment pursuant to this Section 2)(a “Dilutive Issuance”), then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fraction, the numerator of which shall be (A) the Warrant Exercise Price then in effect number of share of Common Stock deemed outstanding (as determined below) immediately prior to such issue or sale, plus (B) the number of shares of Common Stock which the aggregate consideration received by the Maker for the total number of Additional Shares of Common Stock so issued would purchase at such Conversion Price, and (ii) the denominator of which shall be the per share consideration received or to be received by Company in such Dilutive Issuance; provided that the Warrant Shares issued upon any prior exercise number of this Warrant shall be disregarded (as if the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock for deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of Additional Shares of Common Stock so issued; provided, however, that upon the expiration or other termination of options, warrants or other rights to purchase or acquire Common Stock which triggered any adjustment under this Section 3(e)(vii), and upon the expiration or termination of the right to convert or exchange convertible or exchangeable securities (whether by reason of redemption or otherwise) which triggered any adjustment under this Section 3(e)(vii), if any thereof shall not have been exercised, converted or exchanged, as applicable, the number of shares of Common Stock deemed to be outstanding pursuant to this Section 3(e)(vii) shall be reduced by the number of shares as to which options, warrants and rights to purchase or acquire Common Stock shall have expired or terminated unexercised, and as to which conversion or exchange rights shall have expired or terminated unexercised, and such number of shares shall no longer be deemed to be outstanding; and the Conversion Price then in effect shall forthwith be readjusted and thereafter be the price that it would have been had adjustment been made on the basis of the issuance only of the shares of Common Stock actually issued. For purposes of the preceding sentence, the number of shares of Common Stock deemed to be outstanding as of a consideration consistinggiven date shall be the sum of (x) the number of shares of Common Stock actually outstanding, in whole (y) the number of shares of Common Stock into which this Note could be converted on the day immediately preceding the given date, and (z) the number of shares of Common Stock which could be obtained through the exercise or in partconversion of all other rights, options and convertible securities outstanding on the day immediately preceding the given date. “Additional Shares of property Common Stock” shall mean all shares of Common Stock, and all options, warrants, convertible securities or other rights to purchase or acquire Common Stock, issued by the Maker other than cash (i) shares of Common Stock issued pursuant to the exercise of options, warrants or its equivalentconvertible securities outstanding on February 21, then 2007 (including, without limitation, all of the Warrants issued pursuant to the Loan Agreement), or thereafter issued from time to time pursuant to and in determining accordance with stock purchase or stock option plans as in effect on February 21, 2007, and (ii) shares of Common Stock and/or options, warrants or other Common Stock purchase rights issued subsequent to February 21, 2007 for up to an aggregate of 900,000 shares of Common Stock (such number to be subject to adjustment in accordance with Sections 3(e)(i) and 3(e)(ii) above), where such options, warrants or other rights are issued both (x) with exercise prices per share of Common Stock at the then-current fair market value per of a share and the consideration received or receivable by or payable to Company for purposes of this Section 2.5Common Stock, the fair value of such property shall be as determined reasonably and in good faith by the Company Board. As used hereinBoard of Directors of the Maker or the Compensation Committee thereof, “Companyand (B) to employees, officers or directors of, or consultants to, the Maker or any Subsidiary pursuant to stock purchase or stock option plans or other arrangements that are approved by the Maker’s Next Financing” means Board of Directors or the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000Compensation Committee thereof, and by the Maker’s stockholders.

Dilutive Issuances. (a) If Company shall at any time and whenever on or after the Closing Date and until and including date of issuance of this Warrant, the earlier of (iCompany issues or sells, or in accordance with this Section 6(d) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue is deemed to have issued or sell sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock Equivalents owned or held by or for the account of the Company, but excluding shares of Common Stock issued or deemed to have been issued or sold by the Company in a Subsequent Issuance (other than an Exempt Issuance) connection with any Excluded Security for a consideration per share less than a price (the “Applicable Price”) equal to either (i) in the case of the issuance or sale of shares of Common Stock, the lesser of $0.90 0.25 per share or the Exercise Price in effect immediately prior to such issue or sale or (subject ii) in the case of the issuance or sale of Options or other Convertible Securities, the Exercise Price in effect immediately prior to adjustment pursuant to this Section 2)(a such issue or sale (the foregoing a “Dilutive Issuance”), then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fractionafter such Dilutive Issuance, the numerator of which shall be the Warrant Exercise Price then in effect shall be reduced to an amount equal to the Applicable Price. For purposes of determining the adjusted Exercise Price under this Section 6(d), the following shall be applicable: (i) If the Company in any manner grants or sells any Options and the denominator lowest price per share for which one share of which Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 6(d)(i) the "lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion or exchange or exercise of any Convertible Securities issuable upon exercise of such Option" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon granting or sale of the Option, upon exercise of the Option and upon conversion or exchange or exercise of any Convertible Security issuable upon exercise of such Option. No further adjustment of the Exercise Price shall be made upon the actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Common Stock upon conversion or exchange or exercise of such Convertible Securities. (ii) If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance of sale of such Convertible Securities for such price per share. For the purposes of this Section 6(d)(ii)), the "lowest price per share for which one share of Common Stock is issuable upon such conversion or exchange or exercise" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the issuance or sale of the Convertible Security and upon the conversion or exchange or exercise of such Convertible Security. No further adjustment of the Exercise Price shall be made upon the actual issuance of such share of Common Stock upon conversion or exchange or exercise of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Exercise Price had been or are to be made pursuant to other provisions of this Section 6(d), no further adjustment of the Exercise Price shall be made by reason of such issue or sale. (iii) If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exchange or exercise of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exchangeable or exercisable for Common Stock changes at any time, the Exercise Price in effect at the time of such Dilutive Issuance; change shall be adjusted to the Exercise Price which would have been in effect at such time had such Options or Convertible Securities provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 6(d)(iii), if the terms of any Option or Convertible Security that was outstanding as of the Warrant Shares issued upon any prior exercise date of issuance of this Warrant are changed in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be disregarded (deemed to have been issued as if of the exercise of this Warrant and the issuance date of such Warrant Shares as a result thereof had never happenedchange. (iv) In case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the extent necessary parties thereto, the Options will be deemed to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had have been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock issued for a consideration consistingof $0.01. If any Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the gross amount received by the Company therefor. If any Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company will be the fair value of such consideration, except where such consideration consists of securities, in whole which case the amount of consideration received by the Company will be the Closing Price of such securities on the date of receipt. If any Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in partconnection with any merger in which the Company is the surviving entity, the amount of property consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or its equivalent, then securities will be determined in determining good faith by the fair market value per share Board of Directors of the Company within five (5) days after the occurrence of an event requiring valuation. If the Holder disagrees with the determination of the Board of Directors and gives written notice of such disagreement to the consideration received or receivable by or payable to Company for purposes within ten (10) days after the occurrence of this Section 2.5an event requiring valuation (the "Valuation Event"), the fair value of such property shall consideration will be determined reasonably and in good faith within five (5) business days after the tenth day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company Boardand the Holder. As used hereinThe determination of such appraiser shall be deemed binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company. Notwithstanding the foregoing, “Company’s Next Financing” means in the closing event any Common Stock, Options or Convertible Securities are issued in exchange for the extinguishment of any invoice, account payable, loan, advance, debt, liability or obligation denominated in U.S. dollars or any other currency, then the consideration received by the Company will be deemed to be the U.S. dollar amount of such extinguished invoice, account payable, loan, advance, debt, liability or obligation. (v) If the Company takes a Subsequent Issuance yielding gross cash proceeds record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. (vi) In the event that an event would result in an aggregate amount of at least $2,000,000adjustment to the Exercise Price under Sections 6(a), 6(b) or 6(c) and also under this Section 6(d) an adjustment shall be made under only such applicable paragraph that results in the lowest Exercise Price.

Dilutive Issuances. (a) If In the event the Company shall at any time after the Closing Date and until and including the earlier of (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue or sell any ------------------ additional shares of Common Stock or any securities convertible into, exchangeable for or exercisable for Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuancethe "Additional Securities") without consideration or for a consideration per share less than $0.90 the applicable Warrant Price in effect on the date of and immediately prior to such issue (subject other than shares of Common Stock issued to adjustment pursuant employees and consultants of the Company in accordance with Section 5.12 of the Company's Series C and Series D Preferred Stock Purchase Agreement dated January 25, 1991 (the "Preferred Stock Purchase Agreement"), up to this Section 2)(a “Dilutive Issuance”a maximum of 1,000,000 shares as adjusted for any dividend or distribution of shares of Common Stock), then the and in such event, such applicable Warrant Number Price shall be adjusted reduced, concurrently with such issue, to a price (calculated to the nearest tenth of a cent) determined by multiplying the such applicable Warrant Number immediately prior thereto Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares of Common Stock which the aggregate consi- deration received by the corporation for the total number of shares of Additional Securities so issued would purchase at such applicable Warrant Exercise Price then in effect Price; and the denominator of which shall be the per share consideration received or to be received by Company in such Dilutive Issuance; provided that the Warrant Shares issued upon any prior exercise number of this Warrant shall be disregarded (as if the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock for a consideration consistingoutstanding immediately prior to such issue plus the number of shares of such Additional Securities so issued. For the purpose of performing the calculations required by this Section 4.4, in whole all shares of Common Stock issuable upon the conversion, exchange or in partexercise of outstanding securities (including, of property other than cash or its equivalentwithout limitation, then in determining the fair market value per share options issued to employees and consultants) shall be deemed to be outstanding, and immediately after the consideration received or receivable by or payable to Company for purposes any shares of this Section 2.5Additional Securities has been received, the fair value of such property they shall be determined reasonably and in good faith by the Company Board. As used herein, “Company’s Next Financing” means the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000deemed to be outstanding.

Dilutive Issuances. (a) If Company shall at any time after the Closing Date and until and including the earlier of (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue or sell any shares of Common Stock or Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuance) for a consideration per share less than $0.90 (subject to adjustment pursuant to this Section 2)(a “Dilutive Issuance”), then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fraction, the numerator of which shall be the Warrant Exercise Price then in effect and the denominator of which shall be the sum of (i) Warrant Exercise Price, calculated as if the initial Warrant Exercise Price was $1.00 per Share, plus (ii) the per share consideration received or to be received by Company in such Dilutive Issuance; provided that the Warrant Shares issued upon any prior exercise of this Warrant shall be disregarded (as if the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock for a consideration consisting, in whole or in part, of property other than cash or its equivalent, then in determining the fair market value per share and the consideration received or receivable by or payable to Company for purposes of this Section 2.5, the fair value of such property shall be determined reasonably and in good faith by the Company Board. As used herein, “Company’s Next Financing” means the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000.

Dilutive Issuances. (a) If Company shall If, at any time after while this Note is outstanding (the Closing Date and until and “Adjustment Period”), the Company issues or sells, or in accordance with this Section 8 is deemed to have issued or sold, any Common Shares, Convertible Securities or Options (including the earlier issuance or sale of (i) Common Shares owned or held by or for the second anniversary account of the Closing Date and (ii) Company’s Next Financing issue , but excluding any Excluded Securities issued or sell any shares of Common Stock sold or Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuancedeemed to have been issued or sold) for a consideration per share (the “New Issuance Price”) less than $0.90 a price equal to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (subject such Conversion Price then in effect is referred to adjustment pursuant to this Section 2)(a as the “Applicable Price” and such issuance, a “Dilutive Issuance”), ) then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fractionafter such Dilutive Issuance, the numerator of which shall be the Warrant Exercise Conversion Price then in effect and the denominator of which shall be reduced to an amount equal to the per share consideration received or to New Issuance Price. The Merger shall not be received by Company in such deemed a Dilutive Issuance; provided provided, however, that the Warrant Shares issued upon any prior exercise of this Warrant Merger shall be disregarded deemed a Dilutive Issuance if it is based on a pre-Merger valuation (as if prepared by a third party valuation expert reasonably acceptable to Buyer) of the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) Company (excluding any investment by Holder pursuant to the extent necessary to achieve Securities Purchase Agreement) of less than $6 million or if in connection with the same readjustment to Merger, any securities of the Warrant Issuer other than Common Shares are issued, assigned or transferred. For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and consideration per share under this Section 2.5(a8(e)(i)), clauses (ii) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock for a consideration consisting, in whole or in part, of property other than cash or its equivalent, then in determining the fair market value per share and the consideration received or receivable by or payable to Company for purposes through (vii) of this Section 2.5, the fair value of such property 8(e) shall be determined reasonably and in good faith by the Company Board. As used herein, “Company’s Next Financing” means the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000applicable.

Dilutive Issuances. (aA) If Company shall the Maker, at any time after or from time to time, issues or sells any Additional Shares of Common Stock (as defined below), other than as provided in the Closing Date foregoing subsections of this Section 3(e), for a price per share (which, in the case of options, warrants, convertible securities or other rights, includes the amounts paid therefor plus the exercise price, conversion price or other such amounts payable thereunder) that is less than the Conversion Price then in effect, then and until and including in each such case, the earlier then applicable Conversion Price shall automatically be reduced as of the opening of business on the date of such issue or sale, to a price determined by multiplying the Conversion Price then in effect by a fraction (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue or sell any shares of Common Stock or Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuance) for a consideration per share less than $0.90 (subject to adjustment pursuant to this Section 2)(a “Dilutive Issuance”), then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fraction, the numerator of which shall be (A) the Warrant Exercise Price then in effect number of share of Common Stock deemed outstanding (as determined below) immediately prior to such issue or sale, plus (B) the number of shares of Common Stock which the aggregate consideration received by the Maker for the total number of Additional Shares of Common Stock so issued would purchase at such Conversion Price, and (ii) the denominator of which shall be the per share consideration received or to be received by Company in such Dilutive Issuance; provided that the Warrant Shares issued upon any prior exercise number of this Warrant shall be disregarded (as if the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock for deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of Additional Shares of Common Stock so issued; provided, however, that upon the expiration or other termination of options, warrants or other rights to purchase or acquire Common Stock which triggered any adjustment under this Section 3(e)(vii), and upon the expiration or termination of the right to convert or exchange convertible or exchangeable securities (whether by reason of redemption or otherwise) which triggered any adjustment under this Section 3(e)(vii), if any thereof shall not have been exercised, converted or exchanged, as applicable, the number of shares of Common Stock deemed to be outstanding pursuant to this Section 3(e)(vii) shall be reduced by the number of shares as to which options, warrants and rights to purchase or acquire Common Stock shall have expired or terminated unexercised, and as to which conversion or exchange rights shall have expired or terminated unexercised, and such number of shares shall no longer be deemed to be outstanding; and the Conversion Price then in effect shall forthwith be readjusted and thereafter be the price that it would have been had adjustment been made on the basis of the issuance only of the shares of Common Stock actually issued. For purposes of the preceding sentence, the number of shares of Common Stock deemed to be outstanding as of a consideration consistinggiven date shall be the sum of (x) the number of shares of Common Stock actually outstanding, in whole (y) the number of shares of Common Stock into which this Note could be converted on the day immediately preceding the given date, and (z) the number of shares of Common Stock which could be obtained through the exercise or in partconversion of all other rights, options and convertible securities outstanding on the day immediately preceding the given date. “Additional Shares of property Common Stock” shall mean all shares of Common Stock, and all options, warrants, convertible securities or other rights to purchase or acquire Common Stock, issued by the Maker other than cash (i) shares of Common Stock issued pursuant to the exercise of options, warrants or its equivalentconvertible securities outstanding on the date hereof (including, then without limitation, all of the Warrants issued pursuant to the Loan Agreement), or hereafter issued from time to time pursuant to and in determining accordance with stock purchase or stock option plans as in effect on the date hereof, and (ii) shares of Common Stock and/or options, warrants or other Common Stock purchase rights for up to an aggregate of 900,000 shares of Common Stock (such number to be subject to adjustment in accordance with Sections 3(e)(i) and 3(e)(ii) above), where such options, warrants or other rights are issued both (x) with exercise prices per share of Common Stock at the then-current fair market value per of a share and the consideration received or receivable by or payable to Company for purposes of this Section 2.5Common Stock, the fair value of such property shall be as determined reasonably and in good faith by the Company Board. As used hereinBoard of Directors of the Maker or the Compensation Committee thereof, “Companyand (B) to employees, officers or directors of, or consultants to, the Maker or any Subsidiary pursuant to stock purchase or stock option plans or other arrangements that are approved by the Maker’s Next Financing” means Board of Directors or the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000Compensation Committee thereof, and by the Maker’s stockholders.

Dilutive Issuances. (aA) If Company shall the Maker, at any time after or from time to time, issues or sells any Additional Shares of Common Stock (as defined below), other than as provided in the Closing Date foregoing subsections of this Section 3(e), for a price per share (which, in the case of options, warrants, convertible securities or other rights, includes the amounts paid therefor plus the exercise price, conversion price or other such amounts payable thereunder) that is less than the Conversion Price then in effect, then and until and including in each such case, the earlier then applicable Conversion Price shall automatically be reduced as of the opening of business on the date of such issue or sale, to a price determined by multiplying the Conversion Price then in effect by a fraction (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue or sell any shares of Common Stock or Common Stock Equivalents in a Subsequent Issuance (other than an Exempt Issuance) for a consideration per share less than $0.90 (subject to adjustment pursuant to this Section 2)(a “Dilutive Issuance”), then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fraction, the numerator of which shall be (A) the Warrant Exercise Price then in effect number of share of Common Stock deemed outstanding (as determined below) immediately prior to such issue or sale, plus (B) the number of shares of Common Stock which the aggregate consideration received by the Maker for the total number of Additional Shares of Common Stock so issued would purchase at such Conversion Price, and (ii) the denominator of which shall be the per share consideration received or to be received by Company in such Dilutive Issuance; provided that the Warrant Shares issued upon any prior exercise number of this Warrant shall be disregarded (as if the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of Additional Shares of Common Stock so issued; provided, however, that upon the expiration or other termination of options, warrants or other rights to purchase or acquire Common Stock which triggered any adjustment under this Section 3(e)(vii), and upon the expiration or termination of the right to convert or exchange convertible or exchangeable securities (whether by reason of redemption or otherwise) which triggered any adjustment under this Section 3(e)(vii), if any thereof shall not have been exercised, converted or exchanged, as applicable, the number of shares of Common Stock deemed to be outstanding pursuant to this Section 3(e)(vii) shall be reduced by the number of shares as to which options, warrants and rights to purchase or acquire Common Stock shall have expired or terminated unexercised, and as to which conversion or exchange rights shall have expired or terminated unexercised, and such number of shares shall no longer be deemed to be outstanding; and the Conversion Price then in effect shall forthwith be readjusted and thereafter be the price that it would have been had adjustment been made on the basis of the issuance only of the shares of Common Stock actually issued. For purposes of the preceding sentence, the number of shares of Common Stock deemed to be outstanding as of a given date shall be the sum of (x) the number of shares of Common Stock actually outstanding, (y) the number of shares of Common Stock into which this Note could be converted on the day immediately preceding the given date, and (z) the number of shares of Common Stock which could be obtained through the exercise or conversion of all other rights, options and convertible securities outstanding on the day immediately preceding the given date. For purposes hereof, “Additional Shares of Common Stock” shall mean all shares of Common Stock, and all options, warrants, convertible securities or other rights to purchase or acquire Common Stock, issued by the Maker other than (i) shares of Common Stock issued pursuant to the exercise of options, warrants or convertible securities outstanding on the date hereof (including, without limitation, all of the Warrants issued pursuant to the Loan Agreement), or hereafter issued from time to time pursuant to and in accordance with stock purchase or stock option plans as in effect on the date hereof, and (ii) shares of Common Stock and/or options, warrants or other Common Stock purchase rights for a consideration consistingup to an aggregate of 12,000,000 shares of Common Stock (such number to be subject to adjustment in accordance with Sections 3(e)(i) and 3(e)(ii) above), provided that, in whole each case, such options, warrants or in part, other rights (A) have an exercise price per share of property other Common Stock equal to or greater than cash or its equivalent, then in determining the then-current fair market value per of a share and the consideration received or receivable by or payable to Company for purposes of this Section 2.5Common Stock, the fair value of such property shall be as determined reasonably and in good faith by the Company Board. As used hereinBoard of Directors of the Maker or the Compensation Committee thereof, “Companyand (B) are issued to employees, officers or directors of, or consultants to, the Maker or any Subsidiary pursuant to stock purchase or stock option plans or other arrangements that are approved by the Maker’s Next Financing” means Board of Directors or the closing of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000Compensation Committee thereof, and by the Maker’s stockholders.

Dilutive Issuances. (a) If Company shall at the Maker issues or sells, or is deemed to have issued or sold, any time after the Closing Date and until and including the earlier of (i) the second anniversary of the Closing Date and (ii) Company’s Next Financing issue Shares for no consideration or sell any shares of Common Stock or Common Stock Equivalents in for consideration on a Subsequent Issuance (other than an Exempt Issuance) for a consideration per share basis less than $0.90 the Conversion Price in effect on the date of such issuance or sale (subject to adjustment pursuant to this Section 2)(a or deemed issuance or sale) (a “Dilutive Issuance”), then the Warrant Number shall be adjusted by multiplying the Warrant Number immediately prior thereto by a fraction, the numerator of which shall be Conversion Price and the Warrant Exercise Price then in effect and the denominator of which shall be adjusted so as to equal the consideration per share consideration received or to be received receivable by Company the Maker (on a per share basis) for the additional Shares so issued, sold, or deemed issued or sold in such Dilutive Issuance; provided that . If the Maker issues or sells, or is deemed to have issued or sold, any Shares for consideration per share less than the Warrant Shares issued upon any prior exercise Exercise Price and equal to or greater than the Conversion Price in effect on the date of this such issuance or sale (or deemed issuance or sale), then the Warrant Exercise Price shall be disregarded (adjusted so as if to equal the exercise of this Warrant and the issuance of such Warrant Shares as a result thereof had never happened) to the extent necessary to achieve the same readjustment to the Warrant under this Section 2.5(a) as if there had been no prior exercise of this Warrant. If Company shall sell or issue shares of Common Stock for a consideration consisting, in whole or in part, of property other than cash or its equivalent, then in determining the fair market value per share and the consideration received or receivable by the Maker (on a per share basis) for the additional Shares so issued, sold, or payable to Company for deemed issued or sold in such issuance. For purposes of this Section 2.51.8(e), if the fair value Maker issues, sells or amends any options, warrants, convertible securities or other similar instruments whether or not immediately convertible, exercisable or exchangeable, then the Shares issuable upon the exercise of such property shall securities shall, as of the date of the issuance, sale or amendment of such securities, be determined reasonably deemed to be outstanding and in good faith to have been issued and sold by the Company Board. As used hereinMaker at the per share price for which Shares are issuable upon the conversion, “Company’s Next Financing” means the closing exercise or exchange of a Subsequent Issuance yielding gross cash proceeds in an aggregate amount of at least $2,000,000such securities.